Europe: Between Democracy and Oligarchy

by Adam Blanden

What exactly is the EU and what would joining it mean for Ukraine?

First published: 10 March, 2014 | Category: Corporate power, Europe, History

Though Ukraine’s structural problems go far deeper than the current upheavals over aligning more closely with the European Union, the fact that this peculiar international body can spark pitched street battles refutes one lazy but perennial assertion of its critics: that the EU is simply a trade organisation – a glorified NAFTA – which in the broad scheme of things matters little, both to the populations of Europe and in terms of continental governance.  Critics point to low voter turn-out all across member-states and high levels of disillusionment among new entrants as evidence that the Union has little real effect on people's lives and little impact on where power lies – either national or transnational – within Europe.  But as Ukraine proves, the status of relations with the EU is capable of summoning extraordinary social forces, a rallying point not only for the immediate question of membership but also for much broader questions about the paths of national development prospective member states find themselves on.  The task of understanding the EU – and what membership of a future Union might mean for prospective members – is more important than ever.  The violence on the streets of Kiev demands a reassessment of critics’ complacency. 

Patterns of European integration (beginning, in most histories, with the European Steel and Coal Community of 1951) have by no means been monolithic.  Indeed, for a long time the political institutions designed to underwrite and extend the deepening processes of economic integration were largely neofunctionalist in their goals: aiming for a gradual harmonisation of national tensions through an equally gradual extension of the Community's legal remit.  This was expansion by stealth, occasionally in an explicitly social or corporatist and welfarist vein.  The most famous of the Community's architects, Jean Monnet, was pragmatically federalist and pro-democratic.  ‘Is it possible,’ he asked, ‘to have a Common Market without federal social, monetary and macro-economic policies?’[1] Monnet has more or less been proved right by the eurozone crisis, though political pressures (especially in Germany) continue to resist that conclusion.  Major political and economic imbalances between member states continue to undermine any movement towards greater integration of this federal variety.  

The Europe Union's other predominant ideology, that of intergovernmental realism, conceives of action undertaken by national governments as the primary locus of European integration.  Intergovernmental realists stress the importance of national governments, and point to how further integration will proceed from interactions between states, not above them.[2]  Thus neofunctionalist liberals of the Monnet variety stress the transnational processes at work in integration, aiming to further it through the fostering of greater power for international institutions operating outside of or beyond the sovereignty of nation states.  Intergovernmental realists, however, stress the limits of possible supranational integration owing to the self-interested nature of national governments.  Realists are convinced that the highest form of legal order is one which mediates between self-interested nation-states, curbing their democratic excesses through old-fashioned diplomatic manoeuvring.  As such the nation is conceived as the pre-eminent political actor on an international terrain of Hobbesian anarchy with no novel conception of sovereignty emerging.[3]  Though such an approach may be appealing for those wishing to understand continued national conflicts within the Union, it has only occasionally reflected the piecemeal reality of EU development, which has involved a good deal of class compromise between states, trade unions and financial institutions, among other conflicting parties.  

Nevertheless, by the early 1990s European integration appeared to be stagnating under conditions of a fractious world economy and apparently divergent political and economic paths – with German corporatism, French social-welfarism, and British emulation of the American ‘neoliberal’ model all representing conflicts among Europe's ruling elites.  It took the sudden collapse of Communism in the USSR, the Balkans and the states of East-Central Europe (all widely unforeseen) to reignite pro-integration passions.  Despite the obvious confidence boost the end of the ‘Evil Empire’ gave the western half, no amount of good-will could fund reunification efforts (on the part of Germany) and reconstruction efforts (on the part of the soon-to-be-Union as a whole).  Even if European voters largely supported the drive towards integration, the process itself was carried out in the interests of capital accumulation.  The newly democratised states on the periphery would become highly profitable, relatively risk-free spaces of capital investment.  Though a great deal of public funding went in to reconstructing Eastern Europe, the overwhelming tendency was for capital – in the form of factory relocations, foreign direct investment, and enormous financial lending – to seek major profits.  Thus, following 1989, the specifically pro-market forces underlying EU integration and expansion were foregrounded. 

What has come to sustain the impetus towards integration, then, is the near total success of an ideology of market liberalism, itself the progeny of the cycle of capital accumulation that has been taking place since the collapse of the postwar Bretton Woods regime of fixed exchange rates in the early-70s.  As the Keynesian model of high employment and financial capital controls buckled under conditions of intensified capitalist competition (with America's peripheries able to under-price the big core economies, thus sapping manufacturing profit-rates[4]), European leaders have attempted, through integration, to create a competitive, successfully accumulative regime within the Union itself.  As such the European Union has come to represent the economic ambitions of Europe's elites far more than the political hopes of its population at large.  European integration has tended towards neoliberalism even as it has reproduced old corporatist methods of class compromise in its decision-making processes and in its institutional make-up.  

On the one hand, theory has oscillated between internationalist liberalism and intergovernmental realism, while real processes of EU integration have largely reflected pro-market class compromises.  The result  is a labyrinthine bureaucracy whose most peculiar habit is to constrain governments at the national level while tightly regulating civic input at the transnational one.  For example, trade unions are brought into the fold, though only to re-affirm with minor qualifications the offers already on the table.  Friedrich Hayek, the doyen of contemporary neoliberalism, once wrote that it was ‘common sense that the central government of a federation composed of many different people will have to be limited in scope.’[5]  To some degree, the EU as a form of government (albeit one lacking classical Hobbesian sovereignty) has achieved Hayek's ends without even having to federalise.  Instead, by mediating between national governments, it rids member-states' initiatives over taxation and defence of their niggling, though already constrained, democratic content, relegating the vast number of decisions to a tightly-controlled, largely hidden procedural set of mechanisms within the Union's Commission (whose functionaries are nominated by existing member governments) and the Council of Ministers (members of actually elected governments, whose deliberations are nonetheless secret).  The less said of the European Parliament (which has no powers to propose legislation and often returns the most reactionary national parties to power, since elections to it hardly ever scrape 40%) the better. 

Understood as a form of highly specialised sovereignty, the EU looks deeply oligarchic.  The theoretical irony is, of course, that conservative ideologists of intergovernmental realism would not wish for the EU to be understood as a governing body at all, merely a mediating one.  Yet the strains of rapidly deepening and expanding integration (due both to the collapse of communism and the need to combat global economic volatility) have necessitated a major enlargement of EU powers – at the fiscal, regulatory, and legal levels.  EU expansion – i.e.  the 2004 and 2008 accessions of mostly ex-communist states – has taken place so far because of the need for a legally and economically ‘stable’ European periphery (one a ‘Russo-sphere’ simply could not provide) and the need for new tranches of low-paid labour to keep European manufacturing competitive in conditions of globally increasing inter-capitalist competition.  Thus no major steps have been taken to reform the EU's highly-centralized governing mechanisms.  Indeed the bunker mentality of Brussels has probably intensified in an attempt to resist any centrifugal forces unleashed by expansion.  While joining the EU has become the only viable policy for aspiring states, it has also required severe neoliberal disciplining – a sort of self-flagellation intended to demonstrate contrition for former autarkic, nationalist tendencies.  Apparently incapable of self-reform, the EU now demands little else but acquiescence to its fiscal directives (Hungary, for example, is only threatened when it refuses to meet onerous debt repayments; not for its government's deep authoritarianism and pangs of racism).  

For states like Ukraine, then, the EU may represent the only apparent path to prosperity, especially for western-oriented urbanites.  Yet the EU's anti-democratic institutions, and its increasingly shaky existence as a continent-wide guarantor of capitalist competitiveness, mean that it cannot be considered a possible ‘solution’ to the impasse of Europe's peripheral states.  As the examples of Greece, Italy, Hungary, and Slovakia, all in their own way show, increased entanglement with the EU has not tended to deepen democratic accountability, but to hamper it.  With politics in all the above states (with the marginal exception of Syriza in Greece) divided between a pro-business liberalism and a reactionary nationalism, the possibilities for challenging an increasingly ‘zombified’ capitalism for democratic and social ends are also undermined.  Support reform in Ukraine, then; but do so not only at the expense of Russian imperialism but also European capitalism.  If a truly democratic politics is to exist in a united Europe, it must be possible to challenge both nationalism and its flipside: the high European chauvinism which demands an excruciating toll from its peripheries in order to sustain and reproduce an increasingly oligarchic system of power relations at the core.  

Adam Blanden is a regular contributor to the Prague Revue, a blogger on politics and history in Central and Eastern Europe, and EFL teacher.  He lives and works in Prague.         

[1] Monnet, quoted in Perry Anderson, The New Old World.  Verso Books, 2009, 15-16.

[2] See, for example, Apeldoorn, Overbeek, and Ryner: ‘The neofunctionalist/intergovernmentalist debate, then, is strictly concerned with the form of governance, or even more to the point, with the level of authoritative decision making.  One theory emphasises its intergovernmental character and points at the limits to the process of supranational integration.  The other theory takes the opposite view, stressing the supranational dynamics of European integration, seen by some in this tradition as leading eventually to a federal Europe.’ (Alan W., Cafruny and Magnus Ryner (eds), A ruined fortress?: neoliberal hegemony and transformation in Europe.  Rowman & Littlefield Publishers, 2003, 20)

[3] On ‘intergovernmentalist realism’ and other approaches see: Mark A.  Pollack, ‘Realist, Intergovernmentalist, and Institutionalist Approaches’, in Oxford Handbook of the European Union.

[4] See: Brenner, The Economics of Global Turbulence and The Boom and The Bubble for a fully fleshed out account of this ‘long downturn’ and its structural causes.

[5] Hayek quoted in Anderson, New Old World, 30.

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