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European ‘perestroika’. EU just like USSR is being killed by the lack of solidarity

14.06.2017 | By Marcin Kędzierski

Message of the latest European Council summit, concerning Brexit, is quite clear – there will be no mercy for the British separatists. Emmanuel Macron, probably next French president, has spoken in a similar tone about Poland and Hungary two days earlier. All those efforts are made to prove skeptics, that there is no turning back from current direction of European integration. Is there really no alternative?

It is spring of 1985. Power in the USSR is assumed by relatively young, as for soviet standards, Mikhail Gorbachev. Although the western world still fears the Kremlin, Gorbachev is already well aware that after the rules of Yuri Andropov and Konstantin Chernenko, his country is in a state of very serious crisis. Even crises. War in Afghanistan, acceleration of arms race, due to the onset of American program of so called “Star Wars”, fall of oil prices on global markets, activity of opposition movements in satellite states, growing internal disintegration tendencies, droughts and food shortages, finally increasingly inefficient economy – each and every of those phenomena could shaken soviet position on a global stage. What is more, in Washington DC, predictable and liberal president Jimmy Carter has been replaced by an eccentric Ronald Reagan, while in China Deng Xiaoping begins crazy attempt of introducing capitalism into The Middle State.

Gorbachev tries to bring in reforms, but he lacks the courage of Reagan and Deng. Perestroika, which ought to be panacea for all the soviet weaknesses, occurs to be nothing else but a patch sew onto the old cloth. Instead of a savior of the USSR, Gorbachev becomes his gravedigger. Within a few years, an empire which was giving a democratic world sleepless nights for decades, ceased to exist.

Three conclusions from Soviet Union collapse

It is spring of 2017. European Union is in a state of deep crisis. Even crises.

Searching for direct analogies between current situation of European Community and Soviet Union of 1980s does not make greater sense however. More important are conclusions which we can draw from the process which led to the fall of USSR.

Firstly, history is not linear in nature and that is why it accelerates dynamically from time to time. This means that in five years, EU may no longer exist. We cannot assume that in spite of crises it will last even by the force of inertia. It may be like that, but not necessarily. Secondly, as Grzegorz Kołodko likes to say “many things happen as it happens, because many things happen at once”. We live in a more and more complex system. It has its advantages and disadvantages. Advantages, because the increase of complexity enables our development. Disadvantages, as complex systems with high amount of interactions difficult to predict, are less immune to the shocks. Thirdly, poor diagnosis of problems may lead to inappropriate actions, which in turn will only accelerate the decomposition of a system, against the goodwill of reformers.

EU needs to face numerous problems, if it wants to survive. It must be clearly stated, that all of them cannot be solved. What is more, even if it was achieved, it still does not guarantee safety to the Community. Still, it is worth trying to start with crisis which is a source of all other. Although the system is complex, diagnosis seems to be simple. European leaders themselves deliver it.

In The Rome Declaration, promulgated on 25th of March 2017, in the 60th anniversary of creation of the European Economic Community, member states recalled to all the rules, upon which the construct of EU is settled. All but one – solidarity. It is the lack of solidarity that may be recognized as a cause of disease from which Community is currently suffering.

How rich states of “old Union” were taking the financial credit.

The most important sign of lack of solidarity is Economic and Monetary Union of EU, what means the euro zone to put it simply. The idea of introducing a common currency had a political background, especially because part of the participant states did not fulfilled the criteria of so called optimum currency area. Simplifying, states were not characterized by the similar structure of economy and immunity to external shocks. Assumption that unlimited mobility of workers will be a good answer to those differences was naïve. No reasonable man could think that large number of blue-collar workers from Naples will suddenly move to Helsinki in case of economic slowdown.

Euro zone had a chance to succeed however. This would require of states to undertake political adjustment actions in the spirit of solidarity. The aim of such activity would be reduction of imbalances between regions of the zone. This on the other hand, could not go without courageous moves in the fiscal policy. Something for what states were not yet ready.

Main culprit and a country which against political declarations, showed lack of solidarity is Germany. During last dozen of years, they have built their export empire thanks to the common currency. This however, happened at the cost of the southern states, which were not able to deal with disproportionately strong currency and were gradually losing their competitiveness.

It must be honestly admitted though, that Germany is not the only source of the European crisis, as turbulences experienced by other countries, are not caused solely by the international imbalances but also internal ones. This problem concerns mainly states of the “old Union”. Political and economic elites of Germany, France, Italy or Spain were benefiting from the freedom of movement for workers, capital, commodities and services as well as Common Regional Policy. All of that enabled them to take financial credit on contracts in new member states. Simultaneously, middle class was losing on this procedure, via removal of production facilities to new member states, inflow of immigrants, ready to work for half of price as well as financing Common Regional policy from its taxes. However, victorious elites of so called “core states”, were not interested in solidarity with those who became victims of globalization and euro zone.

As a result, income inequalities in developed countries started to accelerate rapidly. It was illustrated by the World Bank economist Branko Milanović in 2012. He used an analogy of an elephant’s trunk to show that considerable part of western societies experienced almost no increase of income in years 1988 – 2008. (On a chart, little increase in a long period of time looks like a trunk.) Disloyal economic integration enabled in fact a freeze of middle class incomes in Western European societies. It is said to be one of the main reasons of Brexit and a success of movements opposing integration.

Paris and Berlin are counting on “Union of two speeds”

It is not surprising then, that voters from Italy, Spain or France, are expecting a radical modification of euro zone or even leaving their states from this community. Paradoxically, those expectations are accompanied by extremely anti-solidarity rhetoric, worked out by the elites, which were not willing to share the fruits of growth during recent years. So called “social dumping”, which workers from new member states are said to use, is nothing else but an equalizing solidarity mechanism, steaming directly from the rule of freedom of movement of people and services. Emmanuel Macron, demanding suspension of those two liberties for Poland and Hungary, in the name of protection of European integration, with simultaneous keeping up of profitable, for economic elite, freedoms of movement of capital and commodities, is a public call to break aforementioned rules. He is not alone in his opinions. Other leaders also speak in a similar tone. It found an expression in an anniversary declaration of EU, signed on March 25th. Declaration, which on the pretext of unity, only deepens distrust between old and new Union. Even leftist, antiestablishment movement DiEM25, leaded among others by Yanis Varoufakis, in its manifesto, originally supposed to stand against The Declaration of Rome, seems to take similar rhetoric of disloyalty towards our region.

Unfortunately, victims of such rhetoric are Central European states. The blame may be attributed to us. Our objection toward policy of relocation of immigrants, understood for internal reasons, could not have been understood in other way than lack of solidarity with the southern states, dealing with consequences of migration crisis. The way in which polish government was coping with an argument around Constitutional Tribunal (CT), was not favoring the process of building trust between European partners. Finally, due to the action “27:1”, Poland officially positioned itself against other member states.

Let’s imagine however, that Poland welcomes immigrants, steps back in the case of CT, support reelection of Donald Tusk and once again becomes a model student of European integration. Would it change in any way a direction of integration designed by the leaders of Germany, France, Spain and Italy (so called “Formidable 4”) in The declaration of Versailles, issued at 6th of March? In my opinion not, because such decision is totally beyond us.

Berlin’s agreement on postulated by the southern states “Union of transfers”, in the form of Euro zone budget, what in practice means an end to the Common Regional Policy in the current form, steams from the will of saving, crucial from German perspective, common currency. In the next step, states of our region should expect suspension of freedom of movement for workers and services, in order to put an end to “social dumping”, as well as a reset in relations with Russia, which is in interest of Western European economic circles. German and French elites will be willing to do everything in order to save EU core, concentrated around Euro zone. This in turn means that indirectly, but still, they gave a green light to deepen distrust between east and west. It will lead to further disintegration of the Community. German declarations that they still are patiently waiting for warming of relations with Warsaw and that they remain open to talks about the future of EU, after Versailles and Rome, seems to be counted only on preserving a good image.

Euro zone will not save us.

Euro zone budget and introduction of limitations of the freedoms of movement for workers and services will not solve fundamental problems, situated in a very construction of a common currency. Member states of this area, are even more diverse in terms of competitiveness of economies and their immunity to external shocks today, than they used to be a dozen years ago.

Frankly speaking, propositions of “Formidable 4”, which can be named a “European perestroika”, will give Euro zone a few more years. Their cost however, can be a dynamic decomposition of the Union.

Because of that, considerations whether Poland in current situation, with present level of economic development, should join the Euro zone, in my opinion are completely groundless. Equally unfounded are statements claiming that by staying quiet, Poles could have influenced course of actions. Gap of distrust and lack of solidarity have much deeper causes. It is sufficient to notice, that in Western Europe, it is difficult to find political forces perceiving Central Europe as a partner. That is why, it is difficult to unambiguously judge rogue foreign policy of PiS. On the one hand it gives image-based reasons to exclude Poland and other states of the region from newly creating EU (what happens anyway). On the other hand it can rise a cost, which Western European states will need to bear for that. Time will tell which effect will be stronger. Due to that, criticism of polish government’s European strategy seems to be premature.

What can we do?

Can history go down other way? It is of course possible, but unfortunately highly unlikely. Let’s assume that at 7th of May, Marine Le Pen will win the elections. In such case, process of disintegration of the Community will accelerate rapidly, together with instant dismantlement of the Common Regional Policy and internal market. Not only there are no leaders on European political stage, ready to follow the rule of solidarity in internal and international relations, but they are also incapable of convincing their electorates to this idea.

In other words, it is difficult today, to find a political party, willing to simultaneously eliminate Euro zone, preserve freedom of movement for workers and services for all member states and introduce fiscal policy focused more on redistribution.

What are the conclusions or Poland? Firstly, it should simultaneously play on the preservation of the Union, having a consciousness of little influence on that process, and getting prepared for its potential dynamic decomposition. In this aspect, keeping an open possibility for cooperation with China seems necessary, as it would give any possibility of maneuver. Secondly, taking into account growing uncertainty concerning the future of European integration, it is worth finding allies who better than others understand polish perspective. It seems that besides the states of Intermarium, polish sight should also turn to Nordic countries, especially Sweden, the biggest beside Poland economy outside the Euro zone. Thirdly, the potential of cooperation with aforementioned allies should be strengthened. In exactly this area, the costs of foreign policy led by PiS may be the most costly, because without peaceful reconciliation of dispute around Constitutional Tribunal and readiness in migration policy it will be difficult to find a common ground with Stockholm.

***

Union needs its own Wyszyński

History is not determined. EU does not necessarily have to follow the USSR footsteps. On Tuesday we celebrated anniversary of Jasna Góra Monastery oath in which Poland was consecrated to the protection of the Virgin Mary. The existence of an independent polish state, which reborn after 123 years and again in 1989, may be attributed to the coincidence, or the actions of rational political factors. A miracle may be an equal explanation. Poland would not need to be on the maps of Europe as well. Interfering God to hard politics? Wishful thinking straight from the church’s vestry? Rather pointing out that reality cannot be easily reduced to GDP columns and political character is something more than just technocratic management of resources. In the shadows of political summits and financial transfers, history is also shaped by the ideas.

On December 8th 1955, during celebrations of Immaculate Conception of the Virgin Mary, Conrad Adenauer and Robert Schuman confirmed flag of the Council of Europe. In Strasbourg cathedral they consecrated the process of European integration to the Mother of God. Maybe the 60th anniversary of signing The Treaties of Rome is a good occasion to renew this act of consecration. It is difficult to expect that leaders of laic states will do that. It was equally unreasonable to expect communists to do such an act in 1955. EU needs its own Wyszyński, thanks to whom the movement of Solidarity was born in Poland. Maybe among the Commission of Episcopacies of the European Community someone will open the Union for a breath of solidarity?

 

Author: Marcin Kędzierski – head of Jagiellonian Club Analysis Center, expert on education, Ph.D. in economics

International_Visegrad_Fund,_emblemo_bluaThis text was created thanks to support of International Visegrad Found.

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