Turbulent and Mighty Continent E-Book

Anthony Giddens

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch
• Veröffentlichungsjahr: 2013

Seitenzahl: 393

Beschreibung

Winner of the 2014 European Book Prize. A "United States of Europe", Winston Churchill proposed in 1946, could "as if by a miracle transform" that "Turbulent and Mighty Continent". "In this way only", he continued, "will hundreds of millions of toilers be able to regain the simple joys and hopes which make life worth living". Today, nearly seventy years later, over 500 million people live in the member states of the European Union - a greater number than in any other political community save for China and India. The currency of the Union, the euro, is used in economic transactions world-wide. Yet the EU is mired in the greatest crisis of its history, one that threatens its very existence as an entity able to have an impact upon world affairs. Europe no longer seems so mighty, instead but faces the threat of becoming an irrelevant backwater or, worse, once again the scene of turbulent conflicts. Divisions are arising all over Europe, while the popularity of the Union sinks. How can this situation be turned around? Now published as a revised and updated paperback that takes account of the May 2014 elections to the European Parliament, Turbulent and Mighty Continent makes a powerful case for a far-reaching and fundamental renewal of the European project as a whole.

Leseprobe

Turbulent and Mighty Continent

Books by Anthony Giddens:

Capitalism and Modern Social Theory

Politics and Sociology in the Thought of Max Weber

The Class Structure of the Advanced Societies

New Rules of Sociological Method

Studies in Social and Political Theory

Emile Durkheim

Central Problems in Social Theory

A Contemporary Critique of Historical Materialism

Sociology: A Brief but Critical Introduction

Profiles and Critiques in Social Theory

The Constitution of Society

The Nation-State and Violence

Durkheim on Politics and the State

Social Theory and Modern Sociology

The Consequences of Modernity

Modernity and Self-Identity

The Transformation of Intimacy

Beyond Left and Right

Reflexive Modernization (with Ulrich Beck and Scott Lash)

Politics, Sociology and Social Theory

In Defence of Sociology

The Third Way

Runaway World

The Third Way and its Critics

Where Now for New Labour?

Europe in the Global Age

Over to You, Mr Brown

The Politics of Climate Change, 2nd edn

Sociology, 7th edn (with Philip W. Sutton)

Edited Works:

Emile Durkheim: Selected Writings

Positivism and Sociology

Elites and Power in British Society (with Philip Stanworth)

Classes, Conflict and Power

Classes and the Division of Labour

Social Theory Today

Human Societies

On the Edge: Living with Global Capitalism (with Will Hutton)

The Global Third Way Debate

The Progressive Manifesto

The New Egalitarianism (with Patrick Diamond)

Global Europe, Social Europe (with Patrick Diamond and Roger Liddle)

ANTHONY GIDDENS

TURBULENT AND MIGHTY CONTINENT

WHAT FUTURE FOR EUROPE?

polity

Copyright © Anthony Giddens 2014

The right of Anthony Giddens to be identified as Author of this Work has been asserted in accordance with the UK Copyright, Designs and Patents Act 1988.

First published in 2014 by Polity Press

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Polity Press350 Main StreetMalden, MA 02148, USA

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ISBN: 978-0-7456-8127-6

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Contents

Figures and Tables

Acknowledgements

Introduction

1   The EU as Community of Fate

2   Austerity and After

3   No More Social Model?

4   The Cosmopolitan Imperative

5   Climate Change and Energy

6   The Search for Relevance

Conclusion

Notes

Index

Figures and Tables

Figures

1  Churchill tips his hat to the crowd, Zurich, 19 September 1946 (Diplomatic Documents of Switzerland, online database Dodis: dodis.ch/33386)

2  ‘The last battle: how Europe is wrecking its currency’ (2010 Der Spiegel )

3  The cause of the instability of the euro is not debt as such

4  ‘My name is Bond. Euro Bond. Never say never’ (taz.die tageszeitung, 16 August 2011)

5  Expressed support for the EU has plummeted

6  The effect of the euro on borrowing

7  EMU lacks the adjustment mechanisms necessary to compensate for the loss of exchange rate flexibility

8  GDP per capita in major geographical regions of the EU (USA = 100), 1950–2007

9  Wages in Europe are less differentiated than in other regions

10  Unemployment in the euro area and beyond (The Economist, 2013)

11  After the London bombings: Muslim women register their protest against violence (© AFP/Getty Images)

12  World energy-related carbon dioxide emissions by fuel, 1990–2035

13  World coal consumption by region, 1990–2005

14  World nuclear generating capacity, 2008 and 2035

15  US Military spending vs. the world in 2008

16  A restaurant in Pristina sporting the EU fl ag alongside the Albanian national flag on the day before the Kosovar declaration of independence, February 2008 (Chris Hondros/Getty Images)

17  ‘Saving the euro’ (Klaus Stut tman, 2013)

Tables

1  Percentage of population aged 65 and over, selected European countries 114

2  Top ten citizenships of immigrants to EU-27 member states, 2008 (© European Union, 1995–2013)

3  Numbers travelling each year: a hyper-mobile world – but unevenly so

4  Reasons mentioned why accession talks with Turkey should not proceed (Reprinted by permission of SAGE)

Acknowledgements

Many people have helped me in the preparation of this book. As always I should like to thank everyone at Polity Press for their efficiency and responsiveness. I owe especial thanks to John Thompson, Gill Motley, Neil de Cort, Elliott Karstadt, Breffni O’Connor and Ginny Graham. Caroline Richmond did an outstanding job in copy-editing the text. Anne de Sayrah transcribed an early version of the work and provided numerous other forms of assistance. I owe a large debt to Andreas Sowa for the research contributions he made as well as for his work checking its factual accuracy. I am very grateful to him for his penetrating insights and criticisms. My daughters, Michele and Katy, read several of the chapters and made important critical comments. David Held read the manuscript more than once and made many valuable observations, to which I have tried to respond, and Gerry Bernbaum did the same; I am very grateful to them both. I would also like to thank Kevin Featherstone for his extremely useful feedback. Alena and Maria Ledeneva helped sort through what was originally a rather disorganised first version. For valuable conversations and observations I have to thank Olaf Cramme, Martin Albrow, Roger Liddle, Enrico Franceschini, John Ashton, Alistair Dillon, John Urry, Mark Leonard, Montserrat Guibernau, Monica Mandelli, Giles Radice, Mary Kaldor and Susie Astbury. I was inspired to write the book by my membership of the Council for the Future of Europe, set up by Nicolas Berggruen and Nathan Gardels. Members of that group hold a variety of views on Europe, and those expressed here are my own take on how things stand. I have gained enormously from interaction with my colleagues on Sub-Committee ‘D’ of the House of Lords, concerned with European Union policy in the areas of Agriculture, Fisheries, Environment and Energy, and would like to pay tribute to them.

Anthony Giddens

Introduction

Excerpts from speech by Winston Churchill, delivered at the University of Zurich, Switzerland, on 19 September 1946:

I wish to speak to you today about the tragedy of Europe. This noble continent, comprising on the whole the fairest and most cultivated regions of the earth, enjoying a temperate and equitable climate, is the home of all the great parent races of the Western world … And what is the plight to which Europe has been reduced? … Over wide areas a vast quivering mass of tormented, hungry, care-worn and bewildered human beings gape at the ruins of their cities and their homes, and scan the dark horizons for the approach of some new peril, tyranny or terror. Among the victors there is a babble of voices: among the vanquished the sullen silence of despair …

Yet all the while there is a remedy which, if it were generally and spontaneously adopted by the great majority of people in many lands, would as if by a miracle transform the whole scene … What is this sovereign remedy? It is to re-create the European Family, or as much of it as we can, and to provide it with a structure under which it can dwell in peace, in safety and in freedom. We must build a kind of United States of Europe …

We British have our Commonwealth of Nations … why should there not be a European group which could give a sense of enlarged patriotism and common citizenship to the distracted peoples of this turbulent and mighty continent? And why should it not take its rightful place with other great groupings and help shape the onward destinies of men? … Therefore I say to you: let Europe arise!

It is 2006, the 60th anniversary of Churchill’s speech. There is no United States of Europe, but what has become the European Union is riding high. The Cold War is over. The USSR has long since dissolved, remarkably almost without the firing of a single shot. A divided Germany has become one again. West and East Europe have been reunited too, with the EU playing a key role in the process. The euro has been launched, its apparent success confounding its critics. In its report in September of that year, the IMF pronounces the global economy to be in robust shape even if it notes a few causes for concern. Not much more than twelve months later the world lurches into what turns out to be its biggest economic crisis since the 1930s. European leaders originally see the problem as an American one, brought about by the free-wheeling nature of its version of capitalism. That is in some part true, but its effects in Europe* then start to become profound and disturbing. The hubris of the EU leaders rapidly turns to something close to despair as they struggle to cope. The existence of the euro – a fully fledged currency but without the backing of a sovereign power – compounds the wider problems. The eurozone countries become engaged in an almighty struggle to keep the euro alive.

* In this book I follow convention in using the terms ‘Europe’ and the ‘European Union’ interchangeably except where the context needs them to be clearly differentiated. A precise line is difficult to draw, because national policies can have a major impact at the European level – for example, in the areas of welfare and energy policies.

Move forward to the present day. The travails of the euro have been contained but by no means fully overcome. The EU’s problems remain serious and dangerous: serious, because the whole project of building a united continent could founder; dangerous, because if things should go badly wrong the consequences could be cataclysmic. Some say that the same antagonisms that produced wars in the past are still around. ‘The demons are not gone – they’re only sleeping, as the wars in Bosnia and Kosovo have shown.’1 The prospect of military conflict between the major nations of Europe fortunately seems remote. The Balkan conflicts, after all, occurred in the remnants of the Soviet empire, now vanished forever. Yet it is right to agonise about the spectres that lurk in wait should the EU start to disintegrate. When the single currency was introduced, the EU was in effect taking a huge gamble, and consciously so. From the beginning the euro was a political project as well as an economic one. Those who founded the euro were aware that the full conditions needed for a currency to be stable and successful were not there. The idea was that they could be developed as the euro helped foster a more cohesive European economy. The extent of the gamble may not have been realised by those who initiated the project, because economic conditions were fairly propitious at the time and remained so for some while.

Europe is no longer mighty but has again become turbulent as conflicts and divisions spring up across the continent. Unemployment has risen to a new high and is especially pronounced among younger people. Countries that before the financial crisis balanced their books have now run up spectacular levels of debt. Among those that were more profligate, some are in a dire state economically and lack the means to devalue their currency. They have had to accept huge bailouts. The fortunes of the Northern and Southern eurozone members have diverged quite radically. Under the impact of the crisis, support for the Union has begun to corrode. The findings of Eurobarometer, the survey carried out by the European Commission every six months, show increasing disillusionment with the EU almost everywhere.2 In Spain, for example, in 2007, 65 per cent of respondents expressed trust in the EU, compared with 23 per cent who did not. Those figures have now been more than reversed: 20 per cent still endorse the EU, compared with 72 per cent who take the opposite view. Similar figures apply in countries such as Greece, Portugal and Ireland, as well as in some of the former communist nations such as Hungary and Romania. In a less dramatic way, the same is the case in the more prosperous member states, including Germany, Austria and Finland. In the UK, long the country with the lowest level of public support for the Union, views of the EU have turned even more sour than before. There have been anti-EU protests and demonstrations in many different countries.

Figure 1 Churchill tips his hat to the crowd, Zurich, 19 September 1946

Few if any groups have been seen on the streets demonstrating in favour of the European Union. It would be fair to say that, in spite of its many successes, the Union has not put down emotional roots anywhere among its citizens. As academics are fond of saying, it is a ‘functionalist’ enterprise, driven by results rather than affection, let alone passion. Thus it is hardly surprising that, when the results are no longer forthcoming, people’s support plummets. The ‘sense of enlarged patriotism and common citizenship’ of which Churchill spoke has simply not arrived. I argue in what follows that the EU must move closer to its citizens over the next few years – and vice versa – or it will not survive in recognisable form at all. I have written this book to explore how such a process might happen. I introduce new concepts to help understand the limits of the Union as it stands and its potential for the future. If I am quite often critical, it is with the aim of helping to propel the European project onwards. The fate of the Union matters, it matters a great deal. Over 500 million people live in the EU states. What happens in Europe is world-historical in terms of its importance. The stakes are high indeed.

The structural make-up of the EU explains a lot about why it is so remote from its citizenry. To put things baldly, the Union suffers from a simultaneous lack of democracy and effective leadership. The three main institutions in the EU are the Commission, the Council and the Parliament. The Commission is formally responsible for initiating plans, projects and policies for the Union as a whole. Decisions on the Commission’s proposals are made by Council and the Parliament, often a long-winded process and one with no guarantee of ultimate success. Moreover, citizens are nowhere directly involved. The European elections are fought largely on national issues. Turnout in the elections is low because voters are well aware of the situation. The Parliament tends to operate on the sidelines, its procedures obscure to the wider public. National leaders, especially of the larger countries, often want to have their cake and eat it. They proclaim their European credentials, but in practice what is perceived as the national interest comes first. So far as its citizens are concerned, the EU has only a shallow pool of legitimacy to draw upon, since it has no deep roots in their everyday lives.

Normal EU governance is incremental and the Commission plays the most prominent part in it. It even has a name, the ‘Monnet method’. Jean Monnet, one of the great European figures, held that a European architecture could be built most fruitfully brick by brick. Dialogue and discussion to initiate such steps took place mainly in small circles of people; national parliaments and citizens were left out. The EU was thus created in some substantial part ‘out of sight’. When rapid or especially consequential decisions have to be taken, there is a big, big problem. Effectively, they cannot be handled within the formal institutions themselves. In such circumstances a handful of individuals, usually from the big member states, take over, shape what has to be done and push it through. This is what took place, for example, with the reunification of Germany and with the initiation of the euro. The lack of effective leadership in the EU is thus temporarily resolved. France and Germany have normally been the key players, along with a finite and shifting number of other states, plus sometimes the heads of international organisations.

The governance of the Union hence takes place through two intersecting structures, which for want of better names I shall call EU1 and EU2. EU1 is the Europe of the Monnet method, with the Commission and the Council, plus more latterly the Parliament, in the driving seat. EU2 is where a lot of the real power lies, exercised on a selective and informal basis. The EU1/EU2 distinction is quite different from that between the Commission and the Council. It focuses upon the differences between how things are supposed to be done and how they really are done, especially in crisis situations. However, a more nebulous version of EU2 operates behind the scenes in a more chronic way, and indeed could be seen as intrinsic to the Monnet method. It is a point of recourse for the Commission and the other EU bodies, which consult specific national leaders informally before pursuing policy initiatives.

The EU2 which is de facto running Europe at the moment consists of the German chancellor, currently Angela Merkel, the French president (François Hollande) and one or two other national leaders, plus the heads of the European Central Bank (ECB) and the International Monetary Fund (IMF). The presidents of the European Council and of the Commission quite often get a look in. The term Troika has become widely used to refer to the heads of the ECB, the IMF and the Commission in their role as overseers for the failing economies. The label carries an overlay of heavy irony. It originally designated the leaders of the Soviet Union – the heads of the Communist Party, the government and the state. Yet the notion is misleading in the current context. Chancellor Merkel is in fact the most important figure in Europe today. Whatever the Troika may agree has to be ratified by her.

The concepts of EU1, EU2 and what I shall call paper Europe are crucial to this book. I argue that the evolution of the Union can be interpreted in terms of them, as can its current struggles. Because of the absence of democratic leadership, the Union occupies a space where these three intersect. The EU’s aims in a variety of fields, from economic success through to global peacekeeping, are often very ambitious. As ends rather than means, they stand in contrast to the caution of the Monnet method. Paper Europe consists of a host of future plans, roadmaps, and so forth, drawn up by the Commission and other EU agencies. Many, however, remain just that – aspirations that cannot be fleshed out and made real because there are no effective means for their implementation. Paper Europe isn’t the same as bureaucracy, although it overlaps with it. The point is not its procedural nature but the fact that ambitious schemes and proposals are drawn up which remain largely empty. The existence of paper Europe is obvious inside and outside the EU and hence affects its credibility. One wouldn’t take an individual too seriously who was full of grandiose but undelivered promises, and the same is true of an institution.

Almost all observers writing about Europe at the current time focus upon the schisms that have opened up across the continent. I want to diverge rather radically from this conventional perspective. I suggest that there are in fact two processes going on, intertwined with one another – division and conflict, yes of course, but also de facto integration. Driven precisely by the depth of the current crisis, the EU has become experienced as a community of fate in a way in which it never was before. What I mean by this is that citizens and political leaders across Europe have become aware of their interdependence. There is for the first time a European political space. In spite, or because of, all the tensions and the protest movements, Europe has risen way up the political agenda, both for the member nations and, more crucially, for citizens. National elections reflect European issues more directly than has ever previously been the case. One can hardly open a daily newspaper without seeing a feature about the EU (even in the UK). This transition is momentous because it is almost certainly irreversible.

For those like myself who want to see the European Union survive and prosper, there is a simple question to ask and try to answer. Can the changes happening under a negative sign be converted into a positive one? EU2 under a positive sign would be not an ad hoc cadre of individuals with no legitimacy, but an institutionalised system of leadership with a democratic mandate. Turning the Union into a community of fate in a positive sense means building solidarity and feelings of belonging to the EU as a whole rather than only to its constituent nations or regions. I believe these developments are not only possible but necessary if Europe is to emerge from its malaise.

In the short term the 2014 European elections could mark a watershed. The elections are likely to be the first of their type actually to be focused on European issues, not just on national ones. They will be an important skirmish in the more protracted battle for the future of Europe. The obvious danger is that they could be dominated by the populists and Eurosceptics. Pro-Europeans across Europe should get together well before the elections to put their arguments to the public. These endeavours should be not just national but pan-European – led by a diversity of actors, such as civil society organisations, think-tanks and grassroots party groups. I would like to see the media sympathetic to the European project contribute by sharing on a regular basis articles focused specifically on issues of common concern. The Commission has its own initiative for a ‘great debate’ across Europe, and its representatives are touring Europe to develop it; but I have in mind something much more wide-ranging and less top down.

My longer-term argument is as follows. The euro has performed the task its founders intended. It has made the eurozone, and by extension the EU as a whole, far more interdependent than ever before. However, it has done so in an oblique, explosive and in some respects irresponsible way, bringing much suffering in its wake. The economic discipline and fiscal mechanisms that should have been there from the beginning are being created because of fear of further disasters. EU2 has moved fairly quickly, at least by the usual standards of the Union, to make needed innovations, although all need German acquiescence. A great deal more remains to be done. On the face of things, Germany seems to have achieved by pacific means what it was unable to bring about through military conquest – the domination of Europe. As a permanent condition, however, ‘German Europe’ is a non-starter.3 Its existence is at the origin of the resentments that divide the continent. In essence, Europe must choose a new future, and this time the citizens must be directly involved. The eurozone countries have to set the pace, but the states outside the euro will be affected just as much by the innovations that are made.

The path ahead is in principle quite clear, although the practical and political problems standing in the way are formidable. The chain of reasoning goes as follows. The euro must be saved – even winding it back progressively would be extremely difficult and possibly disastrous. Moreover, the EU would be finished as a credible influence in world affairs. Structural reform is needed on a wide scale, not just in the weaker economies but to some degree across the board. In more concrete terms, defending the single currency means setting up a banking union and transferring some fiscal powers from the eurozone states to economic governing bodies. In turn, such a move implies acceptance of mutuality – shared responsibilities between richer and poorer economies alike. If this step is not taken at some point, all bets for a stable future for Europe are off. Intensified coordination, the EU’s usual path, cannot substitute for that key move. The EU has, one might say, a detailed, indeed overly complex, anatomy but a poorly developed physiology.

Economic interdependence on this scale in turn at some point presumes further political integration. To put it bluntly, a federal solution of some sort, even if minimalist in character, is not just back on the agenda but an exigency – and in the relatively near future. Federalism: nothing provokes the wrath of the Eurosceptics more. Eurosceptics come in different hues, but they almost all fret about ‘rule from Brussels’. Yet they don’t seem to worry at all about rule by the bond markets, which are far more distant and impersonal. They don’t seem to worry that immigration into Europe would be far harder to regulate than is the case now. They don’t seem to worry about the possibility that national conflicts of a serious nature could reawaken. They don’t seem to worry about the fact that, if the EU disappears or becomes shrivelled, what could be left is a G2 world, dominated by the US and China. Most concerns about federalism are about loss of national sovereignty. However, to have any meaning, sovereignty must refer to real control over the affairs of the nation. You cannot surrender something you have largely lost anyway. The power of individual nations in the global arena is slight. The rationale for the further pooling of sovereignty in the EU is what I shall call sovereignty+. Through their collaboration, the member states of the EU acquire more real influence in the world than they could as individual actors. Each, in other words, experiences a net gain. This effect is not confined to communal decisions. Because of the implicit back-up provided by EU membership, individual nations have more influence than they otherwise would have even when acting alone.

I write this book as a committed pro-European. I am a pro-European because the evidence as to why sovereignty+ confers large-scale benefits is so strong. The EU and its forerunners have helped bring together a war-torn continent. Many say that this phase of the Union’s development is now over, as the prospect of war in Europe has disappeared. Yet a lot of work remains to be done. There has been a bitter and bloody conflict in recent times, consequent upon the break-up of Yugoslavia. The war has left its trail behind it, including some extremely challenging problems. Croatia is the latest member state of the Union. It is of the first importance that adjacent states, especially Serbia, at some point follow suit. It would be a massive achievement if the Balkan countries as a whole at some point could be incorporated as full EU members. The EU can play a role in global politics well beyond that open to any of its component nations. In other words, it can and should become a significant world influence at a time when the orthodox international institutions have reached gridlock.4 For better or worse, the international arena is dominated by a handful of the larger states. A fragmented Europe has little chance of making its voice heard.

Common action is needed in many areas in Europe and around its borders – most of which would apply were the EU to exist or not. A whole diversity of concerns can be included in this category, among them frontier management, customs controls, combating crime, applying international law, co ordination of monetary systems (were there not to be a single currency), environmental cooperation, disease prevention and control, and a multitude of others. The EU can perform most of these functions more effectively and cheaply than would be possible with a multiplicity of ad hoc arrangements. New areas of instability now exist along the EU’s periphery, especially in the Middle East. They will demand a collective response should their consequences leak over into Europe. The EU can help promote values which, if not unique to European civilisation, are deeply embedded in it – alongside, one must say, its violent and colonial past. These include ideals such as the promotion of peace, the rule of law, rights of democratic participation, the equality of the sexes and other moral imperatives. If the Union should fade in importance, or worse, Europe would become a backwater, a jumble of small and medium-sized states. Yet it could not withdraw from a world of massive change and would at the same time be geopolitically vulnerable.

Implausible although it may appear in current circumstances, the EU is there to promote common economic prosperity. Before the financial crisis hit, the single market in 2006 was calculated to add 2.2 per cent a year to EU overall GDP. The EU economic arena is larger than the American economy. In many domains, businesses operate with a single set of rules rather than the multiplicity that would otherwise exist. The EU can negotiate trade deals externally that single nations could not match. In the short term, economic reconstruction is likely to be the key to almost everything else in Europe. Should the eurozone, under the aegis of greater economic integration, return to prosperity, the attitudes of Europe’s citizens would probably be transformed. The Union would be seen as the solution rather than the problem.

On the face of it, the situation looks dire. There is only a feeble and partial return to growth. Unemployment on average remains dauntingly high. All the EU states, indeed all the industrial countries, have accumulated huge debts. Amazingly, some analysts seem to be acting as though the current recession were simply a temporary hiatus. It cannot be so. There is abundant evidence that deeper factors are involved. We may be at the point of a major transition in world economic history and one that remains imperfectly understood. No one has lived before in such an interconnected world. The dominant theory of the global economy over the past three or so decades has been confounded without a replacement in sight. In the established orthodoxy, the way to run an economy effectively was through keeping inflation low, while maintaining a fiscal balance and allowing large-scale deregulation. The real world has turned out to be quite different. In this world, system shocks may be impossible to predict, low interest rates do not stimulate economic activity, capital flows destabilise rather than enhance economic stability, and financial bubbles may become identifiable only when it is too late. It is not at all clear that Keynesian economics has an alternative to offer, deriving as it does from a time very different from that in which we now live. There may be further shocks stored up, given the complexity of the world financial system, where reforms made so far have still been relatively marginal.

At this point we have to think radically and in an innovative way. The recession is not simply one in which a resurgence of demand and consumer spending will put everything right again. It is deeply structural. Remedies have to be commensurately wide-ranging. Where will new jobs come from in the industrial countries and in the volume required? It is a huge issue, especially acute in Europe because of its overlap with the problems of the euro; and it goes well beyond the question of the relationship between austerity and proactive investment. Deindustrialisation has done much damage in Europe, as elsewhere. We should not be content just to accept it as a given, but see if and how the trend can at least to some extent be put into reverse. Profound changes are affecting not only industrial production but the service industries, driven in some large part by the extraordinary global transformation that is the internet. Digital production looks to be a revolutionary force in the making. I believe that I was one of the first, years ago, to deploy the notion of globalisation; yet I had no inkling at the time how intensive and ubiquitous that process would be. Even so, it is perhaps only in its early stages, with much more to come.

I shall argue that, largely because of the acceleration of globalisation and the rise of the internet, we (human beings as a whole) are living in a different kind of social and technological system from that even in the quite recent past. I call this the high opportunity, high risk society. Partly because of our new-found global interdependence and partly because of an accelerating overall level of scientific and technological innovation, opportunities and risk intertwine for us in a way that has no precedent in prior history. We have no easy way in advance of telling how the balance of opportunities and risks will pan out. There are fundamental system risks in a much more interdependent world, as we see from the financial crisis. We simply don’t know how far we can contain the risks from climate change, the possible proliferation of nuclear weapons, pandemics and other fundamental threats. On the other hand, the level of innovation in some areas, such as genetics or nanotechnology, is stunning. Opportunity and risk combine in very complicated ways, difficult or impossible to predict in advance. I fold these ideas into every chapter of the book. Rethinking will be needed in many areas, from the economy through to coping with climate change.

No matter how far-reaching they may be, policies internal to the EU or its constituent nations are not likely to restore significant, let alone stable and sustainable, growth without a reshaping of the world economic order. The Union absolutely must seek to play a central part in such a process, which may stretch over years: it will be far easier to do so if the euro is stabilised as a global currency. One should be cautious, I think, about all the talk that this will be the Asian century or that the industrial countries are condemned to relative decline. It may be so, but history tends to progress dialectically. Existing trends often call into play their opposites. In any case, the situation that has existed over the past several decades cannot continue. This was one in which the Asian countries, especially China, produced goods for Western consumers that essentially those consumers could not afford. They then borrowed extensively to do so, accumulating debt that was bought up … by the Chinese, in the shape of sovereign bonds and other assets. In the meantime, the propensity of Chinese citizens to save rather than spend (rational in the absence of a welfare system of any note) dampened Chinese internal demand, which was needed to develop the country further. An extensive adjustment is in order. Adventurous thinking and policy-making will be necessary here too if a major impact is to be made upon these difficulties.

At the time of such profound problems for the EU and for the industrialised world more generally, it makes sense to look again at all of its major areas of activity, opening them up to scrutiny. There are serious concerns about whether Europe’s cherished ‘social model’ can survive in a period of severe economic retrenchment. The social model – in other words, a comprehensive and effective welfare system, coupled to goals of equality and inclusion – was always part reality, part aspiration. Major reforms will be needed in most countries if the first is not going to be wholly displaced by the second. Yet, if transformed into what I call a social investment state, it can both survive and prosper. The social model has to be integrated with the achievement of economic prosperity, not just treated as dependent upon it. A connected question, hugely controversial, is the impact of immigration. Some see immigration as almost as great an issue as the continent’s political and economic problems. Multiculturalism, they say, has been a disaster. I don’t agree at all and try to show why. However, the issue has to be reframed in the context of the age of ‘super-diversity’ in which, as a result of the internet, we now live. The world has moved on from the early days in which the notion of multiculturalism was originally framed. A better concept for grasping this is that of interculturalism.

One of the EU’s special emphases has been its focus on environmental questions, especially its aspiration to be in the vanguard of the rest of the world in combating climate change – a worthwhile and urgent endeavour if ever there was one. Yet the United Nations meeting in Copenhagen in 2009, which was supposed to be the crowning effort of Europe’s leadership, famously became a wholesale fiasco. As a result of its usual problem – who speaks for the EU? – the Union’s leaders played no direct part in the meeting at which the agreements that were reached were drawn up. A big rethink is needed, starting with the concepts of ‘conservation’, ‘sustainability’ and the ‘precautionary principle’. The difficulty with these notions as widely understood is that they developed within the green movement, with its characteristic emphases upon protecting nature and upon the limits to growth. Hence they emerged as essentially conservative and defensive ideas, with the aim of preserving nature. Yet nature today has become thoroughly humanised. When examined closely, the precautionary principle turns out to be incoherent. Innovation is the wild card in the pack so far as sustainability is concerned. In the energy field, for example, no one anticipated even only a few years ago that shale gas would be so transformative in its implications. The US has reduced its CO2 emissions by a larger percentage than the EU over the past few years, in some part because of having turned towards gas and away from coal. Its energy prices have become cheaper, thus helping in its industrial renaissance.

In the sphere of international relations the EU should drop its flight from power, including military power, understandable though the origins of that attitude are. The new narrative for the EU in fact has to be about power – the power to do good in a world which is not a Kantian sphere of eternal peace or a Hobbesian war of all against all. Nor is the international order a balance of power in the sense which that term had in the past. Rather, it is a world of multipolar collaboration between the major states and groups of states, albeit regularly punctuated by tensions and divisions. The European ideal of replacing its own destructive past with the promotion of peace through negotiation and the rule of law is surely wholly justified. Yet in practice it has involved a good deal of hypocrisy too. The EU will turn to the US to bail it out when necessary, as happened in the conflict in ex-Yugoslavia; and it is content to shelter under the protection of NATO, which is funded mainly by American money and whose operations demand the use of American technology. The Union should seek to be more of an equal partner with the US in these respects, at least in the context of operations in and around Europe.

Following a federal path will mean giving up some of the EU’s conceits. A federal Union will not be the experiment in international relations that so many have seen it to be. It will have far more impact on the wider world than hitherto, but it will not be a contribution to global governance in its actual form. A mea culpa is needed here. Along with many others, I used to think that the EU could pioneer government without any of the trappings of a state. I have had to revise my views.

In a federal Europe, with the eurozone as its driving force, there might not be much space any longer for ‘variable geometry’. That is to say, member states with opt-outs from the euro and a range of other EU provisions are not likely to stay that way indefinitely. The direction of movement of the EU, if it is to overcome its current woes, must of necessity be more or less along a single path. There are worrying problems in wait here for the UK, whose prime minister, David Cameron, has set out a position quite at odds with this exigency. The country might find itself seriously isolated within the EU and perhaps opt to leave. It would be in the position Churchill foresaw, but without the mantle of empire that still existed in his day – for better or worse, on its own in a very large and perturbing world.

Chapter 1

The EU as Community of Fate

The malaise of the euro does not stand on its own. It reflects issues that stretch a long way beyond Europe itself, including a series of deep economic problems shared across the industrial countries. Within the European context, the problems surrounding the euro have brought to the fore weaknesses in the Union that are of much longer standing but now demand resolution. All could yet end in disaster. If the euro were to collapse, as could still happen, the economic consequences could be calamitous not only for Europe but for the wider world economy as well.

Europe at the moment is dominated by a specific version of EU2, called into existence by the euro crisis. It features an informal ‘president’ of Europe, Angela Merkel. If Barack Obama wants to influence what is happening in Europe, he talks in the first instance to Mrs Merkel. The ‘president’ has an ‘inner cabinet’, of varying composition, with whom she takes the key decisions – especially in periods of particular difficulty – and seeks to push them through. The ‘cabinet’ consists of a small number of the leaders of influential states, the president of the ECB, plus one or two IMF officials. Of course, there is also a range of connections with EU1and its several presidents, still labouring away in the background. The German leader calls the tune because of the size of the country’s economy and its relative success in comparison with the other larger European states. That situation has to be a transitional one. It is dangerous because of noxious divisions that have opened up between member states as well as its more general ramifications in politics. Countries in the South that depend on German acquiescence to release needed funds are as resentful of that fact as are the ‘donors’. The German public is put off by the image of the ‘feckless’ Greeks that has taken root in the wake of the turmoil in the country. Meanwhile, some Greek politicians are raking over the coals of the Second World War, demanding that Germany pay reparations for its historic brutalities. Populist parties have appeared almost everywhere, although the most prominent antedate the crisis itself. Most are nationalist and Eurosceptic in one sense or another. Some, such as that led by Geert Wilders in the Netherlands, have participated in government. Democratic processes have sometimes been put in suspension. In November 2011 the prime minister of Italy, Silvio Berlusconi, resigned from his position and was replaced by a ‘technocrat’, Mario Monti. Monti initiated a reform programme in Italy, approved of by Chancellor Merkel, the then president of France, Nicolas Sarkozy, the ECB and the IMF – EU2, in other words.

Monti then stood for office in the general election of February 2013, at the head of a new coalition group. His coalition, however, finished bottom of the four main contenders. The big surprise was the success of the ‘Five Star Movement’, led by the comedian and actor Beppe Grillo. As a consequence of the division of the vote, no coherent government could initially be formed. Grillo described Mr Monti as an agent of the banks and repeatedly called for a referendum on Italy’s membership of the euro. He is not, he said, a Eurosceptic or anti-European, but a critic of how the EU has evolved. ‘Why is only Germany getting richer?’ he asked.1

The euro could in principle be wound back, one or two members could either be ejected or leave, or even the whole thing could be abandoned. I defer detailed discussion of these possibilities to the end of the book. Even the more limited options could prove far more difficult than many who have proposed such courses of action seem to imagine. Following the path of further integration is the only way the Union can effectively deal with the problems it faces today. The basic theorem is simple. Saving the euro means moving towards greater economic cohesion within the eurozone. Because EU2 leadership is inherently too unstable and divisive, this in turn presumes a transformation of the EU’s political institutions. The deep, and connected, flaws that have haunted the European project since its inception must be dealt with – its lack of both democratic legitimacy and effective leadership. The politics of getting from here to there, however, are testing indeed, since they reflect the very limitations of the system that needs to be replaced.

Progress so far has been substantial, if erratically so. Since reform is crisis-driven, decisions are quite often taken, and interventions made, at the last minute. Once things appear a bit more placid, the impetus to push through major change can be lost. The personalities involved count for a lot, as does how well they get on with one another at any particular point, since their association is informal – that is, not based upon an established institutional system. Moreover, EU2 is unstable because of the vagaries of national election processes which, being timed differently, act against continuity of leadership. Thus for some while commentators used to speak of Europe being led by ‘Merkozy’ – the duo of Angela Merkel and Nicolas Sarkozy. Some newspapers even published photos in which the traits of the two were combined to form a single face. The German tabloid Bild carried a headline: ‘Merkozy – sieht so das neue Europa aus?’ (‘Merkozy – is this how the new Europe looks?’)2 Although in the early days there were many tensions between them, Merkel and Sarkozy became ‘Europe’s indispensable couple’. Sarkozy explained in private the dynamics of the ‘marriage’ and he put it very appropriately: ‘Germany without France frightens everyone. France without Germany frightens no one.’3 By acting together they could mute each of these qualities and could also underpin the wider activities of EU2.