Tag Archive | eurozone

Václav Klaus live and unplugged

A few years ago I honestly told myself that I would spend less time academically on Czech right-wing politics and more time on other things. The world really did, after all, need some decent research about Central European interest groups and under-the-radar new parties threatening to break through into Czech politics. Inevitably, things didn’t work out like that.

As the Czech media have noticed rather than sit at home and write his memoirs the former Czech president is embarking on the political equivalent of a European and world tour and – as with 1980s electro pop or – when you’re got all the albums, but didn’t manage to catch the acts live, it’s hard to stay away.

And so it was that I found myself in Pembroke College (Cambridge) listening to Klaus giving the Adam Smith Lecture (transcript including asides faithfully posted by the Václav Klaus Institute here).

In recent years figures on the left, not least fellow Scot Gordon Brown, have tried to reclaim Smith from his totemic status as an icon of the free market right, but – following in the footsteps of previous lecturers Charles Moore and Nigel Lawson – this will be a strictly orthodox interpretation.

 Accordingly, Klaus tells us about the Smithsonian influence over his career, explaining to semi-approved of status of classical pre-Marxian economists in communist Czechoslovakia and his position as a junior researcher attracted to liberal market economics in the 1960s, critical of the market socialist plans of the Prague Spring.

 Adam Smith, the Adam Smith Institute and the politics of Thatcher and Thatcherism were also an inspiration after the fall of communism when he is – he says – promoting the idea of a fully fledged capitalist market economy against residual ideas of a Third Way on the liberal left. Anglo Saxon liberal ideas helped see off the threat of a French – or German inspired social market economy in the Czech Republic.

 This is the classic Klaus back story. Read More…

Europe as antipolitics machine

Entropa Total

Photo: Daniel Antal via Flikr

The customers in this Westminster café seem a strange mix of  suited civil servants and builders in boots and hi-vis. But it’s worth the early start and the cup of industrial strength tea to beat a path back to the European Council for Foreign Affairs, who this week are  putting on two-handed discussion on Legitimacy: Democracy versus Technocracy.

Despite the abstraction of the title, the event focuses on the experience of the two countries which have borne the brunt of the current crisis and catalysed the political weaknesses in the Eurozone Greece and Ireland.  Looking at experiences and perspectives of small countries is (I think quite rightly) a particular concern of the ECFR, although Greece is admittedly not exactly under the radar right now.

Both speakers, Brigid Laffan of UCD  and Loukas Tsoukalis of the ELIAMEP thinktank sensibly  avoided addressing the populism vs. technocracy dichotomy of the title – one of ECFR’s favourite motifs, but too simple and stylised –   and instead  stressed the way in which the new politics of low-growth and hard times locked in by the Eurocrisis (especially grim in Greece despite success in budget-cutting and squeezing living standards to effect ‘internal devaluation’) are reshuffling the party political deck. Populist ‘challenger parties’ such as the True Finns and (possibly – notes teas-stained and illegible here) Syriza in Greece were picking up support and making electoral breakthroughs in both creditor and debtor states.

The net result was a new ‘politics of constrained choice’ reflected the oft-noted (and often prosaic seeming) fact that EU is a system of multilevel governance: now see national governments trying (and failing) to be accountable to both their own domestic electorates and EU partner governments. This meant not the abolition of any scope for national policy responses – there was some political wiggle room and EU members had quite different capacities for adaptability and reform – but its constriction.

However, elections so far (as in Ireland) had seen frustrated voters turn to main opposition parties and, to a lesser extent, to previously marginalised but coalitionable  substitutes for them (Syriza) the next cycles of elections would put this to the test. The unanswered question was much social pain and dislocation, economic contraction and what level of unemployment – especially youth unemployment – would it take to trigger an explosive political crisis.

Cyclists demonstrating

Photo: Gesimpopos via Wikicommons

For Ireland the answer would seem to be quite a lot. Irish society, said aid Prof Laffan, was a characterised by pragmatism, ideological moderation and a certain fatalistic passivity – there had been little in the way of Southern Europe contentious politics and anti-austerity protest – partly reflecting its historical experience, partly its more global and transatlantic, outlook. With the exception of the last point, it sounded oddly, but familiarly, East European. In Greece, where there was more anger, protest and populism, there was very little nationalistic, euroscepticm (or Euro-scepticism) – notwithstanding the media attention lavished on Golden Dawn – with few people advocating Grexit. However, the main political surprises, both speakers agreed, were still to come.

But what of Populism versus Technocracy? ‘Challenger parties’ was another term for populism – understood here to mean a loose amalgam of demgagogic, impossibilist demands, rather than in the more precise academic sense – although the speakers tended, I think rightly, to see such parties as an unknown threat yet to come, rather than recycling the  hackneyed and predictable line that the rise of the far-right is already upon is. But where was the technocracy?

European Commission flags

Photo: Sebastien Betrand via Wikicommons

The answer was partly in the presence of technocrats and technocratic governments in Greece and Italy, but more in the technocratic nature of the unelected European institutions now moving to centre-stage: the European Central Bank  (‘a pivotal’ institution) and the European Commission, which noted the new fiscal pacts and oversight arrangements were empowering as never before (although I seem to remember reading other commentaries arguing that the crisis had, in fact, disempowered the Commission and robbed it of the political initiative it once possessed).

I wasn’t sure whether such how fully European level institutions really are or whether the problem with them is the fact that they are technocratic or the fact that they are European. Leaving this aside, however, the option of a top-down technocratic solution to the crisis centring around such institutions, it was argued, risked further de-legitimation of the EU – there was a need to re-build EU institutions into new frameworks of accountability perhaps by enhancing roles of national parliaments with European Parliament also having a potential role despite its failure to become a fully-fledged (and legitimate) European-wide legislature.

Rather interestingly – although ominously – the concept of democracy evoked was as accountability without representation similar to the one Mark Leonard of the ECFR claimed to detect emerging in China.  But unfortunately, at national level there are democratic structures with the reverse profile: representation without (clear lines of) accountability

It’s hard to see this staving off the rise of see off populist challengers.  In the absence of growth the [Euro] system lacks the political and economic resources to see them off as it once did to Communist Parties after 1945.  The whole, complex multi-level economic and political system of the EU, it seems is set up as a giant anti-politics machine, a production line for populist  challengers parties of all shades and models that is ready to roll.

Sligo yeats

Photo: Rowan Gillespie via Wikicommons

And in a sense this is the one bright spot to the pessimism-laden analysis that isthe stock in trade of thinktanks these days: the uncertainty around the exact form that such new forms will take. While the ‘Things fall apart; the centre cannot hold’ line from Yeats’s The Second Coming  - surely one of the all time favourite lines for of the  literate political scientist to quote – may indeed fit our current sense of fear and foreboding we do not yet know the identity of the rough beast  politicall slouching towards Bethlehem – or should that be Brussels? -  to be born

God save the Queen – and the EU governance regime

How do you celebrate the Jubilee? Given the choice between watching Prince Charles on TV, mowing the grass or reviewing a book about Central and Eastern Europe and the European Union, I knew what I would go for.

 There is enormous literature on the influence of the EU on the states of CEE, both as candidates and (latterly)new members of the Union, embracing a gamut of mechanisms, institutions and policies.  You almost feel there should be a moritorium of some kind. But a (thankfully) smaller body of work, however, asks what effects ongoing enlargement into CEE has had on the Union itself.  A lot of seem preoccupied with how   the influx of CEE new members will impact the efficiency of EU decision-making or reshape coalitions and bargaining between members.

 Eva Heidbreder’s new book, however, takes a somewhat different tack, questioning two (implicit) assumptions that seem to underpin many debates about the relationship between enlargement and integration:  that changing patterns of intergovernmental competition and cooperation drive integration; 2) and that there is a trade-off between widening tending to obstruct deepening.

  Her study examines the extent to which the extra powers delegated to the European Commission to manage the accession of CEE states which the EU in 2004-7 resulted in permanent extension of the Commission’s authority. Her theoretical point of departure to my great interest was the neo-functionalist paradigm, which crudely stated sees European integration as underpinned by pressures for larger scale, more functionally efficient  policy solutions and so driven  – somewhat in the face of existing national state structures – by process of ‘spillover’ whereby integration in one sector created pressures for the integration of related sectors.

 Once widely considered obsolete because of its apparent inability to political processes of political competition, neofunctionalism has seems to have enjoyed something of a revival in EU studies in recent times. Drawing on ‘neo-neo-functionalism’ reworking and updating by Philippe Schmitter and others of classic texts of 1960s and 70s Heidbreder  argues, that extensions of the European Commission’s competencies in policy sectors  pioneered during Eastern  enlargement may ‘spill in’ to the broader EU system, effectively extending the  acquis as a side effect of enlargement.

 Such ‘spill-in’, she argues, can be traced by examining the post-accession growth Commission’s ‘action capacities’ in different fields where the conditionalies presented to candidate states ran ahead of the existing acquis in the old EU member states. Picking out five policy areas, - institutional capacity building; minority protection; cross border cooperation, nuclear safety; and anticorruption she asks if, Eastern enlargement has, in some instances have reinforced integration. Such ‘spill-in’ occurs neither automatically nor contingently, but is dependent on the nature of a particular policy field, in particular, and the ‘modes of governance’ used by the Commission to administer it.  Drawing on Theodore Lowi’s neglected ‘arenas of power’ approach to public policy – and incorporating his argument that policy processes shape institutions rather than vice versa – she distinguishes four types of EU policy-making: regulatory; redistributive (zero-sum correction of inequalities); distributive (targeting resources to meet particular groups’ needs); and constituent (making rules about rules).

Photo: Dincher/Wikicommons

Where, as with capacity building and cross-border co-operation,  the Commission relied on loose, informal governance mechanisms of or (as with minority protection) framed policies as distributive programmes targeted at particular groups, member states were willing to allow a degree of ‘spill in’ from accession – even when as with the cross border co-operation and Neighbourhood Policy this entailed the Commission moving into sensitive fields such as foreign policy. However, where implied formal regulation as with nuclear safety or anti corruption, she finds, member states blocked it, either relying on international bodies outside the European union to achieve functionally desirable end or (as with anticorruption policy) simply allowing double standards between old and new  EU members to persist.

 Despite a sometimes dense and desiccated academic style, the book was a well argued original one, which keep me reading even as the wall-to-wall royal coverage started to fade. As being theoretically thorough and engaging, it does an excellent empirical job in surveying and picking paths for the reader through the tangled forest of regulations, conventions and instruments that make up EU governance.

 My one nagging doubt was whether member states’ underlying reason for sometimes irrationally rather blocking integration in relatively low salience issues like nuclear power could credibly be seen as a fear of ‘political spillover’ in which national actors and citizens would re-orient themselves towards supranational European institutions. Given the deep illegitimacy of EU institutions among the Union’s citizens and deep ‘democratic deficit’ has such spillover ever happened – or could it – other than perhaps in very anaemic form?

 The book’s broader finding that integration can often take place most easily through  the creeping extension informal governance offer an interesting lens through which to observe ongoing EU enlargement into South Eastern Europe which – if the Euro holds together – is likely to unfold over the next 10-20 years, the last chapter of the enlargement story, I would guess. It might perhaps even offer some pointers as to how the Commission, widely considered to have been sidelined, if not emasculated, by member states in the new political climate of austerity and debt/currency crisis management, might reassert itself.

Eurozone politics: Black, no sugar

 The European Council for Foreign Relations stages a Black Coffee Morning event on European Politics after the EU Summit. I have mine white, but from the general tone of the discussion among thinktankers, politicians and journos the prospects for the Eurozone and the EU could be as dark as the stiffest Italian expresso. Some contributors thought it might not survive a year

Discussion centres entirely on the one large existing member whose stubborn pursuit of its national interest is obstructing a long-term viable EU: Germany. France admittedly got a lot of what it wanted out of the summit, retaining the basically intergovernmental approach, but conceded the German demand for a reformed treaty of austerity-inducing financial discipline.

Germany and German politics are overwhelming what matter and, in some ways summit and the drama of the British veto-that-might-not-be-a-veto are sideshow compared with how Europe’s biggest and most economic powerful member decides to play it.

Photo: Tage Olsin

Was Angela Merkel playing a kind of high stakes poker waiting for the right moment to fold ‘em and concede some form of Eurobonds? Or was her government determined to press ahead to a possibly very bitter end?  German public debate and perceptions across political spectrum are, unsurprisingly, very different from those in many other places in Europe with little appetite for a Berlin bankrolled Euro bailout after painful and divisive economic restructuring (and the earlier costs of re-unification).

Indeed, some in Germany are apparently toying with the idea of partial break-up of Euro producing perhaps a sharp two-year recession followed by prosperous German-centred ‘small Euro’, which could ‘go global’ playing to Germany’s industrial and export strength. Unlikely, said some: anchoring in EU part of the political DNA of the FRG.  Be careful countered others:  re-united Germany was different country where old assumptions about how things work are  no longer always safe.

 The vision of Treaty-bound austerity Union in which a French-German tandem  (with the Germany as the senior partner) – European institutions have lost power and influence in the current crisis and may not regain it -  would run up against the interests of states normally closely economically and politically aligned with Germany in the EU such as Netherlands, Finland, Denmark, Poland and other CEE states (I have the phrase greater ‘Greater Germany’ scribbled down in my notebook – did somebody actually say that?). But none bar Poland  – in the remarkable speech by Foreign Minister Sikorski  – have actually raised these issues openly.

Seems in some ways as if history has run full circle and we back once again discussing the idea of a form of Mitteleuropa, albeit in the context of the more balanced and more democratic structures of the EU (or whatever it turn into)

And those pesky Brits? Well, those British demands were perhaps rather modest – maybe we should give Nick Clegg some credit (did I really just write that?) and in some ways leaning to  greater not less regulation.  The consensus view at the ECFR BCM seemed to be –  diplomatic and strategy of the UK were just a disaster, although the underlying issue of who (EU or UK)  regulates was perhaps the key issue was possibly less easily negotiable

Cameron (rather like Sarkozy) comes out a big short-term winner in domestic politics, but at the more strategic levels the Brits are left needing to improvise ‘creative diplomacy’ to prevent emergence of too starkly Two Speed Europe – perhaps pushing for varied integration, really going against the grain of European politics for more political integration. Underlying British problem is that it wants viable Euro to avoid economic meltdown, but fears the decline in own influence that integration necessary for this will bring.

Perhaps, however, if the politics of Euro rescue were to prove Mission Impossible, integration would painfully rebound, as someone put it, like piece of stretched elastics reverting to something closer to UK vision and/or status quo.

And there was distinct pessimism – reflecting in the dank rainy day visible taking shape outside – as to whether the politics could overcome economic diversity across EU with no underlying European identity or solidarity legitimising redistribution.

We are, it seems, caught in a vicious circle/cycle of technocracy and populism:  populist mood of public anger with elites, politicians and distant, illegitimate looking European institutions leads these elites to, as ever, look for quiet, backdoor technocratic workarounds feeding waves of inchoate (and ultimately unfocused and possibly inconsequential) anti-elite politics.

The weather  outside was dark, dank cold with storm brewing up for later.

EU Czechs and balances

Karel Schwarzenberg Photo: Henrich Boell Stiftung

I’m sitting listening to Czech Foreign Minister Karel Schwarzenberg. I look up occasionally at the map on the wall and wonder what projection it is. Europe seems big and fat compared to the more politically correct/geographically accurate cartography I usually see.

But that’s kind of appropriate. Schwarzenberg is, after all, speaking to me – and the rest of a Chatham House lunchtime audience –on the record about the role of smaller EU member sin the post-Lisbon Treaty.

It’s interesting to see Schwarzenberg in person. Presentationally, he conforms to the media stereotype of distracted aristocratic anti-politician:  he looks tired, sports a crumpled-looking bow tie and speaks at  an ambling conversational pace with an unplaceable Central European accent.

 I’ve never bought into all the noblesse oblige hype surrounding Prince Schwarzenberg whose TOP09 party is one of the mainstays of the Czech Republic’s centre-right government and may yet become the dominant force on the Czech right. But a couple of minutes listening quickly highlights that he  has the state of the EU and European politics carefully and subtly thought through.

 The small state angle is a classic Czech motif dating back to Masaryk and beyond, (although as chair William Wallace dry comments the Czech Republic is one of the ‘bigger small countries’ in the Union) but Schwarzenberg uses it to good effect.

 Although it had always had a few small members, until the 2004, he argues, the EU had always functioned – and actually functioned quite well – as a big nations’ club. Eastern enlargement had changed all that bring in an influx small new CEE states, most of which lacked the economic wherewithal to join the Euro.

In harmonious tandem

Paradoxically, however, expansion to 27 upped the power of bigger states, who gained from drive to create more workable decision-making structures, which resulted in the Lisbon Treaty.

 The need for speedy action in current crisis had upped the power of bigger over small states. Indeed, in some sense the euro crisis had made EU governance a tandem of two big states – read France and Germany. (This, Schwarzenberg noted was kind of appropriate given that Maastricht and the Euro were essentially a Franco-German political compromise intended to anchor and clip the wings of a re-united post-Cold War Germany – the contradiction of introducing a common currency without adequate economic governance had been left unaddressed, setting up the current crisis.

 Big states bossing it might be an effective (and necessary) way of running things post-crisis– and the EU had never exactly been run democratically since its foundation – But a big state-driven EU was aggravating an already acute trade-off between efficiency and legitimacy, opening up the democratic deficit (although he didn’t use the term – I have ‘citizenship gap’ in my notebook).

All non-EU traffic turn off here?

 Moreover, the distinct politics of the Euro crisis management being decided by the 17 Eurozone members, splitting the Union into two bloc: although no one had an interest in Euro meltdown, on certain issues the 17 might act as a bloc against the other ten members. As the 17 were likely to adopt steps towards further political/economic governance integration, a two-speed Europe was opening up. As on a motorway, those moving slowly and gradually falling behind might, he suggest, be tempted to turn off at the nearest exit.

 So small states needed some new channels to participate (I presume both in their own interests and for the sake of EU legitimacy, although this didn’t get mentioned). But what channels? One would be to operate in flexible informal blocs. Visegrad (despite having one Eurozone state and three non-Euro states) worked well did similar Nordic, Benelux and Baltic groupings. Another was to be useful and effective especially in niche role: the Czech Republic’s special mission was to be a promoter in human rights – its diplomats had been active over Burma, Cuba. Eastern partnership and the Western Balkans (‘a powder keg’) were also spaces to watch.

 Rather refreshingly Schwarzenberg offered to grand vision or or clear blueprint offered for EU reform. Just the thought – in response to a question from the Swiss ambassador – that the Union had in the fullness time to find itself way to a Swiss style arrangement, but with member states retaining the trapping of traditional statehood (like national armies) for the sake of legitimacy and as part of a system of checks and balance. Democracy mattered less than balance.

Nevedieť, kde je Slovensko, to je také ...

 The Q and A also tracked back to the question of a dual EU with discussion of an inner (Euro-)zone and outer core of members with roughly Danish level of integration. Intriguingly, we didn’t get to hear where the thought the Czech Republic should or would end up, although geography and economics ruled out British style debates about more extensive disengagement.

Overall, it was surprisingly sceptical take for a politician associated with the liberal ex-dissident europhile centre of Czech politics. Indeed, in its basic diagnosis, it didn’t seem that far removed from some of views you could hear Václav Klaus express, at least in his more cautious days in 1990s.

Still, I guess we’re all eurosceptics now.

Slovakia, in case you wondered, was not mentioned once.

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