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Staying in the EU
Adrian Pabst
At the heart of the EU is political economy. The post-war European project came into
existence to resist the three forces that had threatened Europes including Britains
peace and prosperity in the preceding century: economic nationalism, the free-market
ideology of laissez-faire capitalism, and the state corporatism of the communist,
fascist and national-socialist regimes.
Europes founding fathers were inspired by classical and Christian ideas more than by
secular ideology. They inaugurated cooperation between former enemies in
agriculture, coal and steel while also building coalitions among trade unions,
businesses and the churches. There was thus a balance of power between the state and
the market on the one hand, and the intermediary institutions of civil society on the
other hand.
Underpinning this new economic settlement was a substantive conception of the
common good based on shared interests. The social market economy that was
supported by both Christian and Social Democrats in Germany, France, the Benelux
and northern Italy embodied many principles of Catholic Social Thought, such as
interpersonal solidarity, real subsidiarity, mutual recognition and the valuing of
Europes recent evolution towards a market-state that centralises power,
concentrates wealth and commodifies social life was the result of a failure to develop
a shared political economy that would extend to the rest of the EU the virtues of the
social market model while correcting the vices of French dirigisme and German ordoliberalism: too much emphasis on state planning and on centralised regulation, and
too little emphasis on the social purpose of investment and on trust not compliance
as the basis of competition.
Germany has preserved many elements of the social market, including worker
representation on boards, regional banks, an industrial policy and a vocational labour
market. But neither the Christian nor the Social Democrats resisted the neo-liberal
takeover of German ordo-liberalism that mutated into the sole pursuit of austerity and
price stability, which within the Eurozone produces deflation and depression.

The collapse of state communism and the periodic crises of finance capitalism
provided an opportunity to build a political economy that pursues virtue and the
common good rather than trying to maximise private happiness or public utility.
Instead, the reunified Germany exported its ethics and politics rather than its
economy: Kantian morality of context-less duties, Weberian statecraft void of virtue
and Bismarckian quasi-military management of citizens through rationalised welfare.
Reinforced by French statism in the traditions of Colbert and the Jacobins, the
dominant method of European integration in 1980s and 1990s engendered a Europe
that imposes top-down harmonisation with all power to the Commission and the
Court of Justice rather than upholding the mutual recognition of national diversity
(with some basic minimum standards) that is negotiated by the member-states. In
practice, the EU has put in place a regulatory regime that enforces uniform standards
whereas before European directives required some minimal harmonisation of
European law and could ban restrictive regulation in some countries that interfere
with the four freedoms (people, goods, services and capital).
Just as harmonisation replaced mutualisation, so too centralisation superseded the
voluntary association of democratically governed nations. The EU interpretation of
the principle of subsidiarity exemplifies this logic: in Article 5 of the EU Treaty and
other texts, subsidiarity implies that the Union is obliged to take action wherever it
has an advantage in terms of scale or effect. Not only does this invert the burden of
proof and raise question over who has the legitimate authority to decide, but it also
hollows out the social embedding of the economy.
From the family via intermediary institutions all the way up to the nation, the primacy
of the social over the economic is central to Catholic Social Thought and cognate
traditions such as guild socialism or one-nation conservatism. As a result of EU
legalism and the triumph of procedure over politics, subsidiarity has become an
engine of centralisation when it was supposed to be a device for devolving power to
However, EU centralism is neither necessary nor inevitable. It was the outcome of
contingent political decisions to fuse Anglo-Saxon finance capitalism with
continental bureaucratic statism, which successive British governments have taken to
new levels. And it is this EU market-state not the European project as a whole
that lacks political direction, economic vitality, social cohesion and civic consent.
Scepticism about reforming the Union is well founded but all-too-often a pretext for
disengagement and even fatalism. There is nothing fated about where the EU is today
or how it will develop going forward.
Advocates of Brexit assert that the EU is bound ever more to centralise and be
dominated by both big business and big government. They cite in support of their

argument last years report of the five presidents of the EU institutions, which calls
for the strengthening of the monetary union by 2025, the creation of a Eurozone
treasury and a move to full-blown political union. The pro-Brexit case rests on the
claim that this will hijack the whole Union (including non-Euro members such as
Britain) and that, unlike national governments, EU power is and always will be
unaccountable and undemocratic.
However, the five presidents report, far from offering a roadmap to the future, is a
relic of a moribund conception of a supranational Europe wherein the European
Commission, the Parliament and the Council of Ministers would replace the national
executive and legislature. That was Jacques Delors vision to which Mrs Thatcher
famously said three times Non.
A federal super-state has no mainstream political or popular support in any of the big
member-states, not even the Eurozone countries that are unwilling to agree even a
banking union never mind a fiscal or a political union. And lets not forget that the
French and the Dutch comprehensively defeated the Constitutional Treaty in 2005.
Since then power has flown from the supranational level back to the
intergovernmental level. Echoing Margaret Thatchers 1988 Bruges lecture, the
German Chancellor Angela Merkel argued in the same place in 2010 that the future of
the EU lies with the union method of co-ordinated action by national governments,
as opposed to the community method of automatic supranationalism favoured by
Delors and, before him, Jean Monnet. All the major decisions on Eurozone bailouts
and the migration crisis have been taken by Germany and other big member-states.
At the same time, no country has an innate right to lead the EU. France retains
military might but her stagnant economy and deeply divided politics highlight the
existential crisis that is engulfing the Fifth Republic. Germany is the Unions
economic powerhouse but lacks the means to direct foreign and security matters.
Neither country has a global strategic outlook or the same cultural soft power as
Britain. A more creative UK foreign policy would regard Londons geo-political and
geo-economic situation as a vortex of meeting and competing economic, political and
cultural forces that provides a springboard for much greater positive influence in
Europe and across the globe.
In a European Union of concentric and overlapping circles, the country that might be
best-placed to lead is perhaps the least sentimental member with one foot in the EUs
core (trade, foreign, defence and security), one foot in its periphery (outside the Euro
and Schengen) and a keen eye on the wider world Britain. Current economic and
demographic trends are reinforcing the UKs pre-eminent position in Europe. By
2030, Britain will have the largest economy and largest population in the EU, giving
it greater power in terms that are both real (representation in the EU institutions) and

If Britain does decide to stay in, it has the opportunity to re-engage with the rest of
the Union and lead by building new alliances with like-minded member-states such as
Germany, Scandinavia, the Low Countries, Central and Eastern Europe as well as
Mediterranean members such as Portugal and Italy who are disillusioned with the
current drift. All this requires old-fashioned virtues of courage, imagination and
Over-ambitious? Perhaps, but the alternative is either a permanent paralysis of the EU
or else the collapse of the Union and with it the end of the only political expression of
Europes shared culture. Faced with the threats of terrorism, economic depression in
the southern Eurozone and the impact of mass migration, the EU could yet
disintegrate. After Brexit, the UK would have much to fear from a messy breakup of
the rest of the Union, as it would be swept up into its turbulent wake.
Should the EU survive and muddle through, a Brexit would leave the remaining
member-states exposed to a German hegemony that Germany does not want and
everybody else fears. Throughout her modern history Britain has acted as a bridge to
secure a balance of power and prevent the dominance of any one continental country.
No other European state can play this vital role.
Europe is fundamental to Britains identity and national interest, but what sort of EU
would the UK be part of in case it votes to remain? Britain will be member of a
multi-speed union with different destinations, as the deal negotiated by the Prime
Minister guarantees a permanent opt-out from ever closer union. Confronted with
existential threats, the EU has little appetite for further integration and enlargement,
and there wont be another 28-member treaty for a generation.
That leaves the vastly imperfect Lisbon Treaty, which nonetheless enshrines as one of
its goals the creation of a highly competitive social market economy across the EU.
Amid the lack of political leadership, Britain together with kindred member-states has
a unique opportunity to provide direction and a sense of purpose, started with a
shared political economy. This would involve building new coalitions of interest
within and between nations in ways that respect the things both Westminster and
Brussels elites have dismissed as anachronisms: tradition; a respect for settled ways
of life; a sense of local place and belonging; a desire for home and rootedness; the
continuity of relationships at work and in ones neighbourhood.
After 1945, few thought that Europe could see peace, prosperity and partnership
between former enemies, but the political project that brought this about has ground
to a halt. A vote to stay in offers Britain the chance to reengage with her European
partners and lead Europe.

Adrian Pabst is a Senior Lecturer in Politics and the

University of Kent.
Political notes are published by One Nation Register and a
contribution to the debate shaping Labours political renewal. This
article was also published on Labour List.
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