The EU’s Split Personality

Critique Internationale (International Critique),
No. 13, October 2001, Paris

The European Union (EU) has always been something of a hybrid, with political ambitions grafted on to economic roots. Since the first tentative steps toward integration half a century ago, member governments have used economic measures to promote political cooperation. In spite of the name change from an "economic community" to a more ambitious "union," the EU remains primarily an economic arrangement.

Some countries are happier with this status quo than others. The United Kingdom has historically been reluctant to move beyond a simple free trade area with free movement of capital and labor; former Prime Minister Margaret Thatcher was often the bête noire of pro-Europeans for her vociferous defense of the strictly economic nature of the EU. Many continental European commentators recoil at this idea. Former European Commission President Jacques Delors, German Foreign Minister Joschka Fischer, and others have all called recently for greater political union.

A recent article by Nicolas Jabko in the quarterly Critique Internationale — published by the prestigious Institute for Political Studies in Paris — attempts to bridge this divide. Jabko, a researcher at the Paris-based Center of International Research and Studies, argues that if the aim of European integration had been solely to create a free trade area, the EU would never have gotten off the ground and no single market or single currency would exist today. But at the same time, he concedes that "market forces" have helped shape political choices and create political momentum.

In Jabko’s careful, if somewhat laborious, analysis, he attempts to untangle the political-economic nexus. In the early postwar decades, he argues, the reasons for forging closer ties within Europe were so obvious that they were not even discussed; three wars in four generations between France and Germany sufficed to show the need for cooperation. At least since the early 1980s, however, the interaction between politics and economics has become more complex. A loss of faith by governments in the ability of industrial policy, protectionism, and even activist monetary policies to produce prosperity has reduced the perceived scope for national economic policies and opened the field to pan-European approaches to policy reform. In this environment, further European integration presents a rallying point both for laissez-faire types and for those unrepentant policy activists who still see a crucial economic role for the state.

Jabko believes that governments can pursue unpopular policies at both a national and regional level because European integration is presented as a means of fostering regional development, not as an excuse to give market forces free rein. Thus, complementary European-level policies aim to ensure that those regions bearing a disproportionate share of the costs of integration have access to structural funds that help them develop local infrastructure and attract investment — such as the massive Japanese and American investments that have gone to Wales and Scotland. Such structural funds are not large, but they are politically important. European integration must be seen as beneficial to all if it is to succeed. In other words, the European project is presented as a way of harnessing the pressures of market forces within a European social model.

But even if one accepts this political imperative behind European integration, a nagging question remains: What drives this imperative? Is a united Europe really the only "big idea" left among the many that have been demolished by market forces over the past two decades? Perhaps, but in France at least, market forces have a name: Anglo-Saxon capitalism. If right and left in Europe can agree on the European ideal as a rallying cry, they do so primarily to compete with — and sometimes confront — the economic colossus across the Atlantic.

Will this political desire for parity with the United States on the world stage sustain further attempts at European integration, notably in the area of common defense and foreign policies, the direct election of the president of the European Commission, and a European Constitution? Will the creation of a single market and a single currency serve as a catalyst in these areas, much as market forces did in the 1980s? Or will teething difficulties surrounding the move to a common currency make further reforms even less likely? The risk of using economic policies to further political objectives is that any further political integration will ultimately hinge on the success of those economic policies. A hybrid is only as healthy as its roots.