UK Labour and the EU

In Britain, Labour is in a curious spot. After it allied with Eurosceptic Tory rebels to defeat the government on a non-binding motion on the EU budget, Labour Leader Ed Miliband tried to outline a sort of pro-European realism (interview with The Telegraph here), which has managed to convince neither the Eurosceptic Telegraph or pro-European Jon Worth. Jon Worth argues:

"Would Labour dare say it has a “hard-headed” approach to schools or hospitals? No it would not, because being seen to be harsh on such issues is at odds with the values of the party, the values that we are all better off if we work together to achieve collective goals.

Labour’s rhetoric should be that to achieve what we need to achieve in the UK, we also need the European Union. An unrestrained free market, with Britain outside the EU, would mean less social protection, more of a race to the bottom on tax, harsher conditions for workers. The social systems of countries across the European Union should be an inspiration for the UK. Labour has made noises saying the German social model is to be admired; the means to achieve it is at EU level."

Leaving aside the tactical issues with Labour trying to present itself as an option for those who want to be tough on the EU (see Jon's post for more), the central issue for Labour when it comes to the EU is that it finds it almost impossible to articulate a centre-left vision on Europe. Occasionally there are noises on the left that leaving the EU would lead to a more deregulated (and unequal) Britain, with less economic and political clout. But such a basic idea is hard to express, since the major narrative in Britain on the EU is of the internal market as an indisputably good, but fundamentally technical, arrangement that has been cluttered up by the EU "extras" of social, environmental and home affairs policy. (I have previously argued that as the trade-off for opening up and giving up national controls, Member States projected parts of their social contract [parental leave, etc] on to the European level to balance the socially negative parts of market liberalisation out, as a kind of quasi-European Social Contract).

Labour, while realising that the internal market is political when it comes to employment rights and the social impact of competition across Member States, mainly accepts this narrative - at least in general - and only occasionally defends established benefits won at the European level. This basically means that Labour agrees that the EU is just an intergovernmental deal-making machine, but the UK happens to come out of the cost-benefit analysis a bit better than the right thinks. This argument isn't a credible position because it doesn't deal with Euroscepticism either in general or on the left - that the EU goes too far in the technocratic imposition of free-market policy - and it says nothing of the issues of democratic deficit or even suggest a vision for the reform.

Also, the idea that the EU's credibility problem could be solved with a few reforms - and vague and undefined reforms at that, because apparently just demonstrating the ability of the UK win any reform will prove the EU's credibility - is a patently tokenistic approach. It focuses too much on bringing trophies back from EU summits: a short-term and shallow way of conducting politics that will not make a convincing EU policy.

So what should Labour do? It may seem academic at first, but Labour needs to look at it's values, and build up from there. It needs to say why, from a centre-left perspective, (a) a European level of governance is a good thing to be a part of, and (b) what participating in that means in terms of reforming the EU, and what Labour stands for in the EU.


A Social Democratic/Labour vision for Europe

I've already written about the failings of the intergovernmental argument for the EU - the basic peace argument and a simple cost-benefit analysis of membership doesn't answer the pressing questions of representation and participation. Earlier this month, the Guardian/Observer outlined a harsh anti-vision to parallel that of the Eurosceptic press in Britain: that withdrawal will mean less economic sovereignty and more deregulation - essentially that the UK will have less power to steer itself through the global economy. A more positive vision from the centre-left would be to articulate a vision where participation in the EU enhances not just the UK's position as a Member State, but allows the people to participate in economic decision-making to a greater degree than if the UK wasn't a member. Implicit in the concern on the left that withdrawal will lead to deregulation and rising inequality is that the EU, by building the richest market in the world, gives the UK a share in the economic power needed to maintain its social contract.

When it comes to the internal market, it should not just be accepted that the internal market is a good technocratic arrangement - the left doesn't think that the market at home is an unalloyed good or that it's unpolitical, so why should it be accepted on the European level? The idea of the internal market not just being about free markets, but fair markets would reconnect Labour's Europe policy with its values, and give it something to stand for during the European elections. At the moment, Labour can hardly be said to be giving people a choice at elections, or thinking much about why it wants seats in the European Parliament at all. What connection does budget cuts on a European level have with Labour's domestic mantra that more investment in the economy is needed? What connection does Labour's rejection of a European Financial Transaction Tax have with its position on the financial sector? What's Labour's position in the Socialists and Democrats Group in the EP compared to the Tories' ECR on the internal market?

This also speaks to the type of reforms that would matter at the EU. Trophies won at EU summits have a short political shelf-life and exclude people from power, rather than opening up the EU to democratic participation. It may be argued that being part of the EU gives the UK more influence, but what use is that to people if the power is wielded more by diplomats than democrats? The national interest does not define everyone, and people should be able to participate in the opportunities that pro-Europeans argue being a member opens up for the Member States. Reconnecting Europe policy with centre-left values would link up questions of economic regulation, social justice and democratic representation and participation in a way that lends itself more to a credible and coherent vision.


Labour and the EU

Of course, my opinions on the left and Europe are far from representative of the UK Labour party, so you couldn't just turn Labour around into advocating that the EU becomes more democratic and less intergovernmental. But looking again at Labour's values when it comes to market regulation and social justice should be the starting point when formulating its position on the EU. It needs to ask itself if it thinks that being part of the EU means that the UK is more able to construct the kind of social and economic future that Labour would be in favour of,* and what kind of future does Labour want to articulate.

This doesn't mean that Labour politicians should ramble on about Labour values and the EU any time it comes up - this is more about knowing where you're coming from so you can be credible in where you're going. For example, when employment rights and the EU comes up, Labour could talk about being for the internal market, but that it needs to be fair (e.g. protect parental leave across the EU so a minimum standard cannot be undercut), and that the rights of all workers should be protected. Labour could also say how they want the internal market to be more effective or fairer, and contrast its position with the Conservatives and Liberal Democrats. (Having examples of what Labour is doing in the European Parliament would be a help too).

Being able to say what you're for and what you want to change is, obviously, an essential part of being a political party. If Labour can't say what it's for based on its claimed values, then it shouldn't draw attention to its lack of ideas on Europe.

*The right could do just as well politically in the EU, however.


Postscript: UK Europhiles

Jon Worth also made a good argument about the bad position of UK Europhiles, though I disagreed with him on having a "let a thousand flowers bloom" approach to winning referendums:

"I don’t think the “letting a thousand flowers bloom” model is a viable one for a pro-[anything] side in a referendum. A strong case – and persuasive narrative – needs to be built around the rationale for the EU, single market, etc., if it’s to win support. Pick and mix when challenging the status quo (which is the UK’s mindset towards the EU no matter how established the EU institutions may be) will not work. Personally the lesson I’ve learnt from referendums in Ireland is that political parties are simply not designed to fight them properly, and that civil society groups win referendums."

While I stick to that, if Labour, and other pro-Europeans on the right and centre, articulated their own narratives for why EU membership is good, that would strengthen the pro-European position. It would supplement the core argument by giving people of different political backgrounds a path to buy in to the core argument. However, for a referendum, the core argument of a campaign for something would need to be pretty coherent for it to win.

A few questions for Relaunching Europe

The S&D Group have set up their Relaunching Europe initiative, asking for opinions and questions about Europe and their policies, so I thought I'd ask a few questions.

1. It's a good idea for Europarties and the groups in the European Parliament to reach out to citizens and include them in the European debate. Will there be many Relaunching Europe events outside of Brussels?

2. How should tax evasion and avoidance be tackled at the European level? Barroso mentioned saving tax agreements in his State of the Union speech: are these effective and would the S&D Group propose any other measures?

3. If there was a Social Compact inserted into the EU Treaties, what would it do? Would it oblige Member States to maintain a certain level of social protection or would it create an EU support mechanism for social protection?

4. You argue that Troikas undermine democracy, so it seems that the current rules for the Eurozone are unjust. If the S&D and PES win the next election, will you push for repealing or reforming the 6-Pack (and 2-Pack if it's passed) of legislation and propose changes if you win the next election (as your candidate would become Commission President)?

5. Hannes Swoboda has mentioned the creation of a class of working poor in Germany. Would the S&D push for a European Minimum Wage (or a band of minimum wages to take into account the different economies)? (Or what other measures would you propose?).

6. It's great that the PES has committed itself to proposing a candidate for the Commission Presidency at the next election. Do you think the Commission should reflect the European Parliament better - ie. reflect the make up of any coalition or majority after the European elections?

7. There seem to be problems with finding projects for the regional funds to fund in crisis-hit Member States. Should the regional funds be reformed to also support national social spending in crisis situations to help the country reform?

8. Hannes Swoboda also said that we need an adequate EU budget to promote growth. How much should the EU budget be increased by, and what should the money be spent on?

Relaunching Europe

The Socialists and Democrats Group in the European Parliament have launched their Relaunching Europe website. The initiative is about creating an alternative to the current policies and direction of Europe, and it invites people to submits ideas and questions. Hannes Swoboda, the leader of the S&D group, was in Hamburg recently for a talk that produced this video for the launch of the site:





There will be a debate in Brussels for people to debate the direction of Europe on the 3rd of October, but hopefully there will be events outside of Brussels to increase accessability.


S&D Ideas

It's a listening and communication exercise - which suggests that there won't be many new announcments at the PES Congress this month - but the group is outlining some ideas on the website that add a bit more detail to Swoboda's idea of a Social Compact that he called for during the State of the Union speech last week. Here's a list of some of the ideas:

• The current Troikas should be expanded to include advise from the International Labour Organisation and similar organisations so that expertise and concern for employment and growth is reflected in policy.
•  They demand a commitment on social cohesion in the Van Rompuy report and a pact for social cohesion within the treaties.
• The financial markets must be better regulated and the rating agencies must do their job in a more transparent manner. We have to control high-frequency trading.
• We have to ensure that tax evasion and avoidance are tackled.
• We need stronger private and public investment to create employment. But Europe is seeing a reduction in public investment, as opposed to the policies in the US and Japan. And there is money for investment. Tax evasion costs €1 trillion a year in Europe. Just one quarter of this money could boost public investment by 40%.
• We need a financial transaction tax.
• Europe must launch an efficient union for banking supervision that reaches beyond the eurozone, accompanied by comprehensive banking reform across Europe.
• We need an adequate European budget that stimulates growth.

These ideas need to be further fleshed out: what would a Social Compact contain? The idea of a Social Compact to balance out the Fiscal one is a nice idea, but I'm not sure what it would mean in practice: should Member States commit to a certain level of social protection (and how would this fit in with the Fiscal Compact - would European solidarity bridge some social spending gaps while there's fiscal reforms, or would it just moderate the timescale and austerity of the current Troika system)? More details on the better regulation of banks and financial markets would be welcome: what changes to the recent legislation are necessary?

There are also some more broader views and principles:

"We must not only solve the economic and social crises but also the democratic one. In several countries, notably Germany, parliamentary participation and national sovereignty are at the heart of the debate. But what is overlooked is that it is not the EU that threatens sovereignty, but the financial markets and the rating agencies which dictate interest rates and spreads.

 

But we are also seeing increasing de-democratisation. The European Council is increasingly taking more and more decisions, including on the EU budget. But who are the Council and the President of the Council accountable to? Neither the national parliaments nor the European Parliament. The Troikas too act in a democratic vacuum with no accountability.

 

[...]

 

[T]his means strengthening parliamentary participation and the European Parliament and the national parliaments must co-operate closely.

 

[...]

 

 Referendums can strengthen democracy in Europe if they are held at European, not just national level. We must have the courage to speak out clearly against growing nationalism. We have to organise referendums in a way that does not allow the outcomes in individual countries to dominate the others and undermine the European project."

 

I like the connection with the working poor in Germany; the S&D Group (and PES) need to have a broad message of social justice and how it can be delivered through the EU for all citizens, rather than  a simplistci dicotomy of strong versus weak Member States. The commitment to better parliamentary democracy and cooperation and to European referendums is very interesting, but really should be fleashed out.

How far are these ideas just Swoboda's and not those of the group or the PES Europarty? It all depends on if the PES come up with a good manifesto with clear policy commitments come the 2014 election - that will be the real test. But Swoboda took pains to refer to the agreement in his group for these ideas during the State of the Union speech. What difference this initiative will make depends on what use people make by contributing and what use the S&D make of them.

They invite people to ask questions on Facebook or via Twitter.

Amartya Sen: Democracy, Austerity and Social Justice in Europe

I came across this interesting article by Amartya Sen via the CELS: "What happened to Europe?" It's a very broad article, but covers the connection between politics (and democracy) and austerity, social justice and European integration. An extract:

"That austerity is a counterproductive economic policy in a situation of economic recession can be seen, rightly, as a “Keynesian critique.” Keynes did argue—and persuasively—that to cut public expenditure when an economy has unused productive capacity as well as unemployment owing to a deficiency of effective demand would tend to have the effect of slowing down the economy further and increasing—rather than decreasing—unemployment. Keynes certainly deserves much credit for making that rather basic point clear even to policymakers, irrespective of their politics, and he also provided what I would call a sketch of a theory of explaining how all this can be nicely captured within a general understanding of economic interdependences between different activities (emphasizing in particular the fact that someone’s expenditure is another person’s income). I am certainly supportive of this Keynesian argument, and also of Paul Krugman’s efforts in cogently developing and propagating this important perspective, and in questioning the policy of massive austerity in Europe. 

But I would also argue that the unsuitability of the policy of austerity is only partly due to Keynesian reasons. Where we have to go well beyond Keynes is in asking what public expenditure is for—other than for just strengthening effective demand, no matter what its content. As it happens, European resistance to savage cuts in public services and to indiscriminate austerity is not based only, or primarily, on Keynesian reasoning. The resistance is based also on a constructive point about the importance of public services—a perspective that is of great economic as well as political interest in Europe.

THERE IS A CENTRAL ISSUE of social justice involved here—that of reducing rather than enhancing injustice. The public services are valued for what they actually provide to people, especially to vulnerable people, and this is something for which Europe had fought. Savage cuts in these services undermine what had emerged as a social commitment in Europe at the end of World War II, which led to the birth of the welfare state and the national health services in a period of rapid social change in the continent, setting a great example of public responsibility from which the rest of the world—from East Asia to Latin America—would learn.

In order to understand the inadequacy of Keynes as a guide to solving the European economic crisis, we have to ask: what kind of an economist was Keynes in terms of his vision of a good society? Keynes did say—famously, and accurately enough—that paying laborers to dig holes and then to fill them up can be a very good thing, because of its impact on increasing effective demand to combat a recession or a depression. This is fine as far as it goes, but Keynes had extremely little to say on what social commitments a state should have—what public expenditure should be for, other than for just strengthening market demand through state intervention."

 And:

"[...]

If we add to this economic argument the long-term concern in Europe about some form of social justice and the more immediate political worry about the undermining of the European sense of solidarity, we can see what a disaster the recent European financial policies have been. The case for resisting the savage cuts in public services can hardly be ignored. This is not because the commitment to social justice must always be paramount, but surely it must be a serious concern that cannot simply be discarded by bankers and financial leaders. There is, of course, always a need for rational scrutiny and examination of what a country can afford and what it cannot—taking into account all the relevant factors, including the changing age distribution of the population. But this is not the same question as checking what a country can afford with inefficient economic and financial management, with fuzzy thinking on exchange rates and market demands and economic competitiveness."

The first two pages are a bit of European integration history, and the substantive argument really gets going from page 3 onwards.

"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.