Author Archive

David Miliband: Charting a future for Europe

Written by David Miliband | July 27, 2011 | 5 Comments | Theme: David Miliband

By the standards of Ralf Dahrendorf’s life, the current travails of the European Union would hardly amount to a squall never mind a crisis. Ralf Dahrendorf knew that the post war combination of welfare capitalism and liberal politics embodied the best of European history. He also knew that the worst of European history – on terrible show in the first half of his life – made the peace, prosperity and unity established in the second half of the 20th century a modern day miracle.

However, while for much of the 19th and 20th century Europe set the global agenda, for ill as well as good, today it has to find a place within a new and changing global scene. Economic power is shifting from West to East. America’s gaze is certainly rebalancing towards the Pacific. Rising powers, including our neighbour Turkey, are establishing pivotal positions. Big risks, to climate and health, are emanating from beyond our borders.

But the IMF says the European periphery is the biggest danger for the global economy. The economic risk is coming from within Europe. So while the European economy as a whole is in balance, and the overall European debt: GDP ratio is below that of the UK or US, the imbalances within the European economy are now a global concern. That is why Jacques’ Attali’s recent article diagnosing a European financial crisis – and not just a Greek one – is an important starting point for this LSE symposium. Certainly, more austerity for Greece is not going to solve the problems.

The European Union has always represented a balance between efficiency and legitimacy. Efficiency dictates the pretence that European should be seen as a Federal country run by majority rule. Legitimacy dictates the opposite – an a la carte intergovernmental club in which everyone has a veto. The genius of Ralf Dahrendorf’s vision of a “democratic, united Europe” – from which this symposium takes some inspiration – was that he never defined what he meant.

In truth the EU has achieved important success as a hybrid, working most effectively when clarity of vision and alignment of interests has given momentum and purpose. But when the EU struggles, it satisfies the demands neither of efficiency nor legitimacy. That is the issue today – and it is a political issue as much as if not more than an economic one.

Europe has great economic weight and political freedom. But its economy is unbalanced and its politics threatens to turn in on itself. Economic integration that was such a strength of Europe in the 1990s is now a danger, as banks in the core of Europe are exposed to financing problems in the periphery. And the politics has become more difficult, whether in creditor or debtor countries. This is not only about Germany (though there is no answer without Germany). Nor is it only about finance. For example Anglo-French defence cooperation cannot be an excuse to avoid closer European defence integration.

Britain is an agenda taker when it comes to the major economic questions facing the Eurozone. But it should be a confident agenda setter when it comes to the budgetary, environmental, industrial and foreign policy questions that confront us.

Pretending that Europe is what Richard Gowan has evocatively described as a “strategic suburbia: a collection of small, quiet and obsessively inward-looking communities suspicious of the outside world” is not an option. In fact it is a route to faster decline.

While there are plenty ready to bury the EU never mind the Euro, I believe that the global context points to the increasing importance of regional organisations in the years ahead. Interdependence within the EU is matched by interdependence with the countries and regions beyond it. This symposium should be a chance to chart a way forward.

(Written on the 22nd June 2011)