On Monday (February 1, 2021), I wrote about recent developments in the EU, which make it hard to argue that it can be reformed in any way that would deliver progressive outcomes. There was also a good article in the London Review of Books (January 7, 2021) – Ever Closer Union? – by veteran British author Perry Anderson, which, while long, is worth reading if you somehow still think the EU is a haven for democracy and progressive potential. It provides a massive body of evidence that reinforces the view I presented in my 2015 book – Eurozone Dystopia: Groupthink and Denial on a Grand Scale (published May 2015). It amazes me that the EU is held out as something progressives should aspire to be members of.
The author analyses the development and operations of the five key institutions of the EU: the Commission, the European Court of Justice, the European Parliament, the Council and the ECB.
The reality he finds is not at all what a progressive Left aspirant should ever aspire to be part of.
Some insights from the article:
The European Court of Justice
The ECJ “the most withdrawn from the public … its proceedings are hidden from public scrutiny; its decisions permit no admission of dissent; its archives grant minimal access to researchers.”
The history of its appointees is telling – Nazi operatives, in the early days to political operatives or “scions of well-placed family dynasties”.
Its “agenda … did not correspond to the intentions of its founders” and its “assertion of the supremacy of Community over domestic, let alone constitutional laws … had no basis in the Treaty of Rome”.
The court thus became not just a unique institution within the Community, but unique within supreme or constitutional courts, endowed with powers that no analogue in a democracy has ever possessed. In all other cases, the rulings of such courts are subject to alteration or abrogation by elected legislatures. Those of the ECJ are not. They are irreversible.
“it has no special expertise, it had from the start a particular orientation” which has morphed into being a fierce promotion of the pro-market, neoliberalism that the EU now exemplifies.
… it would be difficult to conceive of a judicial institution in the West that, from its tenebrous origins onwards, was purer of any trace of democratic accountability.
So one of the things that Britain has done by leaving the EU is to ensure that its legislative discretion can only be challenged within its own legal institutions, and, those institutions, while imperfect, are constrained by the legal framework created by the elected representatives.
By breaking free from the jurisdiction of the ECJ, which has clearly demonstrated a tendency to not only interpret European law selectively (see below on the ECB) and is biased in its interpretations by its neoliberal leanings, is a major advantage of Brexit which the Remain crowd seem to overlook.
When – Walter Hallstein – was President (1958-1967) he declared that “national sovereignty a ‘doctrine of yesterday’, and awarding himself the status of ‘prime minister of Europe’.”
This was ultimately his demise because it brought him into direct conflict with Charles De Gaulle who instructed the French to boycott meetings of the ‘Common Market’ while Hallstein was President.
As an aside, this was where the Member State veto plan originated from.
With power being centralised in Brussels, the city “quickly became a magnet for corporate lawyers and investors from America, on the lookout for market opportunities and bringing with them the expectations and practices of a powerful federation”.
The corporate honey pot was thus consolidating within the EU even though the EEC “created by the Treaty of Rome was not conceived as a free-fire zone for the market”.
But the developments in Brussels – particularly the creation of the Competition Service departments, which was “a fortress populated by German ordo-liberals, whose devotion to market principles and determination they should not be impeded by improper meddling on the part of any state made them natural proponents of federalism”, set the bias that now infests the operations of the EU today.
The Legal Service in Brussels also worked hard to subvert “the rights of national legislatures”
Then came the socialist-turned-austerity maven, Jacques Delors who pushed the EU into the single currency via the Single European Act, which Perry Anderson writes was:
… crafted under him by an emissary of Thatcher – unifying and deregulating markets across the Community, and to drive through the Monetary Union that became the centrepiece of the Treaty of Maastricht.
Delors bought the line that the single market was required for solidarity, which Delors tried to brush into some desirable by promoting his ‘social Europe’ concept, which progressives still hold out as their hope for a better Europe.
The reality is different.
While Delors pushed a concept of ‘social Europe’ alongside the neoliberal single market development, the reality is that he “led them to the single currency, but failed to achieve the social objectives he had thought he could buy with it”.
Instead, the “cohesion funds … were crumbs of solidarity, not the loaf: compared with the subsequent impact of the single currency, little more than the alms of an instrumental charity.”
José Manuel Barroso’s “tenure marked the apogee of the neoliberal drive that followed the introduction of the single currency”.
Barroso hosted the summit that led to the illegal Iraqi invasion by the US and the UK. He oversaw harsh austerity in Portugal as its Prime Minister.
So he was amply qualified to become EU President – a war-mongering, neoliberal with no concern for the well-being of the least well-off.
By now, the decision making processes with 27 Member States are elongated and to avoid the smaller states having too much influence:
… the president of the Commission, responsible for liaison with the heads of government of member states, normally confers only with those in that select group, or perhaps just with Berlin and Paris at the top of it: to do otherwise would be ‘too time-consuming’.
The ‘select group’ referred to are the representatives of the six major states of the Union.
The legislative agenda is essentially developed by the – Committee of Permanent Representatives (COREPER) – and is then largely “rubber-stamped by the relevant Council of Ministers when passed up to it.”
The ‘Eurocrats’ that support this process – “the permanent bureaucracy of the EU” – are dominated by officials trained in mainstream economics who are paid premium salaries “to compete with the private sector”.
A revolving door exists – “Barroso’s elevation, from presidency of the Commission to chairman of the international division of Goldman Sachs, was a natural sequel …”
While in the past, intakes to the bureaucracy required “knowledge of foreign languages or of any general culture”, this has “faded … giving way to MBAs”.
Perry Anderson calls it a process where “neoliberals were being neoliberalised”.
And the bureaucracy in Brussels are infested by the mass of “corporate and consultant lobbyists” ensuring the EU works as a corporate cabal and:
That Europe’s executive could resist infection from the vapours of this swamp is implausible.
I have seen no detailed proposals from Left progressives outlining how their so-called EU reform process would eliminate this infestation. My proposal is to outlaw much of the corporate lobbying.
… has historically been an ally of the Commission and the court in its aspirations to a federalist future for Europe.
The hopes that it would become the “legislature of Europe … did not materialise” although like all these European institutions it “acquired a substantial bureaucratic infrastructure of its own”.
It has “does not possess … the rights to elect a government, to initiate legislation, to levy taxes, to shape welfare, or determine a foreign policy” – all the normal powers and responsibilities that a democratic parliament possesses.
Perry Anderson is clear – it is a “semblance of a parliament” only.
Citizens in the Member States realise it is a sham and “have shown scant interest in it” with turnout at elections low. The operations of the parliament “neither aggregates nor channels the wishes of voters” but is really a process of “elite consolidation” – a cosy facade of ‘democracy’:
… behind which oligarchic coteries are comfortably entrenched.
While the citizen voting turnout is low, their elected representatives to this “largely ceremonial body”, demonstrate their disdain by the fact that their “average attendance is around 45 per cent” only.
Overall, despite EU supporters claiming the Parliament represents the democratic face of the Union, the reality is that it:
… is not what it seems, and is the least consequential component of the Union …
But the ECB is an entirely different matter and is “one of the most powerful EU institutions, some would say, the most powerful”.
Unlike the central banks in the US and Britain, “Its proceedings …. are secret … No dissent is ever published.”
It has no “counterweights” such as an elected parliament or treasury department, which in most nations embed the central bank in “a political setting where it is publicly accountable”.
Its operations cannot be changed by parliamentary legislation – only a Treaty change can alter its position, which means as long as the EU is in place it is very difficult to force any significant change on the bank.
Its creation was “political rather than economic”, given that it was always clear, despite the denial by the Delors gang leading into Maastricht and the period following that there was no way the common currency zone was what economists call ‘optimal’, given the diversity of the different economies involved.
The plan was to crush Member State discretion as much as possible and impose a dominant and unified neoliberal ideology on the whole continent.
Of all the obvious EU failures in recent years, one has to acknowledge they succeeded in achieving that aim.
A succession of ECB presidents (Duisenberg, Trichet) failed to use the ECBs power for good.
Trichet, in particular, force the procyclical austerity on Member States as a condition for keeping them from insolvency as the GFC ensued.
His behaviour was mindless.
Then came Draghi who intensified the public bond buying program and provided the private banks with cheap liquidity because he knew that the EMU was close to collapse.
He is often cast as a the ‘good’ guy after Trichet.
But anyone who believes that doesn’t know much about him, history or anything.
Draghi came into the ECB president’s role via Goldman Sachs then the boss of the Bank of Italy.
But much earlier he was the chief Treasury official in Italy and oversaw the largest privatisation plan to date as the chair person of the national committee for privatisation.
Apparently, on June 2, 1992, in that role, he met a group of British bankers on Queen Elizabeth II’s yacht anchored near Rome to help him achieve dramatic cuts to the Italian public sector.
What followed was a massive sell-off of public companies and a massive redistribution of public wealth to the financial markets.
He sold off the utilities, the highway system, construction and energy operations and more.
His next position was with Goldman Sachs.
He was not a saint compared to Trichet. Trichet was just ordinary stupid neoliberal. Draghi was rat cunning neoliberal with a better smile.
But a lot of progressives got sucked in to thinking he was then nice face of Europe.
But he was disaster for Europe.
He gave an interview to the Wall Street Journal, which was published on February 24, 2012 – Europe’s Banker Talks Tough.
He told the journalists that there was:
… no escape from tough austerity measures and that the Continent’s traditional social contract is obsolete … Europe’s vaunted social model—which places a premium on job security and generous safety nets … is ‘already gone’ … Backtracking on fiscal targets would elicit an immediate reaction by the market …
That last point about the “market” was the exemplar of disingenuity, given he knew that the ECB could control yields at any level it chose and if need be completely deal the bond investors out of the equation.
Perry Anderson writes that in August 2011, Draghi and Trichet sent a “secret letter to the Berlusconi, then Italian prime minister, demanding that he resort to a Cold War emergency mechanism to cut pensions and other public expenditures – an unprecedented violation of its mandate by the bank.”
And while pressuring elected politicians to invoke harsh austerity which was beyond any remit of the so-called ‘independent’ central bank, they both invoked QE schemes which were obviously in violation of the no bailout clauses in the treaty.
On February 8, 2012, just before Draghi gave his WSJ interview, the Financial Times published an exposee of the way that Draghi and Trichet ran the ECB – see Eurozone crisis: A deft way to buy time.
Draghi had only just assumed his position as President (2 weeks earlier) and was confronted with the reality that the currency union was in danger of collapsing because of impending insolvencies of some Member States (including Italy).
He denied he would ramp up the QE, that Trichet had started in May 2010 under the guise of the Securities Markets Program.
At a meeting with bankers he crafted the bank bailouts at a function where the guests were “being offered white wines from the nearby Pfalz region” which provided a “wall of money” to the private sector, while publicly demanding governments hack into pensions and sell off public assets for cheap.
This was his workaround of the Treaty rules. Pump money into the private sector rather than the public sector. But eventually he had to do both and so heads were turned and eyes closed as he oversaw massive bond buying programs that were “in blatant breach of Articles 123 and 125 of the Treaty of Lisbon”.
The European elites just decided that:
Lisbon meant the opposite of what it said.
That has been neoliberal Europe in spades.
When the elite position is threatened, anything goes.
When the position of the workers is threatened, they just double down with more!
This is what the Europhile progressives think is worth supporting.
When the ECB’s behaviour was challenged in the Court of Justice the judges also looked the other way:
The comedy of judges solemnly explaining that financial assistance under the European Stability Mechanism constituted an act of economic, not monetary policy, and was therefore perfectly in order, while outright monetary transactions were an instrument of monetary, not economic policy, and therefore were also perfectly in order, calls for the pen of a Swift.
Hypocrisy was writ large during this period and all the major EU institutions were in on the corruption and dissembling.
The Italians have a saying: “Fatta la legge, trovato l’inganno”.
Or “every law has a loophole” and the expression normally means that there is some sort of contest between “those who make the law and those who trick the law”.
But in the case of the EU “the two are one” where elaborate texts are bent to take on any meaning that serves the purposes of the elites in Europe.
While the EU raves on about “the rule of law” relentlessly, it continually violates it and there is little the ordinary citizen can do about it, given the opaqueness of the institutions.
How all this came to be was the topic of my 2015 book – Eurozone Dystopia: Groupthink and Denial on a Grand Scale (published May 2015).
I traced the transition from sovereign nation states to Member States as the neoliberal infestation took hold throughout the elites of Europe and intersected with the inflated ambitions of France for supremacy in the face of the economic supremcacy of Germany.
If you are interested in these issues, then the LRB article (29 pages and 15, 238 words of it) is worth reading in full.
It covers a lot of the territory by 2015 book covered and it clear that more researchers and observers are becoming knowledgable of the EU disaster.
It is obvious that:
… the world the Union inhabits is one in which ‘the language of democratic politics is largely unintelligible’.
Also while claiming to be a protector of human rights, the EU elites co-operated with the US renditions and “EU members complied with assistance in kidnappings and supply of torture chambers on Union soil”.
And then is the solidarity nonsense. They talk about that relentlessly when they are gritting their teeth and punishing some vulnerable group in a vulnerable nation with austerity policies.
Divergence is the norm across social groups, across regions within Member States, and across Member States
And even if we consider something as banal as economic growth – the EU fails.
So no democracy. No rule of law. No human rights protections. No solidarity. No economic miractle.
Need we go on!
For the progressives, where would your reform process start and how long would it take?
That is enough for today!
(c) Copyright 2021 William Mitchell. All Rights Reserved.