EU Political Class Rides Roughshod over Citizens’ Concerns & Frustrations as it Pushes Integration

Even the “elite” is not totally on board.

By Don Quijones, Spain & Mexico, editor at WOLF STREET.

2017 has been a surprisingly kind year for the European Union — so far! Staunchly pro-EU candidates not only survived the gauntlet of national elections in France and the Netherlands but emerged triumphant. The once-imminent threat of political populism is now on the wane, we are led to believe. As if to prove that point, even the UK government is struggling to preserve a united front to see out Brexit after recent elections delivered a hung parliament.

The governments of the EU’s two core nations, Germany and France, appear to share a unified sense of purpose. Merkel has expressed a willingness to go along with two central French demands — the appointment of a Eurozone finance minister and the creation of a common budget — as long as certain conditions are met. “We can of course think about a Eurozone budget as long as it’s clear that this is really strengthening structures and achieving sensible results,” she said.

Ms. Merkel’s surprise overture, however qualified, suggests the stalled process of EU integration could kick back into life sooner than most experts had expected. Particularly surprising is the timing of Merkel’s comments, coming as they do ahead of make-or-break general elections in September.

Berlin had initially refused to debate the future of the Eurozone before the vote. Merkel clearly believes her reelection is more or less in the bag. If so, for the first time in a very long time, she and her fellow eurocratic legislators, emboldened by recent political developments, have a relatively clear path to forge ahead with fiscal and political integration, unhindered by potentially destabilizing national political events — at least until Italy’s general elections, scheduled to take place next year.

Back on the table is a proposal to upgrade the grossly unaccountable Luxembourg-based European Stability Mechanism (ESM) into a full-fledged European Monetary Fund. As we’ve noted before, creating a European Monetary Fund (EMF) would be an important statement of intent. If Europe’s core countries are truly set on taking the EU project to a whole new level, such as by pursuing the creation of an EU army, an EU border force (with full powers), fiscal union, and ultimately political union, some form of burden sharing will ultimately be necessary. The establishment of a fully operational EMF could be an important move in that direction.

The EMF would essentially act as a fiscal backdrop to the banking system, something the Eurozone has desperately needed ever since its creation. As Bruegel proposes, it would serve as a fiscal counterpart of the ECB to guarantee the financial stability of the euro area in the event of a sovereign or banking crisis, or a threat thereof — of which there are plenty these days, in particular emanating from Italy’s broken banking system.

Naturally, the creation of an EMF would deal a further blow to the fading remnants of national sovereignty in Europe. But that’s a price that many (but certainly not all) of Europe’s elite is more than happy to pay; some would say that destroying national sovereignty was the ultimate goal of the EU all along.

In a survey of more than 10,000 EU citizens and 1,800 EU elites carried out by Chatham House, of the elites:

  • 37% believe the EU should get more powers,
  • 28% want to keep the status quo and
  • 31% would prefer to return more powers to individual member countries.

This enthusiasm for a more centralized, more powerful EU is not shared with equal enthusiasm by European citizens: 48% want powers returned to the individual member countries.

Citizens, overall, do not feel they have benefited from European integration in the same way Europe’s elite does. Whereas 71% of elites report feeling they have gained something from the EU, the figure among the public is only 34%.

Even more worrisome for national leaders, a clear majority of the public — 54% — feel that their country was a better place to live 20 years ago, before the euro existed.

The findings of the Chatham House survey reflect a growing public frustration with Brussels’ tendency to ride roughshod over their voices and concerns. In a recent Pew poll a median of 53% across nine European countries surveyed, excluding the UK, support having their own national referendums on continued EU membership. And while most do not want to leave the bloc altogether, many European citizens want to ensure that their voices are heard.

That is unlikely to happen: engagement and consultation have never been Brussels’ strong points. According to Fredrik Erixon, a Brussels-based economist and co-founder of European Centre for International Political Economy (ECIPE), the EU’s gaping lack of democratic accountability and legitimacy and its determination to plow ahead with integration regardless of popular support (or lack thereof) will ultimately be its undoing.

“The notion of the ever-closer union has been very, very strong for more than 60 years, but it has died,” Erixson said. “It didn’t end with Brexit nor did it end with Trump’s skepticism about the EU. It ended far earlier than that – 15 years ago when France and the Netherlands voted against the constitutional treaty. This was an early warning about declining support for anything that suggested a deeper integration.”

Brussels chose not to listen then, just as it is choosing not to listen now. The risks are huge. The so-called populist forces of discontent and opposition may have been contained for now, but they are still bubbling just below the surface. And in Italy, where those forces are arguably strongest, conditions are about to get a whole lot more difficult as the banks are bailed out and, to pay for it, a new austerity regime is unveiled. By Don Quijones.

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