Another EU: possible and necessary

The EU is busily making Berlin and the rest of Europe, and indeed the rest of the world, more like Boston, writes Andy Storey…

The EU is busily making Berlin and the rest of Europe, and indeed the rest of the world, more like Boston, writes Andy Storey.

There was a pronounced, and understandable, feel-good factor in the reporting of last Saturday's EU enlargement.

By contrast, media coverage of the protests held on the same day focused on the threat of violence. It is a pity that the arguments of the protesters received relatively little attention as they have important things to say about the direction Europe is heading.

As the EU welcomes its 10 new members, and debates adopting a new constitution, the protesters are absolutely correct to raise questions about the nature of the whole process of European integration and expansion.

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In particular, a question posed by many speakers at the "Another Europe is Possible" rally on Saturday afternoon was: what type of economic model does the EU now represent? European politicians and commentators often speak (admiringly or accusingly) of Europe's supposed "social model".

But the reality, as the protesters point out, is that right-wing (or neo-liberal) economic policies are now dominant at EU level.

This is evident in, among other things, an EU competition policy that can act against state provision of certain goods and services. As part of competition policy, the EU limits state aid to businesses (though there are certain egregious exceptions, such as the Common Agricultural Policy).

For example, German public banks, whose investments are guaranteed by the state, have been deemed to be in receipt of illegal state subsidies and, as a result, government policy towards the sector has to be altered by 2005.

In similar vein, Électricité de France, the state power company, has been ordered by the Commission to repay €1 billion in subsidies received from the French state, and the French government ordered to terminate its credit guarantees to the company.

Irish people will be well aware of the EU ruling that a Belgian regional government's support to Charleroi airport constituted illegal state aid (in this case, to the main Charleroi user, Ryanair). The ability of publicly-owned enterprises to compete with privately-owned ones is, as pointed out by Ryanair - an unlikely defender of public enterprise - severely damaged by the ruling.

In similarly neo-liberal vein, EU monetary policy is administered by an "independent" (from electoral pressure) European Central Bank with an anti-inflationary mandate but with little or no concern for issues of growth and employment.

Likewise, fiscal monitoring by the EU Commission through the Stability and Growth Pact seeks, though it does not always succeed, to limit states running fiscal deficits even when these might appear justified by the need to lift an economy out of recession.

All of the above constitute mechanisms, not of defending or extending the European "social model", but rather of undermining it. Furthermore, the EU is globalising these neo-liberal policies.

An example is the requests tabled, in 2002, by the EU under the General Agreement on Trade in Services to 109 countries; each such request involves asking the government of the country concerned to open certain, specified service sectors up to competition from EU firms.

While these requests were not initially made public, leaked documents obtained by the World Development Movement led that organisation to draw conclusions about the EU's negotiating stance.

One such conclusion is that the EU is targeting countries where effective non-market delivery systems are in operation, precisely because such not-for-profit systems limit the commercial opportunities available to European service exporters.

Bangladesh's water sector has been targeted, for example, putting at risk workers' co-operatives involvement in water supply and sewerage services in the city of Dhaka.

EU requests also seek to restrict countries' abilities to regulate foreign investment: examples include the EU request to Malaysia to drop its current cap on foreign equity participation in its insurance sector, and to Brazil to end its restrictions on profit repatriation.

Mary Harney has famously argued that Ireland is closer to Boston (dynamic, unfettered capitalism) than to Berlin (stifling, semi-socialist bureaucracy). The EU is busily making Berlin and the rest of Europe, and indeed the rest of the world, more like Boston.

The disjunction between the idealised (or derided) vision of a European "social model" and the reality of neo-liberal policies is stark. At a January 2004 meeting of EU employment and social ministers in Galway, anti-poverty campaigners pointed to the absolute contradiction between stated aspirations towards European welfare provision and the reality of cutbacks in Ireland and a number of other member-states.

In Ireland, resistance to EU policies is often constrained by the extent to which the EU is seen as a progressive force for change - in relation, for example, to women's rights and the environment.

But there is no reason why campaigners against the current nature of the European project need throw the baby out with the bath water. Where progressive gains (gender, environmental, or other, including elements of competition policy) have been made, these can be defended at the same time as efforts are made to, say, place EU monetary policy under democratic control.

Saturday's protesters are closer to this nuanced and sophisticated approach than are most EU leaders, who continuously present the people with crude "take it or leave it" choices.

At a time when the European project is in a state of considerable flux and expansion, the debate about its future needs to be broadened beyond simple "yes" or "no" answers in the context of a constitutional referendum. We need to consider wholly different ways of organising European economy and society. Another Europe is indeed possible, and necessary.

Andy Storey is a lecturer in development studies and a board member of Action from Ireland (Afri)