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European Lefts and the Puzzles of European Integration

George Ross Draft April 2008

In a context of tectonic international shifts over recent decades European

integration has had large consequences for the European Left. Analyzing this is not easy,

however. In part this is because the EU really does justify the widely-used label of

‘unidentified flying political object’ that defies Westphalian conventions and constantly

changes its size, scope, and institutional costumes.1 Over these decades the European

Left itself has also been a multiplicity of different political formations varying with

nationality and historical moment. Finally, the worlds around both the EU and Center

lefts have been changed by much more than the three international crises which are the

central focus of this volume.

The best way to begin is by historicizing the interactions between the EU and the

Left. Our first part will thus consider Lefts and the “Common Market’s” founding years

prior to the international economic crisis of the 1970s, a period when Lefts focused on

national post-war development models and when nascent European integration was an

accessory to these models. Next, we revisit the EC and the Left as they move from this

crisis into the heady years of EC’s `1992`program for unifying and liberalizing the

`single market,`followed by the creation of European Economic and Monetary Union

(EMU), major changes that deeply challenged national models. The third part turns to the

huge effects on the EU and European Lefts of the end of the Cold War and the coming of

globalization. By this point the EU had become a major puzzle to political parties on all

sides.Was it, could it be, a buffer for promoting globalization with a European social

democratic face, or was it a machine aggressively promoting neo-liberal globalization?

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I. Lefts at the Founding?

The European Union was founded by six Western European countries – France,

the German Federal Republic, Italy and the three Benelux countries - in the 1957 Treaties

of Rome. Its initial name, the European Economic Community (EEC) and its colloquial

title, “the Common Market,” both underlined its primary focus on economic matters. The

Rome Treaty announced great ambitions, including “ever closer union” among its

members, but it was primarily about creating a “customs free zone” - a common external

tariff within which trade barriers among its members would be opened, mainly to free

trade in manufactured and agricultural goods.

Institutionally, the EU adopted a model created earlier (1952) for the European

Coal and Steel Community (ECSC). The EEC was basically intergovernmental and a

Council of (national) Ministers decided key policy matters. But it also had a unique

supranational “European Commission” with the exclusive monopoly of proposing

legislation. In addition, to ensure that the Commission proposed and the Council decided

strictly within the areas covered by the treaties there was a European Court of Justice

which promoted the superiority of European over national law. Finally, there was a

“European Assembly” (the precursor of today’s European Parliament) whose members

were appointed from national legislatures which had little power.

This institutional model was chosen because the founders knew that building

Europe demanded more than inter-governmentalism. Without supranational mechanisms

like the Commission and Court, purpose-built to promote cooperation, they hypothesized

that only low-level and ineffective deals would follow. If the EEC could stimulate real

inter-state cooperation in its initially-chosen economic-market areas, however, they

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anticipated that linkages between economics and other key policy areas might lead to

“spillover” and eventually broaden the scope of integration. Finally, they recognized that

European integration would work best, at least initially, if a degree of political stealth

could be maintained. If peoples knew too much, processes could get bogged down.

The EEC was founded during the high point of Europe’s postwar boom. West

European economies were then emerging from protected, often statist, post-war

reconstruction programs and were profoundly national. 2 Each EEC member thus had its

own specific economic strategies, welfare states, and industrial relations systems. Given

their differences and relative policy insularities, these national models placed limits on

how far early Europeanization could go. Integration served to increase intra-EEC trade in

manufactured goods that stimulated national growth. The Common Agricultural Policy

greatly stimulated agricultural investment and cushioned the difficult transitions from

farming to factory work that accompanied new post-war industrialization. The EEC’s

external tariff provided some protection from international trade, simultaneously a buffer

against, and a subsystem within, the U.S.-coordinated Bretton Woods system.

Post-war Socialist, Communist and other parties were organizations that

represented social groups, workers in the first instance, that were often relatively new to

full democratic participation. These parties, and the party systems within which they

worked, differed greatly from place to place. Some, Social Democrats or Communists,

the latter powerful in France and Italy, were classic `mass` parties with close ties to

organized labor while often faced with the need to seduce new middle class clienteles to

achieve electoral success. The Germany SPD, for example, explicitly decided at its

Godesberg conference in 1959, that it needed to become a more of a ”catch-all” party.

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Some, like the French and Italian Socialists, were odd combinations of clientelism and

municipal socialism. It was rare for any of these Left formations to have exclusive

representational franchises in their countries, with the German SPD an exception. Lefts

were usually divided, whether between Communists and Socialists, as in Italy and

France, or by linguistic or religious differences, as in Belgium and the Netherlands, with

such divisions making for persistent quarrels and electoral problems, and where such

divisions existed, the Left usually had to compete within multi-party landscapes, making

their strategic problems even more complicated. 3

Divided or not, these Lefts had often been central in building these national

political economies. Partly because of their actions the EEC`s new national political

economies thus all had expanding welfare states, growing, if hesitant, commitments to

labor rights, and deep state involvement in the working of markets. Looked at more

closely, however, the differences were striking. West Germany’s “social market

economy” initially thrived on exports, cheap labor and a tough monetary policy, even

though things would change a bit in the 1960s.4 French statism, pronounced already in

the feeble Fourth Republic, assumed exaggerated proportions after 1958 under de

Gaulle.5 Belgium and the Netherlands lived with heavily contractualized pillar

arrangements until the 1970s (Liphardt, Visser+Hemerijck). Italy, less developed, played

catchup, at least in its North, in semi-statist ways that hid behind a clientelist and corrupt

Christian Democratic regime (Hellman). In the EEC’s near neighbors, the Scandinavians

built densely organized social democratic systems in which most actors knew that

national cooperation for international economic success was essential (Stephens, also

Esping Andersons 3W, on welfare state matters). The British, politically determined but

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ineffective saboteurs of EEC integration in the 1950s, lived with a Labour-created public

sector and welfare state stalled by bad economic policies, a flawed industrial relations

system, and a collapsing empire.

European Lefts, with eyes focused on specific national systems, were not fervent

supporters of European integration, and the EEC was not a Left project. True, Spaak, the

Belgian Foreign Minister who ran the talks that led to the Rome Treaties, was a titular

Socialist, but was really much more a Belgian national politician deeply molded by

wartime experience(see Spaak, The Continuing Battle, Memoirs of a European Weid and

Nic London 1971). Some French Fourth Republic leaders (including Guy Mollet, head of

the SFIO, and Francois Mitterrand, an independent Leftist) were “Europeans” but parts of

the French Left energetically opposed integration.(Newman). The German Social

Democrats initially opposed it but changed their minds after the mid-1950s. The Italian

Left, Socialist and Communist, was more positive, however, as were Italian politicians

more generally. But the EEC really emerged from a generation of elite leaders haunted by

World War II most often Center-Right Christian Democrats.

The Left had reasons to be apprehensive. Trade liberalization could change the

balance of comparative advantage and threaten national jobs. The idea of “ever-closer

union among the peoples of Europe,” had enough federalist connotations to scare Leftists

who saw national models as their best bet. Some Lefts also interpreted the EEC as a

renaissance of German power (the Communist line in the 1950s). The Treaty also

suggested abolishing “obstacles to freedom of movement for persons, services and

capital,” which, if taken seriously, could pose a bigger threat than open trade in

manufacturing. The Treaty’s other explicit objectives, beyond the common agricultural

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policy, included common policies for transport, coordinating EEC economic policy,

controlling balance of payments disequilibria, and an anti-trust “system ensuring that

competition in the Common Market is not distorted, ” all readable as threatening from the

Left. Moreover, with the exception of the timetable for internal tariff liberalization, the

treaty was a “framework agreement” that announced general goals but left practical

substance to be worked out later, opening it to readings that implied untold future

surprises. One comfort, however, was that the EEC was legally empowered to work only

in those areas mentioned in the Treaty. Everything else, including social and tax policy,

remained national.

The EEC’s institutions prompted additional Left worries. The new European

Commission was clearly meant as a motor to expand the EEC’s mandate over time.

Mission creep would be hard as long as the Council of – national - Minister had the last

word, giving national governments a veto. But the treaty proposed that once the Common

Market was fully in place the Council should shift toward a system of “qualified majority

voting” (QMV) in which member state votes were weighed by their size. When that

moment came, some member states might be outvoted. The ECJ could also be a threat to

national models because of its capacity for making European law through jurisprudence.

The future was difficult to predict, therefore.

The EEC nonetheless floated happily on buoyant economic conditions in its early

years, creating a win-win game for European integration and national models, mollifying

many anxieties. Things did not always run smoothly, however. When the Commission

proposed an economically liberal Common Agricultural Policy (CAP) that threatened

French and German agricultural subsidy systems, it was shot down.6 Commission

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attempts to promote common transport, regional, and industrial policies were also

blocked.

It was French President Charles de Gaulle, a Center-Right nationalist, who

spearheaded member states resistance in this period. Thus when the British finally

decided that they wanted to join the EEC, de Gaulle, mistrustful of the British-American

special relationship, twice vetoed their applications. He then turned on Commission plans

to enhance its financial powers leading, in September, 1965, to a French withdrawal from

the Council of Ministers that paralyzed decision making, the “empty chair” episode. The

result of this was that the introduction of qualified majority decision-making was

postponed, making unanimity the norm until the 1980s. De Gaulle spoke for France, but

reflected deeper realities. The Common Market had begun after each member

government had developed its own strategies of economic governance. Each EEC

member moved through the 1960s in its own ways, therefore. Trade unions grew

stronger, and often Lefts with them, making the tasks of controlling wages and inflation

more complicated and fueling social tensions, and these processes sometimes exploded in

dramatic ways, as in the 1968 French “May events” and the 1969 Italian “hot autumn.”

National elites on the Right could still think either that things would correct themselves

and on the Left it was still possible to believe that that they would lead to a new wave of

reforms and move socialism closer. Few anticipated the huge international storm that was

gathering.

II. The EC, the Left and the Crisis of the 1970s

The crisis of the 1970s was a turning point.7 The US, faced with inflation,

increased international competition, and chronic balance of payments problems retreated

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from its Bretton Woods engagement to dollar/gold convertibility in 1971. Currencies then

floated against each other, exchange rate speculators shifted into high gear, and financial

globalization began. The oil shocks of 1973 and 1979 then sharply accelerate inflation,

particularly in Europe, with already high inflation and no oil. EC governments reacted in

dispersed national order. The British Labour government and the Gaullist French (along

with the Carter Presidency in the US), tried austerity measures and then reverted to

Keynesianism. The result was stagflation –rising inflation and unemployment in a context

of lower growth. Countries where wages could be kept in line were less perturbed –

Germany, for example, relied upon tough monetary policies to maintain price stability -

although not immune. Lefts in power faced difficult encounters with key constituencies

and risky paths in the international economy, like British Labour, which tried out “Social

Contracts” to limit wage growth and failed, leading to the election of Margaret Thatcher

in 1979. Central bankers and the Anglophone economics profession quickly pronounced

the death of Keynesianism.

The European Community’s situation was desperate. EC leaders proposed

innovations at the Hague summit in 1969 that included Economic and Monetary Union,

deeper foreign policy cooperation, and new social policy, and almost all were abandoned

in the 1970s. Floating exchange rates menaced common market trade and the CAP. EC

member states, desperate to protect themselves without violating Common Market rules,

turned to non-tariff barriers. In general, European cooperation became much more

difficult. The invention of the European Monetary System (EMS) in 1978, shepherded by

France and Germany, was one of the few innovations of the crisis period and the most

prophetic.8 All EC members belonged to EMS, but membership of its inner circle, the

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Exchange Rate Mechanism (ERM), included only those who accepted stronger monetary

constraints such as keeping the value of their currency within a “narrow band” of

reference (± 2.5 percent) to a “basket” of member currencies tied to fluctuations in the

dollar. ERM also had market intervention mechanisms to help threatened currencies and

methods to revalue currencies when needed.9

The EMS system, based on sharp dealing between Center-Right French President

Valéry Giscard d’Estaing and German Social Democratic Chancellor Helmut Schmidt,

was founded on an equivocation. Stronger- currency EMS members used monetary

policy to maintain price stability, following the German Bundesbank, an approach for

which Schmidt, the Social Democrat, was an implacable advocate. Weaker-currency

areas like France were traditionally more tolerant of inflation and devaluation.10 Giscard

and French elites clearly hoped that the Germans would impose limited external

constraints upon French domestic policy and the French could win more flexibility from

the Germans. These differences underlying these hopes provided the central thread in EC

history through the 1990s.

EMS was not a cure for everyone’s problems, including those of the EC. The

British, who in 1973 had made a bad deal when they joined the EC, were contributing

more to the EC budget than they got back. When the Tories replaced Labour in 1979

Thatcher made this her cause, announcing that “we want out money back” and blocking

decisions on everything else. Then in the later 1970s, after the collapse of Southern

European dictatorships, the new democracies succeeding them wanted to join the EC,

with Greece admitted first in 1981. Greece, governed by PASOK, a harder-Left Social

Democratic Party at the time, then demanded that the EC come up with serious

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development aid for poorer members (i.e. itself) and threatened that until this happened it

would prevent Spain and Portugal from joining. Until these two large problems could be

resolved the EC was stuck.

Renewing European Integration

The dramatic history of the French Left explains how the EC eventually got

unstuck. With France sinking into crisis, the French Left, out of power since the later

1950s, won in 1981 behind new French President (and Socialist leader) François

Mitterrand, who carried pledges aimed at re-invigorating France’s dirigiste national

model of development. The Left rapidly legislated extensive new nationalizations,

industrial policy and planning, industrial relations reforms, devolution of powers from

center to regional level, redistributive shifts in social protection programs and Keynesian

stimulation, including extensive public sector job creation.11 But almost immediately this

"Mitterrand experiment" ran into big international difficulties.12 Pressures on the franc

led to retrenchment and three devaluations through March, 1983. 13

By winter 1983 the French had a stark choice between leaving the EMS at high

risk of failure or staying in EMS at the cost of major economic policy changes.

Mitterrand’s decision –using France’s exceptional presidential power - was to stay, a

providential moment for European integration. For France, the new period started with a

major shift to austerity, budgetary constraint, market liberalization, public sector

rationalization and, eventually, privatization, high interest rates, job-destroying industrial

restructuring, and slow growth. It also brought commitment to a hard currency line of

deflating toward parity with the German DM and recession-deepening high interest rates.

The message was that France, of all EC countries, and a French Left president, of all

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political animals, had recognized the new international constraints. This was the

beginning of transition for French Socialists from radical reformism toward “Center

leftism” (Goldhammer and Ross, this volume).

Change was as decisive in foreign policy, the French President’s exclusive

domain.14 François Mitterrand had been a “European” since his days as an independent

Left Minister in the 1950s, and his renewed commitment became evident during the

French EC Presidency in the first half of 1984, which successfully resolved the "British

check" problem and the issue of Spanish and Portuguese accession to the Union, thereby

ended the EC’s decision-making paralysis. Quite as important, Jacques Delors, formerly

Mitterrand’s Minister of Finances and an architect of the Left’s domestic policy shift,

became President of the European Commission.15 In January 1985, in the very first weeks

of his term, Delors announced a huge new program to “complete the single market.” The

Commission White Paper that followed involved a massive program of EC legislation to

remove all barriers to a single European economy by the free circulation of goods,

capital, services, and people.16 The White Paper led a few months later to the Single

European Act (SEA) - the first major European treaty change since Rome in 1957 –

which expanded EC prerogatives, changed EC decision rules to allow qualified majority

Council voting on single market issues, and granted the European Parliament new

amending powers.

After the successful startup of “1992,” the European Council in June, 1988

appointed Delors to be chair of a top-level Committee of central bankers to produce

proposals for Economic and Monetary Union. 17 Delors had managed to insert language

favoring new monetary initiatives into the SEA.18 However, the first explicit suggestions

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for creating a European Central Bank and a single currency then came in 1987 from

Edouard Balladur, French Finance Minister, who had been exasperated by exchange rate

dealings with the Bundesbank. The EMU story borrowed its key lines from EMS. The

French wanted to seize some control over monetary policy from the Bundesbank and

others, the Italians in particular, were interested in helping out. The hope was to construct

a new institutional basis for European monetary policy less biased toward price stability

and more growth-friendly. The Germans had bargaining advantage because of their

financial power, however, and this allowed them to set out German pre-conditions -

independent national central banks, an independent European Central Bank, priority

given to price stability, requirements for budgetary and economic policy convergence for

membership, and liberalization of capital markets.19 The 1988 “Delors Report” outlined

what would eventually emerge - an independent European Central Bank committed to

price stability, a gradual three-stage approach involving careful, monetarily restrictive

movement to policy convergence. Every EU leader but Mrs. Thatcher approved the plans

at Madrid in 1989, just as the Cold War was ending. Since treaties needed to be changed

for EMU, an intergovernmental conference was eventually scheduled to begin after the

first national elections held in united Germany.20

Story in the Story?

What had happened? Mitterrand, as President of a French Left administration, had

exclusive responsibility for conceiving and conducting French foreign policy. Europe

was a natural arena for the most important French international operations, the nexus of

all important Franco-German relationships and a key location for France to work

indirectly on the world stage. Mitterrand pursued long-standing Gaullist goals in

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European matters, trying to promote integration to make Europe stronger and, he hoped,

more independent of American hegemonism. France also had foreign economic policy

interests in diluting German market and monetary power in broader European vessels.

Mitterrand was also a great expert on the ins-and-outs of French domestic politics and

fully aware that new policy activity was necessary to justify his abandonment of the

radical dirigiste and Keynesian program which he and his government had rushed to

implement after May, 1981. He knew that this abandonment would bring higher

unemployment, greater inequality, tough budgetary squeezing, and other painful

consequences for the French and particularly for the French Left’s own constituencies.

On its own, proposing that the French suffer serious difficulties for several years in the

interests of a new liberal project that contradicted the one upon which the Left had only

recently been triumphantly elected would discourage the Left’s base and lose votes.

Sacrifices to help Europe recover from its doldrums through new programs, policy

competencies, activities, and institutional changes in the name of a greater European

cause of economic success might be understood in very different terms and, at the very

least, perhaps least help cover up the bitterness of failure. High-level, high visibility

European initiatives and mundane electoral concerns were intertwined, therefore.

Commission President Delors, unlike Mitterrand, had been genuinely “Center

left” throughout a long career in French politics, one of the reasons why he had been an

outsider in the French Socialist Party during the ‘79s and ‘80s (Delors Memoires). As

Mitterrand’s Finance Minister, he had consistently dragged his feet on the Left’s renewed

dirigisme and Keynesianism after 1981. In his Commission position Delors set out a

Center left reformist strategy for the EC itself that only began with the single market and

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EMU. He believed that liberalization, ending inflationary public spending policies, and

working serious structural reforms were necessary and also sensed the coming of

globalization before most politicians. Decline in the face of international competitors –

his pet threats were the US and Japan – was likely without it. Beyond this, however, he

felt strongly that liberalization and monetary stability should be accompanied by new EC-

level social policy.

At heart Delors was a Catholic corporatist who believed that key social groups

should negotiate over and cooperate in promoting a common good. He thus invested

considerable resources in promoting “social dialogue” at European level in the hope of

eventually creating Euro-level collective bargaining.21 He followed this in 1989 with a

Charter of Fundamental Social Rights to prod EC legislation in those – relatively few –

areas of social policy where it had prerogatives, in the not-so-hidden hope that this

spillover into new EC social policy powers. He also successfully promoted EC-level

development funding for poorer EC regions – what came to be called the “structural

funds.”

Delors’ “social Europe” strategy was a gamble. Big business, most employers,

and the Right wanted liberalization, deregulation, and sounder public finances and were

willing to see Europe intervene to make them happen. To them, a liberalized European-

wide market should carry its own social policies, primarily of a neo-liberal kind. But

Delors hoped to mobilize other groups, including unions, to Europeanize and reform

European social models to adapt them to the new circumstances. The business and neo-

liberal constituencies were strong, however, and those in favor of “social Europe” much

less so, making the Delors enterprise a long shot. Even at that, however, during the

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“1992” period liberalization and monetarism went along with “upward harmonization” in

areas like workplace health and safety, equal opportunities, and environmental policy.

Big business and employers might have a weakness for neo-liberal prescriptions, but the

relatively wealthy EC countries that counted most had no taste for the political

consequences of a genuine “race to the bottom.”

What was most significant in Delors’ and Mitterrand’s post-1983 new

Europeanism went unspoken. Euro-politics, moving pieces of national policy

sovereignty to EC level, was a high-stakes game. Successful policy innovation at EC

level constrained member states to change domestic policies. “Going European” was thus

a good way of circumventing national level reluctance to undertake needed reform.

Mitterrand and Delors foresaw at least France engaged to change by the single market

program and EMU. The single market program ruled out of order practices that the

French Left’s 1981 programs had taken for granted, like erecting non-tariff barriers,

slowing foreign cargoes with tests at border stations, providing large state aids to

industry, and helping national champions to pump up international market power. EMU

would rule out other things that the French Left had recently taken for granted, like

excessive inflation, high budget deficits and debt, periodic devaluations, and interest rates

set for exclusively national purposes. Whatever else they were up to, Mitterrand, Delors

(and other Socialists in the know about Europe) were binding future French policies to an

ever more liberal and monetarist Europe.

The 1980s were thus a critical, and strange, period when leaders of the French

Left promoted new market opening and a new price stability regime at European level.

Mitterrand, perhaps the most important architect of this, worked in an institutional system

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that endowed the president with very large powers, particularly in the diplomatic realm.

He thus had wide margins of choice, therefore, and could use them to make things

happen at levels well above those where ordinary French citizens lived. Jacques Delors,

European Commission president, worked through an EU institutional system designed to

promote international cooperation. The very large changes that these two helped engineer

were thus taken “by stealth,” at least from the vantage point of the French left and its

supporters. Nonetheless, in very general terms, what they promoted opened to a limited

“Center leftification” which the French Left itself, often grudgingly, was obliged to

heed.22 Some national Lefts had already taken the Center left path, while other Lefts

followed what the French initiative, often with the perspective that Euro-changes could

help achieve otherwise unattainable national reforms. Under Felipe Gonzalez’ leadership

the Spanish Left in power mimicked the French and were reliable allies for Mitterrand

and Delors at European level. The Italian Left (in particular the Communists, who were

rapidly becoming Social Democrats just as the Socialists, in government, were ever more

ensnared in the corrupt Christian-Democrat dominated post-war system) were also

reliably favorable to what the French were promoting at EC level and strongly in favor of

deep domestic reforms. The German Social Democrats were somewhat different,

however, because the German economy was surviving the international shift quite well in

part because of monetarism, and the CDU-CSU-FDP coalition in power around Helmut

Kohl was “European” enough for everyone, Left included. British Labour, in contrast,

was in the middle of an absurd Left turn and taking a terrible beating from Mrs. Thatcher

through most of the 1980s, although Delors, and particularly his “social Europe”

proposals, played a role beginning in the later 1980s in persuading parts of Labour, the

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TUC and some of its constituent unions, to rethink the EC as a way of recouping some

losses through Euro-regulations.

III. All change? The EU Encroaches

From 1985 until the early ‘90s the EU went from strength to strength, broadening

its mandate, changing its institutions, and trying to enhance its legitimacy by giving more

power to the European Parliament. But by the early 1990’s the Single Market, which, to

that point, had been mainly drafting legislation and hoopla, began to have real effects

which many Europeans did not perceive as positive. On top of this, movement toward

EMU was a corset of constraining monetary policies that obliged EU members, and

Center lefts, to make tough adjustments to conform to a new regime of price stability and

budget balancing.

These large economic changes coincided with the end of the Cold War, which

quickly obliged EU members to focus on what to do with the new aspiring “European”

countries of Central and Eastern Europe. One result was that the ambitious 1980s agenda

of new Europeanization – “deepening” in Euro-speak – had to be combined with

enlarging the Union to the East – a “widening” which also involved redesigning EU

institutions to work with the 27 members it would eventually have in 2007. Finally, in the

midst of this globalization exploded, first financially, then as direct challenge to the

manufacturing sectors which European nations had struggled to rebuild in the post-war

boom.

In these European conditions those “Lefts” with pretensions to govern who had

not already changed for domestic reasons would have to become “Center lefts.”

Europeanization and globalization together made it impossible to imagine living outside

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the international market system or inside it within a cocoon of national protection. In

these conditions, the EU took the lead in enjoining those of its members who had not

conformed to shape up to a new world in which Keynesianism was anachronistic and

welfare states and industrial relations systems needed reform. The end of the Cold War

had analogous effects, particularly in the ideological realm. Aspirations to transcend

markets and “build socialism,” waning for decades, ended with the collapse of the Soviet

Union.

Like it or not, Lefts had to live with markets for the duration. For many this

enjoined changes to their ideological, electoral, and policy repertories. But just as “old”

Lefts had varied considerably, Center lefts also differed from country to country. In some

places, legacies made adapting to new circumstances easier in some places. The end of

the Cold War meant that Scandinavian neutrals could join the EU and after 1995 all did

except Norway (where once again a national referendum prevented joining) and

Scandinavian Lefts felt pressure to change, for example, by opening up financial markets,

but historically they were already attuned to the need for employment flexibility and

controlling wages to contain inflation. The Labour Party in the UK had been prepared in

different ways. Thatcherism had deconstructed the old Left system, particularly trade

uion power, and had left Labour with a choice between accepting Thatcherite legacies or

repeatedly losing elections. But with public finances in order and good growth prospects,

there were openings for new social policy initiatives of an “activating” kind. Continental

Lefts were the problem cases, since they had to confront serious corporatist rejection of

labor market and social policy reforms and faced larger electoral problems. There were

two large unknowns everywhere, however. First, how much space now existed for

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“progressive” change and what such change would look like. And second, would

everyone who had traditionally supported the Left go along with a new agenda?

EMU: Euro-Cooperation for Tighter Constraint?

The drive for EMU culminated in the Maastricht Treaty on European Union,

which also renamed the EC the EU. The final deal made EMU’s first priority achieving

price stability and national financial responsibility and included tough “convergence

criteria.” Applicants had to lower annual budget deficits to 3 percent of GDP, squeeze

down longer-term debt (to 60 percent of GDP), sustain low interest and inflation rates,

and stabilize their currencies. EMU would begin officially on January 1, 1999 and only

those who had met the convergence criteria would be allowed in.23

EMU, which had been designed during a relatively good economic period, then

had to be prepared during a bad downturn that began in early 1992. Rising inflation in

Germany, due to the conditions of unification, spread elsewhere and, by summer 1992,

had put pressure on EMS currencies and prompted a severe Bundesbank response.

Realigning currencies could have ended the problems, but few wanted to try it in the

middle of a tight French referendum campaign to ratify the Maastricht Treaty. The first

result was “Black Wednesday,” September 16, 1992, when the British pound sterling left

the ERM, followed by wild currency fluctuations elsewhere. The EMS crisis made the

EMU convergence criteria a major burden because of stagnating growth and rising

unemployment on the continent - to 10 percent in the larger economies. The EMS crisis

and its austere sequels also informed EU citizens that extravagant promises that the single

market and EMU would bring European growth back to life had not been redeemed.

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The Germans, in the EMU driver’s seat, were skeptical about certain eventual

EMU members, Italy and Spain in particular. Thus with the 1998 deadline approaching

they proposed a Stability and Growth Pact (SGP, passed in 1996 and incorporated in the

Treaty of Amsterdam in 1997) to keep EMU convergence targets in force after EMU

officially began. In fact, in the period before final EMU membership was decided, the

Italians looked hopeless, the Spanish only slightly less so, the French were in difficulty,

and the Germans themselves on the margin of qualifying. Reform and creative

bookkeeping nonetheless led eleven member states to be eligible for EMU in 1998

(Greece, Slovenia, Cyprus and Malta have since joined). But the SGP meant that EMU

policies would be restrictive into any future, a datum of great importance to governments,

particularly those on the Left.

EMU in practice has but a brief history. For business, the advantage of having a

single currency has meant more transparent costs and economic indicators. For ordinary

Europeans and foreign tourists money no longer had to be exchanged each time a border

was crossed. Most important, however, without EMU the EU single market would have

had difficulty surviving global currency fluctuations that have occurred since 1989. The

European Central Bank, statutorily completely independent of political influence, is

required to prioritize price stability over anything else, growth included.24 In practice the

ECB has thus made monetary policy and watched out for inflation and if countries got

into difficulty, it was their own fault, most likely caused by selfish market actors and

imprudent governments. If countries consistently did not do well, they needed “structural

reforms,” tough new policies to weaken labor laws and cut-backs in welfare state

programs (Martin and Ross, Bruegel)

21

Criticism of this and the retrenchment that it implied has targeted the Stability and

Growth Pact, particularly the taboo on deficits of more than 3 percent, which more than

half of EMU members violated at one time or another after 2000 – including German and

French Center left governments. Romano Prodi, when Commission president in 2005 (he

was also briefly Italian Center left Prime Minister later), even felt moved to call the 3

percent requirement “stupid.” EMU’s “one size fits all” monetary policy has also been

mildly troublesome, helping some and hurting others, usually because of differing

business cycles.25 The SGP was reformed in 2005 to give members slightly more room

to confront the ups and downs of the business cycle, in particular allowing them to

discount current budgetary costs of future-oriented policies like research and

restructuring. In difficult circumstances EMU members thus could exceed the annual 3

percent deficit, but they were also enjoined to lower deficits when things went better.26

EMU…Holding Hands With Globalization?

In 1993, in its last months, the Delors Commission produced a new White Paper

on Growth, Competitiveness, and Employment, which urged that EU Europe needed to

mobilize itself anew to confront globalization. It began by acknowledging that European

growth and investment had been shrinking over decades, that the EU’s competitive

position was worsening, and that there was no easy cure for chronic unemployment. The

single market had helped, it argued, but not enough, partly because the rest of the world

had also responded intelligently. The White Paper asserted that “creating as favorable an

environment as possible for company competitiveness” was essential, with particular

stress on advanced technology, in which Europe was behind, to push Europe toward an

“information society,” where new comparative advantage could be found (Eichengreen).

22

The White Paper also called for reforms to introduce more flexibility into labor markets

and welfare states. The White Paper was prophetic, and very “Center left,” but EU

members did not have the will to take it seriously. Many had grown tired of high tensions

at Euro-level and faced domestic economic problems and skeptical citizens.

Worries about declining competitiveness found new focus in 2000 when the

“Lisbon agenda,” promoted by the Portuguese Center left government, declared that EU

Europe should become the world’s most advanced “knowledge economy” by 2010, by

which point the EU should have restored full employment and preserved Europe’s “social

model” through reform. The Lisbon agenda proposed a big boost in Euro-level R+D,

training for new skills, new infrastructure, and environmental policies for sustainable

development. It focused particularly on promoting active labor market policies,

increasing labor force participation, and removing disincentives to work in many national

welfare state programs.

The results of Lisbon have been mixed.27 Most Lisbon policymaking lies within

national jurisdictions, meaning that convergence on Lisbon goals depends on voluntary

member state cooperation. Lisbon’s architects relied on an “Open Method of

Coordination” (OMC) to produce this. In OMC the EU first set out European guidelines

and encouraged member states to hold regular and open national discussions about

achieving them, then identified “best practices,”, built up indicators of progress, and,

finally, publicized successes and failures by naming and shaming from Brussels.28 OMC

was a new Brussels technique to use soft law and exhortation where it lacked harder

tools. Lisbon also extended OMC to a range of social policy areas, including “social

inclusion” (poverty policy) and pension reforms. As 2010 approaches it is clear that there

23

may be reform going on, but probably not enough. Moreover, parts of the Lisbon agenda

would have been done anyway for national reasons, and others may never be done. More

important, Lisbon quickly became all things to all people. The Center left saw it as

prodding a remodeling of over-regulated labor markets and humane welfare state

programs to preserve the “European social model.” The Center-Right saw it as way to

push for pushing neoliberal structural reforms. In 2005, as indicators showed that the

strategy was falling far short, the European Commission refocused on structural reform

and liberalization, leading to reassignment of responsibilities to member state

governments and retreat from OMC. Member states now pick and choose what they

want to do, therefore.

…Unhappy Citizens

The EU began to lose popularity with some citizens after the Single Market broke

the cocoons of national development models, EMU Euro-normalized an emerging

international price stability regime and Lisbon tried to “flexibilize” labor markets and

welfare states. Moreover, the Maastricht Treaty increased EU importance in areas that

had earlier been at the heart of national sovereignty (policing, immigration policy, and

foreign and defense policy) and not everyone approved this. 29 Furthermore, Western

European electorates were not always persuaded that enlarging the Union to include

Central and Eastern European countries had been a wise course. Finally, EU enlargement

and unfinished business from the Maastricht Treaty prompted almost constant high-level

wrangling about reforming EU institutions, communicating growing acrimony among EU

leaders to citizens. In general, after the mid-1990s a new generation of national leaders

24

emerged who were more preoccupied with national politics – in part because of the new

constraints created by EU policies – and subsequently more indifferent to the EU.

The most important factor in the relative decline of the EU’s popularity, however,

particularly on the continent, was the failure of the EU’s great reforms (the Single

Market, EMU, and the Lisbon Agenda) to restore growth, end unemployment, and

respond to globalization.30 The EU, and the Eurozone in particular, have done

substantially less well than the US, but some EU countries have coped better than others.

Non-EMU members, the UK, Sweden and Denmark, are among these, but the only

similarity among them is that they have not joined EMU. The UK after Thatcher is as

neo-liberalized as European countries come, while the Scandinavians have large,

expensive but nonetheless flexible labor markets and welfare states. But when one

combines low growth and high unemployment the worst performers have been France,

Germany, and Italy, countries which, given their economic size, together decide the EU’s

general economic fate.31

To this list of reasons for decline in popular support for EU policies, which would

include shrinking participation in elections to the European parliament, one should add

the obvious fact the EU institutions, because they did not look like national ones, are

difficult for citizens, and many experts, to understand. The consequences were clear,

however. In its first period, roughly until 1989, the EU had benefited from lasting

European peace, the fact that its existence correlated with robust democracy in member

states, and prosperity. By the first decade of the 21st century European peace had come to

be taken for granted, the vitality of democracy both at member state and EU levels was

questioned, and continued prosperity had become more problematic. Eurobarometer

25

opinion polling showed that the EU remained valued in abstract ways (more Europeans

had confidence in EU institutions than national ones, in fact), but that only 20% of people

polled associated the EU with democracy and prosperity, the same percentage that

associated it with bureaucracy and wasted money. What worried EU citizens most was

globalization. 42% felt that the EU might protect them from its negative effects, while

40% did not believe this to be the case. But a majority had concluded, quite

pragmatically, that for all its faults and problems, the EU was necessary and could be

useful in responding to globalization challenges in ways that their own countries were too

small to do.32

IV. Center lefts and The New Europe?

Advocates and experts argue endlessly about the implications of recent EU

developments, but they have been reasonably clear for most of the European Left. In

general, the EU has opened many of the borders upon whose existence Lefts had earlier

strongly depended.33 Liberalization to complete the single market breached the relatively

self-contained national development models of the post-war boom. Next, if almost

everyone has been obliged by globalization to squeeze down inflation and avoid

budgetary policies that create deficits and debt, the demands of EMU and the SGP have

been even stiffer, limiting the use of older electoral and policy toolboxes and constraining

actors to find ways to adjust (often to retrench) domestically. Rapid mobility in financial

markets constrains governments to encourage capital inflows and discourage outflows,

thereby constraining tax options, wage levels, labor market structures, and social

programs. In addition, outsourcing and the recent manufacturing successes of lower wage

26

areas of the world have compressed the wages and benefits of European manufacturing

workers and added to employment insecurity.

Such large changes should be superimposed on the end of socialist dreaming.

Slow erosion of the socialist project into lip-service had already gone far in the post-war

boom period. The Cold War, growth, welfare states, social change, Keynesianism, mass

higher education, and prosperity undermined passions for transcending capitalism,

particularly among Left political elites facing the complex tasks of governance. In this

light, the end of the Cold War may seem anticlimactic, but it nonetheless rang down the

curtain on real-world alternatives to market societies, as the decline-redefinition of

Communist and other Marxist political groups indicates. 34 Where new radical forces

have emerged since then, often tapping older Left constituencies, they have nourished

very different dreams, about environmental change, stopping globalization, and

xenophobic populism.

Left elites and parties seeking to govern have thus had to become more “Center

left,” embracing the inevitability of markets and accepting the limits that Europeanization

and globalization place on their actions. The EU has played a significant, although not

exclusive, role in this, disciplining those Lefts which aspire to win elections in the

direction of more “constructive” reformism. Defining and implementing such reformism

has not been easy, however. The single market, EMU, and globalization have increased

employment insecurity, constrained the use of public finances, and compressed growth,

making it more difficult to award traditional constituencies. More often than not center

left governments have had to cut spending, stop expanding and begin remodeling welfare

state programs, prevent wages rising too fast, and introduce new flexibility into labor

27

markets, all policies that run counter to the expectations of many of their supporters.35

The coherence of many Left ideological and electoral coalitions has been strained by this.

The traditional working class and unions are disadvantaged, while “new middle class”

groups may be less so, differences also intensified by the relative decline of

manufacturing employment and growth in services. To win it is now necessary to appeal

convincingly to these new middle class groups as well as workers, and they often have

very different concerns. The electoral and coalitional equation has thus become more

complicated (Kitschelt, Iverson).

There may also be a center right bias built into the new situation. First, it is harder

for the center left to do the policies that earlier Lefts routinely did. In addition, the

widespread salience of anti-immigrant xenophobic populism (often politely disguised by

the word “insecurity”) favors the Right, even if in a great many places it has spawned

troublesome far-right populist trends (Kriesi 2008 CUP). In any event, in 85 elections

since 1996, the Right has won 52.4% and the left 44.5% of the vote. And in these general

voting numbers, the extreme Right gets 7.7% of the vote, as against the extreme Left`s

3.3%.36

Evidence indicates that if the center right may be more favorable overall to

European integration in general, the center left has recently become more “European.”

This is in part because the importance of the EU for its member state domestic politics

has vastly increased since the 1980s, meaning that all serious political forces have to

know how to play in the European arena and cope with its consequences nationally.

Predictably, however, the center left tends to be more favorable to Euro-policies for

“reregulating” markets and redistributing resources than to neo-liberal initiatives

28

(Hooghe, Marks, Wilson etc). From a policy point of view this is problematic, because

the backbone of the EU, despite great changes since the mid-1980s, remains market

liberalization. Re-regulating markets at European level after deregulating them nationally

has often been necessary, but the EU has almost always been better at the latter than the

former. And when the EU has re-regulated, it has consistently done so in more liberal

ways than most center lefts have wanted. Redistribution by the EU has been historically

difficult because EU member states (and political parties, including the center left), prefer

to keep their resources at home rather than donate them to others. This is true also

because the EU has few treaty prerogatives allowing a direct role in social policy, which

remains largely national.

Such policy asymmetry has its complement in the workings of EU institutions.

The EU is an organization made up of states endowed with serious mechanisms to

promote binding cooperation among its members. This means that except in the most

extraordinary circumstances, little can happen until something like consensus exists

among most member state governments. The extension of qualified majority decision-

making rules in the Council of Ministers since the 1980s has helped prevent deadlock,

but not greatly changed this. One result is that the EU’s policy-deciding processes are

slow, since decisions have to be built by complicated negotiations and are often

convoluted compromises between different national interests. Such institutional issues,

which marked the earlier EU, are truer in today`s EU-27. Intergovernmental bargaining is

now longer and more complex and the diversity of national interests entering into

bargaining situations is now greater than it was.37 The mathematics are simple. The more

members, the more divergent national preferences there are, and the more difficult it is

29

for older EU directive coalitions -the “Franco-German couple,” for example - to seize

leadership roles, and the greater the likelihood of blocking or slowing coalitions.

Varieties of Socialism..?

The most significant barrier to strong center left influence at EU level is that

today’s center lefts, like yesterday’s European Lefts, are as diverse in their interests as the

countries where they live. However realistic their elites might be about European and

international constraints, they still must seek power within specific national institutional,

partisan, and economic situations. Their outlooks are also deeply shaped by path

dependent national histories, foreign and other policy legacies, and structures which

usually include deep commitment to some variation of social democratic reformism.

British New Labour`s “third way” domestic approach reflects post-Thatcher

conditions that do not exist elsewhere.38 In EU arenas New Labour remains relatively

Euro-skeptic and wedded to the UK’s traditional preference for a simple free trade area

without supra-nationality. This has led to opposition to EU social policy initiatives,

resistance to political integration, and aggressive promotion to others of liberalizing

structural reforms over the approach preferred by most other center lefts of of patching-

up existing social model schemes.39 Despite its `third way` universalism, New Labour is

thus profoundly British.40

The French PS lives in a multiparty electorate uncomfortably squeezed into a

majoritarian system by strong Presidentialism and bipolarizing electoral laws, in contrast

to New Labour in the winner-take-all Westminster system. French Presidents have the

power to take international leads, as did Mitterrand in the 1980s, In and out of power,

however, the PS as a party faces a pluralist coalitional world where it must compete for

30

voters with cantankerous Communists, Trotskyists, Greens and others, many of whom

hostile both to the EU and to center left policies, and the PS is itself organized into

internal factions which themselves reflect this Left pluralism. The PS`s divisions in the

2005 referendum were a significant reason why the French voted no on the European

Constitutional Treaty and behind them lay jockeying by potential presidential candidates

engaged in deliberate exploitation of deep anxieties about threats to the French social

model from EU and globalization. The chronic difficulties that the PS has faced in

mounting credible presidential campaigns since Mitterrand also reflects the political

complexity of Left pluralism on European and other questions.

The Spanish PSOE, one of Europe`s few consistently successful socialist parties,

followed a very different path than the French PS even though it modeled itself closely

on what happened in France. Because PSOE did not win power for the first time until

1982, it learned from the French failures of 1981-1982. Because it acted against the

background of Francoist authoritarianism and its autarkic economics, it could see EU

membership as a way of consolidating democracy, a new welfare state, and center left

economic and monetary practices (Boix in Notermans, Boix, Perez in Martin+Ross).

The Scandinavians, often thought of these days en bloc as home to the kind of

employment flexibility and openness to globalization that the rest of Europe should

emulate, embraced center left logics and the EU differently. The Danes, famous for

shrewd employment flexicurity, joined the EU earlier than the others and, given their

tight dependence on German markets, hewed closely to center left German monetary

policies which were the prototypes of EMU. They have internalized EU-level political

discussion into national political life perhaps more than any other EU member, but also

31

persistently refused to support movements toward greater EU political integration and

opted out of joining EMU (Haahr in Notermans). The Swedes, in contrast, did not join

the EU until late in the game, in 1995, at which point legacies of Swedish neutrality, a

weakening of SPD electoral strength, and particular economic dilemmas made them

social democrats wary of new European political integration and of EMU (Aylott in

Notermans). The Finns took a different, much less Euro-skeptical course, in EMU from

the beginning, for example while the Norwegians, with the temporary margin of

maneuver granted by oil, stayed away from EU membership altogether (Pekkarinen in

Notermans).

The German SPD was one of the first social democratic parties to “talk” center

left, in large part because the Bundesbank`s monetary stance obliged all actors to control

wage growth, inflation, and debt. Unification and its stupendous costs led parts of the

SPD and the union movement, focused on large domestic problems, to withdraw from

European concerns (Notermans, in Notermans). The SPD has historically been obliged to

find coalition partners to govern, but of late this task has become more complicated.

Under the leadership of Gerhard Schroeder, from 1998 to 2005, a `Red-Green` coalition

government undertook a set of classic reforms to flexibilize the labor market which

encouraged the consolidation of a competitive Left Party – die Linke (ex-Communists

from the ex-East plus left SPDers around former SPD leader Oskar Lafontaine) – that

rejected such reforms. The Greens, in turn, seem tempted to ally rightwards.

Listing more examples would probably be redundant. The stories of other

Western European center lefts might add more variety of parties adapting their specific

trajectories to new circumstances. Those of center lefts in new EU member states in

32

Central and Eastern Europe would be quite different, given their need to reconstitute

political influence from decades of communist rule. All would show, however, that the

primary goal of center lefts is to win support, then to govern, at national level, and that

this goal then structures their outlook on and responses to the EU. There are center lefts

and center lefts, in other words. Each is profoundly national and dependent on success in

its particular national arena.

…in an EU which is politically confusing?

One indication of what this variety may mean at European level can be gleaned

from one of the few occasions when electoral cycles in different countries led to a

number of center left governments holding power at the same time. This happened in the

later 1990s, when New Labour, a cohabitation government of the “plural Left” around the

PS in France, a Center left coalition in Italy, and a Red-Green coalition in Germany

governed in the largest EU member states. While this did impart a Leftish tinge to some

EU-level politics, leading in particular to the insertion of the European Employment

Strategy into the Amsterdam Treaty (with ambiguous results Rhodes, Pochet). But it also

illustrated the salience of different national center left strategies in the EU. Labour under

Tony Blair, for example, probably more pro-EU than any British government in history,

remained Euro-skeptic in key areas – participation in EMU and EU labor market policies

among them, New Labour also aggressively tried to persuade others that deeply

liberalizing structural reforms of welfare states and industrial relations systems, rather

than incremental changes, were necessary for any future success. The French “Plural

Left” government under Lionel Jospin was noticeably cool toward the EU in general,

dead set against Blairite commitments, and preoccupied with domestic work-sharing

33

reforms of which other center lefts disapproved. German SPD Chancellor Gerhard

Schröder’s preoccupation with domestic concerns and cynicism about the EU were

notorious. In contrast, Italian Left coalitions, in contrast, were strongly pro-European and

played an important role in allowing EMU to happen, in keeping with Italy`s traditional

pro-European postures. Given Italy`s exaggerated competitive electoral pluralism across

the board from Left to Right, they were extremely fragile, however. The Danish,

Swedish, and Austrian Center lefts, deeply social democratic although challenged by left-

center partisan pluralism, were somewhat Euro-skeptical, again in keeping with their

traditional `don`t touch our intricate and successful domestic arrangements` perspectives.

The large story was that even when center lefts had a political edge at EU level and might

have weighed heavily on EU decisions they had difficulty agreeing on what the EU might

do. This episode was highly unusual, however. The political situation which more often

exists at EU level is one of center left, center-right coexistence, making center left

initiatives even less likely.

Beyond deep national differences and the lack of any precise “European” center

left identity and strategy, EU institutions would themselves make Euro-Left cooperation

on reformist projects difficult even if center lefts could agree.41 Take the example of the

European Parliament. Center lefts are now well organized in into a transnational Party of

European Socialists (Ladrech).42 The European Parliament, unlike national parliaments,

has no power to initiate legislation. Only the European Commission has this power and

its duty first of all is to be an agent to promote cooperation in Europe, not a government

or party coalition leader.43 It thus uses this power only after very carefully scanning what

national governments, and not parties, are willing to undertake. More often than not, the

34

European Parliament itself shares this vision, rather than any strongly partisan one. Its

project historically has been built around center left-center-right consensus, with the goal

of furthering European integration and not partisan conflict. Without power of initiative,

the EP`s work lies in scrutinizing Commission proposals, which it does in bipartisan

committees rather than in partisan debate on the EP floor. Moreover, the European

Parliament is only a co-legislator in the EU system. This means that to reach any decision

it must compromise with the intergovernmental Council of Ministers. For these and other

reasons – elections to the EP have consistently had low participation rates and national

issues have predominated in campaigning - the presence and concerns of the European

Parliament have not yet managed to penetrate seriously the national agendas of center left

parties. In general, as G. Moschonas has argued, European institutions themselves, as

nested in the broader European political system that includes member state systems,

create a whole in which power is – confusingly – fragmented (Moschonas 2008).

EU institutions create problems for the center left more generally. The exhausting

and complicated EU debate about institutional change to confront enlargement to 27

members, punctuated by the French and Dutch “no” votes on the “constitutional treaty”

and ending in 2007 with intergovernmental agreement on the “Lisbon reform treaty,”

underlined the chronic problems that ordinary citizens have making sense of how the EU

works. It has become common to talk of an EU “democratic deficit,” even if it can be

argued that EU institutions meet reasonable constitutional standards for democracy. 44 At

its core, the EU is a “community of democracies” in which democratically elected

governments cooperate to set agendas and vote proposals, and then are accountable to

their electorates for results. The EU has a second source of democratic legitimacy in the

35

democratically elected European Parliament. The European Commission, with its power

of initiative, is an odd part of the picture, but it is heavily constrained by member state

governments. Finally, there are some EU-level institutions that decide important things

“undemocratically”—that is, to which power has been delegated with limited checks and

balances, as in anti-trust and monetary policies.

Above all, EU institutions have deep problems of “readability.” EU citizens are

accustomed to the legends, structures, cultures, and politics of their home countries,

which have first claim on their loyalties and identities. As political science students

know, sophisticated citizens who master what goes on in their own countries are

relatively rare, despite intense socialization, powerful media, and years of practice.

Adding another layer of institutions at EU level and expecting citizens to understand and

identify with them is overoptimistic. Moreover, EU institutions do not resemble those at

national level. The EU is not a state, and unlikely to become one, yet it does some things

that states do, often shares in doing things that states used to do by themselves, and has

indirect impact in areas where citizens still expect their state to act on its own. The

Commission is mysterious except to the rare few who understand that it is designed to

prevent any strong member state from running the EU show and to ensure that

governments honor the commitments to cooperate they have made. Citizens know about

the Council of Ministers but have little information about how it works because it works

behind closed doors, in classic diplomatic style. The Parliament, as just noted, doesn’t

resemble a real parliament—because there is no government and opposition, its members

don’t argue for or against a clear program, its decisions are technical, and they seem to

come from all over the place. On top of this there is no EU “we the people,” rather

36

twenty-seven different peoples with different histories, cultures, and languages. All this

places the EU at considerable distance space from most of its citizens, whether left or

right, and when the EU acts in ways that touch fundamental matters of daily life it is

bound to stir up controversy. And since it can easily look today as if the EU is shaping up

member states for liberal globalization it will be more controversial for people of the left

than for others.

In fact, “real” European politics happens largely in national arenas. There exists

little European political culture except among elites. There are no European media, just

national media that interpret EU events through national lenses. National parliamentary

discussions rarely place European issues squarely before the public and elections to the

European Parliament remain tightly linked to national political debates. With notable

exceptions—Denmark, for example - national parties and interest groups have barely

begun to embrace European matters. The gap between the thickness of national

democratic deliberative practices and their thinness at the European level is clear, and its

consequences are profound.

Taking and Making?

All this has made the European center left more taker than maker of European-

level policies. Indeed, even when national center left figures are at the center of European

events, center lefts have been obliged to integrate the consequences of large EU

initiatives into diverse national arenas, like it or not. In the EU`s earlier years, when

European integration was handmaiden to national development models and EU members

had a veto over innovations, this was less of a problem. It became more so, ironically, in

the 1980s after the French center left, allied closely with the German center-right,

37

gambled that further opening borders and establishing a monetary union and single

European currency would bring a return to European economic growth, lead to new Euro-

level market regulation and social policy initiatives, and not incidentally, prod domestic

reforms that could not be obtained through ordinary national processes.

Things did not work out as planned. The EU liberalized more extensively and

EMU came into being, but in a context of encroaching globalization growth in European

returned only for those who were already prepared for new conditions for national

reasons. For those center lefts who had inherited flexible, proactive economic and social

policy systems and had already learned to function without Keynesianism and with non-

accomodative monetary policies, as had many smaller EU-15 members, the UK because

of Thatcher, and, partially, Germany, the new world has been a challenge, but not a

disaster. Others, particularly big players on the European continent, faced some

constituents who have more insistently resisted center-left formulae who have asked

whether the EU was a cushion in globalization or an agent of it. This is where things now

stand.

That European center lefts, taken as a group, have been takers rather than makers

of Euro-level politics does not mean, however, that they are persistent victims of EU

policies. The complexities of the EU as an arena can frustrate everyone, including the

center-right and hard-line neo-liberals. If the EU is a difficult place for national lefts to

develop coordinated reformist policies, this may does not mean that it is not a reformist

place on its own terms. When new members join the EU, for example, as they have in

several waves since 1973, they are expected to accept what is called the acquis

communautaire, the EU`s accumulated institutional and legal rules and processes. This

38

has almost always meant that they have had to enhance social, human rights,

environmental and other policies as part of their entry fee. In many cases they might

otherwise have chosen not to do such things. Moreover, the political and economic

power of Northern European `social market` societies within the EU has usually meant

that new policy cooperation, when it does occur, has involved `upward harmonization`

rather than the races to the bottom that some had feared. Environmental policies are a

case in point, but there are others. The EU may have little power in key areas of social

policy, which the treaties have left to national members, but it has often used what power

it has held in reformist ways, often to raise standards. From the beginning, for odd

historical reasons, the EU acquired some power over equal opportunities between men

and women in the workplace and it has used this power to promote very high standards of

equal treatment across Europe. Similar things might be said of the EU`s activities in the

area of workplace health and safety. In 2006 the EU also established a “European

globalization adjustment fund” to help workers adapt to job shifts due to globalization, a

small, but significant, gesture. And even when the EU has few explicit treaty powers it

can also try to promote change via “soft law” techniques of recommending, monitoring,

establishing important indicators, advertising `best practices` and otherwise urging its

members to make reforms in coordinated but decentralized ways. How successful such

softer methods actually are is difficult to know, yet they have been used recently to

promote more active labor market policies, pension reforms, educational changes, anti-

poverty policies, more and better skills training, and targeted research and development

schemes, to list only a few. Changes in these areas have occurred in dispersed order, but

some have occurred.

39

What does all this mean? EU Europe has been mainly an obstacle course for

center leftists seeking to promote direct reformist change, for reasons we have discussed.

Yet this should not be taken to mean that the EU is a happy hunting ground for neo-

liberal forces that seek to dissolve humane social policy regimes into pure markets. EU

Europe has itself sometimes been the generator and location for reformist changes and it

has historically been an open arena for debating them. It has consistently legitimated

serious debates about preserving the specificities of European social models through

reform. At the time of writing, for example, EU officials are carefully beginning

extensive debate on the EU`s “social agenda” to accompany the last period of the Lisbon

strategy by circulating an important document on “Europe`s Social Reality.”45 Much of

this is bureaucrats talking to other bureaucrats with a few MEPS, academics and

specialists listening in. But some of it will be taken seriously. In short, there are more

openings for debating and promoting reformist change from within the EU system than

the problems that national center left parties have in influencing the EU would indicate.

ENDNOTES 1 In keeping with this idea of European integration as a process rather than a fixed entity, the actual name of

“Europe” changes over time. After the Rome Treaties until 1965 the “Common Market” was officially

called the European Economic Community (EEC). In 1965 member states signed a merger Treaty bundling the ECSC, Euratom, and the EEC together legally, leading to the European Communities or EC, the name

until 1993. When the Maastricht Treaty on European Union was ratified in 1993, the name became

European Union, or EU. At the risk of occasional confusion, this essay will try to use the historically

appropriate abbreviation for the period under discussion. 2 Each national reason for doing this was different. The French were initially hesitant but brought in by

concessions from the others, then shifted after 1958 when de Gaulle decided that France needed a broader

field for his planned national champions and a staging ground to woo other Europeans away from

American hegemony, the Germans wanted a more open market to continue their export-led growth, the

Italians needed externally stimulated ways out of their national ineffectiveness and help for their

underdeveloped South, and the Benelux countries for trade and voice in key economic and other policies

40

that their bigger neighbors would pursue.See Moravscik, The Choice for Europe, for a somewhat

schematized review of this. 3 One gets a good sense of this from a contemporary point of view in William E. Patterson and Alasdair H.

Thomas, Social Democratic Parties in Western Europe (London: Croom Helm, 1977), especially the

Criddle, Hine, Patterson, Mabille and Lorwin, and Wolinetz chapters on the EEC countries. See also

Neuman and Featherstone. 4 For an analysis of this see Fritz Scharpf, Crisis and Choice in European Social Democracy (Ithaca:

Cornell University Press, 1991) 5 The classic contemporary discussion of this is Andrew Shonfield, Modern Capitalism: The Changing

Balance of Private and Public Power 6 It was replaced by the costly scheme of administered price supports for agricultural goods that protected

EEC farmers internationally that we now know. 7 see, for example, Frieden, Eichengreen). 8 They also took the lead in promoting direct elections to the European Parliament and the creation of the

European Council. The European Council – institutionalized summits of member state leaders four times a

year – was to enhance the EC’s capacities for promoting new policy cooperation as a general strategist for

the Union. The European Council would decide on the basis of unanimity. 9 Revaluation occurred twenty-six times between 1979 and 1999, when EMU came into existence. 10 This quickly endowed EMS with a particular rhythm. Periodically weaker currencies would run up

against the +/-2.5% barrier. At that point the divergence indicator would enjoin central banks, in particular

that of the “offending” currency’s country, to intervene using reserves (sometimes coming close to using

them up). Any stabilization would only be temporary, however, unless the country in question decided on

serious change in its monetary strategy. Speculators did well in consequence. 11 For an overview see Pierre Favier and Michel-Martin-Roland 1990 La Décennie Mitterrand 1. Les

Ruptures (Seuil, Paris, 1990). 12 Hall, Peter A “The Evolution of Economic Policy Under Mitterrand,” in George Ross, Stanley

Hoffmann and Sylvia Malzacher, The Mitterrand Experiment (Cambridge: Polity Press, 1987). 1985). 13 David R. Cameron, “ Exchange Rate Politics in France, 1981-1983: The Regime-Defining Choices of the

Mitterrand Presidency”, in Anthony Daley, ed The Mitterrand Era (New York: Macmillan, 1996)

14. Mitterrand had been careful to cultivate the German government even before the 1983 shift. His

dramatic gesture of support for the then-new Chancellor Kohl in a pro-Euro-missile speech to the

Bundestag in January 1983 created an important new friendship.

15 Ross 1994 16 The “1992” title for the program to complete the single market came from the end date of the two

European Commission terms that it would take to legislate the hundreds of directives proposed. 17. EMU had been proposed earlier in the 1970 Werner Report, itself largely inspired by Raymond Barre,

then a French European Commissioner.

18 Quatremer, Jean and Thomas Klau , Ces Hommes qui ont fait l’euro (Paris: Plon, 1997), 150-151. 19 Quatremer and Klau Op cit. 156 20 Kohl was initially reluctant about calling an Intergovernmental Conference to modify the EC Treaties for

EMU largely because of forthcoming German elections. He ultimately supported Delors’s and Mitterrand's

position on the IGC after the elections partly because Mitterrand, after serious doubts, agreed to support

German unification in 1990. 21 He managed to persuade the EU to invest heavily in this, in fact, getting a clause dedicated to its pursuit

included in the SEA and then pumping up the finances of the theretofore weak European Trade Union

Confederation to allow it to play more significantly at EU level. On this see Martin and Ross, Chapter 22 The French Left was historically divided in ways which meant that initiatives for change from certain

sectors, in this case the Socialist Party leadership, were not enough to carry the entire Left. 23 The French wanted an “economic government” to set EMU macroeconomic policy, but the Germans

refused, insisting instead on a completely independent European Central Bank statutorily committed to

price stability. 24The new euro fluctuated quite a bit. In January 1999 it was valued at $1.18, by autumn 2000, it had fallen

to around 80 cents, and by 2008 it was at $1.60, dampening Eurozone exports.

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25 ECB policies worked well initially for France and Germany, for example, because they needed new

growth, but also simultaneously heated up the smaller economies of Ireland and Portugal, obliging their

governments to adjust painfully. This happened again, but in reverse, to France and Germany in 2003–

2004, with greater effect on broader European economic health. 26 EMU created other problems. Its members retained control over their own macroeconomic policy

decisions—taxing and spending—and this proved fraught with pitfalls.The “Eurogroup” of EMU members

that worked within the Council of Finance Ministers tried to promote coherence through “broad economic

policy guidelines,” but these did not oblige member states to harmonize macroeconomic policies, which,

since they can win or lose elections, have varied greatly. In other words, the “policy mix” between

federalized monetary policies and decentralized macroeconomic policies will often be unsatisfactory. 27 Liberalizing services was one centerpiece, but national resistance to an admittedly harsh 2004

Commission proposal watered down the directive. Financial services liberalization is incomplete, particularly in retail banking. Proposals to liberate energy markets have foundered in the face of

disapproval from national energy monopolies. Brussels has moved on chemicals regulation (REACH),

climate change (Kyoto and beyond, stressing “smart growth”), and talked a great deal about lightening its

regulatory hand, but results have been limited. 28 OMC was initially devised in the 1990s for the Broad Economic Policy guidelines and then, after the

Amsterdam Treaty, used for the European Employment strategy. 29 The rocky start of the foreign and defense policy story did not help. The EU proved itself impotent in its

Yugoslavian backyard, making, American intervention the only effective recourse. 30 A few numbers illustrate this best.

Table 1: Growth and Unemployment in Different EU Countries and the US

Country Annual

GDP

Growth

1995-2006

Unemployment

EU “Smalls” 1995 2005

Denmark 2.1 7.1 5.0

Finland 3.8 15.4 8.4

NL 2.5 7.1 5.2

Sweden 3.1 9.2 7.8

EU Large

“Continentals”

France 2.3 11.6 10.0

Germany 1.5 8.2 11.2

Italy 1.4 11.7 7.8

EU “Liberals”

UK 2.8 8.6 4.6

Euro Area 2.2

EU 15 2.3 10.8 8.3

USA USA 3.2 5.6 5.1

Source: OECD in Figures, 2007 31 Both actually missed it from 2002-2004 and were likely to miss it again in 2005, despite repeated

European Commission “excessive deficit” warnings. 32 For a useful summary of Eurobarometer data see Dominique Reynié, “L`avènement d’un stato-

scepticisme en Europe,” in L’opinion européenne en 2008 (Paris: Ed Lignes et Repères, 2008). 33 Stein Rokkan’s important work on shifting borders, state and nation-building in Europe has been

resurrected recently in very fruitful ways to discuss European integration. See Rokkan, Flora ed, Stefano

Bartolini, Restructuring Europe (Cambridge: Cambridge University Press 2005) and Kriesi, CEP 2008. 34 The Italian and French CPs were both major electoral contenders for decades after World War II, ran the biggest trade unions, and had great cultural power. The French CP’s strength declined electorally from 20%

to below 5% in less than three decades, with the end of the Cold War leaving the party ideologically and

programmatically unmoored. The Italian CP, has also lost strength , but not so badly, underwent a

42

thorough social democratizing conversion experience, itself becoming Center left. CPs in Spain, Greece,

Portugal, and elsewhere have become splinter groups. 35 Levy argument 36 Dominique Reynié, in L’opinion européenne en 2008, 215. 37 The new CEEC members have just regained sovereignty after long domination by the Soviet Union

during which distasteful economic and social models were imposed upon them from outside. They are

unlikely, therefore, to want to give up any more of this hard-won sovereignty to the EU than they were

obliged to do to become EU members. Moreover, their development models are quite different from those

of in Western Europe. Most are more liberal economically and in social policy outlooks than their Western

colleagues, for example, and even where this is less the cases the tasks of building a modern democratic

social market economy practically from scratch endow them with different perspectives than those held by

societies that have taken decades, sometimes centuries, to do so (see de Waele, this volume, other enlarge stuff). 38 Its domestic strategy has been to promote solid economic growth based and then to redistribute the fruits

in mildly reformist ways that target social inclusion, labor force participation, and investment in human

capital, something that might be labeled “Scandinavia on the cheap.” 39 See Cronin, New Labour and, for a very intelligent, if a bit “gone native” tract, see Roger Liddle, The

New Case for Europe, London: Fabian Society, 2005. 40 For “third way” Europeanr proselytizing, see Anthony Giddens, Europe in the Global Age, Cambridge,

Polity, 2007 41 Center Rights vary in similar ways, but their lesser commitments to re-regulating and redistributive

reforms at Euro level and the innate bias of the EU toward liberal market and economic perspectives

lessens their coordination difficulties in important areas and may make them less significant when they do arise. 42 Some experts, like Simon Hix, hope that this, plus growing Right-Left divisions in the EP, will

eventually play a significant role in nourishing a stronger “Euro” dimension in national center left thought,

strategy, and purpose (Hix). There are good reasons to think that this process will be limited and slow,

however, for institutional reasons. 43 This is true even if, in recent years, Commissions have been appointed in the wake of European

Parliament elections to reflect the partisan balance in the Parliament. 44 For one argument see Andrew Moravscik “In Defence of the ‘Democratic Deficit’: Reassessing

Legitimacy in the European Union,” Journal of Common Market Studies 40, no. 4 (2002). 45 See European Commission, Communication from the Commission. The Social Agenda. (Comm33 Final)

and European Commission, A Consultation Paper From The Bureau Of European Policy Advisers, Europe's Social Reality.