How Britain’s stay in EU can affect Europe

If Britain ends up staying inside the European Union it will be a shock to both systems. All those inside the EU contemplating its breakup, or the weakening of its institutions, will have to seek a different game plan.

But what should “remain and reform” mean for the left? I’ve toured European capitals in 2018 explaining my answer to centre-left politicians, it tends to make their faces drain of blood: scrap the Lisbon Treaty and redesign the project.

The Europe of the 21stcentury needs to be statist, dirigist and offer a future of high welfare and wages to its 500 million citizens, or it will not survive. Though it needs to defeat the economic nationalism currently rising among its discontented populations, it needs to become (within limits) economically nationalist on behalf of the Union itself.

Because, by enshrining neoliberal economics in a treaty, and activating its lesser-known counterpart German “ordoliberalism”, the Lisbon Treaty of 2007 has profoundly weakened Europe as an economic bloc, and as a concept. From Maastricht onwards, the deflationary politics of austerity were mandated for the Eurozone. But Lisbon went further, giving the European Court of Justice the irreversible constitutional power to override left wing, pro-growth policies.

If the world’s economy were stable, that might only be of detriment to socialists. But since 2008 numerous crises have hit the world order, of which the financial crisis was only the first. The slow, inadequate and one-sided response of the Eurozone authorities to the financial crisis is well documented. It produced mass unemployment in the periphery, full employment with a crumbling infrastructure in northern Europe.

Alongside this, from around 2013, began the fragmentation of the rules-based geopolitical order. It is the stated intent of Vladimir Putin to make Europe the chessboard across which three multipolar global powers fight for influence: Russia, China and the USA. Since the election of Donald Trump in 2016, it’s clear that the USA has become an unreliable ally for those who want to keep Europe wedded to a democratic, independent but basically Atlanticist orientation.

So, to put it bluntly, we have an economic model that only works for Germany, Austria and the Netherlands; declining consent for democracy and social liberalism; and a strong geopolitical player in the East actively trying to exacerbate the economic and political fragmentation of Europe.

Meanwhile, in the critical technologies of the 21stcentury, European strategy is lagging far behind. We face – in the USA, China and Japan – economic superpowers with a clear economic, nationalist and dirigist approach to investment and innovation. China overtly, and the USA by default, both operate policies of technological sovereignty, promoting the interest of their national champions (Google, Amazon, Apple, Facebook and Tencent and Alibaba). Europe is designed to be incapable of responding.

Once you understand the problem the answers write themselves. Europe must break with austerity. It must embrace smart state intervention to promote and defend hi-tech innovation. We need to reject not just the Lisbon strictures against state aid and state ownership, but the philosophy that underpins them needs to be driven out of the technocratic and corporate culture.

To address the problems created by freedom of movement, the left should fight for a Europe-wide employment policy, with incentives and disincentives, aimed at forcing welfare and wage levels upwards in Eastern Europe. To the extent that the corrupt, right wing nationalist governments of the East obstruct this, we should be prepared to create a two-speed Europe, and even to lose member states that cannot abide by the Treaty of Copenhagen, which says that rigging your own elections, and controlling the press, are not compatible with EU membership.

This strategy of tough love for Europe may not succeed. Even the people groping towards it, such as Piketty with his asset tax plan and Varoufakis with DiEM25, are too timid and cannot find the language to inspire the working class victims of Eurozone-imposed austerity. Likewise the German business elite, and its allies in Austria, Hungary and the Netherlands, seem content to go on gaming the Eurozone to create stagnation for everybody else.

If so, the left would have to retreat to a second trench, re-posing the strategy of social justice at primarily national level. The trailblazers here are Melenchon in France and the Aufstehen movement in Germany: with every hour of inaction and complacency by the European centre, their arguments grow stronger.

But as long as the possibility remains to remain, reform and restructure Europe, it is worth fighting for resolutely. Resolutely in this case means the slogan: scrap Lisbon and start again.


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