Mounting pressure on EU to embrace change

Because of increasing inequality, Europeans are voting for radical alternatives to mainstream parties, but integration is not to blame. Policy errors are the culprit, says Jean Pisani-Ferry

IN Europe, 2015 began with the far-left Syriza party’s election victory in Greece. It ended with another three elections that attested to increasing political polarisation.

In Portugal, the Socialist Party allied with its former archenemy, the communists. In Poland, the nationalist Law and Justice (PiS) party won sufficient support to govern on its own.

In Spain, the emergence of Podemos, a new left-wing party, has ended the traditional hegemony of the Spanish Socialist Workers’ Party, on the centre left, and the Partido Popular, on the centre right. (In France, moreover, the far-right National Front, led by Marine Le Pen, showed its strength in the first round of December’s regional elections, though it eventually failed to win any).

The message is impossible to miss: voters are deeply dissatisfied with mainstream parties and are giving a chance to radical alternatives. They are supporting parties that, though different from one another, all blame the European Union for the sorry state of their countries’ economies and labour markets.

Radicalisation is not limited to Europe. American presidential candidate, Donald Trump, owes his rise to many of the same factors that are driving Le Pen’s growing popularity. What is particularly problematic in the EU is the clash between radical politics and mainstream governance.

For 30 years, centre-right or centre-left parties, with a shared vision of Europe, have governed most EU countries. Despite their policy disagreements, they jointly embodied the ideological consensus — and formed the political coalition — that built the single market, the euro, and the enlarged EU.

But many voters feel that mainstream policies have failed. Governments have been unable to protect unskilled and semi-skilled employees from the consequences of globalisation and technological change.

Mass education, progressive taxation, and social-welfare benefits have not prevented increasing inequality. And the euro has failed to engineer prosperity and stability. Those (like me) who think that policy errors and institutional flaws are more to blame than European integration are being drowned out.

Political realignments are to be expected in democracies; democratic institutions are designed to make them possible. The constitution does not change, or changes only slowly, whereas a new party or coalition redefines the policy agenda and reforms the legislation. This combination of rigidity and plasticity enables democratic regimes to adapt to shifts in citizens’ preferences. The same does not apply to Europe, however.

First, political change is not synchronised. Some countries may have voted for radical parties, while others have not (or simply have not held elections). This clash of legitimacy is what the Greek government initially failed to understand last spring, when it sought to ease austerity measures: Syriza had received a mandate for change from voters, but other countries’ representatives had not.

Second, unlike national democracies, the EU does not derive its legitimacy from the process through which political choices are made, but mainly from the output it can deliver.

This is not to say that there is no democratic process: the elected European Parliament is a serious legislative body, and its vetting of European commissioners is often more thorough than personnel selection at the national level. But it has no visibility, because major decisions are negotiated between national governments.

Third, the boundary between constitutional and legislative matters is peculiar in the EU. All treaty provisions have constitutional status; indeed, they can be changed only by unanimous agreement. Furthermore, because governments did not trust one another, they included in treaties what would normally belong in ordinary legislation. The many rules that govern economic life in the EU are much more difficult to amend than are similar domestic provisions. The scope for redefining the rules is exceedingly narrow, even though they reflect a policy consensus that is no longer widely shared.

What options does this leave the EU for responding to political polarisation and to the concomitant demands for more policy leeway at the national level? The EU could simply ignore these changes, and hope that radicalism will wane, once its bearers are confronted with the responsibility of governing. But that would be foolish.

Syriza accepted tough choices because Greece depends on external financial assistance. No other country is in the same situation. Ignoring demands for change would deepen popular hostility toward the EU.

Another possibility would be to exploit, ad hoc, the flexibility in EU treaty provisions. Pragmatism can be helpful, and the European Commission, headed by Jean-Claude Juncker, is willing to embrace it. But it would be dangerous to turn the EU framework into a thicket of country-specific political bargains. Those for whom the rule of law and the enforcement of fundamental principles are serious matters — not just Germany — would soon object.

The last solution would be to make the EU more amenable to political change. This would require changing the balance between constitutional and legislative matters, so that principles are preserved, but policies can be responsive to politics. Moreover, the EU should be able to legislate on a wider array of policies, including, for example, taxation. This would end its awkward impotence on — and apparent indifference to — inequality.

The European Parliament should be given a higher profile, as in a truly federal system, so that governments, at the national and European level, are perceived as equally legitimate. With such federalisation in the EU or, more likely, the smaller eurozone (within which the degree of integration is higher), policy conflicts would place elected national governments in opposition, not to an opaque system, but to a politically legitimate federal institution.

This approach confronts formidable obstacles. An attempt to write an EU constitution was made in the early 2000s. It failed. Germany, and other countries where mainstream policies still command wide support, would vehemently oppose any perceived softening of the common rules and principles. It will be hard to agree on additional competences and a stronger European Parliament, when so many in Europe, starting with the radicals, consider the EU the main culprit for their current woes. Yet, the construction of a transnational democracy is the most viable response to political polarisation in Europe.

Jean Pisani-Ferry is a professor at the Hertie School of Governance in Berlin, and commissioner-general for policy planning for the French government. Copyright: Project Syndicate, 2015.


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