Will European bonds translate into Eurobonds?

There are, we are told, no plans to bail out Greece, which has come under a lot of pressure and scrutiny for its government debt. However there seems to be a general feeling that if it came to it, Greece would be bailed out: see the Irish Times and A Fistful of Euros. A few months ago, when the pressure was more focused on Ireland, I had the impression that, in the end, Merkel would relent and accept the need to bail out Ireland to prevent the Euro from being damaged. In terms of the Euro, any state is probably too big to fail, and so there probably needs to be some mechanism for supporting Eurozone states.

If Greece is bailed out by the EU, then there’ll be a strong precedent and expectation to do it again – and it could be called to do so again, as AFoE seems to suggest when you consider its articles on Spain. Of course, it may not come to a bail out, but already the EU is setting precedents through checking the Greek government’s figures and offering advice on the economy. Granted, the EU isn’t yet setting fiscal policy or writing Athens cheques, but it does show a growing need for greater formal economic co-ordination – and a certain willingness to do something about it.

There have been calls for more co-ordination in tax (which would be resisted by Ireland, among many member states).

Also, the Eurobond issue has been raised again, as it was when Ireland was the focus, and with the S&D group coming out in favour of its creation. It would make borrowing cheaper for countries like Ireland and Greece, but more expensive for countries in a better position, which in political terms looms large as Germany. Germany rejected the idea back when Ireland was the issue, and Berlin remains an obstacle to the idea. But if idea proves resilient and keeps coming back – as it probably will during what will likely be a long recession, and particularly if Greece does need to be bailed out – it could happen. Is it a necessary element of a stronger Eurozone?

The S&D group is also advocating the EU adoption of Obama-like plans for the banking sector. Given the UK’s unease with the prospect of financial regulation at a European level in the guise of a simple oversight system, and the dominance of the right generally, it isn’t really a serious prospect. Except... It is interesting that in the UK the Conservatives have, strangely, enthusiastically adopted Obama’s ideas and David Cameron has called on the Prime Minister to clearly come out publicly in favour as well. I doubt they adopt the same position in the EP.

Could Gordon Brown turn around and say, “Why, yes, of course we support such a plan – and we’re part of an EU-spanning political party that advocates it too. Given the international value of banking, and the single market, it would make sense to have common rules on the matter – and we’re the only party in the UK that has the political clout in Europe to make it happen.”? Well... no. Besides Britain’s euroscepticism and the government’s continued awe of the City, it would be too risky to support it at a European level because the S&D are in opposition, so there’s no guarantee that it would pass in the EP, never mind in the Council and Commission; the Commission, which would need to introduce any draft legislation on the matter, may not back the idea; it could end up playing as a victory for the French and a result of their “winning” an economic portfolio, even if it was originally Obama’s idea, etc.
Pity: the thought of Labour turning its European-dimension to its advantage on an issue (to show coherence and effectiveness on several levels compared with the Tories) is a nice thought, but still a fantasy.

Will European bonds translate into more co-ordinated action and a more structured way of working together in the future? Necessity might demand it, but there may not be the supply of political will.

Update on the EU's "Visibility"

The Times has now started bashing Ashton for her failure to fly the European flag in devastated Port-au-Prince. It's strange to see a newspaper such as the Times - one generally sceptical towards all things European and which seems to doubt the usefulness of European initiatives - effectively supporting a vanity trip for the EU. While it is good to fly the flag, it's vastly more important to get things done, which in Ashton's case means organising good co-ordination.

Despite the attacks on Ashton's style, I have to say that I haven't heard/read a similar attack on her co-ordination efforts. There's probably more that can be done in this area, but if Ashton's opposition can't back up their criticism with evidence - or even claims - of effective policy failure, then it's just hot air.

Watching Ashton briefing the EP on Haiti, I was struck by how the government-opposition roles were reversed. The EPP is normally in government mode (it is, after all, the largest party, and controls the Commission - perhaps even forcing Barroso to lending more public backing to Jeleva then he wanted to). Yet here the S&D group was playing the role of the governing party: Michael Cashman gave a particularly vocal defence of Ashton while strongly attacking other parties (translation: EPP) for "political point scoring".

Which raises the question: was lobbying for such a high profile post politically wise?

The EPP is very much in power at the moment; it's the strongest in the EP and controls the Council and Commission. But while the S&D group has largely started to play a more natural (if sometimes grandstanding) opposition role, Ashton's prominence makes it harder to claim that they have nothing to do with the current Commission. On one hand, the S&D are making the best of an awkward hand - the state-centredness of the Commission means that unless the centre-left aren't in power in any member state, they will have at least one Commissioner. Nevertheless the S&D have strongly looked for some governmental power, and it's not completely free to play the constructive oppositional politics it needs to if it wants to have any hope of making an impact.

"What Is Living and What Is Dead in Social Democracy?"

"What Is Living and What Is Dead in Social Democracy?" is a speech by Tony Judt I came across via Concurring Opinions. While it's addressed to America, and is concerned with the lack of political space to properly discuss ideas outside the conservative box, it's also a great review of social democracy over the last century. As a short overview it's great at putting social democracy in context, and Judt delivers a good defense of its validity, even if it may not be as visionary or inspiring an ideological direction as some may hope for.

Examining the future of social democracy in Europe is fashionable (see Social Europe's blog, particularly the Ken Livingston video) after the defeat suffered by the centre-left in the European elections at a time when the economic project of the right had stalled globally. I'd encourage you to read the lecture, as it's very good at setting social democracy in a historical context, and it does help when thinking of the direction social democratic parties should take in the future.

Judt rightly observes that Europe is a place where social democracy has "won": there's been a consensus here for a long time over the rights and responsibilities of citizens and the state, and a political will to maintain a stable social order based on lower levels of income inequality. Though this has been eroded over the last two decades or so, such attitudes still remain and can be seen when the "European model" is invoked. This should be both comforting and discomforting to the left: it means that the basic set of assumptions they promise about society is largely accepted, but it also means it's harder to formulate what they stand for that's different and new. This challenge is made tougher by the left's adaptation and acceptance of the right's economic views, which has left the left far less able to adapt politically to the changes brought about by the recession than the right, as can be seen from the European elections.

"So long as the primary objective of social democrats was to convince voters that they were a respectable radical choice within the liberal polity, this defensive stance made sense. But today such rhetoric is incoherent. It is not by chance that a Christian Democrat like Angela Merkel can win an election in Germany against her Social Democratic opponents—even at the height of a financial crisis—with a set of policies that in all its important essentials resembles their own program.

Social democracy, in one form or another, is the prose of contemporary European politics. There are very few European politicians, and certainly fewer still in positions of influence, who would dissent from core social democratic assumptions about the duties of the state, however much they might differ as to their scope. Consequently, social democrats in today's Europe have nothing distinctive to offer: in France, for example, even their unreflective disposition to favor state ownership hardly distinguishes them from the Colbertian instincts of the Gaullist right. Social democracy needs to rethink its purposes.

The problem lies not in social democratic policies, but in the language in which they are couched. Since the authoritarian challenge from the left has lapsed, the emphasis upon "democracy" is largely redundant. We are all democrats today. But "social" still means something—arguably more now than some decades back when a role for the public sector was uncontentiously conceded by all sides. What, then, is distinctive about the "social" in the social democratic approach to politics?"

At the same time, what does the left stand for on the European stage? What does it propose that's different from the right? Environment, financial regulation... it's not enough to say that the left will govern better and with the vague promise to be more socially minded - the left must develop politics that go beyond the economy, and offer a better an more comprehensive vision of fairness and justice. If it can confidently promote a more socially just vision, and seem less beholden to the same political mindset of the right without been utopianistic, then the left can set about rebuilding itself as a coherent and positive movement. Of course, this is all easier said than done.

Europe doesn't need a Pro-European Alliance in the EP

Guy Verhofstadt has spoken of the need for a "strong pro-European alliance" in the European Parliament for this term. He said:

"The three largest groups in the European Parliament announced today their commitment to pro-European values and their intention to seek a political consensus at the heart of the European Union in order to respond in a coherent and united way to the multiple challenges that Europe's citizens are now facing in terms of employment and financial security."

Now the only thing you can say about pro-Europeanism when it comes to "employment and financial security", it that there should be some degree of EU involvement in these policy areas. The problem is that "pro-Europeanism" either amounts to the constitutional status quo, or a vague degree of increased integration. "Pro-Europeanism" in itself doesn't provide any ideological clue to what kind of policies a coalition will enact - what, for instance, is Europeanism's stance on the level of workers rights that's appropriate to an economy in recession? Verhofstadt has confused a unified cross-party pro-European alliance for some sort of Coalition from the Napoleonic Wars that, if it held together long enough, would put an end to the spectre of Euroscepticism. But it can't work like that.

Grand Coalitions aren't necessarily a bad thing; grand coalitions can make good governments, and they provide political stability in a country. But they need a common programme for government. In the EP, the executive is separate from the legislature so there's no need for a fixed or agreed programme of government to provide stability. So this alliance is not strictly necessary on a long-term basis. Also, since the EP's say over constitutional matters is extremely limited, basing a coalition on what is essentially a non-issue - apart from non-binding reports and the occasional vote on treaties or enlargements - isn't exactly a strong foundation. The rhetoric of Pro-European unity will paper over the divisions on the practical issues that the EP has to deal with in its day-to-day life. It hardly helps the EP's image to have such an alliance - wouldn't it be better to project it as a mature arena for political debate that scrutinises legislation and the Commission well?

If Verhofstadt wants to win more hearts and minds to "pro-Europeanism", he needs to draw in the public to the Brussels Bubble and spark interest and participation in EP politics. An outwardly cosy coalition in control of Parliament won't do this. Political competition encourages participation and interest, so it shouldn't be suppressed. The alliance - which I suspect will be more rhetorical than real, except for important votes, such as the Commission President vote - will give credibility to the ECR's strange claim to be the "first real opposition". For several reasons, the ECR is just not that significant, and will probably collapse at some point. Open political competition will make party politics in the EP matter more and if this perception increases among the public, then it would be more of a threat to the ECR than attempts to marginalise them. After all, the ECR are already having difficulties maintaining coherence, and it's only their first day!

It's also bad politics for ALDE. Ruling out coalitions on an issue-by-issue basis ties the hands of the EPP, since the only other option it has is a coalition with PASD or PASD and ALDE. This weakens ALDE's position as the EPP and PASD can do deals without ALDE's input. While it strengthens the hand of the PASD when it comes to coalition politics, in terms of electoral politics it will mean that they are not playing the oppositional role well or positioning themselves properly for the next elections.

Finally, this line of politics already goes against what ALDE and the PASD want - Barroso has used this line of reasoning before to try and brush away calls for presenting a programme for the next 5 years and to downplay the significance of the lack of a contest for his post. He said:

"I am in favour of a political Europe, but I am against partisan political confrontation in Europe. If we are a supra-national reality, we need to be supra-partisan politicians. ...I am against political parties’ artificial dramatisation... We must talk about Europe positively, because what most encourages eurosceptics in times of crisis is the pessimism of pro-Europeans."

Surely the worst thing "pro-Europeanism" could do is adopt the politics of Barroso?

PASD Strategy: Opposition or Office?

The PASD are in a tough spot. Barroso has the political backing of the Council and the EPP has linked the continuation of the shared EP Presidency deal to supporting a second Barroso term. Do the PASD bow to the EPP and Barroso to maintain some of their traditional influence, or do they continue to oppose Barroso on principle? The question has been pondered by eurosocialiste and Jon Worth.

I agree with Jon Worth's conclusions:

"If I were in the shoes of a leftist MEP I would refuse to play the game with the EPP, and aim to develop a clear and coherent opposition to the right in the EP throughout the next 5 years. That doesn’t need a socialist as the President of the EP to be achieved, and might help the left determine what it stands for before the 2014 elections. I somehow suspect that won’t be the way many MEPs in the PASD will see it."

The PASD need to act like an opposition. I don't mean they should oppose for opposition's sake, and they have acted in the last parliament to oppose or change legislation their way, so it's not a massive change. Still, if you want to win an election or win power, then there must be a risk of loosing, otherwise there's not much motivation to go out and to try and win support or for supporters to vote for you. There is no sense of change if the results of an election do not change the party colour of the EP Presidency or how politics is conducted in the chamber, it's harder to demonstrate how people's votes count.

Barroso will likely be elected, in the teeth of opposition from the PASD and the Greens, but it would be better for the PASD to make sure that it is in the teeth of their opposition. The PASD need to establish why they are different and what values and policies they stand for - and show that they are willing to stand up for them. Demanding a programme for government, standing up for parliament, opposing Barroso are all good things, but if the PASD caves to the EPP, then they tarnish their record for the next election.

It could be argued that record doesn't matter for the European elections - and it would be a very strong argument: European issues weren't prominent in the campaign. However, it would be wrong to rule it out as a strategy. Eurosceptics and the Greens did do quite well in the elections; both ideologies were able to give some clear link to Europe, and with parties that did campaign on European issues. It would be a mistake to think that voters don't expect some form of European campaign. At the same time, the hope that voters would vote against their national governments simply didn't work out. In the next election, the PASD might also be in a better position to try and run a candidate for the Commission Presidency - Barroso won't be able to serve a third term, so there's no incumbent to support, and the UK's Labour party is likely to be out of power and may have little objection to running a candidate - and if Lisbon is passed, then the Parliament's (and Parties') hand will be stronger.

So the PASD should be more confrontational - to show that parliament is somewhere where politics happens, and that the PASD have a vision of where the EU should be going. They should push for a greater input for Parliament and greater scrutiny of the Commission and Council, and push for expenses reform and greater transparency - be able to prove just how progressive the PASD is (or can be), and be able to show that the PASD is trying to remedy what critics have highlighted, and present themselves as a party worth voting for. They should also try to get more media attention - a big ask, since the media care little for European politics, and especially EP politics. But they could try starting off by informing the media of their position if they are interested in a significant piece of legislation, or by informing them of important votes coming up.

If the PASD do aim for a more European campaign in 2014, then they should push for electoral reform. A single electoral system in itself would boost the European dimension to the election just before it, and if the system allows for voting for individual candidates and/or pan-European lists, then it will add an incentive to campaign on European issues.

Also, the PASD need a brand relevant to Europe, and they will have a tougher struggle to achieve this than Eurosceptics and the Greens. Whereas Green issues are seen as partly European issues, and Euroscepticism is obviously linked to Europe, the EU is generally seen by left-leaning voters as neo-liberal, or purely concerned with free market-ism. If the PASD is able to associate itself or its parties with even a few policy goals at European level (e.g. worker's rights), then it would be easier to demonstrate that voting for them has a purpose. Changing the group name from the simple "Party of European Socialists" to the PASD was a bad move in this regard - alliances appear weaker in purpose and direction than parties, and it's unnecessarily long and explanatory.

Now that Barroso is almost certain to win a second term (failing some ruthless Council politicking), the Liberals are likely to align with the EPP in order to win influence and to try and win a stint at the head of the EP (could Graham Watson end up winning via the same "smoke-filled room deals" he was trying to rid the Presidency contest of?). The PASD must not fall into this trap. The Liberals are the third party, and it makes more sense for them to try and win concessions and influence via deals, but the PASD is the main opposition, and should be playing for - and seen to be playing for - bigger stakes.