Return of the Currency Commissioner?

The Commission has just launched a blueprint for Economic and Monetary Union (PDF). I haven't had time to read it yet, but from the EUObserver article, it looks like the idea of a Currency Commissioner has returned:

"This time frame would also see "further budgetary coordination (including the possibility to require amendments to national budgets or to veto them)," says the paper.

[...]

Other steps to consider would be giving "clear competence for the EU level to harmonise national budgetary laws and to have recourse to the Court of Justice in case of non-compliance." Final steps to full economic and monetary union would only be taken in the "longer term" and would require "major treaty reform" suggests the paper.

This would likely include a possibly large central budget with stabilisers – meaning money would be transferred to member states in trouble.

“As a final destination it would involve a political union with a central budget as its own fiscal capacity and a means of imposing budgetary and economic decisions on its members.”"

Back in October Germany's Finance Minister, Schaeuble came up with the idea of a currency commissioner that would be able to veto national budgets. It was wrong then, and it's wrong now - federalism does not mean this sort of centralisation. As I wrote last month:

"You cannot "depoliticise" the fundamental matter of national budgets, because you cannot pretend that budgets and economic issues are simply matters of technical wizardry, with expert options being implemented for desired outcomes - desired outcomes are political matters, and deserve a meaningful airing in a publically accountable body: the national parliament. While there is an argument for certain budgetary contraints on Eurozone Member States to ensure the functioning of the common currency - in exchange for solidarity between Member States, it should be stressed - at the end of the day Member States should be able to set their own budgets.

Rather than trying to come up with tighter and more rigid and better enforced rules for the Eurozone, we should be working to divorce banks from the sovereigns to make banking a European matter within the Eurozone, and creating a system where Member States can go bankrupt, without endangering the system and with some support for recovery after bankruptcy. A flexible and politically accountable system would work much better than Schaeuble's approach - there needs to be political accountability for national budgets at the national level, and at the European level for those elements of European solidarity."

This idea should be killed off, and killed off quickly.

Blairite Europe

Yesterday former British PM Tony Blair made his big speech on Britain and the EU at the Business for New Europe event. You can read the speech in full here. So after writing at length about Labour and the EU on Monday, is there anything in the Blairite vision of the EU?


Eurocrisis

On the Eurocrisis, I partly agree with him.

"...the flagship policy of Europe is listing dangerously. As I have said before, to save it, I believe, requires a kind of ‘Grand Bargain’ approach rather than incremental steps, in which Germany agrees, effectively, to some form of mutualisation of debt; the debtor countries carry out profound structural reform; and the ECB stands fully behind the bargain. There are some signs this may happen. But even if it does, Europe will suffer for some time to come."

There have been calls for some form of debt mutualisation for a while now (and some Parliamentary amendments pushing for it), and it's hard to see how the current bailouts - which in Greece's case have led to the country's debt ballooning to 190% GDP rather than falling - actually help solve the fundamental problems of the Eurozone rather than  helping the balance sheets of creditors.


Narrative

Blair pushed for a change in the narrative away from peace towards power:

"...the truth is the rationale for Europe today is stronger not weaker than it was back 66 years ago when the project began. But it is different. Then the rationale was peace. Today it is power. Then it was about a continent ravaged by war in which Germany had been the aggressor and Britain the victor. Today it is about a world in which global geo-politics is undergoing its biggest change for centuries. Power is shifting West to East. China has emerged, with its economy opening up, one which will grow eventually to be the world’s largest. Its population is three times that of the whole of the EU. India has over a billion people. Brazil is two times the size of the largest European country, Indonesia three times and there are a host of countries including Russia, Turkey, Mexico, Vietnam, the Philippines and Egypt larger today than any single EU nation.

What is more, as technology and capital become globally mobile, in time there will be a re-alignment of GDP and population i.e. the larger your population, the bigger your economy. The USA remains extraordinarily strong, its military easily the largest and best equipped but the time when it has been the world’s only superpower, is passing."

The speech was clearly intended as an argument for Britain's membership of the EU, and as an attack on Euroscepticism in the UK, so the speech doesn't offer much in terms of the direction that Britain should go within the EU. He restated the case for membership based on economic advantage and global power. In a sense I agree - on Monday I was arguing that collective European decision-making should give the people and the Member States more opportunity to decide their economic and social future - but Blair's vision is almost completely dominated by the terms of international power relations.

It's a vision with some truth to it, but little appeal. Most Britons aren't as concerned with Britain's global position as Blair is - indeed, Blair's premiership isn't exactly an encouragement for British global involvement. The message, without much on sharing the economic and social power democratically among citizens, and the messenger, who comes across as being more concerned with the power of great office-holders than anything else, does not make a convincing narrative and is not really one that the left should or could adopt.


Euroscepticism

If it doesn't quite live up to being a bankable European narrative, it is good to have a public figure talk publicly about the advantages of EU membership, although many pro-Europeans on the left, myself included, will not enthusiastically welcome a Blairite vision of Europe. When it comes to the EU, there needs to be a place for political families of the right, left and centre. The pro-European voices from these families will inevitably conflict, but the Eurosceptic voices from the same families will have their own arguments and will need to be engaged with on their own terms. Yesterday Blair couched his argument in terms of the national interest, and the basic pro-European argument may need to be made there, but it's limited in providing a narrative that goes beyond the balance sheet approach.


Tony Blair for president?

There's been some speculation about whether Blair still wants to get a position in the EU, and he launched a Twitter account yesterday dedicated to his views and work on Europe. (There was also an unconnected website (mockingly) advocating him for the European Council presidency). I wasn't a fan of the idea the first time 'round...

Financial Transaction Tax and Multispeed Europe

The UK government's stated opposition to the FTT was hardly unexpected. With the City of London acting as the financial heart of the EU, and a sacred (cash) cow for the UK government in terms of tax receipts, the UK was always going to be resistant to the idea. Barroso, in his State of the Union speech, seemed to recognise this and generally supported a two-speed (or multi-speed) EU.

When the national interest is invoked as a reason for a policy position, it shuts down debate. However, while national interest is part of it, since the UK government supports the idea of FTT in principle, provided it is applied globally, there has been a bit more debate on the idea. I have to admit that I don't fully understand the mechanics of how the tax would puch financial businesses outside the EU and outside the UK: my understanding is that the proposed tax would be applied to transactions where one side of the transaction was in the EU - so even if the financial businesses and banks moved outside the EU, they would have to pay the tax if they wanted to do business in the EU. It would only make sense to move if the business did most or all of its business outside the EU. However there are good points on the fact that a large proportion of the tax would be collected from the City of London, and this would be unfair if the Eurozone mainly benefited. If the income was used to build a safety net for the banking and financial system across the EU (to reduce the burden on taxpayers in the real economy), than that would probably be fairer.

While the Labour party in the UK will probably support the government's resistance, it would be interesting if they decided to support an EU FTT in some form - after all, their leader Ed Miliband has referred to businesses which were "bad" for the economy: would the FTT not make sense in rebalancing these ethical issues by making the financial industry pay a bit more tax to insure against the danger of being (ultimately) underwritten by the taxpayer? The BBC's Robert Peston has an interesting take on the FTT here.

In any case Member States have a veto on the matter, so the UK can block it. But the implications for the EU of a Eurozone FTT haven't received much attention. We already have a multi-speed EU, with some countries in or out of the Euro, the Schengen Zone, the EEA but not EU Members, etc, but these have been in different areas of integration. If you start to adopt different speeds to the internal market in a way that affects the four freedoms, then it could cause some political headaches. It would raise the EU's West Lothian Question. Why should MEPs from the slower countries have votes in areas where their countries aren't affected? Already the British Commissioner couldn't (politically) be the Commissioner for monetary policy since the UK is not a Eurozone member. The more the Eurozone countries pull ahead, the less influence those outside Euroland will have.

"But we signed up to a free trade area!"

More and more I see the argument that the EU should be turned into a free trade area, and I thought I should try to create a short reply.


"But we signed up to a free trade area!"

This is also argued with "common market", with it clear that a free trade area (like NAFTA, for example) is meant. But there's a big difference between a free trade area and a common market (a.k.a "single/internal market").

A free trade area simply reduces tariffs and import quotas between countries - this was the aim of the European Free Trade Area,* which the UK helped found in opposition to the EEC, and then left to join the EEC. FTAs don't cover the free movement of goods, people and services that a common market consists of.

The issue with free trade areas that they only reduce tariffs between members, so members can have different tariffs with third countries. This means that some goods might try to get into the free trade area via FTA country A (which has lower external tariffs) before moving on to country B (which has high external tariffs). This lack of control means that some countries prefer a customs union, which is like a FTA but with common external tariffs.

A common market is much more than a FTA because it not only deals with tariffs and import quotas, but also deals with the free movement of goods, services, establishment (freedom to set up businesses throughout the common market), capital and people. This requires some restrictions on the law-making of member states (they can't legislate for import quotas, discriminate against goods from outside the country with different tax rates, etc.), and requires common law making so goods, etc., can move freely without being blocked by different technical standards. This common law making and standards means that there would need to be a common court and law-making institutions in any case. That's why the EU needs to have institutions, but NAFTA doesn't.

Leaving a common market means that a country and its citizens would loose free movement rights. While it's true that there will still be trade between the EU and ex-members (the EU has FTA agreements with Chile, Mexico, South Africa, etc., so I don't see why an ex-member wouldn't get one as well), without common laws, the ex-member would move away from the common standards of the common market, and more and more non-tariff barriers would block trade. Citizens of the ex-member country would also loose their free movement rights.

Having a common market also means that there needs to be a common trade policy with third countries, and the free movement of persons creates pressure for there to beco-operation and common rules on cross-border crime, but foreign affairs and justice and home affairs are other debates.

Since the EEC was aimed at creating an common market, joining countries never signed up for a free trade area.



*Confusingly, the EFTA is now a single market because its member countries are linked up to the EU's single market via the European Economic Area (or via 120 bilateral agreements in the case of Switzerland).

The Gloom of having no Good Options

The Greek government has survived the vote of confidence, and now its next test is passing more austerity measures. Austerity has little - if any - support among the Greek electorate simply because it hasn't delivered the goods yet. It seems obvious that Greece will default at some point, but would it be better to do it sooner rather than later?

There doesn't seem to be any good solution here.

Greece cannot pay its debts, but the default and decouple option, as advocated by Daniel Hannan, among others, would be disasterous for Greece and for the EU. Defaulting would unleash a tidalwave of debt back into the European banking system and European taxpayers in the Eurozone would take a big hit at the same time that their governments (particularly in Germany, France and the UK) would be forced to decide whether or not to bail out their bad-Greek-debt-holding banks. For Greece, it would be locked out of the international financal markets (as it is now), and without an alternate line of credit. Since it takes in less in taxes than it needs to finance its expenditure, the resulting austerity could be much, much worse. Leaving the Euro at such a time could lead to extremely high inflation.

Just leaving the Eurozone (and not defaulting) is unlikely to help either, as the devalued New Drachma would make it harder for Greece to pay off its debts, most of which are in Euros.

Continuing austerity doesn't seem to be working either. Greece needs time to restructure and reform its economy, but the time-frame is extremely short for the task that faces the country, and the refrain of "tough love" from Northern Europe is not endearing for the Greek public, to say the least.

Further integration is the call of others, and interestingly also of the IMF, urging the Eurozone to integrate economically and politically. However, these calls still seem vague to me on detail, and I'm not sure how much they are aimed at solving the current crisis rather than on preventing it from happening again (or both). The blue-and-red bonds (where there are some Eurobonds and some national bonds) or the Eurobonds idea is attractive, and could ease some of Greece's problems, but it could also raise some others. Regardless, there is little political will for more integration, and as no attempt by any Eurozone government to really make the case for further integration, it doesn't look like that will change soon.

At the moment the best option seems to be to accept the bad austerity and bail-out deal and forge ahead with reforms in Greece with at least the thin cushion of EU/IMF loans rather than no loans at all and hope that either (a) the EU gets its act together; or (b) the painful austerity will help Greece just enough so that it can partially default in a more managed way in a year or two when the prospects are better for it and the EU. Neither option is an inspiring or very sellable one.

The protests in Greece will continue, but I wonder what the historical legacy would be if they won and Greece defaulted unilaterally - both for internally and in Europe?

Back from RIO

It's been pretty quiet on the blog recently because life has been very busy lately. Apart from exams, papers, and general work, I've just been on a RIO Trip. Unfortuneately it isn't as glamourous as it sounds, as RIO stands for "Recht der internationale organisaties", which is Dutch for "Law of the international institutions".

The trip consisted of visiting a lot of European organisations in Strasbourg, Luxembourg and Brussels, and entailed an exhausting amount of presentations and travelling, and, as was pointed out, an unknown number of bars. The EU and the Council of Europe naturally featured on the list, but so did other less well known organisations and institutions within the EU and outside of the EU umbrella. The lasting impression is of a Europe that has embraced an extrodinary depth of co-operation and integration, the scale of which rarely strikes you until you've seen the many different forms of co-operation - and I'm sure we only saw a quick overview. The commitment of the people involved in these institutions is also impressive: again and again, we met people who were genuinely enthusiastic about their subject area, whether it was the prevention of torture or the regulation and safety of the skies.

The positions of the other, non-EU, organisations was interesting as well. In a continent full of international co-operation, the EU looms large as the Europe, and the other organisations are adjusting their roles in the face of the EU's success. From conflicted self-assertion and resignation (Council of Europe), to a vision of providing expert advice (Commission on Navigation of the Rhine), to that of enthusiastic service provider (EuroControl).

Notable exceptions from the trip were the Council and the EP. The Council was dropped because of the European Council summit which occured while we were in Brussels (so ironically I was close by but didn't know what exactly had happened until I got back home). The EP was dropped because, apparently, they're just bad at handling visitors and left a bad immpression on the last RIO trip - which is a shame, because the EP is, for me, the institution that communicates best online.

So to get back into the swing of blogging, I think I will cover some of the institutions and organisations and my impressions of them.

Holidays and Integration in Ireland

Over the last week there has been a bit of debate over holidays and integration in Ireland. This was started when a former Tánaiste Michael McDowell suggested that it would be a good idea to make the Twelfth (of July) an official holiday in the Republic of Ireland. The Twelfth is a loyalist holiday mainly celebrated by the Orange Order, which commemorates the defeat of an English King by the Dutch Stadtholder William of Orange (hence the Orange Order). If you're wondering why the supporters of the usurping King designates themselves "loyalist" and why the nationalist Irish are let down by the defeat of the English king, well... it's mostly about religion but has since become more about nationalism. It's best not to think about it too deeply, really.

The argument for is that it will help re-integration and that it would be a good signal to the Unionist community in Northern Ireland (and those Orange Order lodges in the Republic) that they are a welcome part of the Irish tradition and the Irish nationality. Also, the Irish flag is supposed to be a symbol of reconciliation between the "Green" and "Orange" traditions in Ireland, and support has been drawn from the secular nationalist/romantics in the Irish nationalist tradition (Wolfe Tone, etc.). Plus, it'd be another holiday!

The argument against is that the Orange Order is an essentially sectarian organisation with a history of burning effigies of the Pope, etc., and that celebrating a sectarian tradition doesn't aid re-integration. The Twelfth is marked in NI by the iconic Orange marches, and these have caused unrest since the marching routes run through Catholic/nationalist areas. Also, it seems strange to celebrate an event of monarchist history in a modern republic.

Generally people seem to be against it (see the Irish Times letters page). The marching season has been undergoing a PR re-invention in recent years with the events being portrayed as "Orangefest" and European funding going to them. However, the image within Ireland remains of a fundamentally Protestant organisation that is anti-Catholic (Catholics are not allowed to become members).

It is very hard for me to imagine the Twelfth being an inclusive holiday, and the goals and nature of the Orange Order mean that it's difficult to find a place for it in a modern secular(ising?) republic. There could be a place for it in the future if it's "modernisation" attempts achieve some success, but I don't think it's anywhere near "detoxified" enough to be an inclusive holiday - and the re-invention of the holiday can only come from within the Orange community; attempts to change it some outside (especially by the Irish state) are unlikely to work. But attempts of cultural integration and tolerance definitely need to be explored and promoted.

Another aspect of integration that wasn't explored during the debate is the great changes in Irish society over the last decade. Ireland is, despite the recession, much more open and European than ever before, and these trends are likely to continue, regardless of the pace of institutional European integration. There has been lots of immigration from Eastern Europe, and from elsewhere, and integration has been celebrated to some degree during the last St. Patrick's Day parade(s). But we do have a Europe Day that we're not making use of; one that would be perfect to celebrate the cultural diversity of modern Ireland, and a perfect way to have fun with festivals and promote connections between communities. It's strange that we're not making use of it.

European Theology Season opens early on Euroblogs

Is it yet another sign of climate change? Usually Eurobloggers hang on for another week or so before they start musing on identity crises and the meaning of European integration, but today 4 bloggers started to ponder the purpose and direction of European integration: Charlemagne, Jason O Mahony, Eurogoblin, and Grahnlaw.

Grahnlaw ended his post with this line (and perhaps I'm just imagining the weariness):

"There is no end in sight for blogging on the high politics of EU fundamentals."

Integration Doctrine?

No doubt some people do see European integration in somewhat doctrinal terms, but it's not something I've seen a lot of Eurobloggers do (indeed, it's noteworthy that Open Europe recently seemed to advocate greater discussion on the "Integrate or not to Integrate" question rather than focusing on policy*). Charlemagne is right to say that doctrinal thinking on integration - to see opponents as nationalists and integration as a higher goal - is wrong. But it's important to note that there are many shades of integrationalism and that being for integration is no indication of being against subsidiarity and healthy local government. For example, I don't think even the most ardent federalist would support a single European social security system (the clue's in the name "federalist" - federalists believe in political power at several levels).


Anglo-Saxon Europeans

Eurogoblin has called himself an "Anglo-Saxon European": greater democracy at a European level is good, but the Council is and should remain the most powerful institution, and member states should remain the primary form of political organisation. In a lot of ways, I agree: member states do a lot of things better than the EU, and the subsidiarity principle needs to be strengthened and given greater practical effect. However, I don't think that the Council should remain ever-mighty forever: it needs reform to be made more transparent, open and responsive to national parliaments. It is the focus on the national and intergovernmental character of the Council that gives it political licence to work in the secrecy of diplomacy and intergovernmentalism.

"Rather than creating a centralised federal super-state, my support for the EU stems from my belief that the barriers between states should be melted away. I want a genuine European single market – with goods, services, capital, labour and knowledge swimming backwards and forwards across borders. Europe is working to reduce the arbitrary power of the state over the individual, and to let citizens travel, settle or conduct business wherever they want. The EU is a tool of decentralisation – encouraging devolution of powers to regions and local administrations and helping to settle (peacefully) nationalist conflicts."

Again, here I'd like to point out that federalism emphasises power being dispersed to different levels (though I think Eurogoblin was relying on "centralised federal super-state" as a turn of phrase - it is, after all, a cliché of European politics). It's hard to see, however, how the EU could be a tool for decentralisation without interfering in the make-up of member states, which would surely entail a massive centralisation of power in the first place. Unless it was only meant to be an example of federalism to be repeated within member states.

I actually think that integration is a flawed process and not a panacea - and, perhaps ironically, this leads me to the conclusion that a more politicised EU would be better. This would entail greater political prominence of the institutions and greater political competition within them (and also greater public participation). Especially if the dismantling of barriers is to make sense. Which leads me to the next point.


A political Union or a Union that's political?

People have argued against a more political EU because they say that the EU cannot get the support to decide on redistributionist policies, so therefore the EU should restrict itself to the internal market. Now the internal market will never be complete, in the same way that national markets aren't complete: economic and business innovation mean that regulations will always be evolving. Nevertheless the internal market has made remarkable progress and it pretty integrated. Further integration and barrier-breaking would necessarily entail a degree of redistribution: of chances and opportunities in the market, etc. As the conflict over the services directive show, further market integration is not a non-political question. Should we integrate further in the free movement of services and people, there will need to be choices on what level of European protections need to be set.

The EU is a lot more "redistributionist" in its decision-making than is realised. What about CAP and the Structural Funds? Are decisions of more or less regulation not increasingly about market protection, worker protection, etc., and do these decisions not affect the incomes and lives of people? The Euro, as we have seen, redistributes risk - not only in the sense that ratings agencies treated Greece the same as Germany, but the whole European economy is integrated: after all, Greek debt is owned by French and German banks.

Integration has brought economic development and growth, as well as greater freedom for citizens across the continent. But simply liberalising everything doesn't help everyone equally: there are losers in this process. Let's flip the question of greater democracy in the EU on its head: instead of "can a democratic EU retain the support of the people?" let's ask, "can an EU focused on a closed-off Council make these decisions and retain public support - or would a more democratic EU be better placed to make these decisions?"

I believe in further integration and democracy because I believe that not everyone benefits, even though integration and the internal market are necessary for our economy(ies). An integrated market provides the best guarantee for prosperity, but we need the scope for greater political involvement to decide how we run it, and to decide how we can make it work better for those who have lost out. This requires greater political integration; more pan-European elections that offer a choice in competing policies. This also necessarily means that the EU level will become more prominent versus the national egos in the Council, but the member states will remain in control of most of the areas that affect citizens lives. Put simply, we need greater integration and participation in the areas we are already "integrated" in, and more political control, because integration isn't perfect, and we all need to be involved in making sure it works for us.



*I disagree completely. The more the Euroblogosphere examines the policy questions, the more mature it is and the greater impact it can have, rather than just being an online club for discussions on integration theories. Discussing integration is good and necessary, but we shouldn't withdraw into a theoretical bubble.

UPDATE: Grahnlaw has written another article on the subject.

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.

The Turkish Question, and Which Europe?

The EU and Turkey. Will they? Won't they? Could they just move in together for a few months and see how it goes?

The US has certainly given its blessing to the Union, though this has upset those who see parental blessing as outmoded and interfering.

Apart from the issues concerning Turkey itself (of which there are many [see further down]), the EU's "Turkish Question" is mostly about the EU itself, and how it sees itself (though everything seems to boil down to that in Europe nowadays). So here are 2 incomplete models (they overlap a lot, and they're also unsatisfactory in themselves anyway): Europe the geographical and Europe the cultural.

1. Europe the geographical:

Despite the fact that Europe is not really a continent in the geographic sense (it is a continent largely through a historical-cultural consciousness/tradition), there are geographically themed arguments for the limitation of Europe.

The EU should be limited to the European continent (and a limited version of that), since most of its benefits only make sense in that context: peace between European nations, strong and strengthening trade links with neighbours, plus cultural factors are heavily influenced by geography: history and common values can only spread so far and bind so many. By expanding the EU beyond Europe's "natural frontiers" (an idea heavily layered in political and cultural thought in itself), these common ties weaken - not just between older members and the newer, far-flung members, but between all members.

The common ties linked so heavily with geography cannot be so easily exported, especially since the EU model of integration leaves national identity and cultures largely intact: without a higher degree of assimilation, which would in itself detract from the European model, how could such an ever widening membership retain a common identity? Addition of new member states beyond a certain frontier is also of dubious value in pure materialistic terms: the greatest beneficiaries of integration are the core geographical countries: goods and services flow thickest between the original 6 and their neighbours due to geographical factors (though all countries benefit greatly from the single market). The further the member state is from the "core", the less the materialistic benefit to the older members. The opening of markets is a great benefit, but would geographical factors mitigate against the realisation of this potential, and render it a paper gain, whereas the costs remain real.

2. Europe the cultural:

This includes some of the ideas in the "geographical" model: a shared history and geography form the basis of common cultural ties. However, it moves beyond that to hold up some of the rationales underlying the EU (as opposed to the current form of the EU itself) as containing universalist ideals which are ripe for export to other countries, and that there can be a process of societal and value change which may result in a country sharing the same "top-level" of values: the welfare state, similar views on the relationship between the state and the individual, on the relationship between individuals and between states and peoples. This "top-level" of values and cultural modes of thinking would leave most local and national traditions and identities intact, but it would set them in a context suitable for membership of the EU without weakening the common values of the Union.

The cultural model places less store in the limiting factors of geography, and this applies to the material sphere: before the "big bang" expansion of 2004, there was no group of member states that could provide a counter-weight to the core. As the eastern European states grow more wealthy, they could form a "core" of their own - or more likely, give rise to a series of interlinking cores across the continent. Such a set-up would be more stable than the geographical model suggests, and all member states would benefit from a strong single market economy both economically, and politically in trade talks, etc. The "costs" to older member states would decline as the newer member states become more wealthy and develop equally strong trading links, and the benefits of their membership for the other members would remain and grow. The increasing power of technology as a communication tool and a trading tool also unlocks the potential of sustaining strong trade and economic links, as well as cultural links, across greater distances.

While the cultural model underplays the restrictions of geography, the restrictions of time are more acutely felt: values take longer to transmit than the acquis of the EU.


These are both terrible models - I'm leaving a lot out, and throwing in a lot of my own speculation, as well as implying a level of coherence and awareness about the models that doesn't translate into real life. But I've tried it to shed some light on what I think are a few of the arguments that underlie enlargement.

My own feelings for the moment lie somewhere in the middle, as a mix of both. Both are to some extent arguable with the models of ASEAN, Union for South American Nations, and the Africian Union. These organisations show that the universalist aspects of the EU model can be exportable - but perhaps that the limits imposed by geography, as well as political factors, mean that this will result in regional variants rather than EU expansion. (Granted, this is a crude comparison).

And Turkey...

So where does Turkey fit in in all of this? It has some territory in what is classically considered Europe, and it has many of the same values that are considered shared European values. There are also big differences on both counts: the "European territory" is small, and Turkey faces legal reform challenges, especially on Human Rights.

Of course, there are also a lot of political reasons too: letting in a big, comparitively poor country raises issues of the balance of political power within the EU institutions and the strain on the EU budget, quite apart from any politically sensitive cultural differences. My personal preference is that Turkey should become a fully-fledged EU member - apart from all of the practical arguments, I feel that we have already made a committment to Turkey's eventual membership by opening negotiations, and it would be wrong to turn our backs on Turkey now - if anything else, it will reduce the EU's leverage in the region.

As for the big question of "Kleineuropa oder Grosseuropa?", I'm a Grosseuropa-ist at the moment, though I would put off accepting any more candidates for membership until the EU is institutionally ready for them.

Republican Aspirations

Mayotte has voted to become a department of the French Fifth Republic (95.2% approval). With the level of integration required - Mayotte will have to largely give up its Islamic legal system for the secular republican one, as well as give up many local customs in order for there to be equal gender rights - it will be very interesting to see how well France can integrate them. France is, after all, not well known for social harmony at the best of times.

I suppose the promise of French government and EU funds played a part in the decision, but will there be enough to go around?

Does Europe have any Common Foreign Policy interests?

In my post on Neutrality and Europe, which was focused mainly on Ireland's policy of neutrality and its compatibility with EU membership, I hinted at what I thought was a basis of a possible section of common European foreign policy interests: the single market. On Grahnlaw's Blog (the post on Sweden's neutrality/non-alignment), in the discussion, Grahnlaw remarked on the tendency of European foreign policies to speak in more pacifist terms when discussing foreign policy, perhaps just to placate a more pacifist public. I think that Europe is probably home to some of the most pacifist populations and perhaps that translates into (truly) more cautious governments (I suppose that depends on both the country you're talking about, and who you're talking too), i.e. governments are actually affected deeply by the public consensus because they are part of that society, though the calculations would end up playing out a bit more differently when cold policy choices need to be made (and these can be between 2 evils).

These attitudes have both historical and contemporary reasons - and these are well known: WWII/history of destructive war, and the contemporary experience of successful multilateralism. However, I think that these attitudes and the policies that come with them are suited to the problems we face in our region (and perhaps even a mature reaction to these problems, though that would be very contentious to argue). While I've said that Europe has probably the most pacifist populations of any region of the world, I think that most people here fall into the multilateralist band - in other words strong diplomacy, and any use of force to be based on some form of the "just war" doctrine.

So what could be the common foreign policy problems that Europe faces? Sadly, this part isn't too radical, as much as I'd like to say something completely original here. It's mostly stability - stability of:

- Eastern Europe (defined here as countries east of the current member states)
- the non-EU former Yugoslav states
- North Africa
- the Middle East, especially Israel, Palestine and Iran
- energy security
- trade security (e.g. security of trade routes such as those passing by the Horn of Africa)

These would be issues for the member states with or without the EU, in a sense, because of geography. But the internal market means that we are a lot closer and our interests are less bound by coincidence: the free movements mean that we've a highly integrated economy which is adversely affected by stability on our frontiers. All member states are more equally exposed and exposed in more similar ways; northwestern member states are no longer quite so insulated. Failed states also mean more and less controlled immigration, more criminality, increased drug trade, etc. The impact of this on a free single market and our societies can be very damaging. The problemd with a lack of energy security can be seen by events over the last few winters in Ukraine and Russia. The Middle East Peace process is an issue for both these reasons and for moral reasons.

The solutions to these problems are mostly the ones which the European publics and the European states have been talking about for so long, albeit backed up with a more robust diplomacy and more willingness to take the initiative. A prime example is the Middle East Process, and indeed the Middle East in general. Due to our close proximity to the region, we suffer more than the US when things go wrong (though obviously we're not the ones that suffer the most) - it's hard to see why Europe isn't more assertive here; sure we have our differences, but we're all agreed on the goal. Even the US agrees with the European position. So why can't we be more robust in promoting the peace process? There needs to be tough love with both sides (a basic outline of some of my thoughts on what could be done here), and Europe has the resources to act effectively here. The US may handle Israel with kid gloves, but we don't have to, and we don't have to wait until the US catches up in foreign policy again.

The basic formulation of multilateralism, robust diplomacy and engagement tailored to each area is a winning formula, if done properly. Inherent in this is the recognition that foreign policy is, in a way, just like domestic policy: force of arms generally is a bad idea, and should only be used in extreme cases - and even in extreme cases, they only provide the breathing space needed for a proper political settlement. A good foreign policy is based on a drive for a legitimate international structure, based on balancing needs and interests encompassing economics, stability, participation and political recognition. In many ways a good foreign policy shapes and sustains a successful region in a way that mirrors that of domestic policy. Obviously there are some extreme cases which don't fall into this theoretical musing of mine: not all interests can be balanced or satisfied. However, I believe that such an approach is the best approach for the problems we currently commonly face.

While the US has been portrayed as a global policeman, I think that Europe is the one with the more policeman-like tendencies. The US is more like a superman, racing off to fix certain problems in special circumstances, while Europe works away in the manner of a policeman (though, still in a limited way and in a limit sphere): policing communities, building nations, acting as an administrator, a trader, etc, etc. The US has elements of this too in its policy, but these aspects are the core of how foreign policy is perceived here, if not consciously (or so it seems to me).

Enlarge your Horizons

The Czechs are using the impending release of a Commission report on enlargement to push the benefits of enlargement. The report will be released on Friday and is supposed to detail how enlargement has strengthened the economies of both the new and old member states.

I've mixed feelings on this. The need for EU reform is pressing now, so with more members the EU will become less and less effective. Also, the countries closest to membership, Croatia and Turkey, face opposition from within the EU and still have progress to make on meeting the conditions for membership, so it's not as straight-forward as: enlargement is good, therefore we should push on with enlargement. Romania and Bulgaria were arguably not ready for membership, and it is a lot harder to put pressure for reform on them now that they are members (that said, some older members are in need of reform too...). It would also make keeping other candidate countries to the letter of the conditions harder in the future if any current candidate got a fast-track entry. Not that that's what's being suggested.

On the other hand, it would be good to open up more markets (by increasing the EU market size) and secure free trade. I'd like to see the report to see how much enlargement has added to the EU economy and how convincing the evidence is. I could see lots of conditions attached to the free movement of people, etc for any new member states that join over the next few years, though - if so many member states did it during the 2004 enlargement, then I can't see a more open approach any time soon. Would enlargement help at all in the current crisis? The 2004 member states attracted investment to grow; such investment is very scarce now.

Still, it's good to know that the Czech deputy prime minister has his enlargement priorities right:

""In general, Croatia is a country that belongs to the community - I go there almost every summer," he added. "It has a strategic value.""