Globalisation and European Integration

Critical Approaches to Regional Order and International Relations

Petros Nousios, Henk Overbeek, Andreas Tsolakis

• Publisher: Taylor & Francis
• Year: 2012
• eBook ISBN: 9781136335075
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Politics
• Index: Politics & International Relations

This book explores the links between European integration and globalisation, and examines the potential for social transformation in the context of the global economic crisis and the resulting EU reforms.

Divided into three parts, this book offers both empirical and theoretical analyses of social integration, supranationality and global competition. Drawing on Critical Political Economy research, Neo-Gramscian, Open Marxist, Regulationist and Post-structuralist scholars subject a wide range of European flagship policies in matters of competition, trade and security to critical scrutiny and relate them to global political economy dynamics. Contributors examine the ways in which current global economic turbulence has affected the European Union, its membership and its adjacent areas, and determine the potential for economic and political transformation in light of the global economic crisis and Europe's 2020 Strategy. In the emerging multi-polar world, in which the EU and the US are expected to share global policymaking with new powers, this book argues for a revised conceptualisation of European integration and its relationship with globalisation.

Globalisation and European Integration will be of interest to students, scholars and researchers of globalisation, political economy, international relations, and European Union politics.

Part 1

Explaining European integration

Critical approaches

1 Globalisation and European integration

The nature of the beast¹

Petros Nousios, Henk Overbeek and Andreas Tsolakis

The production of the present volume coincided with a moment of crisis in European Union (EU) socioeconomic governance. The experience of economic turmoil throughout the EU arising from the transmission of the credit crisis originating in the United States of America (US) in early 2008 was accompanied not only by the elaboration of a new grand strategic vision, or in Gramscian terms, a new hegemonic concept of control (Overbeek, 2004), for the EU as a whole under the label Europe 2020 (European Commission, 2010), but also the continuation of the enlargement of the Eurozone with Slovakia and Estonia joining the core of European economic and monetary arrangements in 2009 and 2011 respectively. The former sought to take stock of, and to overcome, the perceived limitations of the Lisbon Strategy of the preceding decade (Van Apeldoorn, Drahokoupil and Horn, 2009) in enhancing the competitiveness of the European space in an adverse context of demographic imbalances, US imperial overstretch and the rapid emergence of a multipolar world order in which the EU and the US are expected to share the centre stage of global policy-making with new poles of capital accumulation (the so-called BRIC countries: Brazil, Russia, India and China). The latter development, in turn, indicated in no uncertain terms the irresistible attraction exercised by the single currency project for local political and economic elites of the direct periphery of the EU, interpreted as a means of consolidating their countries’ integration into an Atlantic sphere of power and production relations, conceptualised in neo-Gramscian scholarship as a Lockean Heartland of transnational capitalism (Van der Pijl, 1998, in this book).²

Yet the conventional economic rationale for joining the regional monetary club chiefly centred on the idea that a strong common currency would provide protection to national states from adverse external forces, including financial speculation against states’ credit-worthiness – i.e. that it is in the ‘national interest’ to join the Economic and Monetary Union (EMU) – has increasingly come under attack as the sovereign debt crisis engulfing some member states has called the European single currency and its economic and political benefits into question. Conversely, the lack of participation of some EU member states in the region’s unified monetary arrangements has induced business and government elites in the United Kingdom (UK), Sweden and Denmark, for example, either to retrospectively argue for the benefits of, or to claim credit for, their past refusal to join. This triumphalism, indubitably tempered by the dire condition of these countries’ economies as well, nonetheless has significant ideological power, expressed in the electoral victories of parties rejecting membership of the EMU and the marginalisation of pro-EMU discourses in information media in these countries, concurrent to the emergence of profound disagreements among policymakers and academics concerning the ability of the Eurozone to survive the Greek sovereign debt crisis (Radice, 2011; Dimitrakopoulos, 2011; The Economist, 2011; BBC News, 2011).

The current economic turmoil has not been solely regional in scope and is therefore not confined to Eurozone member states, as illustrated by the deepening fiscal woes of the United Kingdom’s state, not to speak of the impending crisis in the US regarding its own public financial performance. However, it has arguably become most severe in countries that do participate in EMU, suggesting, in turn, not only the existence of significant weaknesses in the original formulation and operation of Europe’s institutional arrangements, but also an accentuation of the underlying contradictions of the social order out of which these institutions emerged in the first place. The heated debates currently under way in the international business and current affairs press on the optimal responses to the crisis have only reflected the acrimony between Europe’s political elites in negotiating and determining a way out of the present economic malaise. Drawing from the financial difficulties experienced so far by Greece, Ireland and Portugal and with the threat of contagion to Spain and Italy, European leaders have been locked into prolonged negotiations regarding the establishment and operation of institutions aimed at remedying the economic, ideological and institutional damage caused by the global credit crisis and at silencing criticism left and right of the European single currency project (Polychroniou, 2010). The establishment of regional economic (that is, fiscal) governance institutions to match Europe’s monetary union has, therefore, never appeared closer, yet at the same time been so distant. The initial 110 billion Euro support package agreed for Greece in May 2010 was subsequently complemented by the creation of the European Financial Stability Facility (EFSF) with a mandate for additional funds to be raised by member states and the European Commission respectively, in order to prevent the spreading of financial crises, dissuade speculation in the European sovereign debt market and thereby prevent the unravelling of the region’s unified monetary arrangements. The financial assistance programmes that have been provided to Ireland and Portugal (as well as Greece) have been of a similar character. Although their final outcomes have been so far uncertain, the first indications are that as these countries’ economies have been driven into recession in an attempt to convince transnational financial market actors of the Eurozone’s credibility, member states’ very ability to settle the public debts generated by the 2008 and 2009 bailouts of banks, insurance companies and industries ‘too big to fail’, has itself been jeopardised.

The trauma of the 2008 financial crisis had opened a window of opportunity for alternative approaches to the so-called finance-led neoliberal accumulation model predominating in the EU. The latter was characterised by the absolute sanctity of fiscal and monetary stability, interfaced by worldwide privatisation of accumulation, financialisation and the suppression of real wages for a large majority of workers, a model fuelling in turn the hypertrophy of private and public indebtedness to sustain consumption and investment that led to the present crisis. However, burgeoning proposals by European elites to alleviate the most blatant aberrations of financialisation by establishing a regulatory framework for transnational financial capital flows – including a thrust against tax evasion and fraud by businesses and wealthy individuals – and by consolidating a ‘fiscal Europe’ were rapidly neutralised by capitalist forces beyond and within global, regional and national governance institutions. In large part, the ability of transnational capital, in particular its financial fraction, to emerge from its temporal frailty and rapidly retake the initiative by consolidating and intensifying the neoliberal restructuring efforts through welfare cuts, labour and pension reforms and regressive tax hikes, was a product of the subdued response of labour organisations, their back manifestly broken by three decades of restructuring, to the opportunities generated by the crisis (Nousios and Tsolakis, 2011). The crisis did not translate into rupture with previous accumulation strategies, and private financial institutions, with the active support of credit-rating agencies, initiated speculative attacks on the capacity of EU member states to repay the very debts generated by the bailouts and the expansion of social spending in the context of rapidly rising unemployment rates. The effectiveness of these attacks, reflecting the structural power of transnational capital, is manifest in the recently ratified Euro Plus (or Stability) Pact conditioning the future implementation of National Reform Programmes as well as the European Commission’s Budget proposal for the 2014–2020 financial programming period, which place fiscal austerity above all other considerations for the achievement of competitive growth (European Council, 2011; European Commission, 2011).³

The restructuring efforts currently unfolding and being crystallised in aforementioned EU directives and regulations imply that labour (initially state employees, followed by the rest of workers but excluding privileged employees of the European Commission itself and other multilateral organisations) will bear the brunt of public debt settlements. In Greece, for example, the effects of the latest bailout plan, ratified by parliament during a two-day general strike in July 2011, have been very drastic: wage cuts, increases in pension contributions, and various tax hikes signify significant decreases in real wages for public sector workers; additional institutional changes in Greek wage bargaining structures have led to similar pay results in the private sector as well. The intensity of the disciplining measures is generating, in some cases (for example Spain), unprecedented forms of resistance by labour and subaltern forces fuelled by an acute realisation that ‘For the first time in Europe’s recent history there is widespread fear that today’s children will be less well off than their parents’ generation. Today, we live an age of insecurity’ (Reflection Group on the Future of the EU 2030, 2010: 11). The protests in Greece and Ireland have also been just as energetic, mirroring the drastic nature of the economic policies implemented to address the ‘mismanagement’ of previous years.

The commitment of member state governments to stay the neoliberal course – despite public outcry and popular opposition expressed not only in mass mobilisations in Greece, Spain, France and the UK overtaking traditional organisations defending labour rights (the so-called movements of the ‘indignados’ in Spain and Greece) (ATTAC, 2011), but also in the electoral successes of ultra-nationalist and xenophobic political parties⁴ – would seem to suggest that the EU has managed once again to resolve, in the usual ad hoc manner, the problems arising from the process of monetary integration initiated in the recent past. The latter conclusion, however, would be at best premature and at worst misleading given not only the actual range and content of the policies agreed in exchange for financial support for the affected governments, but also given the participation of a reinvigorated International Monetary Fund (IMF) in the financial rescue operations for the troubled Eurozone member-states, accompanied by provisions laid out in EMU-related legislation subsequently adopted for its further involvement in any future member-state assistance programmes. Despite some misgivings expressed by European officials and others regarding the involvement of this US-dominated global institution in what was initially regarded as a strictly regional economic matter related to the governance of European polity, the eventual acceptance at the insistence, amongst others, of the German and Dutch governments and the quiet satisfaction of the United Kingdom Treasury of the participation of the IMF into the process, demonstrated in the strongest possible terms the compatibility and close fit, if not embeddedness, between European monetary integration and governance, and the globalisation process under the aegis and global projection of US authority (Cafruny and Ryner, 2007; Panitch and Koonings, 2008). Therefore the regional integration process and its various policy aspects under examination in the present volume cannot be understood in isolation of, or be considered as divorced from, the global neoliberal restructuring process unfolding since the late 1970s and early 1980s (Overbeek, 1993).

The turmoil experienced over the past three years throughout the European continent arose from transatlantic financial contagion and the concomitant reduction of trade volumes between Eurozone member-states and their main trade partners that the financial crisis had initiated. The present crisis of the EMU, then, cannot be analysed in isolation from financial, industrial and commercial relations through and beyond the EU’s direct jurisdiction, and without tracing their causal relationships with past social processes. The current economic turmoil is structurally conditioned by global social and geo-economic imbalances. The sovereign debt crises of Ireland, Portugal and Greece and the current intensification of financial agents’ speculative attacks on the Greek state’s ability to settle its public debt are not merely country-specific (referring to the usual suspects of low productivity, high wage costs, administrative inefficiency and rapidly declining competitiveness, as emphasised in information media’s reference to the Portugal, Ireland, Italy, Greece and Spain through the PIIGS acronym) (The Economist, 2010), nor even exclusively EMU-related in essence (Nousios and Tsolakis, 2011).

A more fundamental concern for the citizens of the countries involved and affected by the IMF/EU/European Central Bank (ECB)-supported economic reform programmes has been not only the transformation of the content of European integration process over time, but also the acceleration and deepening of a set of policies accompanying balance-of-payments support assistance that, although previously crystallised in the EU’s Lisbon Strategy, have come to define the form and substance of European economic policy; the fiscal and monetary centrepiece is interfaced by privatisation (or in its alternative guise de-etatisation), the further flexibilisation of labour markets (legitimised by the concept of flexicurity), reductions in (and in some cases partial privatisation of) welfare state service provision, and pension reform (legitimised in turn by Europe’s ‘unsustainable’ demographic imbalances).

The aforementioned reform strategies have not been confined solely to the peripheral members of the Eurozone area that are presently undergoing a series of drastic socioeconomic adjustments; the consolidation of the structural power of capital is taking place throughout the transatlantic Heartland. However, while the most energetic expressions of public discontent are observed in Portugal, Italy, Greece and Spain (the so-called PIIGS), the recent difficulties in achieving the ratification of the Lisbon Treaty and the discontent registered in countries such as France and The Netherlands, traditionally assumed to be at the forefront of the integration process, highlighted the underlying tensions inherent to the current stage of the regional integration project. The public’s dissatisfaction with the polyarchic form of the institutions tasked to manage the crisis only intensifies popular discontent at the content of public policy emanating from ‘Brussels’ or undertaken in the name of or because of ‘Europe’, as euro-sceptic politicians throughout the political spectrum like to put it.⁵ The promotion of popular austerity and the associated reductions in public expenditure as the only credible solutions for the present economic deadlock have brought into question not only the basic popular consent to the European project as a whole, but have also led to an incipient and potentially much more virulent reassessment of the role of the EU into the political and economic welfare of the c...

Table of contents

• Cover
• Halftitle
• Title
• Copyright
• Contents
• List of Figures
• List of Tables
• Notes on contributors
• Foreword by Amy Verdun
• Preface
• Abbreviations and acronyms
• PART 1 Explaining European integration: Critical approaches
• PART 2 Supranationality and international competition
• PART 3 Europe in the global political economy
• PART 4 Conclusions
• Postscript
• Index