How do you analyse the Brexit vote?
First of all, the vote is uniquely British, reflecting the country’s difficult history with the European Union and, no doubt, its status as an island nation that has resisted invasion for almost a thousand years. The UK stood apart when the six founding countries created the common market. It has often remained aloof since finally joining 15 years later (in 1973), staying out of Schengen and the Eurozone. The British negotiated several more opt-outs over the years, giving them a special “in-out” status and prompting even their closest allies to see them as always with one eye on the exit door. They are not and never have been at the heart of the EU despite protestations to the contrary. So history and this special position may not fully explain Brexit but they do render that vote, however narrow, more explicable than would be the case with other countries.
Strangely enough, while the single market has been for them the limit of integration and cooperation, even this has now become too much. One might feel that, given that they are not at the core of Europe, they could happily remain a member – if on the periphery. But they reject even this restricted relationship.
If a Eurozone country decided to leave the EU and, with it, the euro area, that would create huge problems for the Union. Brexit may be a problem, and certainly more so for Britain than for the 27, but a big Eurozone country leaving would be a catastrophe, economically and politically. Without a shadow of doubt, the day after its intention to leave was signalled Europe would be hit by financial speculation, pressure on the bond and foreign exchange markets and other serious disruptions.
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Secondly, the June 23 referendum, in common with all other plebiscites, gave answers to questions never put to the voters. Austerity and opposition to the Cameron government played a significant role in it. As did the fact that people felt themselves to be victims of change, victims of globalisation – their sense of alienation may even have been broader and profounder than that. Of course, the European Union is bound up with globalisation so this was a factor but the UK referendum also gave vent to strong sentiments, even severe resentment, against the policies conducted by the Conservative government over recent years.
This alienation is a problem within contemporary European society and is also a phenomenon in the United States where the idea of building walls and restricting immigration is gaining traction. This is accompanied by xenophobic reactions and fear of globalisation, of delocalisation of industries. Brexit and Trump are two sides of the same coin, part of a much broader movement linked to society, linked even to Western civilisation as a whole.
The ‘no’ vote gave voice to these complex feelings. There was a tiny majority for ‘Leave’ of just 52-48 and what appears to have made the difference was migration. Without the so-called immigration crisis the vote would have gone the other way: it would have been, instead of 52/48, 48/52, perhaps even a bigger Remain majority.
Freedom of movement made the difference because the 3.5 million EU citizens living in Britain are viewed there as migrants. If you are an EU national living in any another EU country, you are recognised as a fellow citizen. But for the British, these are migrants; they remain outsiders.
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Whatever the real source of the ‘no’ vote, the outcome now has to be handled by the EU-27 and the UK. Brexit means Brexit, as Theresa May and Donald Tusk say. The only interpretation on which everybody can agree is that the Brits will leave. The rest is yet to be decided.
What do you expect – given that Brexit means Brexit and the British will leave – will be the short-, medium- and long-term consequences for both the UK as well as for the European Union of the 27?
Given that migration was the prime reason for that (narrow) majority in favour of ‘leave’, the British government has put it above the economy as the priority issue. By doing so, it rejects the option of remaining part of the single market, a market which is extremely advantageous for the British economy. The UK Prime Minister and her key colleagues are saying: “We will not be part of it because we have to accept free movement of labour and we never will.”
Within the hierarchy of their priorities, migration comes above trade, above the economy and acts as the UK Cabinet’s red line. This renders the pending negotiations very complicated because the Norwegian model, and to some extent the Swiss model, are based on free access – or full access in the Norwegian case and in the Swiss case there is free access in 100 sectors.
Refusing to accept the principle of free movement of labour represents a major hurdle for any future relationship and this was underlined in recent statements from the presidents of the three European institutions – Tusk, Juncker, Schulz. They all give the same message: all four freedoms (of the single market) must be accepted, there can be no pick and choose.
The three major countries of the Eurozone (Germany, France, Italy) share this view and this creates, from the outset, a huge problem for the British because leaving the single market entails falling back on a free trade agreement such as the EU has with many third countries. But there is a price to pay and it is one that is detrimental for the UK and, to some extent, also the EU.
There is even a technical problem for the UK. They are not a full member of the WTO so leaving the single market would place them in in a minefield. They are undertaking a leap in the dark and that is all the more surprising because Britain has always had a transactional perspective on Europe. The founding countries had an idealistic view of Europe: they wanted to secure lasting peace, democracy, etc. But the British always had a transactional view: what’s in it for me? Where and what is the added value? We need to make a cost-benefit analysis…
But the referendum had nothing to do with a rational process and British ministers are compounding this by refusing to take a transactional view of the outcome. This is puzzling the EU-27 which will have to wait until the end of March for the UK to have triggered Article 50 and to explain how they see the separation and, critically, how they see the framework for future relations between the EU and the UK. They appear not to have decided their viewpoint.
The EU-27 will then give a collective reaction, even though there are nuances and divergent interests among the 27. One thing is certain: if the British do not accept the four freedoms, then the 27 as a whole, the countries of both Central Europe and Western Europe, will be lined up against them.
Do you think that the Bratislava Summit signalled an appropriate EU-27 reaction? And what do you see as the likely outcome of the reflection phase EU leaders are now in and what would you personally wish for?
The Union was already beset by problems pre-Brexit and Brexit is, in that sense, adding instability to instability. Before June 23 there was a ‘polycrisis’ or succession of crises that the EU tried to overcome in its own way. It overcame the Eurozone crisis, thereby saving the Euro. It even overcame, to some extent, the refugee crisis because the massive influx of people coming from the Middle East has been stemmed.
The humanitarian tragedy that lies behind this unprecedented movement nevertheless remains unresolved. Yet, EU policies have brought results. That is the case even in terms of economic recovery: Germany enjoys full employment; my own region (Flanders) also has full employment. There is a shortage of labour. As many as 5 million jobs were created between 2014 and 2017 in the Eurozone. Unemployment is now at its lowest level since March 2009, so it cannot be said that policy-makers failed to react – although, arguably, it was too little and too late.
It has to be admitted, however, that the general climate is very negative vis-à-vis both the EU and the bulk of its member states, because national governments and parliaments are under the same pressure as the European institutions. But the EU institutions are weaker entities than nation states in the sense that if one criticises the EU one may end up questioning its very existence. This is never true of France. For instance, nobody disagreeing with François Hollande says: “Let’s give up on France.” The EU is in a weaker position because European identity is not as well anchored as national identity. The US shares the same problem: a divided society, to some extent a polarised society.
In Bratislava it was important to show unity and signal that the Union is not imploding. No other member state is asking for an exit, not even the Netherlands or outliers such as Hungary or Poland. On the contrary, after Brexit, confidence in (the benefits of) EU membership has increased dramatically.
But the EU-27 can only show unity by looking for common ground. And that common ground can be found in what I call the ‘Europe of Results.’ The foremost task remains to create jobs and growth and thereby help to restore confidence. The key role in restoring confidence rests with individual governments but much can be achieved at the European level. The Juncker investment plan and the ECB measures to inject money into the economy and promote lending to companies are prime examples of Europe working together.
There are other initiatives proving how Europe can make a difference: deepening the single market by creating an energy union, a digital single market and a capital markets union. Stemming irregular migration and fighting terrorism require Europe-wide co-operation and collaboration. The Commission is furthermore taking renewed action to bear down on unfair competition and to combat social dumping. The latter may be difficult for the Central European countries but it is also a big issue in Western Europe. Achievements have already been won in the fight against international tax fraud and tax evasion although more remains to be done. This Europe of Results could re-imbue citizens with the sense that the EU institutions and common European policies are relevant to their lives.
Second, there is a considerable role for what may be called the ‘Europe of the Necessary’. The economic and monetary union and the single market will have to be deepened and/or completed. An emphasis on the EU’s military dimension has emerged as a genuine topic of interest for the very first time.
Earlier decisions such as deepening the Schengen zone require measures to implement them. Next on the agenda will be how to achieve a more common asylum and migration policy.
My hope is that after the French and the German elections, and the formation of new governments in both countries, their leaders would say: “Look, we can’t go on as now. We have to take initiatives going further forward in terms of economic and monetary union, European defence and many other areas. There may be no broad public support for all this within the member states, but we, France and Germany, propose making a qualitative leap.”
The situation on EMU is exactly the same now as when I left office two years ago. This cannot be allowed to continue and requires a new initiative that can only come from France and Germany. The Commission can launch ideas, but ultimately, it is the European Council, it is the member states and, foremost among these, France and Germany, that set the tone and lead the way.
My hope is that they will put aside short-term considerations because their leaders will be freshly elected. I am not, however, urging immediate moves towards federalism or the United States of Europe. I leave that to Jürgen Habermas and others. The climate in Europe does not favour such a qualitative leap, even if there is a crying need for more ambition than at present when, in truth, there is no ambition at all.
Europe cannot just be about survival or face-saving yet shows no real ambition to bring the ‘Project’ further forward. It is not the right time, admittedly, but in, say, a year from now, France and Germany should act to prepare the way and go beyond what public opinion is ready to accept.
In the famous words of the British philosopher Jeremy Bentham: “Let it not be objected that the age is not ripe for such a proposal: the more it wants of being ripe, the sooner we should begin to do what can be done to ripen it; the more we should do to ripen it. A proposal of this sort, is one of those things that can never come too early nor too late.”
How can we win back those people that are disengaging and see the EU ever more as a problem but not as part of the solution? You talk about a Europe of Results, but is this really what could convince people? And how to get the mainstream to be much more outspoken about what they want, setting a positive agenda?
We used to think the problem lay with socio-economic circumstances such as inequality. But we’re also witnessing something more like a cultural backlash. What would your approach to capture this be?
Culture and civilisation are indeed at stake. Equally, if this is the case, then we are facing a long-lasting crisis and politics has not got a very strong handle on it.
There are elements of culture and civilisation within the crisis but I don’t agree with the notion that the Europe of Results is the wrong answer. One of the fundamental reasons for the current situation is Angst. In 1981 I wrote a paper for my party called “How to turn fear into hope”. I think I can reread that text without blushing. Full employment may have been the answer then but is no longer enough. Germany has full employment but it is also beset by insecurity and inequality, particularly among its working poor.
Even people with a job fear that from one day to the next they could lose it. This is a growing problem for the middle class. A new phenomenon in society is that not only ordinary people, but also people with higher education and better skills can be susceptible to populism because they feel insecure about their future. Providing jobs is vital in the southern part of Europe, but the situation is quite different with regard to Germany, the Netherlands, Scandinavia, and so on. In France there is still a significant level of unemployment and the same is true in Spain, in Italy, Greece… But even in countries with a relatively satisfactory level of employment it is necessary to empower people so that they’re less afraid of inevitably losing their job to digitalisation and continued globalisation.
Irregular migration is another issue on a scale which took Europe by surprise and for which it was unprepared. People were foolish enough to think that those 4 million displaced people in Syria would stay there forever. It was not Europe’s war, they felt; they just provided humanitarian help and support. When I was in office, only 60,000 people from Syria came to Europe, most of them to Germany even then, long before the Willkommenskultur, because it is a natural destination for them.
There is this new large-scale irregular migration but the task now is to foster legal migration because Europe needs migrants – and, once this has been achieved, migration will be under better control. This is a task of great magnitude compounded by the political and military situation in Northern Africa, in countries such as in Libya. At the same time, more and more people are coming via Egypt while Algeria and Morocco may also no longer be unaffected by irregular migration.
Europe’s populaces are fearful and they think that their country will no longer be the same, they will not feel at home there. The old world of certainty will never return under the weight of this change but the problem besetting our societies was and is the sheer pace and scale of change.
So a “Europe of Results” embraces this core notion: working to combat irregular migration is also fighting against fear. And fear is at the root of our problems.
Market forces can cause inequality but one has succeeded in the past in correcting the outcome of those forces by, for example, creating the welfare state.
Any such correction may no longer work at a national level. We need corrective interventions at a European level to combat, for example, international fraud and tax evasion through collective policy measures that national governments will then be responsible for enacting.
If there is a problem of rising inequality in mainland Europe, then it is not on the same scale as in the Anglo-Saxon world if one looks at the figures, the Gini coefficient and other indicators – nor is it as dramatic. But the trend, not the level, is what matters at this stage.
It is important that one works together on mitigating it. The process of dealing with inequality would take place in each country, with the instruments at each government’s disposal, but this can and must also be operational at an EU level. This “Europe of Results” is not there simply to appease people’s anxieties but to attack the main sources of fear – and fear is the fundament of this special climate in our culture.
There’s another cultural element that lies beyond the reach of politics: for decades our societies have been changing, especially with rising individualism. An isolated individual is always much more vulnerable to negative messages because if too many people live on their own, are not well connected with others, they are more inclined to be distrustful or more often than not to see those others as an enemy, as a threat, rather than as an ally.
But individualism will not disappear so one has to work with the world as it is. Dreaming of the cosy, more cohesive world of the 1950s and of the 1960s, the world of my youth with its greater social and family capital, is pointless as it will never return.
What are the key drivers and who would be the player to try to push this cultural change in a positive direction, getting rid of fear, trying to reinstate trust?
Politics can play a role – unfortunately, a negative role as well by enhancing and manipulating those fears as extremists and populists are doing. This can be very dangerous because fearful people tend to adopt the wrong order of priorities. They are even ready, temporarily or even longer-term, to give up their freedoms if you provide them with security.
Brexit illustrates how people are deeply disenchanted but the change in priorities associated with it is very striking. Making migration a greater priority than the economy means that fear is placed at the top of the agenda together with measures to overcome it. Getting ‘rid of migration’ takes one onto terra nova. It may just be foolish dreaming on the part of its supporters but that is what the underlying message of Brexit is.
The responsibility for stemming this increased individualist anxiety ranges from the educators via the mass media to civil society, etc. There will, however, be no sudden cultural counter-offensive in that one day someone decrees: now begins the fight against individualism. The first prerogative is to be aware that things cannot continue as they are. We are not far from that point but this is a collective problem demanding a collective response.
We’re witnessing this individualisation of entire societies but lately also a renationalisation of European politics. You uttered some hope that Germany and France will counteract that after their elections. Are there others to follow?
Leadership in times of crisis is absolutely key. That may sound old-fashioned but it was available in, for example, France and Germany, until recently – without having to reach back to de Gaulle and Adenauer for models. People speak very readily about the democratic deficit but there is also a leadership deficit. That is the lesson to be drawn from the 1930s. And I still think, expect and hope that that kind of leadership will re-emerge, a little bit against the current tide. It cannot swim too much against the current because it might then become irrelevant or simply out of reach to people. Retaining the right balance is vital and this is currently absent. There is merely a mood of crisis management and survival, with results from time to time but on a wholly inadequate basis as people are painfully aware.
Positive leadership is important because the prevalent other definition of leadership is disastrous: I am their leader so I follow them. That is no leadership at all. Equally, going out on a limb in vibrant democracies such as in Europe is no recipe for success, electoral or otherwise. Political leaders must convince their colleagues and win over public opinion. But it is leadership that counts.
For example: TTIP is being challenged in a country that champions the market economy – Germany. In the US, the fatherland of capitalism, it is under pressure. Can TTIP be saved? Yes, it can. One has to take into account the different sensitivities around this possible agreement but there comes a time when one requires that decisive kind of leadership that says: let’s go for it.
For example: the deployment of euro-missiles in the 1980s. My party and I favoured it and we had the biggest demonstration ever in Brussels against deployment. At that time, Helmut Schmidt and François Mitterrand, both coming from the so-called left, were strongly in favour.
In Belgium we went ahead and deployed euro-missiles. I’ll never forget the 15th of March 1985 (when the decision to deploy was taken). We won the elections triumphantly six months later. There was obviously a silent majority which was absent from the streets but the impact of leadership then as now in mobilising opinion and winning arguments should not be underestimated. Anybody who is merely following public opinion is neither inspiring nor respected. A leader has to listen to and take into account concerns but then comes the moment of decision, and this cannot simply be to reflect what may or may not be the current mood. One leads by example and convinces previously uncommitted people. There are not myriad solutions for our problems; showing leadership is certainly one.
So, we have to break out of transactional reactive politics and try to become more transformational again, guiding change?
Yes. Those are the right words. They say very bluntly: show more ambition for Europe.
And also conviction?
The founders of the European Union were very pragmatic but always drew on strong convictions. One can be very pragmatic simply because one is an opportunist. The EU’s founding fathers were not saints. Their actions, however, were based on strong European convictions. Speed was and is not of the essence; setting the tone, giving direction, is. There are still leaders with European convictions but times have changed and, in general, all transcendent ideas are under pressure; from religion, via philosophy, to ethics, there is generalised doubt. Doubt is not something that is inherently wrong but from time to time one should have convictions, open convictions, always ready to accept new elements and see what can enrich one’s thinking. But doubting everything and just surfing on the mood of the times leads nowhere. It is a dead end.
This is an abridged version of an interview conducted by Henning Meyer, Social Europe editor-in-chief, and Stefani Weiss, Director of the Brussels Office of the Bertelsmann Stiftung. Edited by David Gow and approved by the interviewee. This is the latest contribution to a new Social Europe Project on ‘Europe after Brexit’ organised in cooperation with the Macroeconomic Policy Institute of the Hans Böckler Stiftung and the Bertelsmann Stiftung.