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End of the dream: how Europe lost its way between Rome and Kiev

Reflecting rising resentment of European austerity policies, people from Spain, Italy, Portugal and Greece protested in 2011 at the European Central Bank. EPA/Frank Rumpenhorst

European integration has been an enormous success since its inception in the Treaty of Rome in 1957. For the next five decades European Union (EU) member states enjoyed unprecedented peace and prosperity.

But now this legacy is being questioned. The EU has fallen out of grace with the public. At the recent elections for the European parliament, parties determined to curb EU powers came clearly on top in several member states. What went wrong and why?

Some commentators point to misguided policies for handling the Eurozone crisis; they made the EU look stingy, rigid and oppressive. Other pundits complain about the EU’s imperfect institutions; they are complex, sluggish and hostage to member states’ veto.

Yet others point to poor leadership. Presidents of European bodies are particularly uncharismatic figures. Leaders of the most powerful member states are chiefly interested in enhancing their parochial national interests.

These are all important factors, but the roots of the EU’s downfall go much deeper. The EU has been unable to cope with the impact of three “revolutions” that have shaken the foundations of the European system in the past 25 years.

The geopolitical revolution

The geopolitical revolution began with the fall of the Berlin Wall. This spawned a resurgence of territorial power politics. The Soviet Union and Yugoslavia have disintegrated, Germany has been reunited, while France and Great Britain have found themselves in limbo.

Territorial reshuffling produced new states, autonomous enclaves, semi-protectorates and “shared” neighbourhoods. The politics of recrimination and violent conflict was part of this process as manifested by the horrors of Sarajevo and Srebrenica.

The EU tried to grapple with the geopolitical revolution by making enlargement one of its core policies. In the last decade, 11 post-communist states have been admitted. Membership brought important benefits to these countries: it generated economic growth and helped strengthen their young democracies.

However, admitting numerous new and often poor states increased pressure on EU labour markets and institutions. Enlargement has been halted, leaving many unstable EU neighbours at the mercy of local and external predators. The EU was unable to respond to the European aspirations of either Moldova or Georgia, making them easy targets for Russian nationalists.

The developments in Ukraine should be seen in the same context. The EU lacks the military means to engage in the “hybrid war” instigated by Russia and the political will and institutional capacity to make Ukraine safe through EU membership.

Instability on the Union’s borders causes not only political anxieties, but also crucially undermines business confidence. The effects on the economic well-being of EU citizens are dire.

The Ukraine crisis dominated this week’s G7 summit in Brussels. EPA/Julien Warnand

The economic revolution

The rise of global firms imposing significant constraints on governments’ ability to run their social policies triggered an economic revolution. Some experts talk about globalisation or Americanisation, while others speak of a neoliberal ideological turn.

Empirically, the revolution manifested itself in a surge of deregulation, marketisation, privatisation and cuts to public schools, hospitals and environmental protection. Governments contemplating taxing financial transactions or defending certain workers’ rights were threatened with mass migration of businesses to less-regulated countries. They were urged to promote competitiveness and leave redistribution to the markets. National governments’ priority was to facilitate growth of the private sector and reduce the public sector.

This could not but create a legitimacy problem for the EU. European integration was not only intended to create the most competitive economy in the world; it was also to make the “Stockholm consensus” prevail in Europe over the “Washington consensus”. A functional and generous welfare state was Europe’s global brand to be defended against unregulated, unpredictable and greedy markets.

The EU failed to live up to these expectations. Instead, it embraced the neoliberal agenda of deregulation, marketisation and privatisation. The EU was given extensive powers in the field of business competition, but only symbolic ones in social policy.

The EU is in charge of implementing a harsh austerity policy but has no means to alleviate the social impacts. No wonder that large numbers of Europeans, especially the unemployed, see the EU as an agent of multinational banks or German industrialists and vote for anti-European xenophobes and populists.

The internet revolution

The advent of the internet prompted the third revolution. Digital forms of networked communication have undoubtedly created a wealth of opportunities, yet access to them is unevenly distributed.

The EU was slow in adjusting to the digital world and unable to benefit from it. For instance, the EU employed the internet unimaginatively as a traditional propaganda tool, not as a means of empowering citizens. Social networks spread outside the EU, leaving Brussels increasingly isolated and exposed to criticism.

Despite the internet’s potential to improve transparency, the EU has remained largely a non-transparent organisation. Deals are made secretly by unidentified people unwilling to engage in a meaningful online democratic discourse with the electorate. Failure to use the internet for testing new forms of democracy is particularly puzzling given the EU’s opaque parliamentary representation.

European parliament MPs hail the defeat of restrictions on internet access. EPA/Patrick Seeger

The EU also sided with corporate interests trying to curb citizens’ internet access. The European Commission pushed through the so-called ACTA (the Anti-Counterfeiting Trade Agreement) only to be faced with public protests. Eventually, the EU parliament rejected the agreement and the commission quietly shelved it.

The EU also failed to embrace the greatest winners of the digital revolution, namely European mega-cities, or the Informational Cities, to use Manuel Castells’ term. Cities such as Paris, Hamburg, London, Milan and Stockholm successfully created trans-border networks of financial, technological and intellectual flows. These cities have not been given access to EU decision-making and resources. States, however small and dysfunctional, still run the EU.

Is this the end of the European dream?

The status quo in Europe is not sustainable. The EU insists that traditional nation-states (with their armies) control Brussels, but when confronted with a resurgent Russia the EU appears cumbersomely inadequate to guarantee the security of citizens.

The EU demands austerity and prohibits central bank interventions but, in an age of economic uncertainty, is unable to shield citizens from the risks of unregulated markets and the rise of inequality within and across member states.

The EU prevents parliaments from taking sovereign decisions and ejects democratically elected politicians, but is blindingly short-sighted when it comes to finding novel ways of involving citizens in its deliberations and decisions.

One does not need much imagination to conclude that the European dream is teetering on the brink of an abyss. The EU must re-invent itself or perish. Reforming it will not do.

Jan Zielonka is a visiting fellow at the Sydney Democracy Network, at the University of Sydney. He will discuss the End of the European Dream on June 12 at an event organised by the Sydney Democracy Network with Sydney Ideas to launch the Australian edition of his book, Is the EU Doomed? To register please click here.

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