Home > European Union — No Alternative to U.S.
’This is not the Europe that the world needs’
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European Union: in no fit state to lead
The European Union is failing to offer the world a
different social and financial model to that of the
deregulated United States. And the US itself is
impoverished because of this lack of an alternative.
By Robin Blackburn *
Le Monde diplomatique
February 2004
European social institutions and aspirations for an
independent role in world affairs are threatened by
rampant United States’ power, Anglo-Saxon economics and
European Union enlargement. These are all long-term
forces, but already have enough strength to paralyse
European institutions and subject the continent
internally to corporate-led globalisation and
externally to US leadership, as the White House now
calls its imperial role. This is not the Europe that
the world needs.
Because the EU is now the only global entity with an
economic weight and political potential equal to that
of the US, it has in principle the best possibility of
defying the US. This should not be a question of making
Europe more like the US (a process that has already
gone too far) but ensuring that Europe represents a
different model, based on social justice, and that on
the international stage it frees itself from the
chariot wheels of President George Bush’s policies of
conquest.
Europe has an opportunity for a creative response to
challenges. US leadership is in deep difficulties,
above all in Iraq and the Middle East. And the sterile
formula of Europe’s grotesquely-named Growth and
Stability Pact has been breached by the EU’s two core
states, breaking with the rule of the European Central
Bank (ECB) and its disastrous monetarist dogmas.
European leaders’ current responses to the impasse of
US strategy in Iraq and the crisis of EU monetary
governance do not measure up to the opportunities, but
weaken Europe and betray the hopes of those around the
world who would like a check on the US. Washington’s
allies within Nato protest publicly or privately about
US unilateralism, but then endorse its consequences.
These states voted in the UN to give the US occupation
of Iraq unwarranted post-facto legitimacy.
As the US gets deeper into trouble, it will again
expect its reluctant but meek allies to send troops,
put their citizens in harm’s way to contain a dangerous
situation and help Bush get re-elected in November.
At home the rule of the ECB will be rescued by giving
even greater scope to implicit privatisation - whereby
public services and social protections are degraded to
oblige citizens to become customers of rapacious
finance and insurance houses.
However, opposition will revive. The anti-war movement,
which reached its apex on 15 February 2003, should gain
a second wind as the nature of the occupation of Iraq
becomes clearer. Similar mobilisations in defence of
education and welfare will challenge those who mislead
Europe and open conflicts in the extraordinary alliance
that now unites Gerhard Schröder and Jean-Pierre
Raffarin, Romano Prodi and Jacques Chirac, Sylvio
Berlusconi and Tony Blair.
Europe’s leaders have failed to notice that the US
leadership to which they defer is losing popular
support in the US. Bush’s popularity had dropped
sharply before the capture of Saddam Hussein. Within
the Democratic party a militant wave behind Howard Dean
had a chance of taking the nomination; Dean’s strength
was that he opposed the war but he was prevented from
making the most of it because Europe did not call for
the withdrawal of US troops and allowed itself to be
drawn into an auxiliary role. If Europe came forward
with a plan for evacuation of the occupying forces -
perhaps under the auspices of the Arab league or the UN
– this would chime with the desire of millions of
Americans to see their soldiers brought home.
The European elite also refuses to face the reality
that the US economic model, far from being worthy of
emulation, is beset with difficulties. The collapse of
Enron began a series of scandals that involved every
leading financial institution on Wall Street. The New
York attorney general, Eliot Spitzer, has brought
forward investigations and charges that allege that
large US banks and mutual funds allowed hedge funds to
skim the pension accounts of more than 90 million
savers, a consequence of deregulation.
The US public is uneasily aware that over the next two
decades the regime of commercial provision, which
excludes a fifth of the population, will fail even
those it does cover. Private pensions and health care
suffer from a severe "cost disease" since competitive
marketing consumes vast amounts of money; while
customising provision for individuals is costly and
cumbersome.
Many on the US left look to Europe for an alternative
but are disappointed when they do so. Social protection
remains far better in Europe. But even governments of
the left, such as that of the Social Democrats and
Greens in Germany, lack courage and imagination:
instead of finding better ways to finance welfare, they
cut benefits.
The visible crumbling of Europe’s ability to protect
its citizens weakens its voice in world affairs. A
determined effort to rescue its collapsing social model
could succeed if the EU sponsored at least some new
social provision for all citizens. This was the
approach of President Franklin Roosevelt in the 1930s
when the US faced its most serious social crisis. The
Social Security Act of 1935 eventually covered
everyone, and the social security card became a badge
of civic identity.
The EU should consider similar programmes. At present
it has structural funds and a cohesion fund (1), as
well as the Common Agricultural Policy and schemes
targeted at new members. But these go to countries,
regions and farmers - not to ordinary people in such a
way as to create a link between citizens of European
states.
Three economists, James Galbraith, Pedro Conceicao and
Pedro Ferreira, have argued for a "truly European
welfare state with a continental retirement programme";
"the creation of major new universities of the first
water . . . in beautiful, lower income regions of the
European periphery"; and "the full funding of students
to attend them" (2). A Europe-wide welfare regime
should be organised so every citizen from every country
receives some benefit. This should be an addition to,
not replacement of, national welfare policies that
might also draw on emergency help, where necessary,
from a European fund.
The European Federation of Trade Unions has long called
for the setting up of a proper European social fund
(3), with resources to invest to generate productive
employment and underwrite future welfare expenditure.
In 1959 the then European Economic Community (4)
established the European Investment Bank (EIB), meant
to counter-balance the power of central banks. With the
scrapping of the growth and stability pact, the EIB has
a bigger role than ever. Three Cambridge economists
have argued it should be built up as a counterweight to
the ECB (5).
Social funds would be as much about producing wealth as
distributing it. In a continent where stock exchanges
are of great importance such funds could help to
protect productive enterprises from financial
exploitation, to promote socially responsible business
objectives and assert some popular control over wealth
accumulation.
Europe would be better able to dedicate itself to
rescuing and improving its welfare arrangements if it
refuses to be dragged into US military aggrand isement.
US bellicosity is prompted by the desire to distract US
citizens from grave social problems and ballooning
inequality at home. Europe should aspire to a more
egalitarian and responsible model for its own people
and in its relations with the world. Developing a
Europe-wide welfare compact would help to build the
common citizenship that could underpin a more
independent European foreign policy.
* Robin Blackburn is professor in the Graduate Faculty
of the New School University, New York. He is an editor
of New Left Review and author of ’Banking on Death or
Investing in Life: the History and Future of Pensions’
(Verso)
(1) The structural funds account for a third of the EU
budget and benefit all its members, if unevenly; they
relate to development, agriculture, fisheries and
social funds.The cohesion fund benefits the four least
developed members, Portugal, Spain, Greece and Ireland.
(2) James K Galbraith, Pedro Conceicao and Pedro
Ferreira, "Inequality and Unemployment in Europe", New
Left Review, London, September-October 1999.
(3) Created by the 1957 Treaty of Rome, the present
European social fund, in collaboration with member
states, invests in programmes to improve the
professional skills and opportunities of EU citizens.
But its budget, one third of the structural funds (not
including the cohesion fund), is only ¤62.5bn for
2000-2006, far from real needs.
(4) In November 1993, when the Maastricht Treaty came
into effect, the EEC changed its name to the European
Union.
(5) Philip Arestis, Kevin McCauley and Malcolm Sawyer,
"An Alternative Stability Pact for the European Union",
Cambridge Journal of Economics, vol 25, n° 1, 2001.
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Original text in English