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The Euroskeptics’ delusions

France's far-right National Front (FN) leader Marine Le Pen, seen in a file photo.

By George Pagoulatos *

Brutal and diverse, coarse and noisy, the enemies of the European Union are inside the gates. Chauvinists and angry anti-capitalists, neo-Nazis and drunkards, charlatans and demagogues, they spit hatred, they flatter insecurities, they profit from indignation. They come with a simple solution for every complex problem: It is all the fault of the EU and the euro; their dissolution would cure everything. They want the European Parliament on its knees and the Commission’s head on a platter.

The anti-European vote is sustained by the issues of immigration and the economic crisis, and it consumes three great delusions.

Delusion 1: Immigration will be dealt with better with less Europe. Immigration used to be perceived as a threat to unskilled workers. Now middle-class voters are also biting the bait of xenophobia. Euroskeptics in the North want their companies to do business freely in Eastern Europe but they don't want East Europeans to be able to come and work in their countries. Citizens from the South, a region of emigration in the past, are now denying this same right to economic refugees seeking a better future across the Mediterranean.

No country can fully seal its borders from immigration. For Mediterranean countries this is impossible. Euroskeptics in Italy, Spain and Greece are calling for less Europe while at the same time demanding more EU support in safeguarding their borders. Euroskeptics in Germany, Austria and the Netherlands are accusing immigrants of grabbing their welfare benefits. They prefer to ignore the benefits of immigration for their economies and social security systems and disregard the demographic boost the integration of immigrants brings to an aging Europe. Can there be better support of immigration receiving countries without a common European migration policy?

Delusion 2: There will be greater social justice with less Europe. Left-wing Euroskeptics denounce the intensifying inequality and the growing pressure on weaker and middle-class strata. True, eurozone economies are implementing austerity programs that are cutting incomes and suppressing welfare state entitlements. The high public debt levels in the eurozone foreshadow future tax burdens and spending cuts. But let us take a closer look.

Fiscal policy can be less onerous on working people, productive enterprises and the welfare state if the tax base is broadened by tackling tax evasion and tax avoidance on the part of wealthy individuals and multinationals. Cracking down on bank secrecy and tax havens, as well as taxing short-term financial transactions, can only be achieved through coordinated action on the part of a politically powerful EU.

Tax competition allows multinational firms to play governments against each other, in a regime of free capital movement, suppressing tax rates, depriving welfare states of precious public revenues. Closer tax coordination in Europe will allow governments to raise tax revenues without leading to a mass exodus of firms and disinvestment. If greater tax justice is the objective, deeper European integration is the way forward, starting from enhanced cooperation in the EMU.

Delusion 3: There will be greater national economic sovereignty with less Europe. Uncoordinated economic policies, defective architecture and inadequate EMU tools, and policy errors and omissions at the national and EU levels all led to the severest economic crisis postwar Europe has seen. That said, the idea of returning to national currencies is a nonstarter, as it would be collectively catastrophic. And it would lead to beggar-thy-neighbor devaluations, monetary instability, and eventually European disintegration.

No one can make it on their own. Even Germany outside the EU framework would be just a medium economic power in a global competition among rising giants. The delusion of national sovereignty for the economically strong is a deceptive rhetoric. For the weak it is utter foolishness. Those who believe they can divest the EU of substantial competencies in order to strengthen their national sovereignty are doing nothing but blowing holes in the common European roof that is protecting us from the storms of globalization.

Nationalists from the UK or France lambast Brussels for supposedly oppressing their companies, but their countries owe most of their exports to the single market. Left-wing Euroskeptics in Greece, Spain, Italy and Portugal want everything from the EU (debt relief, Eurobonds, more budget funds, a new Marshall Plan), refusing however to make any commitments to the EU. They want rights without obligations or (as the motto imposed by SYRIZA’s Europhobic faction) “no sacrifice for the euro.” Obviously, no Europe of solidarity can be built upon the absence of national responsibility, and no debt mutualization can ever happen without guarantees of fiscal discipline.

Returning to sustainable growth and job creation will require closer economic integration and stronger EU instruments. It will also require national reforms, a bold investment stimulus by the eurozone, and more expansionary policies by the ECB. Matteo Renzi summarized it well, after rescuing the honor of pro-European progressives in Italy with his 40 percent landslide in the EP elections: “If we want to save Europe, we must change Europe.”

* George Pagoulatos is professor of European politics and economy at the Athens University of Economics and Business and a visiting professor at the College of Europe.
 

ekathimerini.com , Wednesday June 4, 2014 (18:26)  
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