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FGV
INTERNATIONAL INTELLIGENCE UNIT
Working Paper Series 12/2019
Looking at the EU from the outside: Praise, Paradoxes and Perplexities
Renato G. Flôres Jr.♠
[ this version, November 2019, updates previous ones, the first dating from November 2017 ]
♠ Director, International Intelligence Unit (IIU) and Professor, Graduate School of Economics
(EPGE), both at FGV, Rio de Janeiro, Brazil. This text is based on an inaugural lecture at Università de Torino, delivered on October 17, 2017. I’m indebted to Professors Giovanni Finizio and Mario Telò for making the invitation come true; Giovanni, besides my host in Torino, was a stimulating counterpoint to some of my views. A huge and lively audience posed very interesting and challenging questions; a few have been left for a further paper. Several other presentations followed, the last one on November 1, 2019, at the Faculty of Law of the University of Macau, where, about eleven years ago, I’d raised a first alarm on the main argument here exposed. During the past decades, beyond having lived part of the European process, I’ve been working on and discussing it with quite many people -from friends and Europeans from all nationalities, to bureaucrats, politicians and fellow academics. There is no room to name them all: every single one taught me something about this fascinating experiment. However, the usual disclaimer applies: the whole text is of my full and sole responsibility.
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1. Introduction: a major project, a daring experiment, a historical landmark.
The XX Century will certainly stand for a time of change and blood. The European soil, for two moments shortly separated in time, was the theatre of amazingly cruel and devastating wars, the second one widely spreading out to other continents and leading to the atrocious use of nuclear weapons at its very end. In one of the great ironies of history, the century also watched the birth and evolution of a unique, daring experiment in regional integrations: the European project.
The goal of this paper is not to follow the steps of the project, nor to enter into details of its evolution in terms of institutions, scope and ambitions. There is plenty of material and numerous books on this; a subject hard to be encompassed by as many viewpoints and approaches as tried up to now.
My position is not that of an insider or of an analyst of specific features of the European system. I place myself as an outsider who grasps a broad view of the project, and then highlights things that deserve to be praised, is baffled by a few paradoxes and, somewhat unfortunately, closes a glimpse that first brought amazement and admiration, in an annoying state of perplexity.
I do not dwell much on either the economic, political or social forces that modelled and conditioned several facts and developments here mentioned. I do address them, but in a way that surely deserves deeper analysis. The project has also stimulated a vivid discussion on governance approaches to all kinds of integration -Leuffen et al. (2011) standing as one, among a myriad of modern examples of such discussion-, another area that is not tackled here.
The paper raises points -either of praise or of confusion- to invite a closer evaluation of their relevance. Accordingly, they do not exhaust all comments that can be made on the European experiment, nor even those of my concern; space limitations and the impact of the present, challenging times had an important influence on their choice.
Section 2 discusses praise, the following one paradoxes and section 4 perplexities. A set of common considerations remains and is addressed in a final section.
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2. Praise.
Never before a regional integration attempt aimed at a so close mutual interrelationship. Never the integration spirit and objectives had been so well and clearly defined: the key four freedoms of movement -for goods, services, capital and people-, despite all the problems in their implementation, set a standard for analysing any integration design, and the 1957 Treaty of Rome, far ahead of its time, stands nowadays as a pioneering text, a landmark in the area of International Relations, notably in the realm of Regional Integrations.
During most of the XX century, the trend of the integration was a success. Several initiatives can be mentioned, with disruptive effects on the till then established format of interactions inside the European continent. The Schengen space greatly contributed to make the common market and free movement of people self-evident. The Erasmus programme creates a new generation of ‘European citizens’, transforming from the very roots of society the outlook of its future leaders as well as that of the layman. And, in spite of shortcomings and haste, the introduction of the Euro was a major achievement, to match in importance any other main accomplishment of the project.
In times when politicians are so discredited, the names of the giants of the integration make one ponder whether a special breed of notables was assembled by chance or by a superior vision of the needed tasks (to come). Did the historical moment ask for them?
Jean Monnet, the incredible, shrewd and successful negotiator, whose pairing with Robert Schuman created a most efficient political engine of integration. Konrad Adenauer’s enormous patience, dedication and skill in moving the complex, frustrated, fragmented, defeated but always powerful German establishment to the centre of the project. Altiero Spinelli, Paul-Henri Spaak, the list can be greatly enlarged with plenty of right men in the right places. At the end of it, Jacques Delors, the enlightened and courageous blend of a politician cum executive who, from 1985 to 1995, made the encompassing, crucial Europe 92 effort come true, culminating with the Treaty of Maastricht -a game changer of the integration, has an assured place.
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Among other interesting themes, the Delors period brought to the fore a full awareness of the not so subtle dilemma between inter-governability1 and supranational powers, a key issue in regional integrations. Successful during Delors´s mandate, this dilemma has been surfacing again, in ill-posed guises.
Notwithstanding, all the undoubtedly deserved praise must be taken with a grain of salt, as one unfortunate mistake has been to overemphasize the accomplishments.
Somehow the European Union (EU) gradually became fascinated by its own success; somehow it started to indulge on the achievements and self-praising, disregarding the enormous number of things yet to be done: things demanded by the very ambitious goals it had originally set.
3. Paradoxes.
A blunt explanation or excuse for the paradoxes could be that they reflect the human, prone to failure side of a project led by real people. They could perhaps be taken as minor mistakes, but time comes against this interpretation. The cumulation of neglect along so many years led to rather serious problems. The existence of the precipitous Euro, without the dire needed anchors of a proper fiscal and budgetary European system; the lingering imperfect freedom of movement in services, progressively enmeshed with questions of national security and even national pride; the (too) slowly decreasing disregard to the fundamental role of the European Parliament, are among several examples of unaccomplished or poorly rendered jobs.
1 Hoffman (1966, 1982) is usually pointed out as the theoretician of the inter-governmental approach. It is
interesting to remind that he argues that the externalities of this modality are valid for the low politics areas (trade and economics) but fail for the high politics ones (foreign policy, defence and security); something that partially explains evolutions to be discussed later in the text.
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The integration push started to crash against several barriers, with no impetus or due awareness to streamline the problems that started to pop up in nearly all directions: paradoxical behaviour, or rather non-behaviour, emerged. Three main paradoxes are here outlined.
3.1. The relations with the US–Russia pair.
The EU systematically refused -for lack of a better word- to boldly face and equate these two key relationships. They are treated together because there also is an unsolved US-Russia relation and everything that happens or conditions this bilateral affair affects Europe: Russia is a major neighbour, and the US is EU’s main outside partner, ally and ‘mentor’.
From one side, it seems fair to say that the EU relied too heavily on the externalities delivered by the American hegemon -NATO standing as a conspicuous example of this- on the belief, among other things, of a technological alliance which never took place.
Contrary to many recent analysts, signals of American uneasiness with the comfortable EU attitude, shunning its defence responsibilities and placing all the burden on the US shoulders, are rather old. In January 1963, President John Kennedy, addressing the National Security Council, explicitly said ‘[the US] cannot continue to pay for the military protection of Europe while the NATO states are not paying for their fair share… We have been very generous to Europe and it is now time for us to look out for ourselves’, Kennedy (1963).
The US remain as the cradle of world innovation, while the EU lags clearly behind, living on with the conundrum of being unable to generate enough technological novelties to pay its increasing imported energy bill. There are exceptions of course, a few sectors and pools of competitive technology, but dependence prevails. European blindness can range from an illusion of total independence, to denying the crucial role -of course, together with that of the integration giants- the US played in allowing and shaping its sheer existence2.
This asymmetry in the relationship, always ambiguously recognised, coupled with the unclear relations with Russia, was a main vector for the hasty big enlargement of 1 May 2004,
2 I’ve often resorted to a metaphor from Chinese porcelain theory, by stating that the EU is the interior of a vase
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mainly to the East, a potential source of internal problems, nowadays revealing themselves. Strongly pressed and constrained by then US President George Bush Jr., it was perhaps one of the biggest blunders made by the Union.
Moreover, it enhanced the contradictions of the double, far from constructive game it had been playing with Russia, since the Fall of the Berlin Wall. ‘Betrayal’ of the agreement on a non-corresponding NATO expansion, a main condition for the German unification3, was perhaps to be expected, as it did turn out. This marked a disastrous turning point, aggravated by unfortunate, if not highly questionable, gestures from Brussels, like high EC authorities, during the late 2013/early 2014 Ukrainian crisis, publicly urging the population, particularly the youngsters, to go to the streets and depose the democratically elected president, Victor Yanukovych.
This series of paradoxical attitudes received a reality shock both with the new US presidency, started in 2017, and the changed attitude of the Kremlin, displaying a more assertive policy and -even if many times moderate- lack of trust on the European neighbour. Ways to move forward, like the idea of an EU-army, may not solve anything beyond being at present muddled in the corridors of Brussels’ intricate power-broking mechanisms.
3.2. A top-down integration process?
In spite of the auspicious and co-operative beginning, the project progressively morphed into a top-down integration process.
In the earlier times, there seemed to be no doubts that, in accordance to the Treaty of Rome, a democratic supra-national power, in the lines classically described since Montesquieu’s De l’Esprit des Lois4 would take shape. Three sets of institutions would reproduce the balance of power mechanism found in the main Western democracies.
3 During the conversations that led to the unification, the Russians wanted the ‘new Germany’ out of NATO,
something considered unacceptable by both the Europeans and the US. The solution eventually agreed by Eduard Schevardnadze, the Russian negotiator, consisted in allowing Germany in, but, as regarded enlargement of NATO to the former Warsaw Pact members, “not an inch” -in the very words of US negotiator James Baker- would take place …
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The Executive was quickly and efficiently established around the European Commission, which soon took the reins of the process, creating a formidable bureaucracy in Brussels -with more than 30.000 employees!- that anyhow delivered, with impetus, enthusiasm, technical competence and enlightened disregard to transparent political participation and scrutiny, momentum to an integration, codified in a nearly Kafkian set of directives and procedures: the bulk of the acquis communautaire.
It did have a counterpart, and most of the times a kind of ally, in a Judiciary that duly grabbed a share of power and was mostly instrumental in constraining member states and associated rebellious behaviour, broadly reinforcing the Commission’s supranational power. If at its lowest levels, the EU legal system accommodated, or at least heard, certain popular claims, it was however little to qualify the integration as a fully democratic procedure: the third power was missing.
A Legislative, designed since the early times of the European Community for Carbon and Steel -usually known by its French acronym CECA5, was duly transmigrated, via the Treaty of Rome, in the form of a European Parliament supposedly to complement and balance the recently created system. But here a history of long neglect takes place, in a paradoxical way.
From one side, the existing, strong institutions continually tried to avoid the Parliament, in a more, or less open way. From the other side, the Parliament itself lacked assertiveness, starting with a representativeness drawback, as revealed by the rather low participation rate in its elections, notably in its beginnings. Its dubious coexistence with a powerful and often overlooked lobbying super-structure additionally contributed to the negative image of its members.
Is the blame totally on the process? On the integration institutions and leaderships who systematically failed -purposefully or not- to convey to the polis, the citizens, what was at stake and the importance of their engaging in the process? Should the people be partially blamed for first completely ignoring what was taking place, then surfing on a prosperity bonanza and only later, when hard times arrived, and even so half-heartedly, awakening to their needed role?
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Some argue that, conflicts between UK Prime Minister Margareth Thatcher and EC President Jacques Delors have led the latter, despite having successfully concluded the broad Europe 92 endeavour, to implement a ‘negative integration’, eventually favouring the trade and competitiveness side of the renewed project, in detriment of the political, labour and social dimensions of the EU6, and, last and grievously, the solidarity dimension7. The well-known cliché, the democratic deficit of the integration would ironically have been nurtured and definitely become apparent at this time.
However this may stand as a paradox that needs further investigation8, its outcome is clear. The project became a top-down initiative and the majority of people have lost the understanding of how they’re actually governed. In an era when visions of democracy itself are in conflict, Crouch (2004), Wilke (2014), this means that the European project now faces tremendous difficulties to re-orient the course of its developments in a more democratic way. No assurance that this will happen is evident till now.
3.3. The illusion of being a great power (and even more).
The EU undoubtedly is a major, important power, but not a great power; not anymore, if one thinks of the tremendous influence it enjoyed from the XIX up to nearly the first half of the XX century. First of all, it has no army; a great power eventually must enforce ‘armed arguments’, otherwise it is not. The usual answer by its defenders, somewhat overstretching Nye (2004)’s insight, is that it has a considerable amount of soft power. Even if true, this has been dwindling, partially because of its internal paradoxes, of its weak and confusing foreign policy performance, da Conceição-Heldt and Meunier (2015), and, again, because of its total lack of hard power, not only military but financial as well. It is a dependent economy with shrinking clout -something dramatically evidenced in the 2008/9 financial crisis. The unavoidable emergence of Asia -a trend clearly defined since the end of the past century- together with that of multiple, though minor poles, only enhances its minor position.
6 See, ironically, the point on low and high politics and inter-governability, in footnote 1. 7 More on this point, in the next section.
8 According to Thatcher (2002), in a book she dedicated to former President Ronald Reagan, the EU had become
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And yet, the EU oftentimes behaves or speaks as if it were a great power…
I’m afraid this surprisingly naïve, unfortunate behaviour can be attributed to a state of paradoxical euphoria, triggered by the fall of the Berlin Wall and the previously mentioned blind reliance on an eternal and active US support, especially in the case of conflict. Perhaps, only this belief in a Holy Alliance-like external politics, combined with a similar internal structure of alliances, may explain the autist behaviour of the Union, at the same time it disregards the strategic role it could play, as a secondary but counter-balancing actor in many international situations, wasting opportunities to sustain what of power it still holds.
4. Perplexities.
The perplexities are linked to a broad perception of a pattern of systematically disappointing behaviour. How could such a wonderful and daring project, borne out of a true will to innovate and create a modern civilian (and highly civilised) space, open to the world, progressively close itself around its own, peculiar reality, adopting a resentful, overtly protected, reticent when not unresponsive attitude to new and unavoidable realities? Maybe the answer lies heavily on the paradoxes visible along the project, outlined in the previous section. But maybe there is more to it, as most of the issues below refer to thorny new questions, related to the internal European dynamics, some already existing before the very project.
4.1. The management of the relation with the UK (and, recently, with other members as well). To those reasonably versed in EU history, it is well-known that Robert Schuman travelled to London, during the final conversations leading to the Treaty of Rome, sure to get the British engagement in the project. Afterwards, perhaps as a kind of revenge for this initial failure, eventually ‘a French failure’, in the mind of the then powerful leader, General Charles de Gaulle,
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he himself uttered the famous refusal of the British entry, in November 1967, in a speech which remains an outstanding example of French diplomatic (tough) irony9.
The UK at last joined the Union on 1 January 1973, but always kept a kind of ‘side position’. Despite of actively participating in the Brussels bureaucracy, and fairly following its obligations as a member country towards the ever-growing acquis communautaire, examples, or rather signals of its “non-aligned position” abound.
Notable ones are the invention of the opt(ing)-out clause, at the 1991 Maastricht Treaty discussions -eventually duly adopted, and the near indifference to the Euro, being manifest that the UK would never concede the sovereignty and seniorage of the British Pound, besides not being enthusiastic about the prospects the Euro bore to the financial and clearing house operations in the City of London. The other members looked instead at the key role the UK played in European security and the benefits of counting with its remarkable diplomatic skills as a former great power -rather, one of the greatest planetary-ruling Empires in history-, overlooking the dark clouds looming in the horizon.
Faces were lost, nice rhetoric vanished and beautiful posturing crumbled with a single event: BREXIT. Until then, the EU was praised (by itself) as a kind of paradise, a model politico-socio-economic experiment enjoyed by nearly 30 happy and blessed members who dwelt on a heavenly space, coveted by many who laid outside, anxiously knocking at the door. Suddenly, one member wants to quit Paradise.
How come? Anger and revenge dominated Brussels, and though later on the expressions became more moderate, for quite a time the reaction was expressed by statements like: “the UK must dearly pay for its exit”, “BREXIT risks setting an example that may be followed by many others”, “those who dared to think of it must suffer”, and other similar pieces.
Nothing could be more perplexing: were we not in paradise, or there is and was something fishy about it? what kind of paradise was this, from where, if members want to leave, once stating
9 General de Gaulle had already said an equally famous, sounding ‘non’, before television cameras, to an earlier
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this, they must be punished in biblical fashion? The fractures and the until then vapid rhetoric became self-evident.
And, even more perplexing, the same applied/applies to the other regional movements towards autonomy: Catalunya, and other Spanish regions, like the Basque country; Scotland or even the ever-recurring Flemish question in Belgium. If a split takes place, the “leaving part” must re-start all proceedings to enter the Union10. For everyone who holds an open view of the European project, as signalled in its origins, this sounds odd, especially because a great number of such movements belongs to a bargaining strategy to acquire more power within the specific nation state, the EU and, sometimes, even independence itself being not in question. They are oftentimes part of historical, cyclical movements and it is expected the EU should be better equipped to cope with, understand and help in the peaceful outcome of such pursuits.
To categorically and officially say -as happened- that if Catalunya is out of Spain, it is out of the EU, qualifies as sheer non-sense as well as blunt disregard to the spirit that built up the Union, laboriously construed by its Founding Fathers.
One would be inclined to bluntly say: why all this fuss? Unfortunately, all the above is related to another perplexing quality.
4.2. The lack of solidarity and common sense in the internal relations among members. Standard and much advertised images of closeness, coherence and common policies are denied by a manifest lack of solidarity. The long, painful and bloody fractioning of former Yugoslavia had already drawn attention to internal, non-co-operative divisions within the EU space, translated into external inaction with dear consequences. Stark and undeniable evidence was soon after provided during the long (and still lingering) Greek crisis, Varoufakis (2016), and broadly and persistently in the treatment of the Southern countries after the 2008/9 financial crisis. Together, all these attitudes have been eroding the foundations of the project.
10 This is what came to be known as the Prodi-approach, favoured by the former Italian EC president Romano
Prodi. Though supported by many orthodox EU-law experts, there is no universal agreement on it. This author ranks with those against it, but here is no place to engage in this argument.
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Lack of solidarity is also dramatically evident in the broad and complex theme of migration. Since the sudden barriers to the free movement of people within the EU, triggered by the 2004 enlargement, to the present spill-overs of the chaotic Middle East situation (the EU having a share in the responsibility for it), with tragic episodes splattering the never-ending waves of hopeless boat people, desperately trying to reach European soil. ‘Flight from war and destruction’ is compounded by ‘flight from poverty-stricken societies’; a not necessarily new issue, though consistently bypassed for decades.
Apparently, nobody has found a solution to this most serious problem yet -not even in the restricted multilateral setting of the EU! Though nobody denies that there must be quantitative limits to any chosen policy, what is perplexing is the lack of sensible communication, co-ordination and solidarity in almost all debates. Countries like Italy, which by its geographical position receives nowadays a great number of refugees, are left alone in the cold by their own neighbours.
In a space that claims to give foremost priority to human rights, it is devastating to see lack of internal solidarity leading to an absence of human responsibilities. This could only lead to individual hubris and generalised chaos, as has been progressively witnessed in the Eastern economies from one side, Hungary and Poland notably, and, from Southern ones like Italy, while slowly creeping into “Union pillars” like France and Germany11.
The situation gets worse thanks to a third, major perplexity. 4.3. The poor, irresponsible management of the Euro construction.
Everybody agrees that the Euro was hastily created, perhaps unavoidably, given the historical circumstances. However, once again, the proud illusion Paradox 3 produces is perhaps the main culprit for the slow and irresponsible follow up of the monetary union, unfolding into the difficult as well as ticklish present state of affairs.
Despite the official praising, the premature Euro is mostly a failure.
11 All this bears a complex relationship, of mutual reinforcement, with the state of affairs described at the end of
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After two decades, the Eurozone performance since 1999 was of an average 1.5 per cent annual gross domestic product (GDP) growth, lowering to 0.8 per cent if one starts from the post 2008 period: something slightly better than stagnation. The much-complained effect of boosting Germany’s internal exports, in detriment of other members’ development, translates into a failure to increase trade among the Euro members: intra-eurozone trade at 45 per cent today is lower than it was in 1998. It has actually been a force of divergence between the core and the periphery of the Union, Sapir and Wolff (2015). Indeed, as a combined effect of this force and the fixed-exchange rate implied by the existence of the common currency, Germany and the Netherlands have reaped enormous trade-competitiveness benefits; without the Euro -as any junior economist knows- the national currencies of both economies would have experienced significant appreciation, correcting the imbalances.
From the much needed and vast homework to be completed for qualifying as a common currency, one sees the Eurozone group and its associated Eurosystem (= the European Central Bank (ECB) plus the central banks of the Euro countries) muddling through internal disputes and power games, in a display of sheer inability to do what is needed. Systematically acting after the problems eventually expose themselves, with partially ad hoc solutions -like the European Stability Mechanism, a kind of fiscal union through the back door, (not so) urgently created thanks to the dire situation during the 2008-12 crisis-, the Euro area remains heavily on the hands, creativity and financial acumen of the ECB governor. The key basic issues, a unified budget and a decent fiscal union continue to be laterally addressed.
The case of the EU budget is nearly an additional perplexity. Currently set at 1.02 per cent of the Union’s product, negotiations for each seven-years spell, involving both euro-members and those outside it, may linger for years before the deadline, queries and disputes ranging from the level at which to set the percentage of GDP to the much vexed question of where to the money goes. Astonishing as it may be, still one-quarter of the total goes today to the Common Agricultural Policy of farm subsidies -and not long ago it was half of it!
Even after the Greek tragedy, and the excessive burden imposed on the Southern economies by the one-size-fits-all Maastricht criteria (often violated but always in course), no institutional arrangements to make up for the weaker economies’ loss of exchange and interest rate
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management, to counter unemployment and alleviate trade and balance of payments imbalances have been created.
The Euro, as it is, means a forthcoming disaster, at the mercy of asymmetric external shocks of all kinds and the inefficiency of its leaders.
One could continue the list of perplexities, naming perhaps milder ones like the EU border with Brazil, thanks to France’s persistent colonial recherche du temps perdu -the French Guiana, or other less minor and more annoying, as the existence of well-known (and civilised) fiscal safe haven states within the very Union12, but perhaps it is preferable to try to end in a positive, optimistic note, as the still wonderful European project deserves.
5. Conclusion.
Roughly ten years ago, I manifested relative apprehension with the future of the EU, Flôres (2010a). Unfortunately, most of my doubts then have either come true or been enhanced by new facts and events, while other, new drawbacks and riddles emerged.
It is sad to see that, at that time, Paradox 1, for instance, was already salient and the persistently ill-managed relationship with Russia has re-ignited the cold war image of this country as a voracious, menacing, savage and frightening bear, with many people forgetting that, at least as important as the US engagement and the outstanding British resilience and endurance, the Russians played an enormous and crucial role for the victory of the Allies: the background for the European experiment13.
One wonders whether the EU will definitely stop to look at its nostril, denying the relative governance mess the project became since the May 2004 enlargement, and opening itself to the exterior -not the cosy existing groups of international co-operation and common endeavours, but
12 Of course, not to be mentioned here.
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bold neighbours like Russia and the US, without throwing itself in the arms of other powerful nations.
Positive signs are not absent, but do not seem enough yet. Examples abound, like the added powers to the Parliament, included in the 2007 Treaty of Lisbon, Flôres (2010b), that nevertheless remained without (co-)decision powers in the Union’s economic and financial policies; or the brave effort by Vice-President Federica Mogherini to design a (much needed) global strategy for the EU’s foreign policy, Flôres (2016), Tocci (2016), whose further developments look uncertain, to say the least.
Any governance structure is the outcome of different purposes, objectives, desires and pursuits of several actors who, in principle, know what they want. Actually, not all those actively involved in the debate must have a clear, uncontested idea of their respective goals; this is not so crucial -especially in a long-term endeavour- as the awareness of dynamics, the acceptance of and urge for continuous transformations in the established patterns and solutions.
For many an outsider, it seems that the European project made an indefinite, long stop halfway. Has it been the perfect answer to a post-WWII world, under the cold-war logic and moderate planetary change, nowadays unable to find a place in a new, transitional though, order? Is it feasible to transform the existing acquis de l’intégration -to paraphrase the acquis communautaire- and the impressively solid (and fundamental) European cultural heritage into engines that will push on and forge a post-modern, open and co-operative model society, fully conscious of its responsibility and humanitarian spirit, be it in times of peace or war?
Very likely, the EU will not finish or disappear, it will not cease to exist: some way or another structures will remain, but it risks to become a little more than an attractive museum where, at the side of marvellous works of art, one can watch a society that deliberately crystallised itself, still partially mystified by its post-war accomplishments. Very likely, a society with a broken
currency…
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