Views of Europe

Michael Keating is Professor of Politics at the University of Aberdeen and Director of the ESRC Scottish Centre on Constitutional Change,

Maggie Chapman is the Scottish Green Party candidate in the EU elections

Bill Paterson is Lecturer in International Relations at University of Stirling

Iain Bruff isis Lecturer in European Politics at Manchester University

Is the EU more social democratic or more neoliberal?

MK: Social democracy is impossible without the EU. Individual countries are susceptible to movements of footloose capital, speculative pressures and the vagaries of the credit rating agencies. Without an overall framework governing competition, European states would be under massive pressure to subsidise business, cut taxes and engage in a race to bottom in social provision. In European jargon, this is called social dumping. Europe may not be itself a welfare state but it has allowed the European social model (in all its variations) to survive in spite of international and domestic pressures to dismantle it. At European level, a coordinated, Keynesian response to the crisis was possible, sustaining demand and mobilising investment for growth. Europe has tamed the aggressive nationalism of the large states, it has provided a beacon to countries emerging from Communist and Fascist dictatorships and it has (through the Council of Europe as well as the EU) entrenched basic human rights. It is no surprise that social democrats have been among the strongest supporters of European integration.

Current developments in Europe, however, give social democrats cause for despair. Monetarist doctrines have not only been adopted but actually written into the treaties which form the constitution of the EU. Following the fashion of the 1990s, the European Central Bank has operational independence, subject to a narrow remit, focused on inflation rather than employment and growth. The European Commission has made itself the guardian of monetary orthodoxy, without a word of dissent from the Social Democratic commissioners. Member states have used Europe to impose austerity on their populations, so escaping blame. European competition policy, an essential tool to combat private monopolies and cartels, has been extended deeply into public services, promoting their marketisation. It has undermined national labour regulations. Matters are exacerbated by the lack of any countervailing duties to take into account social considerations and the way that the Court of Justice has interpreted competition law. The tragic result is that Europe is blamed for recession and austerity, obscuring the benefits it has brought and could still bring. The beneficiaries are populist movements mostly on the extreme right, taking their grievances out on minorities, migrants and the European idea itself.

MC: That’s a complex question. The EU is more corporatist than anything else. The assumption is that big government, big corporations and big trade unions can negotiate a settlement. That corporatist approach has little remaining support in British politics, so the EU is seen as too social democratic by the right where it enforces popular social chapter rights like the Working Time Directive. It’s too neoliberal where it negotiates treaties like the Transatlantic Trade and Investment Partnership, which will prevent renationalisation of privatised services.

We need a workers’ Europe, not a bosses Europe, and that means more focus on the rights of workers, on the freedom of movement of people and on the spread of human rights. It means that we have to end austerity and the actions of the Troika (of the European Commission, European Central Bank and International Monetary Fund) in southern Europe. It also means that we need to shift power away from the unelected Commission and towards the European Parliament. A social Europe would enjoy support for a clear stance on popular politics that increase the quality of life of individuals and communities.

The need to take action on global human rights and climate change are areas where the EU could act decisively to change the world for the better. But only if there is genuine democracy at the heart of Europe.

IB/BP: The EU is clearly more neoliberal than social democratic. This is more obviously the case now than at any time in the past, especially given the austerity measures that are being imposed on peripheral Eurozone states. Moreover, the recent upsurge in rhetoric about the EU’s so-called ‘Social Dimension’ and the need to ensure jobs as well as growth, masks the growing reality of widening inequality, increased disciplining of workers and unions, and the erosion of public services. The EU does promote regulatory standards which are more ‘social’ than is the case, for example, in the US or the UK, but at the same time we should not mistake this for a social democratic set of institutions. It is an error to equate neoliberalism with free-market economics, for in practice neoliberalism has often been established via formally ‘non-market’ institutions rather than in opposition to them. One clear example is the preference at all levels within the EU for ‘flexicurity’ and ‘activation’ as the cure for all labour market ills, such as high unemployment. As has been documented in numerous studies, flexicurity and activation are bywords for labour market casualisation, the hollowing out of corporatist structures at the firm and policy-making levels, and the justification for greater inequality on the grounds that any job is better than no job at all. Therefore, if we view neoliberalism as the increased disciplining of workers and households via market and non-market means, then the EU is clearly more neoliberal than social democratic, and this is becoming more apparent over time.

Can the EU ever be democratised?

MK: It is often said that Europe cannot be a democracy because there is no demos. According to this argument, only the unitary nation-state can provide democracy. I do not agree. Plurinational and complex states can be democratised, as the experience of Scotland has shown. In any case, falling back on the nation-state is futile, given the impotence of nation states in the contemporary world. There have been some positive experiences in Europe including, surprising though it may sound, the European Parliament, which has greatly extended its power and is less beholden to the executive than most national parliaments, including Westminster and Holyrood. There is a commitment this year that in appointing the new European Commission, the results of the European election will be taken into account – a vague promise but at least it is a start. The present Commission is a sad contrast with the time of Jacques Delors, when it was a hive of ideas and progressive thinking.

The other channel for democratising Europe is by linking it more closely to politics at other levels. This is not the demand by Tory Eurosceptics that national parliaments should be able to block European laws, which would undermine the whole project. Rather it means that Europe will be incorporated into national and local politics, and vice versa. More flexibility could also be given in the application of European directives at national and local levels. The Committee of the Regions was a good idea very badly applied, but there is scope for a stronger multilevel dimension to the European project.

Democratisation is inescapably tied up with the need for a stronger social dimension for Europe. It really makes no sense to talk of democratisation and then insist that Europe be bound into a monetarist straitjacket. Europe is, and must be, a political space in which there are political choices. Here again the social democrats should be in the lead. Prospects of a pan-European social democracy looked promising in the 1990s, when social democrats were simultaneously in so many states. They were fatally undermined by the Blair government’s turning it back on European social democracy in favour of its preferred ‘third way’, which included Bill Clinton and excluded Lionel Jospin, and Blair’s odd choice of political friends (Berlusconi, Aznar, Sarkozy) – and that was even before the Iraq war.

MC: The EU must be democratised. And we must build a campaign of trade unionists, social movements and communities for a Europe of the people. The demand that the EU reflect the needs of people and communities, not the needs of big corporations and distant governments, can have a popular resonance. The imposition of austerity on Greece and other EU states as part of the Eurozone stability plan has brought the EU into disrepute. We must prevent any future imposition of austerity, and instead build collective responsibility for our shared economy.

The current model is fatally distant from communities and democratic structures. The concentration of power in the EU with the unelected Commission means that there is little transparency, a disengaged public and a total lack of democracy. We need to use the demand for EU Reform to place democracy at the heart of the EU. While the movement for change in the EU is far from ideologically united, we must make a case for democratisation that is irrefutable. And that will mean moving away from a corporatist model and towards one that recognises the role of popular movements and communities in creating politics.

IB/BP: There is always the possibility, with institutions such as the EU, which have a heritage that at least partly points to values such as social justice, cooperation, and solidarity, to be reclaimed for more progressive and radical ends. Therefore, it would be foolish to rule out the prospect of the EU being democratised in the future. However, it depends to some extent on your definition of democracy; in a procedural, formal sense, the EU is more democratic than ever before, with the European Parliament possessing more powers than was the case a generation ago. In other words, we need to be careful when answering this question, for a procedural definition of democracy still leaves us well short of where we should be. There are two ways of thinking about this. Most obviously, the last several years of crisis and conflict have made it clearer than ever that the EU has some way to go before it can be viewed as representative of the ideals and aspirations of the European peoples. But more importantly, and also less visibly, the ways in which policies and institutional reforms are produced at the EU level indicate a highly undemocratic way of operating. More specifically, and as detailed in David Cronin’s recent book on corporate Europe (Corporate Europe: How Big Business Sets Policies on Food, Climate and War, Pluto Press), there is a systematic and enduring bias towards transnational corporations. Examples include the privileged access to policy-makers given to lobbyists acting on behalf of these companies, plus the committees which they ‘advise’. Nevertheless, it is worth stressing that, as long as the EU exists, its origins in the above-mentioned values will always make it possible for organised and long-term activism to make a difference.

What current issues on the EU agenda are most important to Scotland?

MK: Recovery from the crisis and the need for a proper European response. Recognition of the social dimension. Research and development policy. Energy.

MC: The ongoing use of EU Directives to promote the corporatisation of our economy is the major issue we need to tackle. A case in point was the use by George Lyon, the current Liberal Democrat MEP for Scotland, of European directives to push for privatisation of Caledonian MacBrayne ferries. His actions as a Scottish Minister are replicated by Councils across the country. I will argue against directives promoting the privatisation and tendering out of services. This will remove one of the most persuasive arguments for privatisation and tendering out.

The EU is currently negotiating the Transatlantic Trade and Investment Partnership which will undermine our economy and our democracy if enacted. It will allow corporations to sue governments who want to regulate markets to prevent speculation, labour rights abuses or environmental destruction. We must fight this to retain our democracy, and control over our economy. The austerity agenda must be resisted at the EU level. The actions of the Troika have destroyed lives and communities and have resulted in a massive transfer of wealth to Germany. This is unacceptable, and must be resisted. Countries must be allowed to adapt to economic circumstances and therefore controls on deficit are inappropriate. We must also make the case for the freedom of movement of people, which is under attack from racists and opportunistic politicians. At the same time we must find ways to curtail the movement of capital to offshore tax havens.

IB/BP: Perhaps the most important issue on the agenda for all EU members, and those seeking accession, is the completion of the EU and US Transatlantic Trade and Investment Partnership (TTIP). I argue this on this basis that the conclusions of the TTIP will fundamentally transform the ability of member governments’ to exercise policy autonomy. Before setting out this argument it is important to note the following. In 2011 Scottish international exports (excluding oil and gas) were estimated at £23.9 billion. The USA was Scotland’s main international export destination (£3.5 billion), but collectively the EU (primarily Netherlands (£2.7 billion), France (£1.9 billion), Germany (£1.4 billion) and Belgium (£1.0 billion)) accounted for £11.0 billion of Scottish exports (Scottish Government 2013). Given that nearly half of Scotland’s international exports are destined for the single market membership of the EU seem important. However, it is important to consider what future EU membership might demand under the TTIP. In essence the TTIP negotiations are to establish the largest ever free trade area (FTA) that seeks the elimination of tariffs and the harmonisation of regulatory standards. To date these negotiations have been devoid of public transparency and participation, but there have been leaked documents. Whilst some argue that the TTIP will simply be a case of harmonising regulations that will enhance consumer choice, but will be largely inconsequential to wider society, more detailed studies of the template used by the US for previous FTA’s paints a different picture of a litigation process securing corporate interests. It is widely known that the TTIP will establish the National Sovereignty and Investor State Dispute Settlements (ISDS), which will give private corporations the legal powers to force governments to maintain trade and investment liberalisation – or face legal battles and financial penalties. This means that if a corporation has investment or trade in Scotland and this is covered by the TTIP, a Scottish Government pursuing economic, environmental, and social policies that undermined the ability of that corporation to maintain its rate of profit would face legal action and liability to compensate the corporation for losses. Due to this it is argued that TTIP will impact on regulations concerning agriculture, consumer choice, environmental protection, finance, health, labour and human rights, public services and intellectual property. As a member of the EU, the UK Government is both party to negotiations and has been a staunch supporter of the liberalisation inherent in the TTIP.

One the one hand, both transatlantic political and corporate elites are championing the TTIP on the grounds that it will cut the cost of business transactions and boost employment. On the other hand, it has been argued that the TTIP may undermine European integration because as the single market is opened to US corporate competition intra-European trade will decline. A recent report by the European Greens argues that the TTIP is shrouded in secrecy; the ISDS is undemocratic; they are deeply sceptical about the growth promised, and fear that liberalisation will cause ecological standards to decline (the ban of fracking in the EU could be contested as protectionism); and that labour rights may be deemed protectionism. A recent study has argued that the TTIP will require the UK’s NHS to engage and lock-in a further drive for privatisation and that health care will be driven by EU and US corporations compete to offer the lowest price for contracts. It further argues that the purpose of the TTIP is for all government procurement (other than security) in the EU and US to be subject to such corporation competition. Given the above, the TTIP is an important issue on the EU agenda for either an independent Scotland in the EU or a Scotland in the union with the UK because it will impact on the policy autonomy of all EU member states.

What things does the EU do well, and what does it do badly?

MK: The free movement of labour in Europe is a huge achievement. The Schengen area of free travel is a boon to citizens – I just wish the UK would join. The EU has been very important in the expansion and consolidation of democracy. The most infuriating aspect of Europe can be the bureaucracy. There is often an obsession with procedure and regulations at the expense of thinking about policy.

MC: The EU has done valuable work in promoting rights at work and spreading human rights. This is balanced by the imposition of austerity on Greece and other southern European countries. While many value the lack of war between the major European powers, at heart the EU’s failure to embrace democracy means it will always fail to work properly for the people.

The abolition of the death penalty and the promotion of human rights has been one of the EU’s finest achievements. European pressure has been instrumental in promoting LGBT+ rights and women’s rights globally. But these gains must be seen in the light of the disastrous austerity that has produced conflict and severely shortened lives. The undemocratic nature of the EU has led to corporate dominance, particularly in the post-Thatcher era. The priority given to big corporations and their sectional interests undermines the democracy of individual states and the rights of workers. It privileges capital over labour. The EU must move to a democratic model that places people, their communities and their rights as citizens and at work at the heart of Europe.

IB/BP: One thing the EU has done consistently well since its inception is prevent a continent-wide war. We need to remind ourselves, especially with this year being the 100th anniversary of the start of World War I, that continent-wide war, or at least war involving some or all of the major European countries, was the norm for centuries. Therefore, if nothing else the EU has brought that vicious cycle to a close – and this should justifiably be seen as an impressive achievement. In addition, although the EU did far too little with regard to many of the conflicts which consumed the former Yugoslavia, it is easy to forget that in the early 1990s many predicted that these would spill over to numerous countries in the former Soviet Bloc (the most obvious example being countries potentially threatened by a revived Hungarian irredentism). The carrot/stick of potential/future EU membership proved to be crucial in steering several countries away from more violent routes. At the same time, the EU has not done well when it comes to living up to values such as social justice, cooperation, and solidarity. This often leaves one in a quandary when it comes to critiquing the EU. That is, how does one seek to build a more socially just Europe when the core aim of European integration – to prevent another Europe-wide war – has been achieved so successfully? Key to any successful Left critique of the EU is the need to show how the traditional neoliberal view of Left politics, national protectionism in the name of inertia, can be challenged through a Left politics which is visibly internationalist and diverse in nature. Unfortunately, the Left is not always so good at rising to this necessary challenge. Nevertheless, the recent explosion of protest and creation of cross-national solidarities give us hope.

What are the constraints on a Common Weal agenda from EU membership?

MK: There are not many. The Nordic states have shown how EU membership is compatible with a social investment and social democratic state. Welfare cutbacks have been the work of national governments, not the EU. European rules do impose limits on debts and deficits but then social democratic governments have never been particularly fiscally profligate. They do have high spending levels but these are covered by taxes. Europe has abandoned Keynesianism but then small states cannot practice that anyway; it must be done at the European level. The dogmatic application of competition policy and its extension into public services is problematic and could be the most serious constraint.

MC: The corporate control of the EU is the biggest threat to a more cooperative, more equal Europe. This corporate control is articulated through austerity in southern Europe. It also finds expression in the tendency to promote privatisation and tendering out of public services. But we can build a movement that forces an economy for all onto the table for Scotland, and creates a model for the rest of Europe. This model would reject austerity and the low tax, low regulation, high inequality of the neoliberal economy.

We must fight for economic democracy. We should build systems that can’t be attacked. We can learn from Latin America where initiatives like Participatory Budgeting and democratic ownership of utilities are a way to prevent right-wing extremists in government selling off public services.

We need to create housing coops and municipal energy companies. We should wholly elect the boards of public organisations like universities. These changes will build an economy that works for the many, not the elite. That’s what Common Weal is about, and that is what we must work for.

IB/BP: The SNP Government has discussed embracing the social and economic policies of the ‘Common Weal’ after independence. The ‘Common Weal’ emerged from Scottish scholars, trade unionists and activists deliberating on an alternative economic agenda to the neo-liberal model favoured by Westminster (privatization and market-discipline). The Jimmy Reid Foundation has been among the main bodies seeking to articulate the ‘Common Weal’ and defines it as ‘(it is) done in the interests and for the benefit of the majority or the general public’. Inspired by the Nordic (Finland, Denmark, Sweden, Norway) economic models, the ‘Common Weal’ aims to address low income and wealth inequalities, promote low poverty levels, develop a more skilled labour force, engender greater democratic participation and an re-establish a tripartite relationship between the state, employers’ associations and trade unions. Central to achieving these aims is a commitment to using government tax-raising and spending (fiscal policy) to invest and protect both existing and new sectors of the economy to initiate growth. Indeed the ‘Common Weal’ echoes many aspects of Keynesian economic policy. In contrast the EU is committed to the deconstruction of Keynesian social and economic policies through not only limiting EU membership to market economies, but with the aim of outlawing government assistance/subsidies to domestic workforce/sectors/companies. Since the 1980s the EC has been assertive in seeking to clarify, legalize and enforce the conditions under which EU members can use state-aid for the above purposes. For example, the legal framework found in the Article 107 (1) of the Lisbon Treaty places significant restrictions on the use of state subsidies by member states, ‘which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the common market.’ Thus members are also obliged under the treaty to illustrate to the EC that state-aid is not distorting the single market. Exceptions are possible, but only within a very limited criterion of defined policy objectives – see Article 107 (2). At present members use the ambiguity of the language on state-aid in the treaty to frame subsidies to national champions in terms of restructuring or streamlining corporations/sectors to enable their competitiveness in the global economy. This has caused conflicts between the EC and member governments. The EC’s assertiveness to address the ambiguity continues, as the declared objectives of the EC for the coming year are to “focus on modernising areas such as state aid rules, industrial policy and completing the single market”. Furthermore, the EC European Competitiveness Report (2012) asserted that “the modernisation of the industrial base and the removal of institutional impediments to entrepreneurship can be seen as crucial for the European enterprises”. This modernisation not only involves addressing subsidies, but also a commitment to establishing a flexible labour market [i.e. short term contracts for labour]. The EC has also promoted the benchmarking and monitoring of member states economic policies to identify government subsidies and protection so that they can be addressed. The supremacy of EU law, including state subsidies and domestic labour law, are important parts of the process for successful accession to the EU. An independent Scotland developing a fiscal policy that sought protection and subsidies for the domestic workforce/sectors/companies as found in the ‘Common Weal’ would have to justify to the EC that these subsidies met the criterion laid out in Article 107 (2) of the TFEU.

Europe and the independence debate: would Scotland get into EU and how, and will the UK stay in Europe and in what form?

MK: I have written extensively about this but, every time the argument seems to be won, somebody comes back and opens it up again. Scotland would need to apply for membership but it would be admitted. Under the Edinburgh Agreement, Scotland would be recognised by the United Kingdom. There is no reason for any of the other EU members to refuse recognition. There is no precedent for a seceding state, recognised by the host state, not being recognised by others. EU membership is open to any recognised European democracy that meets the Copenhagen criteria and adopts the acquis communautaire. Scotland has been within the EU/EC for over forty years and does meet these criteria. The situation is not like Catalonia, where the Spanish government has ruled out an independence referendum and the constitution forbids secession.

It is in nobody’s interest to throw Scotland out of the single market – not Scotland, the rest of the UK, the other member states, business or anyone would gain from this. There is no ‘queue’ to get into the EU. Applicants are admitted as and when they are ready. Turkey first tried to get in 50 years ago, so if there were a queue they would be at the head; but 22 other states have got in before them. As the UK Government noted in one of its papers, the Nordic states completed negotiations in 1-2 years. Were Iceland or Norway to change their minds and apply now, they would be in very quickly. There are many questions about Scotland’s position and strategy within the EU, which the Yes side need to clarify. These include the implications of keeping the Pound, a matter on which the Yes side has recently been put on the back foot. Suggesting that Scots would be thrown out of the European Union simply for exercising their democratic rights, however, is to undermine the very basis of the European order. This is essentially a political issue. The legal details are entirely secondary, as a way can always be found.

MC: There is almost no question that Scotland would be admitted to the EU. The only way in which Scotland would not be admitted is because of a veto by an existing member state. But no member state is going to want its nationals living abroad removed from Scotland. No state is going to want to lose access to shared resources. No state is going to wish to see its students charged university fees at Scottish Universities. The Spanish are not going to give up access to Scottish fishing. Scotland has all of the required legal and cultural status to enter the EU, so there would be little reason to refuse entry. This is why no EU member government has yet stated that they will veto Scottish membership. Scotland will remain an EU member if it so wishes.

On the other hand, UK membership of the EU looks increasingly shaky. The media-fuelled rise of the UK Independence Party and the need for David Cameron to keep his right wing fringe on board has led to the promise of an ‘in-out referendum’ if the Conservatives win the next election. It seems increasingly likely that Labour will also promise such a referendum.Because none of the UK parties are able to make a case for EU membership, and there is little prospect of the sort of pro-corporate reform they want, it seems likely that the British electorate will overwhelmingly vote to leave the EU.

IB/BP: The question of whether an independent Scotland would have continued membership of the EU through being a former territory of the UK or whether it would have to begin its own accession process is mired with uncertainty. The reason for this is that this is the first time the EU has been confronted with the division of an existing member into two separate states. On the one hand, the EU could accept the status of an independent Scotland’s as continued membership due to being a former country of the UK, but this could still require a unanimous agreement at the EU. Article 49 of the Lisbon Treaty stipulates that accession requires unanimous agreement amongst the Council of Ministers after consultation with the European Commission and the European Parliament. Given that many EU members have their own semi-autonomous regions demanding secession, blocking Scotland’s access to the EU may appear as a strategy to undermine popular support for seceding. Confirmation of whether political elites will act in this way has not been given, but we do know that popular demands for independence are not predicated solely on membership of the EU. There is certainty on the criterion for accession as it is written down in EU treaties and known as the Copenhagen criteria. This includes 35 different policy fields (Chapters of the acquis), such as a commitment to accepting the Schengen Agreement and privatisation of the postal service (Chapter 3); to prevent state subsidies (Chapter 8); ensuring privatisation and competition in the supply of energy (Chapter 15), and to adopt the Euro (Chapter 17). Since the Amsterdam Treaty (1999) all new EU member states automatically accept the Schengen Agreement (abolition of border checks on EU citizens) because it has been integrated into the EU law for accession. Ireland and the United Kingdom are the only EU members to have secured opt-outs from the principles of Schengen Agreement. Similarly the UK has negotiated an opted-out from adopting the Euro.

A key question is what would it mean if an independent Scotland’s preferred fast track route was block by the Council of Ministers and it had to apply for membership in the ‘usual way’? A point to consider here is the accession experience of the former communist states during consecutive waves of EU enlargement. These states have undertaken an economic, judicial, political and social transformation in an attempt to meet the Copenhagen criterion. For these states the issues that have normally slowed the process of accession, and continued after membership, have centred on establishing the legal and institutional framework for the protection of human rights; property rights; the democratic process; privatisation of state-owned assets; and the creation of a flexible workforce. With regards to the ‘exceptional’ membership of Bulgaria and Romania in 2007, it has been demonstrated that both the EC and the European Council were prepared to offer a greater degree of flexibility over these states meeting the Copenhagen criterion. For example a year after being granted membership, the continuation of fraud within Bulgaria saw tens of millions of EU funds frozen by the EC. Given that the UK’s current membership illustrates that the whole of the UK meets the Copenhagen criteria, Scotland must already meet the accession criteria after 40 years of membership as part of the UK. If an independent Scotland was to apply for EU membership in the ‘usual way’ and a European Council prevented Scotland’s membership, it would give the impression that Scotland was being discriminated against. Membership could be legitimately blocked if the European Council refused to allow the UK’s opt-out from Schengen to be transferred to Scotland, and Scotland refused to accept the principles of the Schengen Agreement integrated in the EU law. A similar point could be made about the acceptance of the Euro. Again this is all speculation because none of the above has been confirmed by the EU. Briefly on the UK membership of the EU: If the UK remains in the EU, then it will do so as a state which is largely focused on maintaining close economic links with its main export market. If the UK leaves the EU, then it will do so as a state which is largely focused on maintaining close economic links with its main export market. Other issues, in both scenarios, will be secondary. Unfortunately, as outlined above, those close economic links will be in stark contrast to the goals and objectives of the Common Weal.