Why the EU is not a super­state

Introduction at Battle of Ideas, at De Buren, Brussels, 12 november 2014.

Two important misconceptions plague the discussion on the European Union. The claim of its propononents that they are the party of cosmopolitanism and that their opponents are nationalists. And the claim of its critics that the EU is the so-called Brussels superstate, the central slogan of the Dutch and British Eurosceptics.

To start with the first. The debate on the European Union is often described as that of nationalists or xenophobes versus cosmopolitans – or europhiles, if you will. Opposition to the European Union is thus often branded with the mark of stigma. Whereas those in favor of the European project are graced with the aura of enlightened opinion.

But what is a cosmopolitan really? If we follow Immanuel Kant, a cosmopolitan is a world citizen, concerned with the faith of humanity in its entirety. I hate to disappoint the audience but the motivations of the proponents of the European project are less lofty and more prosaic. The most important argument heard in the past elections seems to be that the EU brings in money. When one speaks to the politicians in favor of the European project, they are the first to assert it’s all in the national interest. And there’s more.

Political economy teaches us that the Eurozone is to the advantage of the export sectors of its core members, such as the Netherlands and Germany. They derive benefit from a currency that is underappreciated compared to a situation in which they would have had their own national currencies. It provides their export sectors with an important competitive advantage. On the other hand, the Eurozone is a disadvantage to countries in the periphery, whose economies presently experience deflation, who cannot devaluate their currency, aren’t allowed fiscal stimulation, and have been forced in austerity policies that even the IMF – not historically averse to austerity – now considers to have been a mistake.

In this regard, the proponents of the European project are not the cosmopolitans Kant envisaged. All too happy to join the bandwagon of those deriding the profligate spendthrift southerners with their latin lifestyles. All too happy to demand and impose harsh austerity policies. If considered in its most federalist and ‘antinationalist’ conception as the phantasmagoric United States of Europe, the EU is in effect a nation-building project. The debate on Europe could be described as a debate between two groups of nationalists, concerning the scale for national building. In fact, the European debate, at least in the most powerful core countries is a debate between the pro-European Right and the anti-European Right, who seem to feed off each other.

Now let’s turn to the critique of the EU by the conservatives and the populist Right. The image they put forth is that of a Brussels superstate, a massive bureaucracy sucking the life out of its citizens. Moreover, the superstate is irrevocably heading towards federalization, a process of an ever closer union. But Brussels is not a superstate, it is a ministate. The budget of the EU is 1% of European GNP. The European Union has a tiny bureaucracy of 34.000 civil servants. To put that into perspective, the Dutch Ministry of Finance has the same size as the entire European Commission. And further federalization in the direction of a social Europe, as originally conceived by Monnet and Delors, is definitively off the agenda. The European mini-state could even more aptly be called an anti-state: it has the effect of reigning in national states, especially on terrains such as social expenditures and that of fiscal and monetary policy.

As Perry Anderson wrote in his remarkable book on EU history, the New Old World, the lucid prophet of this vision was Friedrich Hayek, generally considered to be the founding father of neoliberalism. In a 1939 essay ‘The Economic Conditions of Interstate Federalism’ he described the current logic of the European Monetary Union with acute foresight. Within such a union, national states could not pursue an independent monetary policy. And on the federal level, he noted that macro-economic interventions always require some common agreement over values and objectives:

It is clear that such agreement will be limited in inverse proportion to the homogeneity and the similarity of outlook and tradition possessed by the inhabitants of an area. Although, in the national state, the submission to the will of a majority will be facilitated by the myth of nationality, it must be clear that people will be reluctant to submit to any interference in their daily affairs when the majority which directs the government is composed of people of different nationalities and different traditions. It is, after all, only common sense that the central government in a federation composed of many different people will have to be restricted in scope if it is to avoid meeting an increasing resistance on the part of the various groups which it includes. But what could interfere more thoroughly with the intimate life of the people than the central direction of economic life, with its inevitable discrimination between groups? There seems to be little possible doubt that the scope for the regulation of economic life will be much narrower for the central government of a federation than for national states. And since, as we have seen, the power of the states which comprise the federation will be yet more limited, much of the interference with economic life to which we have become accustomed will be altogether impracticable under a federal organization.

The present situation of an undemocratic European Union with expansive political powers to overrule national states and force through free market policies, but a total lack of legitimacy amongst the electorate to pursue social policies is exactly where Hayek and his great admirer Margaret Thatcher would have wanted us to be. The federal European state, with a functioning democracy and social policies was never their agenda, and ceased to be on the table ever since the nineties. That is why someone like former EU-commissioner Frits Bolkenstein is now happy to deride the europhiles on Dutch national television. Anti-European conservatism and pro-European neoliberalism are hand in glove.