Spanish readers: Here is the link to an article on “The Seven Challenges Facing Europe,” for which I was interviewed along with Christopher Bickerton, published yesterday in El Español: http://www.elespanol.com/mundo/20160504/122237835_0.html. I gave this interview in conjunction with a talk on the impact of European integration on national democracies for the BBVA Foundation in Madrid on May 5, 2016.
Vivien Schmidt was interviewed recently by Hungarian news outlet HVG (World Economy Weekly) on Europe’s refugee fears and populist responses to threat of terrorism on both sides of the Atlantic.The interview was published in two parts on January 4 and on January 6.
The interview appears to have been widely read in Hungary, as the number of comments on both publications suggest. Zsolt Bayer, a co-founder of Fidesz and a friend of Viktor Orbán referenced the interview in one of his recent pieces arguing that it is an emblematic example of a conspiracy between the so called Western professors and the so called journalists which exemplifies the European left’s flawed way of thinking and the international leftist propaganda that tries to convince people that multiculturalism is something good.
Vivien Schmid’s UCD lecture draws on a report that she recently prepared for the European Commission. The EU’s economic crisis has generated a crisis of democratic legitimacy, as deteriorating economics and increasingly volatile politics have combined with restrictive governance processes focused on ‘governing by the rules and ruling by the numbers.’
Using the systems related terms of democratic theory, this paper first analyzes this legitimacy crisis in terms of problems with the ‘output’ performance of EU policies, the EU’s responsiveness to European citizens’ political ‘input,’ and the quality of the EU’s ‘throughput’ processes. It then considers how these play out for EU institutional actors—including in turn the ECB, the Council, the Commission, and the EP. The paper’s overall argument is that EU actors have sought to fix the economics and calm the politics by progressively reinterpreting the rules without admitting it in the discourse, and that such reinterpretation ‘by stealth,’ although perhaps beneficial for output legitimacy, risks generating further problems for input and throughput legitimacy.
The paper also shows that EU institutional actors differ with regard to their avenues for legitimation and their responses to fast burning versus slow burning phases of the crisis, with the main differentiation between technical and political actors. The paper finds that both EU technical and political actors have generated mixed responses from the public and analysts alike as a result of the disconnection between what they do and what they say. The ECB is seen either as ‘hero’ or ‘ogre,’ the Council as ‘dictator’ or ‘deliberative public body,’ the Commission as ‘ayatollahs of austerity’ or ‘ministers of ‘moderation,’ and the EP as a ‘talking shop’ or a potential ‘equal partner.’
The paper ends each of the sections on EU institutional actors with proposals in the short-term for modest remedies to the EU’s legitimacy problems, even without treaty change, plus some more bold solutions for the medium and long-term. It adds a final note centered on how to rethink EU governance if Eurozone economic governance deepens. In the conclusion the paper sets the crisis into the context of globalization, capitalism and democracy, and suggests possible future developments for EU legitimacy.
For the Commission, this paper highlights the need for leadership through greater flexibility and transparency in the reinterpretation of the rules, made possible by its new EP linked input legitimacy, and its now simultaneous accountability to the EP and Council. It also recommends a transformation in the Commission’s own approach to administering the rules—from community enforcer to community enhancer/facilitator/advisor within a more decentralized system of supervision/support. For all the institutions, it proposes a return to the long-standing institutional balance embodied by the Community Method. Among the other EU institutional actors, the ECB is to limit its focus to Euro-related issues of monetary governance, leaving economic policy orientation to the other institutional actors, while doing all the necessary as quasi lender of last resort and bank supervisor. The Council is to become a more open and transparent arena for political debate about the rules.
The EP is to be brought into all Eurozone decision-making, and better tied in with national parliaments, which will also see their role expanded. Finally, for the medium and long-term future, in addition to greater fiscal solidarity, the EU should end the unanimity rule, replaced by supermajorities with opt-outs, while treaty-based rules regarding the Eurozone are to become ordinary legislation, and therefore more readily amended. Moreover, instead of a Eurozone hard core with its own Euro-parliament the EU should be conceptualized as consisting of overlapping policy communities made up of clusters of member-states, in which all have voice but can vote only in the communities in which they are members.
Last week, Vivien Schmidt, Director of BU’s Center for the Study of Europe, travelled to London to deliver the Kleh Family Foundation Distinguished Lecture on “The Eurozone Crisis: A Problem of Economics or Politics.” Over 100 people attended the sold-out event at the Boston University London Center in South Kensington.
In her lecture, Schmidt argued that Eurozone crisis is not just about the economics, it is also about politics. The EU’s flawed economic policies have left Europe at risk of deflation, with slow growth, high unemployment, rising inequality, and a humanitarian crisis threatening the poorest Europeans. The toxic politics in response have become increasingly Eurosceptic and volatile, as citizens’ loss of trust and confidence in national governments and the EU have resulted in the cycling of incumbent governments and the rise of extremist parties and populist movements. The EU’s governance processes, focused on ‘governing by the rules and ruling by the numbers,’ have only exacerbated these problems, while also undermining national democracies. Is there any way out of the Eurozone crisis for the EU? Following her discussion of the challenges facing the EU in the crisis, Schmidt speculated on possible scenarios for the future.
Watch this short video promoting the sixteenth edition of Social policy in the European Union: State of Play, in which I have a major chapter. The book has a triple ambition. First, it provides easily accessible information to a wide audience about recent developments in both EU and domestic social policymaking. Second, the volume provides a more analytical reading, embedding the key developments of the year 2014 in the most recent academic discourses. Third, the forward-looking perspective of the book aims to provide stakeholders and policymakers with specific tools that allow them to discern new opportunities to influence policymaking.
In this 2015 edition of Social policy in the European Union: state of play, the authors tackle the topics of the state of EU politics after the parliamentary elections, the socialisation of the European Semester, methods of political protest, the Juncker investment plan, the EU’s contradictory education investment, the EU’s contested influence on national healthcare reforms, and the neoliberal Trojan Horse of the Transatlantic Trade and Investment Partnership (TTIP).
Vivien Schmidt spoke recently at State of Play 2015, a daylong conference highlighting the state of social policy in the European Union held on Sept. 23 at the headquarters of the European Economic and Social Committee in Brussels, Belgium. The conference was held to commemorate the publication of the 16th edition of “Social Policy in the European Union,” the flagship publication of the European Trade Union Institute.
Schmidt, who also contributed research to “Social Policy in the European Union,” spoke on the topic of “Changing the policies, politics, and processes of the Eurozone in crisis: will this time be different?”
Other attendees at the State of Plat 2015 conference included EU labor leaders, European academics, and trade organizations.
The 2015 edition of “Social Policy in the European Union” tackles the topics of the state of EU politics after the parliamentary elections, the socialisation of the European Semester, methods of political protest, the Juncker investment plan, the EU’s contradictory education investment, the EU’s contested influence on national healthcare reforms, and the neoliberal Trojan Horse of the Transatlantic Trade and Investment Partnership (TTIP).
This week’s deal extending a third bailout to debt-racked Greece in exchange for further austerity measures averted the country’s having to abandon the euro, and the possibly devastating consequences that would have brought. But Vivien Schmidt says it’s a Pyrrhic victory.
Schmidt, Jean Monnet Professor of European Integration and a professor at the Frederick S. Pardee School of Global Studies, agrees with critics who say that far from solving the debt crisis, more austerity will merely prolong Greece’s 1930s-type depression. That depression prevents economic growth and the resources it would bring to pay debts, she says—a problem evident on her last visit two years ago, when “you could see lots of stores closed in Athens.”
Yet several members of the 19-nation Eurozone, having undergone austerity themselves in the past in exchange for help, are loath to spare the Greeks what they had to endure, Schmidt says. “It’s like belonging to a fraternity in which everyone gets hazed. You’re not going to let one young freshman who says I’m going to die…get out of being hazed.”
She also agrees with opponents who say the bargain infringes on Greek sovereignty, stripping the country’s ruling party, the leftist Syriza party, of control over the nation’s economic destiny. The quandary for Greece, she says, is that “if it stays in the Eurozone, it’s subject to a massive loss of sovereignty.…If it doesn’t accept this, it’s in much worse shape if it leaves.”
Schmidt, also a Pardee School professor of international relations and of political science, directs the Center for the Study of Europe. BU Today asked her to weigh in on the Greek debt crisis and whether a third bailout would help.
The problem for Greece is that meeting most of the austerity focused demands won’t do anything for growth, which Greece desperately needs. And another year of austerity is unsustainable—after five years of utter misery with a drop of 25% in GDP and an increase to over 50% youth unemployment, with a humanitarian crisis the result.
While the Council and Commission have actually introduced increasing flexibility into the interpretation of the rules for ‘normal’ (non-program) countries, and have put the emphasis on investment and growth-oriented ‘structural’ reforms, they appear to remain largely inflexible on Greece. The problem is that while some Northern European countries (Germany but also Finland) believe that austerity works, governments of countries that have had to impose austerity on their own populations (especially the Baltics, Spain, and Portugal) or are now in the midst of putting ‘structural reforms’ of labor markets and pension systems (France and Italy) are not about to let Greece off the hook, for fear of their own constituencies’ responses. But this is counter productive.
Greece needs to stay in the Eurozone for its own benefit as well as everyone else’s. But what they need is not yet another austerity program. Instead, why not recognize that they need growth, and give the government a two year period of grace…no austerity, release of the monies to repay the IMF, and ECB guaranteed bank liquidity in exchange for an agreement from the unions not to raise wages, for the government to collect taxes from the non-paying rich (including the expatriates with the help of international institutions), major reform of the state administration, rationalization of the rules to make it easier to start businesses, plus investment funds for small and medium sized enterprises, to reignite the private sector that has been dying on the vine these last few years. Moreover, the EU ‘institutions’ (formerly known as the Troika) should transform themselves, moving from ‘enforcers’ to ‘advisers’, to help the Syriza government implement reforms that will not be easy.
Only by changing completely the program—and the discourse justifying it—can Greece stay the course, and succeed. Greece has suffered enough, and should be given another chance to prove that it can succeed—with a program that has a realistic chance of succeeding. This is the new message that Eurozone leaders should now agree on, and convey to their constituencies.
The paper argues that the EU’s sovereign debt crisis is not just economic; it is also political, resulting from the failure of EU leaders to offer solutions that calm the markets and convince the people. These failures stem from problems with EU leaders’ ideas about how to solve the crisis as well as their communication about them. That communication encompasses not just EU leaders talking to one another in negotiations of crisis solutions but also speaking to “the markets’ and to ‘the people’ about those solutions, all of which may interact in perverse ways. My article uses the analytic framework of “discursive institutionalism” to consider the different forms, types, levels, rates and mechanisms of change in ideas followed by the EU leaders’ discursive interactions in the “coordinative” discourse and their “communicative discourse” to the global markets and European publics. It uses a range of country cases, but in particular Germany and France, in illustration.