The EU’s Way of Managing Globalization Democratically

The European Union has been a remarkably successful political experiment. It is the first ever voluntary coming together of sovereign states. By pooling some of their sovereignty, they can do more together than they could separately.

Almost every other political unification or state-building in history has involved the use of force (including, notably, the creation of the United Kingdom and the United States). The EU came together peacefully and voluntarily.

The EU is also the most advanced effort in the world to introduce a measure of democratic supervision into the process of globalization.

Unlike other efforts to supervise globalization, such as the United Nations and the World Trade organization, the EU has a directly elected parliament that co-legislates for the EU alongside the 27 member-state governments, who often decide issues by majority.

Other international organizations operate on a purely intergovernmental basis. That means there has to unanimity to get a decision.

Worse, democratic involvement only arises when a deal already negotiated in private has to be ratified in a national parliament — mind you, without the possibility of further negotiation or amendment.

As a result, other organizations can achieve much less. And they have to do much more of what they do behind closed doors than is the case with the EU.

I believe that the EU provides a model for democratic rule-making, at the supranational level, that will become more, not less, necessary as we proceed into the 21st century. Indeed, the failure to deal with climate change is a good example of the weaknesses of present intergovernmental models of global governance.

If the different regions of the world had unions like the EU that could negotiate seriously and with genuine political legitimacy, as the EU can, the failures of Copenhagen and other climate change summits would not have happened.

And if the EU were to break up, we would have lost a unique instrument for security building in Europe, and for problem solving in the wider world.

Solving the euro crisis

While the euro crisis has become slightly less acute in recent weeks, there are still four things that need to happen — more or less at the same time — to sustain this progress:

Greece’s government debt will have to be forgiven.

The European Stability Mechanism (ESM) will have to be seen to be big enough, on a contingency basis, to stand behind Spain and other countries that might get into difficulty.

The new mechanisms to supervise and, if necessary, rationalize Europe’s banks will have to be put in place.

The already agreed-upon reforms to reduce deficits and to promote growth by opening up the labor and service markets to competition will have to be fully implemented in letter and in spirit.

The point of these four things is to show creditors that, if one forgives debt or creates enlarged contingency funds, one is not throwing good money after bad. One of the reasons the potential for growth has been so low in Greece, Italy and Spain is the lack of competition or flexibility in key sectors.

Germany has set a good example in terms of labor market and pension reform, but there are other reforms it could initiate. This includes helping other EU countries to sell more goods and services to the German market, and thereby trade their way out of their problems.

The EU’s democratic legitimacy problem

The pressures that cause fracture in the EU — whether in the United Kingdom or elsewhere — stem from a lack of understanding among the general public of the extent to which their livelihoods depend on economic developments in other countries. Voters remain amazingly naive about how unrealistic, in modern conditions, an “ourselves alone” policy is.

Political leaders make little effort to explain this because to do so would undermine the nationalist myths which brought most states into being in the first place. It would also rob them of the often convenient way to blame the EU for the effects of decisions that are necessary, but unpalatable.

For these reasons, little effort is made to forge any form of patriotic pride in the EU or its achievements. In that context, it matters a great deal that no venue has been created in which an EU-wide public opinion might be created.

We all know that the European Parliament, despite its potential and generally assigned role, cannot serve as such a platform. There are no truly European elections. Instead, there are 27 different elections, in 27 different countries, in which national issues predominate.

The European Parliament itself has refused to contemplate the election of some of its members from EU-wide party lists, which would begin the process of creating EU-wide debates.

The presidents of the European Commission and the European Council are selected in private meetings of heads of government. They do not have to win the votes of citizens on an EU-wide basis either.

Consequently, EU citizens do not have the feeling that they can vote the government of the EU out of office, in the same way that they can vote their national government out of office. Thus, the EU does not enjoy democratic legitimacy in quite the same way that national governments do.

As a member of the convention that drafted what eventually became the Lisbon Treaty, I urged unsuccessfully that the EU should have a presidential election on these lines. I suggested that the president of the European Commission should be selected in a multi-candidate election in which every EU citizen would vote.

Instead, he (so far, this office has been held only by men) is selected, at present, by 27 heads of government who meet in private, to be approved in a single-candidate vote in the European Parliament.

The European Union is facing an existential crisis, caused by the conjunction of the stress on the euro currency and the implicit threat of one of its long-term members, the United Kingdom, to leave altogether.

Despite this, the EU brings much added value to the 21st century world — a unique means of governing globalization democratically and thereby providing mutual security to its member states.

But the EU has a lot of difficult work to do if it is to survive. It must simultaneously become more efficient and more democratic. It will not be easy to do these two things at the same time — and its critics should be more understanding, and less dogmatic, in assessing what the EU is trying to do.