EU’s Mounting Challenges: Pan-EU Solutions Vital But Absent

David Gow | 18 June 2018

Europe Day 2016 – Strasbourg, European Parliament, CC-BY-NC-ND-2.0

“The German question” is the header on the latest print edition of the Spiegel. As if it never went away. It has nothing to do with the World Cup defending champions losing their first match ignominiously. Rather: “How do we deal with migrants? The refugee crisis threatens Merkel’s chancellorship.” Nine months after the last German elections the vultures are circling around Merkel as she engages in a series of crisis meetings – and tries to head off a full-blown breakdown in key EU policies.

As Brits wallow in Brexit Lalaland, fantasising over spurious dividends for the NHS or musing over the latest boost to Scottish independence/threat to the 20-year-old devolution settlement, the EU itself faces some existential questions most people in the UK are unaware of. Two over-arching issues are: neo-liberal austerity’s continuing shadow over large swaths of the population/regions and resurgent populism fuelled by a failure to manage migration flows into and inside Europe.

Just look at the crowded agenda in the run-up to the June 28-29 European Council (summit). Aside from reforming the common asylum system and the eurozone’s flawed set-up, the EU-27 may well have to decide how to avoid yet another Greek crisis as the bail-out programme ends and whether to impose sanctions on Poland for its egregious and continuing breaches of rule-of-law principles. Then, there’s the matter of the new Italian government’s wilful disregard of the rules, let alone common humanity, in turning away three migrant boats, including the Aquarius (now berthed in Valencia).

In the good old days, France and Germany would cobble together an eve-of-summit deal and win respite from the then crisis and/or, more rarely, launch a ground-breaking initiative. But for all the hopes expressed by Merkel when Emmanuel Macron won the French presidency on a powerfully pro-European platform just over a year ago and the 40 hours of talks the two countries’ finance ministers have recently held on eurozone reform, there is no sense of a breakthrough. (Merkel and Macron meet at a castle in Meseberg, north of Berlin, on June 19). And here is the Commission’s helpful summary of the Juncker/Macron/Merkel plans for the future of Europe – and their differences.

Macron’s initial eurozone proposals included a separate budget from that of the EU as a whole worth an eye-watering 7% of (collective) GDP as well as a more active role in helping countries in trouble. There’s loose talk of German concessions but the reality is that, even with a social democrat at the finance ministry (Olaf Scholz), Berlin is sticking obsessively to its ordoliberal orthodoxy regarding fiscal policy (balanced budgets at all costs) – and refusing to countenance even a whiff of fiscal transfers to poorer countries. Its concept of a European Monetary Fund (superseding the European Stability Mechanism, the main bail-out instrument), is entirely neo-liberal: Greek-style austerity plus privatisation and deregulation on a grand scale.

Yet again, the German government is trotting out the canard that its taxpayers won’t allow it to show solidarity (even less so since Merkel’s open borders troubles). The problem it faces with Macron is that if it doesn’t give him much at all the only winner will be Marine Le Pen and her renamed Rassemblement National. But Merkel, now seriously weakened, is at the mercy of the rightward shift in Germany where polls show her CDU declining, coalition partners SPD in free fall and the leftist Die Linke and, above all, the far right AfD gaining support. Even the long-standing CDU alliance with the Bavarian CSU is under severe strain as interior minister Horst Seehofer demands border controls over asylum-seekers that conceivably could put the Schengen visa-free travel area at risk.

Despite socialist Pedro Sanchez taking over as premier in Spain, the Right is in the ascendancy in Europe, with an unmistakable drift to the further extremes. Political instability and economic uncertainty are increasing as the ties that bound Europe to the Bretton Woods settlement, Nato and the liberal world order are being severed by Trump and Putin et al. Reaffirming or recasting European values in such a setting requires shared political vision all too obvious by its absence.

It remains the case, even more so now than ever, that the issues Europe faces demand pan-EU solutions. But so long as the neo-liberal Right remains in power there is next to no chance of that happening in a way that takes the ground from under the feet of the racist populists and increasingly emboldened fascists. Traditionally, it would be up to the social democratic left to come up with ideas for change and renewal – sadly, a task the current crop of leaders is unable to handle, let alone master.

David GowDavid Gow | Twitter

Sceptical Scot

David Gow is Editor of Sceptical.scot, Editor of Social Europe and Senior Adviser at Acumen Public Affairs. He is former European Business Editor of The Guardian and is Advisory Board member of the Scottish Centre on European Relations.