International

If we wish to strengthen cooperation in Europe, then we should not be charging ahead but lending an ear to those who don’t go along with this, people who sat ‘supersate no, cooperation yes. That was the message from SP leader Emile Roemer in his lecture on Europe amd the credit crisis to the Student Union for International Relations (SIB) in Utrecht, the full text of which can be read below.

In May of this year elections will be held for the European Parliament. I assume that you know that. This puts you, however, in a select group. According to the pollsters Maurice de Hand, half of the people in our country don’t know this, and an ever greater percentage doesn’t intend to vote. I find this a worrying development, and I hope that you agree.

Because whatever you may think about ‘Europe’, the European Union or ‘Brussels’, it determines a large slice of our lives. So I’m pleased that the SIB asked me here to speak on the theme of the global credit crisis, and how Europe could escape from this crisis.

We are surely going to be in agreement over a few things at least: that the world finds itself in a crisis and that we need to get out of it. As to how I think we ought to do that, this is what I want to talk about this evening and I am of course curious to know your opinions on this too.

From students who are members of a student association for international relations you are entitled to expect an interest in the subject, but also that they will be prepared to think critically through their own position and those of others. You understand it, so I have high hopes.

But in order to understand the present moment, it’s good to know how we arrived here.

It’s a hundred years ago this year that the First World War broke out, a war still known in France as La Grande Guerre and in Britain as the Great War. The impact of that war on history can hardly be overestimated.

Last week I was in London and every day there was something on TV about this war.

Our country emerged from it almost unscathed, neutral as we were then. But in other countries a whole generation was wiped out.

If you think for example of the male population of Serbia between the ages of 20 and 50, more than 60% died.

Just take a look around you and think about how many were no longer. More than half of the men present here.

In 2010 the now sadly departed professor of international relations Koen Koch wrote an excellent book on the war: Een kleine geschiedenis van de Grote Oorlog.(1)

In it Koch states that the First World War marked the end ‘of the relatively peaceful nineteenth century, with its firm belief in steady social and economic progress’ and signalled ‘the prelude of the bloody and dark twentieth century with its wars, genocides, mass deportation and totalitarian dictatorships.’

It is also interesting that, according to Koch, this war, in contrast to much that has been asserted, was neither necessary nor inevitable. ‘War is the work of people. Politicians decide to wage it and determine how long the war must last. Generals determine strategy and tactics, which then decide the life and death of millions of soldiers.’

This position – that wars are not natural phenomena – has in my view a broader application. Political crises aren’t natural phenomena either, and the current crisis in Europe no more than any other. It is the result of the actions of politicians and bankers.

And although the present crisis bears fortunately no relation whatsoever to the horrors of the First World War, in this crisis too it is innocent civilians who must pay the biggest price.

After the First World War the first initiatives were taken to avoid, through cooperation, future wars.

The French Foreign Minister Aristide Briand developed, in the interwar period, plans for a European Union.

And in 1919 the League of Nations was established, a supra-national organisation designed ‘to put an end to all wars.’ As students of International Relations you probably know the fate of these two initiatives: one more world war was needed before we could achieve really effective European cooperation. Also, on a global level, it was not until after the Second World War that the United Nations saw the light of day, the only organisation which, with a measure of success - and necessarily also failures – has attempted to enable all of the countries of this world to live together peacefully.

In Europe the Second World War formed the prelude for two organisations: the European Coal and Steel Community which would later expand into the present European Union, and the Council of Europe, an organisation which may be less well-known than is the European Union, but to which far more countries – almost fifty – belong and which concerns itself with the strengthening of democracy and the rule of law.

A century after the First World War we can say with confidence that we have been fortunate in Europe to have made progress, in that we no longer fight each other on the battlefield.

Although for a long time the continent was divided by an iron curtain, and since the fall of the Berlin Wall we have seen the Balkans torn apart by civil wars, it has nevertheless since 1945 become relatively peaceful on this continent.

An achievement for which many others in this world envy us.

Yet our continent is at the present time in crisis nevertheless, a crisis which has an economic, a political and a democratic dimension. In what remains of my talk I will concentrate my attention on this crisis.

But before I can do so it’s necessary to just take a look at what precisely has been the formula for the success of European cooperation after the Second World War. .

Where peace prevailed, prosperity could flourish, and with the active approval in the European integration project of the populations involved.

Arjun Vliegenthart, director of my party’s research department and lecturer in International Relations at the Free University of Amsterdam, wrote the following in 2012 in his analysis of the origins of the European crisis and possible ways of addressing it:

Until the beginning of the 1990s the European integration process was not only reasonably successful, it could also count on broad tacit support from the people in the various member states. This wasn’t all that surprising: cooperation between Germany and France aimed at preventing was and increasing prosperity had in large part succeeded. Other countries joined and together these countries rebuilt their societies and saw prosperity increase due to their ability to make use of each other’s raw materials, knowledge and expertise. Step by step obstacles to effective cooperation were cleared away. The European Coal and Steel Community, with which European post-war cooperation had begun in 1952, was reformed in 1957 with the Treaty of Rome to become the European Community.

In 1967 in Luxembourg the decision was taken to move towards closer cooperation within the European Community.

Support for European cooperation was, until the 1990s, probably so strong, also, because such cooperation had developed in a gradual manner. The way in which European integration proceeded in these times was reminiscent of the dancing procession for which the Luxemburg town of Echternach is famous: two steps forwards, one step back; because alongside the successful decision to intensify cooperation, there were also failures.

This form of cooperation was, however, exchanged in the ‘nineties for a new model, based on a neoliberal reading. The European project began to go off the rails. Major corporations, who celebrated the success of the European Community as a market, looked to take a new step. They came together in the European Round Table of Industrialists and attempted to hijack the European project. This project had to lead, in this view, to a European internal market in which they, with as little interference as possible from the member states, could do things their way.

The industrialists wanted in this way to arrive at a situation in which they could hold their own in competition with the United States and with Japan, which at this time was seen as a new superpower.

This European Round Table very quickly became the most powerful lobbying organisation in the European Community.

With the support of government leaders like the Netherlands’ Ruud Lubbers – who were inspired by the idea that Europe must in the end become a federation – in 1986 the Single European Act was launched, in which it was agreed that by 1992 at the latest a common market would have been created in order to promote trade.

With this agreement the interests of the industrialists became finely interwoven with those of the Eurofederalists. The first group got a Europe in which corporate interests could flourish. The federalists too got their way: the deeply cherished wish to arrive at a common political union had come a step closer.

It is precisely this combination of business and politics which has dominated thee integration process in the decades which followed. Their shared politics is responsible for the causes of the current economic crisis.

Europe in crisis

Because, however you look at it, the European Union finds itself in a crisis. And just to clear up any prejudice regarding my views, I take no pleasure from this. In fact, I’m extremely concerned as to how we have allowed a project aimed at preventing war and improving prosperity to slip through our hands. I’m worried about Europe’s young people, for whom it’s extremely difficult to find work, as you are perhaps experiencing for yourselves at the moment.

In Spain and Greece youth unemployment is a great deal higher than it is here in the Netherlands. More than 50% of young people in those countries are out of work.

It’s this lack of any prospects, of a job and a fully-fledged social life along with it, which is one of the most distressing results of the crisis. And one about which we must do something, and quickly.

I’m also concerned for our democracy. During the last few years we’ve seen how the public has become increasingly alienated from European decision-making. We are seeing a declining trend when it comes to confidence in European institutions. People are losing their confidence that politicians can solve the problems and at the same time I see how ever more powers are being transferred to Brussels without control over this being well-regulated. That’s asking for trouble and we need to prevent our democracy from becoming, alongside our young people, a victim of the present crisis.

I have as a Member of Parliament had to address the current European crisis directly.

I have been an MP since 2006 and just like many of you, in 2008 I was caught napping by events. Banks suddenly found themselves with massive problems. Stock markets broke down, people withdrew their money from banks and governments were forced to nationalise the banks at the cost of many billions of euros.

The financial world collapsed. Free movement of capital, gambling with other people’s money, huge bonuses, making money with money: in a single hard blow it became clear that the world of speculation and profiteering can cause great damage to the economy. It is this hard landing of the raw, unregulated international capitalism that has caused the problems.

The question is how we are going to get out of these problems.

To date, I must unfortunately state for the record, too little has been done to address the causes of the crisis. Because let’s be clear: the present crisis was not caused by countries which had too high a national debt.

Spain and Ireland had fewer debts than did the Netherlands when the crisis broke out. It was the European countries which had to step into the breach when the private branks looked to be going under and threated to drag the European public down with them. That there are people who dare to say that the present crisis was caused by too high a level of public spending shows that they have a cheek, and demonstrates also a short memory. I hope that you agree.

Of course there’s a lot to look back at over the last few years, in the Netherlands and in Europe. Excellent books have appeared on the Eurocrisis, the fall of the ABN Amro bank, the selling off of the Netherlands and the misfortunes surrounding the DSB Bank.

In politics we saw the establishment of the De Wit Commission, which under the leadership of my party colleague Jan de Wit investigated the causes of the banking crisis and came out with sound recommendations as to how in the future things could be done better: higher bank reserves, a brake on bonuses, a splitting of business banking from ordinary banking services.

But a good analysis alone doesn’t get us there. We also need to draw lessons which will be put into practice. And as things stand we are seeing far too little of this.

Banks are once again hardwired for the stock exchange. Bonuses are again being paid out in billions and in Brussels stricter rules for banks are once again threatened by dilution.

What we are doing at the moment is treating the symptoms, fighting against the consequences of the crisis, but as for its causes, we are doing far too little, which means that the chance of a repeat continues to exist.

So if we want to prevent a renewed crisis then we must tackle the problems at source.

That means more surveillance of banks and financial institutions, maintaining greater reserves and limiting speculation. In essence this concerns making the banking sector once again serve the public, the economy, instead of the opposite way round.

We will also need to take major steps towards the democratisation of the economy. More say for workers in companies will enable us to make these firms ‘future-proof’.

And above all we must carry out fundamental changes to our revenue model. An economy where it’s easier to make money with money than by really contributing something to society has in the long term no future.

We cannot leap from one financial bubble to another. Now is the time to invest in sustainable production, clean energy and in products and services which offer something to everyone and not to a select clique who want to fill their pockets at the expense of many others.

The euro in difficulties

But when you say ‘European crisis’ now, what you’re saying first and foremost is eurocrisis.

It is the crisis of monetary union which in the last few years has brought government leaders together in summits, supersummits and summits of summits and which has put the future of the European Union as a whole into danger.

It’s good to remind ourselves that the European Union and the Eurozone are not one and the same thing. There are countries such as Denmark, Sweden and Britain who are members of the European Union, but which do not use the euro.

They consciously elected from 1992 onwards not to participate in the introduction of a single common currency because they – correctly as it now turns out – did not believe that the advantages outweighed the disadvantages.

That the advantages didn’t outweigh the advantages was also the opinion of my party well before the introduction of the euro.

It might be interesting to return to what my predecessor as leader of the SP Jan Marijnissen wrote in 1997 on the common European currency:

With the loss of our guilder we are losing more than folklore. We are losing our say in the area of monetary policy, and everything which depends on that. With the Euro in place, the Guilder would be gone and our control of monetary policy would disappear in the direction of the European Central Bank in Frankfurt. The transfer of monetary power to the European Union cannot be interpreted otherwise than as giving up an important part of national sovereignty. As a former president of the Dutch national bank, M.W. Holtrop said in 1963, "Money is an attribute of sovereignty. If a country gives up its currency, it loses a little of itself.”

The Europe of 1997 is not a country, it is not a nation with which people can identify, a place where they feel themselves to be understood. They have nothing really to do with it, whether or not political leaders decide that we will have a monetary union from 1999 and a single currency from 2002. Europe is only a geographical concept, an abstraction in fact. There is no European people, no European language, no European culture.

I think that this analysis is still current. Our objections to the introduction of the euro concerned the core of democracy and the essence of political economy. With the introduction of the euro the destinies of unequal countries were shackled one to another and control over the politics of our own economy was given away. Moreover, the economic differences have rather widened than narrowed since 1997.

The introduction of the euro means, after all, not only that we pay with the same money but above all that a single monetary policy is conducted.

We have a single European bank which operates the same interest rate from Lapland to Sicily.

That interest rate is – as the economists amongst you will know – the means to regulate the economic temperature.

If the economy’s going badly, you lower the rate so that the motor can turn faster. If there’s a danger of overheating, you raise it in order to cool things down.

These switches have now been brought into line. In completely different European economies, the fire is now everywhere stoked up high. That happens in an undemocratic fashion and it won’t astonish you to know that what’s looked at above all is the situation in big countries such as Germany and France.

The problems created by this were predicted beforehand and will continue to manifest themselves.

In recent years the euro has been sliding along the edge of the abyss. The countries in southern Europe are trapped in a straitjacket and cannot, despite their economic problems, devalue their currencies. The export surpluses of countries in northern Europe, such as Germany and the Netherlands, have rocketed in these years, because here prices have been kept artificially low by means of wage moderation.

Not for nothing did economics professor Alfred Kleinknecht call recently for higher wages in the Netherlands. His research shows that the crisis cannot be resolved by wage moderation.

Countries such as the Netherlands and Germany must instead allow wages to rise, which would mean that domestic demand would increase, more people would therefore find work, the state would increase its tax revenue and we would indirectly be helping competitiveness in southern European countries.

It is this form of international solidarity that we never hear about, however, from government leaders. Instead, we in northern Europe are trying to dig ourselves out of the crisis via austerity, the consequence being that it is in fact deepening throughout the continent. And still we don’t have our heads above water, even if it seems that calm has been restored to the Eurozone.

Because this calm is simply an appearance. 'It could yet be years before the causes of the crisis are really overcome,’ said Jens Weidmann, president of Germany’s central bank last week.

The underlying inequalities are still there, and the straitjacket of ever more European legislation is reaching breaking point – in the eyes of politicians, but even more so in the eyes of the peoples of the EU member states.

The future of the euro

The SP has since the start been against the introduction of the euro. Europe has been plunged into huge problems since its arrival.

But that we were already, beforehand, drawing attention to the problems and dangers of the euro, doesn’t excuse my party from the duty to consider how things should proceed from here.

This won’t be achieved by slogans as supporters and opponents of the euro would often have us believe. If we were to leave the euro today as Wilders would like us to, we would tomorrow face enormous problems, you might say chaos.

Yet sticking uncritically to it, whatever the cost may be, helps us even less. In fact the federalists who want to keep the euro on its feet no matter the cost could in the end become the gravediggers of the European cooperation so beloved by them. .

Parties which make the means – the euro – more important than the end – cooperation in Europe – are taking a big risk. They threaten to lose public support definitively and cause enormous damage to national democracy.

The Dutch Parliament decided – under the force of circumstances – overnight to extend a package of support worth billions of euros, the destination of which no-one precisely knew. In fact, even the various leaders of European governments differed in their opinions on this.

Maintaining the euro has cost many billions and will cost many more. Numerous dangers lurk. Germany and Greece will continue to be in conflict over the conduct of monetary policy. The European peoples will have to give up ever more control over their own economic policies and their budgets and they won’t accept this.

Forced maintenance of the euro will lead to new conflicts, economic and political. Will the Germans and Dutch remain prepared through many more years and for many more billions to continue propping up southern European banks and southern European countries?

Will the Greeks accept that for long that it will not be their own parliament but the Troika which decides what measures will be adopted?

Will all of the inhabitants of the Eurozone countries accept that control over their societies and their budgets is being lost to Brussels?

I honestly don’t think so.

Cooperation in Europe – economic and political – is worth a great deal in my view. So much so that we must not let the fate of this cooperation depend on a common currency.

Forced maintenance of the euro could lead to big problems and even become an ever-greater obstacle to cooperation. That must be taken into account, day in and day out.

Precisely in order to maintain cooperation a moment may arrive when we will have to say ‘the euro in its present form cannot be preserved.’

And in order to be well prepared for that moment we must consider alternatives and possibilities which will allow the euro a ‘soft’ landing. Whether that would take the form of a parallel currency, the departure of individual countries, or whatever alternative it may be.

In addition, the role of the European Central Bank must be held up to the light. The present exclusive focus on price stability has its limits.

Monetary policy must not be conducted at the expense of employment in Europe.

Strengthen the democratic order

Cooperation in Europe has given us a great deal, but has also, as a result of its derailment at the onset of the 1990s brought us into our current difficulties.

Europa has gone from being a solidarity-based solution to being a problem.

Successive governments have allowed that to happen, heartily supporting the transfer of more national competences to a Europe in which solidarity is being sacrificed on the block of competition and the free market.

Europe has alongside that become a technocratic institution, along neoliberal lines, which is acquiring ever more power.

This must change, and on this question in my view will hinge this May’s election.

Allow me in what follows to sketch out how we think in relation to the democratic deficit that characterises Europe and how we can overcome the existing shortfall by restraining the power of the European Commission and strengthening that of the national parliaments.

Both are desperately needed.

Because ‘whoever thinks that national democracy can be replaced just line that by a European democracy’ is perpetrating a dangerous politics of illusion’, wrote Professor of International Relations Bastiaan van Apeldoorn last month in De Volkskrant 92. And I am inclined to think he was right.

Precisely because Europe isn’t a superstate – and also because that it must not become one = we must not treat the European Commission as if it were a European government nor the European Parliament as a fully-fledged alternative to our national parliaments.

That’s why we want to put the power of the most important European actor under restraint.

Over the years the European Commission has become a dominant, controlling and ideologically motivated player.

That must change, and I’m willing to fight for a Commission limited to carrying out decisions taken by the member states. It’s the member states who should direct the Commission, and not vice versa.

Neither is the European Parliament a fully-fledged parliament. It lacks important powers enjoyed by our popular representatives in parliaments at national level.

They cannot officially get rid of the Commission, their thoughts over the budget are incomplete and there are too many policy areas over which the European Parliament has no rights at all. But even greater is the cultural problem with which the European Parliament struggles. It remains to too great an extent a supporters’ club for the Union, on the lookout for new powers and too keen on regulating everything at European level. From the perspective of the European Parliament, that’s understandable, but that still doesn’t make it right.

There’s no need to abolish the European Parliament, but we should complement its function with national parliaments playing a full role in relation to European decision-making. There was a range of reasons why the Dutch electorate in 2005 rejected the European Constitution. One of them was the loss any voice for the national parliament in the European institutions. The Lisbon Treaty that came into force in 2009 was, it’s true, to a large extent the same as the fallen Constitution. But the Lisbon Treaty did create an early warning system of yellow and orange cards that national parliaments should be able to use to put the brakes on an overactive Commission. This system could be built upon, for example adding a red card – a national veto right – with which the member states could tell the European Commission that it should not be meddling in substantial issues with which they want to deal themselves. In addition national parliaments must be given the possibility of calling European Commissioners to account. With these two new potentials we would strengthen democracy in Europe – and that seems to me absolutely necessary.

So our alternative for Europe concerns more democracy. In that alternative we will work well and work intensively together, we’ll have open borders, we will resolve transfrontier problems together. We want to see democracy close to the people. With politicians we recognise we can judge them on their actions and they won’t be able to hide behind what’s decided ‘in Brussels’.

If we want to strengthen cooperation then we should not charge ahead but lend an ear to those who don’t go along with this. What they’re saying is: ‘ Cooperation yes, Superstate no.’ A Europe that preserves peace and promotes prosperity and protects democratic and social rights is worth fighting for. but it is precisely the federalists who jeopardise these worthy aims by forcing us towards a superstate which is unwanted by the people. That’s why we are now speaking out in support of cooperation in Europe, but against the United States of Europe.

To conclude: in the summer of 2011 I was in Athens.in order to speak with the Greeks themselves about the crisis and ways out of it. I was shocked by the extent if the problems in Greece. Tax evasion, the suffocating bureaucracy, nepotism, a civil service apparatus of which large parts simply weren’t functioning.

These are all matters which be dealt with piece by piece, but urgently. But I also noted that it was ordinary Greeks who were paying the highest price for the crisis.

Unemployment, evictions, the disappearance of the entire small business sector, old people on the street. And so on.

Ordinary Greeks had had it up to here with their political leaders, who could hardly show their faces in the street. The uncertainty, frustration and anger were great and today nothing has changed.

In Europe we will not escape the crisis by doing nothing but cutting spending. Nobel Prize-winning economist Paul Krugman remarked correctly that has still never been a major economic bloc that has succeeded in using austerity measures to escape the crisis. What we should be doing now is investing in a way which is directed, in our economy and our society. Certainly in those European countries in relatively good standing – such as the Netherlands – there is space for such a policy.

Whether we take this space is a political choice.

And neither will we get out of the crisis by sacrificing our democracy to more European power in the hands of government leaders and the European Commission. The European Union could, in the first four or five decades after the Second World War, count on broad support from the people precisely because it strengthened national democracies and welfare states, rather than eroding them.

During the last two decades, precisely the opposite has occurred. So it would be a good thing now to take a breath and ask ourselves what we are doing.

The worst answer in the current situation came last week from European Commissioner Reding. She believes that the answer to the growing criticism of Europe would be a more rapid development towards the United States of Europe. Her view of this superstate has wide currency amongst policy-makers in Brussels: the European Union must become one country, with the European Commission as its government, a government with far-reaching powers which would reduce the influence of a member state to that of province within a state.

There is only one problem for federalists like Reding: the overwhelming majority of Europeans do not want this completely imposed union. They don’t feel themselves to be European, but Dutch, Italian, Flemish or Greek. People attach great value to their own identity, to their culture and to the control which they still have over the organization of their lives. Dutch and German want to be able to see for themselves on a daily basis what their politicians are up to, what they are voting for and against and how they can be held to account. That simply cannot be if politicians literally and figuratively do their work far from the voters. People throughout the EU expect respect for their mutual differences, for example for how we organize care services for old people or people with disabilities, how we combat unemployment and provide affordable rental accommodation. Economists who simply point to the economic advantages of a single Europe ignore the massive differences in culture, language and mentality which we still have.

Imposed unity won’t work for all these countries and peoples who still differ so much from each other in so many different areas. We share each other’s values insufficiently and, most importantly, the mutual solidarity and sympathy necessary to the unification of a country is completely absent. So you mustn’t charge ahead like a train with no passengers, but take a moment to reflect. That is my task and my responsibility as a representative of the people. The question which will be put before you this May is the following: do we want a democratic Europe focused on people or do we race ahead towards the federal Europe of Ms Reding, with the risk that cooperation, so carefully constructed, will go overboard? I have given you my considerations on this during the last three-quarters of an hour. I look forward to hearing your ideas and your remarks, and thank you for your attention.

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(1) The title translates as A small history of the Great War, but is unfortunately not available in English translation.
(2) A leading Dutch daily newspaper.