Europe: What now?
When I grew up in West Germany in the 70’s and 80’s, I learned French in High School, and I participated in a student exchange program that sent us young Germans to live during the Summer months with French families, while their teenagers came to our homes. I learned that the Germans and the French belong together, in the words of one of our Chancellors, we are a “Schicksalsgemeinschaft,” a community created by a shared destiny. These experiences were deeply emotional for us, because we had also visited the battlefields of Verdun, and we knew that our grandfathers had fought ferociously against each other, with enormous bloodshed on all sides.
The decision by the British electorate to leave the EU reverberates deeply in every European with a political conscience; I understand it not just as a release of frustration over European paralysis and bureaucracy, but also as a statement of fundamental scepticism towards the future of a unified Europe.
The European Project
Europe was created by politicians and bureaucrats after the Second World War out of political necessity. The history of European hostilities and wars had to be ended if Europe wanted to stay relevant in the world. But given the history of conflicts, and the diversity of languages, cultures, identities, and political systems, the only way a European Union could be achieved peacefully was through a process of complex multi-lateral negotiations and treaties. Everyone has to be on board, and no country can impose conditions on others. Deeper European Unification is a necessity, but it can only be reached through detail-oriented negotiations that result in solid contractual frameworks. These difficulties make Europe a slow-moving project, driven by bureaucrats, diplomats, and career politicians. The unification of Europe is still a work in progress, and due to this slow but steady process of forging a union, it also became very sluggish and reactive in terms of foreign policy. After the Second World War, Europe was interested in its own geographic neighborhoods, but did not project its powers much further. It withdrew from the former colonies in Africa and from the Middle East, joined military forces with the United States through NATO, and tried to absorb the Eastern-European fallout from the disintegration of the Sowjet Union, much to the dismay of Russia.
It currently finds itself at a crossroads in regards to several questions. All of them need to be answered if Europe wants to have a strong future.
- National Sovereignty or Unification? How should it solve the opposition between national sovereignty and European integration? The concept of the nation state is itself a European invention, but 400 years later, in our period of economic globalization, the concept requires substantial modifications in order to allow its citizens to move towards a global future.
- Can it deliver economic rights to its citizens? The massive transformations in the workings of our economies cause deep economic uncertainty for most people. Will Europe deliver social and economic rights for everyone, and evenly distribute the enormous wealth created by new technologies? Economic globalization marches on, but will Europe assert enough political power to “domesticate” and humanize these unleashed economic forces, or let them reign freely?
- Can it overcome inertia through more executive power? We have seen in recent years how European Institutions fail to address problems in a timely manner: thousands of refugees are left stranded, Greece and Portugal went to the brink of bankruptcy, youth unemployment skyrockets, and Islamic fundamentalism inflames the Middle East and threatens to engulf Europe as well. Can European politics gain enough speed to be relevant in today’s age of crisis and universal acceleration? Will Europe be seen as a capable actor, or rather as a hybrid and dysfunctional political construction through which European States are trying to emerge from the mess of their own history?
- What role does Europe want to play in the shaping of our global future? Does it want to work for a functional political justice framework world-wide, or opt for pragmatic solutions and not stand up to governments that bully their neighbors and their own citizens, violate human rights, rights of women, freedom of the press, etc? Will Europe continue to be an agent of liberalism and European Enlightenment, defend open discourse, democracy, and rational government, or avoid the difficult questions, and merely practice political posturing?
BREXIT: How did we get there?
In the eyes of British voters, membership in the EU does not represent a viable political future for them any more. Their verdict indicates that Europe has not passed the test of some of the questions above. In the aftermath of the vote, politicians and commentators are trying to interpret “what it all means”, and why the British decided by 52 to 48 percent to leave the EU. What were the reasons that produced this outcome?
A deep feeling of scepticism and doubt over Europe has existed in the minds of the British for a long time; now they had an opportunity to express it. The participation in a unified Europe runs counter to their sense of history and identity. The political order of Europe has been forged in centuries of balancing power, with fear of each other, containment, collaboration, occasional wars, expansionism, colonialism and competition. Political boundaries and cultural regions do not always overlap; people have a connection to the land that reaches deeper than their political identities and affiliations. The British are also a seafaring culture, which means they are more outward-oriented and less “continental.” In relation to continental Europe, they were always on the fence and trying to hold the balance of power. It made them important as power brokers and mediators. Their geography helped them: As a group of islands, they cannot be invaded easily. They were the staging ground for the American invasion that liberated Europe from Hitler. Great Britain was a maritime superpower at the beginning of the 20th century, and they still live in the afterglow of a global British Empire that dissolved into the Commonwealth of Nations and created English as the universal language.
In spite of the warnings from many economic institutions and experts, and from major politicians like the British Prime Minister or the US President, the voters decided to leave. The decision may have been misinformed and reactive, but nevertheless, the Brexit vote also reflects a sense of fearlessness and independence. The UK is big enough to stand on its own feet, even without the EU. It has a strong economy, with a total economic output in 2015 of 2.68 trillion dollars (PPP), a population of 65 million people, and a GDP per capita of $41,160. It is the second-largest economy in Europe after Germany, and the ninth-largest economy in the world. It produces roughly 17% of the total GDP of Europe, and has the largest center for financial services in Europe, located in the greater London area. 1 The UK has kept control of its own currency, the pound, and has never joined the Eurozone, the group of 19 out of the 28 EU countries that use a common European currency. Currently, the UK economy has very low inflation and unemployment, and moderate growth over the last years. So the macroeconomic conditions are excellent.
So why did a majority of voters want to leave the EU? Three broad reasons can be found: an influx of foreigners, migrants, and refugees, a revolt against a globalized economy that produces huge inequalities, and a European bureaucracy that threatens British sovereignty and does not offer a viable political future.
In all developed Western countries, the incomes for the working middle class have either stagnated or decreased in the last two decades. The structural reason is clear: Due to open markets and rapidly improving globalized trade infrastructure, these workers are now competing against workers in Asia, Africa, or South America. Products become cheaper, and salaries lower. In addition, the population in Western countries is shrinking and aging. Extended life spans open an economic rift between the young and the poor, and privileges and entitlements are shrinking, especially for older people who need them more. Long-term job security has pretty much disappeared for most people. The poor (and older) British middle class thinks that they do not benefit from Europe, they just keep losing, so they vote for an exit, even if they are told that this a self-destructive move. The real message of the Brexit vote for political establishments everywhere is this: Find a way forward that preserves our economic and social justice rights in times of rapid economic and technological transitions!
In the few weeks since the British voted, the sentiments have already changed dramatically: The Brexit leaders have left the ship, people are not so sure any more, and the British Government wants to slow down the process of exiting and does not evoke Article 50 of the European Union Treaty for now, which will make separation unavoidable. The ensuing political crisis engulfed both parties: The Prime Minister resigned, and the Labour party, traditionally pro-Union and pro-Europe, showed only lukewarm support for staying in the EU, and faces a leadership crisis as well. The traditional political divisions did not apply to the Brexit question: it is not a right versus left issue, or money interests against worker rights, it is a question of open or closed systems, economic globalization against the preservation of a culture’s uniqueness. The political institutions of Europe have failed to mediate these global economic and political problems and have not offered serious alternatives to the cataclysms of a capitalist system that allows ownership and incomes for the rich to be separated from real production. We are caught in a race to the bottom through global competition, without sufficient protections for workers, the public sphere, or the environment.
Ramifications for the UK
The Brexit vote was a very sad moment for Europe. It will also come with a price for the UK:
- Great Britain will lose much of its political influence, both in Europe and with the United States: The EU does not have to get British approval for political decisions, and the US does not need the UK any more in order to influence European politics. Europe will be easier to govern and unify without the UK.
- The UK will also no longer benefit or participate in the EU-US trade agreement, also known as Transatlantic Trade and Investment Partnership – or TTIP. This agreement between the US and the EU will affect one-third of global trade, and even though there is strong opposition to it, it is currently scheduled to go into effect around 2020. The UK has to negotiate its participation separately.
- The Brexit might spawn more exits: Gibraltar, Northern Ireland, and Scotland all voted overwhelmingly to stay in the EU. There is a movement to unify Northern Ireland with the Republic of Ireland, which is already a EU member on its own. Scotland strongly considers to separate from the UK and stay in the EU as a separate country. As a member-state of the UK with its own parliament, the Scots can possibly veto the Brexit. If Brexit becomes a reality, it might ultimately lead to a slow dissolution of the UK itself.
- Losing access to the common market of the EU is the main self-inflicted damage for the UK. This free trade zone has over half a billion people, and businesses located outside would simply not be competitive with their European counterparts any more if they have to pay extra fees to access the common market. This is the major reason why British Government wants to negotiate a new trade agreement with Europe parallel to negotiating their exit.
What should be done?
Cameron decided to leave it up to the next Prime Minister, Theresa May, to chart a course forward, or possibly backward. There are many questions to be sorted out, and there is still a good chance the British will end up staying in the EU. The Brexit referendum was an act of direct democracy within a system of parliamentary and representative democracy. How will this statement of the voters be absorbed into the existing political order? Several options exist:
- Scottish or Irish veto: The House of Lords announced in an April report that any decision to exit the European Union would have to be approved by the Parliaments of Scotland, Northern Ireland and Wales.
- Just don’t do it: The referendum is not legally binding. The process of leaving does not begin until the prime minister officially invokes Article 50 of the European Union’s governing treaty. The British Parliament has to weigh in as well. The Prime Minister could let the political discussion unfold and decide not to act until the mandate is really confirmed. What would happen if Parliament votes it down? Or if public polls show in three months from now that the majority of voters want to stay? Also, is a slim majority of 52% enough to make such a far-reaching decision?
- Repeat the vote: In 1992, Danish voters narrowly rejected a referendum on joining one of the treaties that created a new foundation for the European Union. Eleven months later, after more campaigning, Denmark held a second referendum, and voters approved it. Especially the young people in the UK are not giving up: There was a large demonstration in London a week after the vote, and an online petition calling for a new vote had already reached four million signatures two weeks after the vote, at the end of June 2016. A second referendum could also be tied to general elections, because the Government needs to support the exit. What if a new government gets elected that ran on a pro-European platform ? The UK has recently introduced fixed-term elections, which means that the next general election in the UK will occur in May 2020, unless the Parliament dissolves itself earlier due to a political crisis.
- Exit, but try to preserve the Status Quo: If the UK Government invokes Article 50, they will try to negotiate a deal that preserves their current benefits, but surrenders the membership status. They will have to accept conditions like free travel and work permits for people with EU passports, and they will lose political influence over the rest of Europe. The model for this solution is Norway, which is not a European Union member, but subscribes to its common market and open borders for a fee that is roughly equal to a regular membership fee.
The EU Political System
The political framework of the EU is comprised of three main institutions: The European Parliament, the Council of Member States, and the European Commission. There are also some minor institutions, for instance the European Central Bank, or the European Court of Justice.
- The European Parliament: It is a parliament that is directly elected every 5 years and currently has 751 members. It’s first election took place in 1979. It exercises the main legislative functions of the EU, and oversees the European Budget. The Parliament does not have legislative initiative, meaning that it cannot suggest new laws on its own. The European Parliament has to balance its functions with the parliaments of member states. More power for the EU parliament means less power for national parliaments, hence less sovereignty for the member states.
- The European Council is an intergovernmental body, consisting of the heads of state of the 28 EU member states, plus the President of the European Commission. They normally meet four times a year, and decide in most instances by majority vote. This is the most important decision-making body, and sets the political direction for the EU in general. There is also the Council of the European Union, which has a similar name, but a different function. It is composed of the State ministers who operate in a similar field, for instance all the finance ministers, and it coordinates the national laws with the laws created by the European Parliament.
- The European Commission is the politically independent executive arm of the EU, and was already created in 1958. It proposes new laws, develops and oversees the budget, and represents the EU internationally. It consists of 28 Commissioners (one from each EU country), and is directed by the Commission President.
These political institutions work together with all the member states to formulate European politics and work towards more European political, cultural, and economic integration. It is a flexible framework that has to balance the sovereignty of member states with the needs of the Union. The European political system was last updated in the Treaty of Lisbon from 2009, which forms the constitutional basis of the European Union. 2 The Treaty of Lisbon amends the Maastricht Treaty (1993), and the Treaty of Rome (1958). It introduces majority voting in the Council of Ministers, enhances the power of the European Parliament, and creates the position of President of the European Council, as well as a “High Representative of the Union for Foreign Affairs and Security Policy.” The Lisbon Treaty also makes the Union’s bill of rights, the Charter of Fundamental Rights, legally binding. The Treaty introduces the legal right for member states to leave the EU, and the UK may be the first country to invoke this by now famous Article 50.
Outlook for Europe
The EU has weathered many storms during its 60-year history. It will be smaller without the UK, but it does not have to redefine itself fundamentally. It has a good constitutional basis, it just has to learn how to use its own framework. A regulated departure of a member state like the UK can be a historical milestone for the Union, because it defines its identity as a political Union where the members are free to leave. The EU will continue to grow, but it has to work against the perception that it is just a tool for economic globalization that erodes workers rights, or a political system that levels European uniqueness and independence. EU politicians have to respond to the concerns of citizens, but stand up against right-wing movements in several European countries that exploit deep fears about the future and thrive on scepticism and historical divisiveness. There exists also a deeper crisis of legitimacy: Many Europeans live with a mindset formed by old historical structures and oppositions, they think in first, second, and third-world categories, they feel privileged and have not fully understood that globalization brings with it a flattening of the world that cannot be stopped. Politicians have often promised too much, or blamed everything that went wrong on the EU. The EU became an easy scapegoat, rather than the necessary bridge into a strong European future.
The Brexit vote is also a setback in the struggle for a new European identity. We need a strong sense of European political identity, not French, Dutch, or Polish independence movements that polarize against our shared European heritage. Europe is not just a tool to survive in an age of economic globalization: It represents a value system based on universal political, social, and human rights, it represents democracy and philosophically-based political dialog that centers on the rights of individuals.
Europe now has to demonstrate that it can act, address problems effectively, and it needs to exercise and explain its leadership more effectively. The EU plays a major geopolitical role, but it has to get more comfortable with it. Here are some examples:
- In recent years, Europe has been challenged by Russia, because many countries that were under Soviet control joined NATO after 1990, and most of them also joined the EU. Current NATO members are: The Czech Republic, Hungary and Poland (joined 1999), Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovakia, Slovenia (2004), and Albania and Croatia (2009). With the exception of Albania, all these countries are now also EU members. Countries that want to join NATO and eventually the EU are: Montenegro, Bosnia and Herzegovina, Georgia, and the Republic of Macedonia.
- Some European politicians, like the German Foreign Minister, argue the Russia has reason to be concerned and angry, and we should not antagonize them too much. This appeasement strategy will not work: The nationalistic version of Russian politics eliminates free press, and oppresses the internal democratic opposition. It has already isolated Russia and brought great economic harm to its citizens and to some neighbors. It is very possible that the disintegration of the former Soviet Union continues further into the Russian heartlands. The destruction in Chechnya, the annexation of Crimea, or the Russian attempts to destabilize Ukraine, have shown how Russian expansion works. Nationalistic Russian aggression has no future, and eventually the democratic process will succeed in Russia as well. Maybe the UK can create an arrangement with Europe that will function as a model for a future Russian association?
- The Ukraine conflict has also shown that Europe still needs American protection, and that it has not much military deterrence of its own. It is time for a United Europe to become stronger; the provisions for military cooperation already exist in Article 42 of the Lisbon Treaty, which provides for substantial military integration.
- Europe also has to take on more leadership in the Middle East. It has to push back against a politics of coercion and bullying, whether this happens in Israel, Egypt, Iran, or Syria. There should be no tolerance for genocidal dictators like Assad in Syria, or for anyone who supports this kind of regime. Neutrality against abusive regimes, or a politics that plays all sides in regional conflicts, does not create respect: It just shows that Europe is insincere and cynical, because it does not act according to its own values. From a moral-political standpoint, the future of Europe also gets decided in Syria and in the Ukraine. Will Europe again stand by when thousands of people get slaughtered, as it already happened in Srebrenica in 1995? Will it continue to tolerate Russian aggression, or do business with an Iranian Regime that oppresses their own people? Or be silent about human rights and women’s’ rights in the Gulf States, because they are oil suppliers?
- The discord about the refugees last summer temporarily brought down the Schengen agreement, which guarantees free travel within the member states. This was a miserable spectacle of failing European institutions. The answer to the refugee crisis is not simply to close the borders, but to house these people until they can return to their home countries, and to work towards a political solution that allows them to go home. This cannot be done without the removal of Assad’s regime, whether the Russians like it or not.
- Europe needs an immigration and asylum law, not a reaction that varies from country to country. The political agreements about refugees made with Turkey worked in 2016, and now they have to be extended to Egypt and other North African States, because otherwise thousands of migrants will continue to cross the Mediterranean Sea and many will lose their lives in the journey.
- European Governments need laws that allow them to share their databases in order to catch terrorists, criminals, people who invest illegitimate gains in Europe, or who try to avoid paying taxes in their home states. This also requires smart laws that balance between privacy rights and the needs of effective law enforcement.
- Further down the list of to-do’s, but nevertheless very important, is the Europe-wide integration of Energy policy and the merging of infrastructure. Smart grids are easier and cheaper to build in larger spaces, but political unification is a required condition for the creation of better energy management.
- It is very disturbing that Europe has thus far not succeeded in fighting youth unemployment. This problem plays a major role in the lack of faith in European institutions. In 2015, more than 7.5 million young Europeans between 15 and 24 were neither employed, nor enrolled in education or job training programs. This represents an unemployment rate of more than 20% for young people, with strong regional differences. It also means that more than one in five young Europeans on the labour market cannot find a job. More than 33% of unemployed people under 25 had been unemployed for more than a year in 2013. What kind of future do they have?
These examples show that the next steps are clear, and European institutions and politicians need to work faster and harder to create good solutions. Problems like youth unemployment, Energy coordination, military expenses, distribution of refugees and a unified immigration policy can be all be overcome, and a well-functioning European Union could set standards for the rest of the world.
It was a bad idea for the British voters to leave the Union. It will take decades for them to redefine themselves, and to recreate workable arrangements with their European partners. They still have a chance to reconsider their decision.
- Financial Services (Banking, Insurance, investments, accounting, consulting, etc) create roughly 10% of the total GDP of the UK, and is a heavily globalized industry that employs around 2.2 million people in the UK. This sector will be hardest hit by the Brexit, because the companies will move into the EU. ↩
- The Lisbon Treaty was negotiated after an attempt to create a formal European Constitution was thrown out by French and Dutch voters in 2005. The Lisbon Treaty was initially rejected by Irish voters in June 2008. But it got overwhelming support in a second referendum in the Irish Republic on 2 October 2009. Proposals for stronger European unifications generally don’t fare well with the electorate, especially if the treaty has to be ratified by all member states before coming into force. ↩