Term Problems Facing the UK and Other Advanced Industrial Societies

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Demos Collection

Issue 13/1998 Demos Collection is published by the independent think tank

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Printed in Britain by EG Bond Ltd Contents

Euro Visions: new dimensions of European integration vii

FEATURES Sustaining Europe 1 Ian Christie Flexible integration 19 Fritz W Scharpf Choosing Europe 37 Simon Hix Eastern approaches 49 Heather Grabbe and Kirsty Hughes Euro-capitalisms 57 John Plender European multiple currencies 63 Dave Birch Virtual Europe 71 John Browning Europe of the cities? 81 Dr Mark Hepworth Demos Collection 13/1998

Consumer movements in Europe 93 Colin Brown Easing the transition? 105 Éva Kuti Islam and Euro-identity 113 Yasmin Alibhai-Brown Global flows 121 David Goldblatt In search of Euro-citizens 127 Tilo Fuchs Europe’s legitimacy gap 139 Mark Leonard The myth of a Euro-identity 147 Cris Shore How European are we? 157 Alex McKie Branding Europe? 165 Carol Samms

REGULARS Book marks 173 Facts 179 Demos news 183

vi Demos Euro Visions: new dimensions of European integration

John Plender explores the variety of European capitalism

Heather Grabbe and Kirsty Hughes highlight the social and cultural dimensions of EU enlargement

Dave Birch asks whether the Euro has already been superseded by electronic currencies

Yasmin Alibhai-Brown examines the place of Islam in the make-up of the new Europe

Fritz W Scharpf calls for more flexible approaches to welfare reform in the EU

Demos vii

Sustaining Europe Ian Christie

A continent in search of a mission

Introduction: Europe’s improbable success In 1947, George Orwell published an essay entitled ‘Towards European unity’.1 In it he surveyed the bleak state of the post-war world and concluded that the three most likely scenarios for the future were preemptive nuclear war by the USA against the Soviet Union, Cold War between the superpowers followed by a nuclear Third World War, or the division of the globe between three gigantic slave states. Orwell argued that the only hope for a better future was the creation of a grouping of democratic socialist countries in Europe that would provide a model of humane society to the rest of the world. True to his relentlessly honest pessimism, however, he ended the essay with a list of the overwhelming obstacles to the realisation of this vision of a democratic and socialist ‘Western European union’. Half a century later, we are only eight years away from the fiftieth anniversary of the Treaty of Rome. By any criteria this surely ranks as one of the most successful treaties ever signed. It has played a crucial part in the steadily rising prosperity of Western Europe and has given

Deputy Director, Demos.

Demos 1 Demos Collection 13/1998 a civic underpinning for peace in a continent used to war and on the verge of total collapse in 1945. It may not have created Orwell’s ‘Socialist United States of Europe’,but it has helped to provide the framework within which democratic welfare states could flourish. The Semi-United Social Democracies of Europe have survived the grim beginnings of the project of European integration in the late 1940s and the Cold War of the 1950s. In short, what Orwell saw as a scarcely credible optimistic scenario in 1947 has, in large part, come to pass despite the huge obstacles that he outlined. It is a triumph for the project of integration that demands celebration and gratitude. But the achievement was shaped and limited by the conditions of the birth of the European Community. The Community was born in the Cold War and its vision of ‘Europe’ was necessarily limited, focusing on the democratic West and unable to imagine the liberation of the East.When the revolutions of 1989–90 put an end to the Cold War order in Europe, the European Union (EU) was found wanting in vision, inspiration and generosity. Its response was alarm at the reunification of Germany, a hyper-cautious approach to the question of accession to the Union by the emerging democracies of the East, an aid programme to the ex-Communist world that did not match the scale of the need or the historic nature of the opportunity for change and an introspective struggle over the Maastricht Treaty.

Symptoms of stress in the European project It was the process of negotiation over Maastricht that underlined the extent to which the European project had been shaped by the Cold War. The arguments over the deepening of the Union seemed to block out the transformed political geography of the continent: there was a deep reluctance to face up to the implications for the West of the collapse of the Iron Curtain and at no point in the 1990s has a sense of urgency or historic responsibility to the cause of freedom and democracy appeared to animate the EU’s attitude to the applicant states of Central and Eastern Europe. Rather, the prevailing mood has been one of crabbed caution over the impact of the East’s farmers on

2 Demos Sustaining Europe the Common Agricultural Policy and the need for reform of the structural funds in the face of eastward enlargement.

‘EMU will begin against a backdrop of considerable public misgivings and much expert disagreement. It is the culminating expression of the idea of designing a “Europe from above” as the right approach to saving the old continent from its own worst features.’

The Maastricht process also represented the high water mark for the technocratic, élite-driven approach to post-war integration in Europe. The Treaty of Rome and its successors, NATO and the big steps in economic integration were all negotiated in the conference halls and Chancelleries at some distance from the public gaze. Their drafters were undoubtedly foresighted and enlightened. But this was not in essence a democratic project. The builders of the Community assumed that their job was to define the future and that public opinion would follow. The task of creating a Europe that would never again relapse into the barbarism of the past was too important to be allowed a large measure of transparency and popular accountability. Maastricht was the point at which public opinion began to rebel against this approach to deeper integration. The bitterly divisive debates in countries such as the UK and Denmark had an impact elsewhere and the gap between public opinion and élite conceptions of the EU project has grown.2 The experiment with Economic and Monetary Union (EMU) has been devised behind closed doors, arguably with far too little effort to build up public understanding of the project. EMU will begin against a backdrop of considerable public misgiving and much expert disagreement. It is the culminating expression of the idea of designing a ‘Europe from above’ as the right approach to saving the old continent from its own worst features. But this approach lacks any sense of connection to the citizen, of delivering tangible benefits and of direct accountability.

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So although in some respects ‘Europe’ embodies a democratic culture of rights, freedoms and openness, in other respects it is at odds with it. The development of the most democratic European order in history has depended on a political culture that has been secretive, distant,‘club class’ in character. This clash has shaped much of the current political climate. It has made Europe the butt of a sullen mood of ‘anti- politics’.It has encouraged suspicion about EMU and what lies behind it. And it has helped to promote the greatest danger for any transnational enterprise – the rise of identity politics focused on populist parties able to mobilise disaffected regional, national or ethnic groups and trade on their fears and resentments. It is all too easy to imagine ways in which populist parties such as France’s Front National might exploit any crisis arising from the implementation of EMU, such as severe increases in unemployment if a major recession strikes while the new currency and its regulatory regime are bedding down. Such parties can reinforce a negative and exclusive sense of national or regional identity, of ‘us against them’.In a mild form this need not be too dangerous, but in a stronger form it tends towards balkanisation, to zero-sum politics or even to war. It also leads to a hankering for the reassertion of national sovereignty, to calls for a halt to EMU or the empowerment of the European Parliament, and to a sharper division between those wanting an union of nation states and those wanting a European federation with its own authentic government and parliament.

‘The European Union has focused on an institutional and economic agenda at the expense of strengthening its popular legitimacy and harnessing micro-social and cultural forces for integration and common cause.’

This Demos Collection explores the implications of the idea that the European integration project faces a crisis that stems in part from its success as a technocratic programme for binding once warring nations into a common market and system of peaceful conflict resolution. The European Union has focused on an institutional and economic agenda at the expense of strengthening its popular legitimacy

4 Demos Sustaining Europe and harnessing micro-social and cultural forces for integration and common cause. The theme running through the Collection is that the Union needs to pay far more attention to the democratic, social and cultural dimensions of integration in Europe. The need for greater democratisation of the Union’s institutions will be a key issue, as considered by Simon Hix in his argument for new forms of Euro-election. The much-neglected social and cultural dimensions of the enlargement debate are considered by Heather Grabbe and Kirsty Hughes in their essay and Eva Kuti examines the role of the voluntary sector in preparing the new democracies of Central and Eastern Europe for ‘rejoining Europe’.The need for more flexibility and strategic thinking by the Union in the face of new and interconnected economic, social and technological forces is underlined by Fritz Scharpf (on the need for new forms of flexible regulation in the Union), John Browning (on the implications of the Internet), Dave Birch (on electronic currencies and EMU) and Mark Hepworth (on the impact of economic and technological change on EU policies for the development of cities and regions). And we devote several articles to the neglected but vital issue of cultural and social integration, focusing on the complex question of how far a unified Europe can foster a coherent European sense of identity and on the key dimensions of social solidarity that the Union has yet to tackle. Yasmin Alibhai- Brown considers the place of ethnicity in a Euro-identity from the perspective of Islam in Europe; Colin Brown reviews the shortcomings of Euro-consumer movements; and the final set of essays explores the possibility of, and obstacles to, a sense of ‘European identity’. In the remainder of this introductory essay we consider the current crisis of legitimacy in the project of European integration and suggest some ways in which the EU might begin to construct a vision and mission that can sustain popular support and that will be fit for purpose in the next century.

The nature of the integration project The nature of the project of integration was clear in the Cold War period, despite the lack of transparency about many of the steps to

Demos 5 Demos Collection 13/1998 deeper and closer union. The goal was to bind the nations of Western Europe in a system of democratic governments, welfare states and market economies that would create prosperity, overcome social divisions and, above all, prevent a return to the chronic warfare and national rivalries of the past. By the time the Berlin Wall fell the mission had been accomplished.As a result, it is now far harder to imagine where Europe is going or what might be done to celebrate the fiftieth anniversary of the Treaty of Rome, than it has been for some time. The European project has lost its sense of direction. EMU and the rhetoric of ‘ever closer union’ beg the question:‘what is the programme of integration for?’. There may be steps forward – very probably to a larger Europe, embracing the most stable of the post-communist democracies, and possibly to successful monetary union – but even these are uncertain. The vision of what the integration project is meant to achieve has become blurred. The project has been associated largely with geopolitical security (in tandem with NATO) and with economic integration. The political, social and cultural dimensions of ‘Europe’ have become no clearer over time. Certainly we now associate it with free markets, democratic elections, the rule of law and a common heritage of high culture, but this leaves many great questions about the challenges of the next century unanswered. What does the project of integration imply for Europe’s approach to peacekeeping in the post-Cold war world, to the growth of a globalised economy based on information technologies and immense deregulated flows of capital, to inequalities between the rich world and the developing countries, to the problems of global environmental degradation? If there is a clear idea behind the present Union it is probably that of Europe as a set of neutral rules, a Rechtstaat, governing competition, harmonisation, money and budgets. But this technocrats’ vision is not enough to generate political legitimacy, social integration or cultural energy. It is too thin, too austere to work as a source of inspiration for citizens across Europe. The pre-1989 project of underpinning a European peace and creating a space of democratic prosperity had a powerful grip; now Europe needs a new source of inspiration to legitimate the process of integration.

6 Demos Sustaining Europe

The context for a new Euro-democracy The need for a new sense of mission and direction has become a problem first and foremost of democracy. The EU project needs a new sense of legitimacy and participation. This immediately raises the issue of the level at which democratic structures should evolve in Europe: should they stop at the national level or be extended to a pan- European scale? Some still want to see Europe evolve into a genuine superstate, a replica at European level of the nation state, with the USA as the nearest example. This vision demands the eventual creation of a common constitution, a European parliament gradually accumulat- ing powers, a Commission and Council of Ministers taking on the normal forms of government. But the idea runs up against the brute fact of linguistic and cultural diversity in Europe, which fundamentally distinguishes it from the conditions which facilitated a sustainable political and economic union in America. Others try to reassert the idea that Europe must be a union des patries: they assume the permanence of nation state forms and only wish to promote cooperation in traditional policy domains – the alliance for military objectives, the customs union, the creation of economic and technical standards. The problem with these reactions is that neither contributes a viable response to the situation in which Europe finds itself at the close of the twentieth century. They fall short in three respects. First, they fail properly to interpret the nature of Europe as a ‘post-modern’ state structure, as analysed by Robert Cooper.3 The system created by the EU, NATO and the Organisation for Security and Cooperation in Europe is sui generis and cannot be seen as a structure that can be converted into a unitary ‘Euro-nation state’.As Cooper argues, this system contains a high degree of administrative integration, exceeding the extent of political, cultural and economic convergence, based on the development of a cosmopolitan transnational élite of policy makers and administrators; it accepts the growing irrelevance of borders and distinctions between domestic and foreign affairs; it rejects force in dispute resolution and creates a space within which interdependent countries bargain, cooper- ate and build consensus about hard decisions. This kind of system is

Demos 7 Demos Collection 13/1998 not one that can be turned into a cohesive ‘superstate’ which reproduces the old nation state at continental level. Second, they fail to address the real challenges Europe faces in the twenty first century. These transcend the scope of either the existing EU or the old nation states of Europe. They include the need for new forms of peacekeeping and constructive military intervention in the zones of conflict of the ex-Communist world and the Mediterranean rim; the need for concerted international action to protect the natural environment and a move towards ecologically sustainable development at all levels from the global to the local; the cultural and social challenges of the ageing societies of Europe and of acceptance of ethnic diversity as a source of vitality; and the rise of global markets, digital communications and the ‘weightless’ and borderless world of the electronic knowledge economy, new sources of industrial competition and the growing need for new transnational or even global regulation of capital in the face of its environmental and social consequences. Third, they fail to take account of the long-term direction of change among citizens in the advanced industrial world. At the heart of current debates groping for a clear idea of the so-called ‘Third way’ beyond old social democracy and the new Right there is a recognition that economic, cultural and social changes are gradually creating conditions in which ever more people are used to identifying with many different cultural forms, not simply with the nation state, and to working with loose networks and partnerships that transcend boundaries between sectors, disciplines, organisations and countries.4 Globalisation brings with it increasing demand and scope for localisation of identity and political action. The growth of global communications, rising levels of education and exposure to other cultures, and increasing awareness of common risks, notably in relation to environmental problems, all contribute to the gradual development of a significant body of ‘cosmopolitan’ citizens at ease with ‘hybrid’ identities, They also foster the search for a ‘Third Way’ politics focusing on mutualism, quality of life, the ethical challenges posed by new technologies, learning and the knowledge economy, and the linkages between global change and local activities.5

8 Demos Sustaining Europe

Any search for new ways to revitalise the European project needs to work with the grain of these forces for change. EU democracy cannot be a process of shifting key choices from national and lower levels to the supranational one: it needs to supplement and help strengthen the workings of national, regional and local democracy. The rationale also needs to be realistic. We do not believe in more integration and EU- level action because we feel national democracy is failing, nor because we want a European superstate, nor because we feel the EU can give us forms of citizenship we are denied by national systems.6 The reason we want new forms of EU democracy and identity must be because we need the EU to perform specific tasks that only it can do, given the emerging challenges of the next century. What are the elements of a new rationale for the next phase of European integration, one which pays due attention to the need for democratic legitimation and the social and cultural dimensions of Europe?

Towards a new European mission A starting point is the recognition of the impact of the globalisation process, the advance of new technologies and their impact on employment prospects and the emergence of pervasive forms of environmental risk. In this context, there is likely to be a growing acceptance that the nation state alone can no longer deliver the most important things that people need: physical security, economic opportunity and security, and a safe environment. Europe is pioneering a new form of governance which has obvious advantages over what went before in the continent. It includes:

shared tools for economic, social and technological development mutual surveillance techniques and acceptance of limits to national autonomy in many traditional areas of domestic policy end of war as an instrument of policy and end of acquisition of territory as a goal

Demos 9 Demos Collection 13/1998

acceptance of democracy and individual free exchange as the basis for politics and economic order systems of transnational redistribution to overcome structural problems of regions and countries.

This model, for all the strains to which EMU, enlargement and globalisation subject it, is being steadily strengthened over the long term by the shift to an information technology-based industrial structure and in social terms by the long-run trends towards an increasing flux and hybridisation of identities and understandings, stemming largely from the revolution in communications. Nowhere else in the world do we find all these elements of adaptation in place among a set of nation- states – Europe is sui generis, neither a federal superstate nor simply a collection of cooperating states. Its achievement is so enormous in historical terms that we should be extremely careful about jeopardising it.

‘The first priority for Europe is to ensure that its programmes deliver tangible benefits to sufficiently broad groups to convince citizens that the EU matters in their lives.’

Its greatest problem is that it has not yet created a political culture and set of appropriate democratic innovations to match its organisational forms. The EU parliament is the nearest thing we have to such an innovation and it has signally failed so far to capture public imagination or generate demand for an extension of its powers. The main reason for this is that political cultures remain predominantly national and several contributors to this Collection note the factors that weigh against the formation in the foreseeable future of a true European identity that could begin to be strong enough to supplant them. Therefore the framework has to be one that complements the enduring potency of national polities. Moreover, as the EMU experience so far makes plain, economic insecurity tends to promote populist identity politics, which seeks to brand ‘Europe’ as the problem. In this sense the viability

10 Demos Sustaining Europe of the integration project and the overall levels of economic security and inclusion in the EU’s member states are inseparable. The immediate task for EU leaders in search of a revitalised sense of mission and legitimacy for the project must be to deal with the key weaknesses exposed in recent years, all of which can be seen to stem from the secretive and top-down nature of the major negotiations and grand institutional designs such as Maastricht: the mistakes that have characterised the big integration efforts since the mid-1980s, above all the focus on money as the driver of the project the failure to articulate a clear political vision, an end point that is not simply a recreation of the nation state at a higher level – which, as argued above, will not work the failure to find new ways to connect citizens to the Union’s core institutions and to give a sense of ownership and participation in decisions. The first priority for Europe is to ensure that its programmes deliver tangible benefits to sufficiently broad groups to convince citizens that the EU matters in their lives. So far it has only been minority groups who have been the main beneficiaries – farmers, those in remote areas or in zones of old and declining industries, and so on.‘Europe’ needs to be more visible and imaginatively engaged at the micro level in partnership with national governments, regions and localities. It should offer solutions and opportunities to many more individuals, organisations and communities in relation to new developments and problems in work, learning, travel, communication, transport and environmental quality. However, Europe is now committed to the two great macro-level projects of EMU and enlargement, both of which are riskier than they need have been as a result of the neglect of the democratic agenda and the social and cultural dimensions of integration, including better communication of goals and problems to citizens across the EU. The Union needs to safeguard these grand experiments by thinking hard about its longer term development. And here democracy is the key.

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Just as Europe has pioneered a new model of governance, often ahead of our ability to understand it, so now does it need to pioneer a new framework of democracy which does not simply recreate models from the nation state at a higher level. This means in some respects turning away from the ‘Europe of rules’ model that has been so domi- nant – in the theory at least of the single market and EMU. This has been essential for the creation of European administrative integration – an expanding set of clear, transparent, non-arbitrary rules making a framework of EU law and market regulation. But it is not the stuff of a new level of democratic politics, still less of a nascent European identity, that can give renewed legitimacy to the EU project. Some innovations that could help develop a distinctive EU democratic politics that will complement rather than compete with other levels of representation and decision making and that could help reinforce EU social and cultural integration, are as follows:

the establishment, as argued for by Simon Hix, of direct elections for the post of Commission president and of arrangements encouraging the formation of European party alliances7 the extension of ‘portable’ voting rights, allowing citizens of member states who are resident in another EU country to vote there not only in local and European Parliament elections but also in national elections the introduction of a dual vote system for all elections in the EU, whereby everyone resident in the Union would have two votes: one for all elections and referenda wherever in the EU they happen to live; and a second vote to be used once every four years in one other national election of their choice, thus giving EU citizens some potential to influence the political direction of other member states and thus of the Union as a whole, and also giving voters, politicians and the media a powerful incentive to take more interest in the affairs of all the member states and the policies of the EU

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the development of more transparent procedures for administering the allocation of the structural funds and many more opportunities for educational, social and environmental initiatives at local and regional levels, transferring resources away from the staggeringly wasteful subsidies for pointless farm production offered by the current Common Agricultural Policy, which still takes up nearly half the EU budget the development of new mechanisms for consensus-building and conflict resolution – as outlined for example by Fritz Scharpf – between countries in the EU and between levels from the European to the local; the EU as a unique political space can act as a laboratory for the exploration of ‘smart subsidiarity’,mediating between levels of decision-making and implementation and smoothing out conflicts a focus of EU resources and energies on the issues that matter most to its citizens in the face of the challenges discussed earlier and which have an intrinsically transnational character – above all, work and employability in integrating technology-based markets and quality of life in a threatened environment.

Conclusion: sustaining Europe – a twenty first century mission for the EU The long-term imperative for Europe is to create a vision and mission that is fit for purpose in the face of the challenges of the next century and which plays to its strengths. This is partly a matter of developing new ‘narratives’ about the destiny of the integration project and the kinds of identity that Europe can create which will capture the public imagination and complement other forms of identity and allegiance.8 But it is also about developing a powerful and coherent programme for political and economic strategy. Is there a candidate for this? The most obvious area in which transnational action and pooling of sovereignty has commanded assent at all levels of Government and

Demos 13 Demos Collection 13/1998 among citizens of the Union as a whole in recent years is that of environmental protection. Pollution and other forms of environmental degradation are intrinsically ‘trans-boundary’ problems and there is substantial and enduring popular support as well as technical arguments in favour of EU competence at this level.9 The Union is best placed to be the champion of environmental policy, to set the framework for national, regional and local action, and to act as negotiator for its members en bloc at global level. A focus on environmental strategy as the core component of the EU’s twenty first century mission makes sense from many perspectives. First, it provides a practical set of tasks with a clear set of benefits that can be delivered to EU citizens: the reduction of pollution, the improvement of quality of life, the improvement of public health, the development of cleaner and more efficient technologies and new markets for eco- friendly goods and services that can create new jobs. Second, it is a policy area in which linkages across sectors, countries, disciplines and policy domains are of the essence: the EU has a clear role as a coordina- tor of standards, an advisor on and enforcer of legislation and a broker between different interests and levels. For all the patchiness of EU integration of environmental factors into its structural funds and strategic plans, the Union is gradually greening the CAP and beginning to develop a greener energy and transport programme. Third, it is an area in which the EU has already begun to develop a relatively coherent and sophisticated view of future challenges and of the social and economic opportunities arising from global recognition, as for example at the Rio and Kyoto summits of 1992 and 1997, of ecological problems.10 The treaties of Maastricht and Amsterdam include reference to the duties and goals of sustainable development and environmental protection. The concept of ‘sustainable development’ has been developed to embrace not only crucial elements of ecological sustainability but also of the linkages between respect for eco-constraints and future competitiveness and social cohesion.11 EU programmes on economic and technological development recognise the need for environmentally sound development and the scope for Green job creation and industrial opportunities through improved

14 Demos Sustaining Europe energy saving, recycling, cleaner technologies, improved public transport systems and restoration of polluted landscapes. Fourth, this is a policy area in which inter-governmental action across the world is essential, especially in relation to the reduction of greenhouse gas emissions implicated in the threat of disruption of climate systems. The EU is uniquely placed to develop its systems for consensus-building and structural funds into a model of ‘ecological modernisation’ of infrastructures and regulatory and tax regimes for the rest of the world as we feel our way towards a global framework for sustainable development.12 It also has the opportunity, with eastward enlargement, to demonstrate on a large scale how ‘redeveloping’ economies such as those of Central and Eastern Europe can be helped to make a ‘leapfrog’transition to Greener forms of energy, material and transport use that will benefit them and the Western member states alike and that will also promote new forms of competitive enterprise and social capital. The EU can also act as a global exemplar and laboratory for experiments in sustainable development strategies such as international trading of greenhouse gas emission permits, creation of sustainability indicators for the economy and exploration of controversial ideas such as that of targets for the reduction of the ‘environmental space’ consumed by Europe.13 Finally, Green issues are one of the few sources of civic energy and popular idealism that can be detected in the disenchanted political landscape of the 1990s: this offers an opportunity for the creation of a Euro-vision that will have real purchase on citizens’ aspirations and concerns and potential for idealism. EU strategists should exploit this opening in the next decade with new initiatives, such as:

development of the European Environment Agency beyond its current information and research role into a pan- European inspectorate of national inspectorates, building on existing networks for exchange of ideas and good practice in implementation and monitoring, and providing consultancy and training in enforcement of EU regulations across the Union

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creation of an EU Green Taskforce offering brokerage for voluntary placements for people of all ages across the Union and on conservation projects and schemes linked to the sustainability programme Local Agenda 21 creation of a European University of Sustainable Development, offering scholarships, work experience, best practice case studies and exchanges between individuals and organisations across the EU and the applicant states of the East and South radical reform of the CAP to switch financial support further towards income support for farmers, countryside protection and new sustainable rural enterprises reform of the structural funds leading over a decade to their consolidation into a set of Sustainability Funds for projects designed to enhance environmental quality, local enterprise and social cohesion further development of EU initiatives and pilot projects on issues such as Local Agenda 21, ecological tax reform and sustainable mobility development of a sustainable EU energy strategy focusing on energy efficiency standards, job creating insulation and renewable energy projects, and waste minimisation in industry and domestic consumption.

Against all this, and echoing Orwell in 1947, we can easily draw up a list of reasons not to be cheerful about the prospects ahead. The EU’s scope to act on these opportunities for eco-leadership is constrained by the short termism of member states and the political fear of the impact on voters of ambitious policies such as the introduction of a carbon tax or of tighter regulation of private car use. The EU set out to be a global leader in reduction of greenhouse gas emissions at the 1997 Kyoto Summit, but settled for overall cuts in carbon dioxide output of 8 per cent by 2008–12 against 1990 levels, much less than the 15 per cent originally proclaimed as the Union’s target. The integration of sustainable development criteria and rigorous environmental impact assessment

16 Demos Sustaining Europe into the design and implementation of EU structural funds and other strategies, especially in relation to energy, transport and agriculture, remains very patchy. Above all, enforcement of existing EU regulations on all aspects of environmental quality is poor: resources for implementation and monitoring are inadequate across Europe. If the EU cannot rise to the challenge of sustainability, the outlook for the rest of the world is poor. Orwell’s reasons to be fearful are paralleled now in John Gray’s recent diagnosis of global unsustainability and deepening social division.14 To many citizens, such a vision of twenty first century breakdown might seem all too plausible. But we should remember that Orwell’s ‘realistic’ pessimism proved wrong: the least likely outcome, from his perspective, has come true in its essentials. Europe has proved capable of an historically near-incred- ible achievement – overcoming its legacy of endemic warfare and demonstrating to the world the possibility of a democratic and ever closer union of cooperating nations. In the next 50 years it needs to accomplish what seems now to be an equally unlikely feat – to overcome its legacy of waging war on the environment and to demonstrate to the world the potential for states, communities and organisations to collaborate in the immense and complex task of ecological modernisation and movement towards sustainable development. It is an essential challenge for the Union and, along with new forms of democratisation, it is perhaps the only one which can provide it with the inspiration and legitimacy needed to flourish in its second half century.

Demos 17 Notes

1. Orwell G,‘1970, Towards European 1993, Growth, competitiveness and unity’ in The collected essays, employment White Paper, CEC, journalism and letters of George Luxembourg; European Orwell, volume 4, Penguin, London. Commission, Agenda 2000,CEC, 2. Leonard M, 1998, Making Europe Brussels, 1997; Town and Country popular: the search for European Planning, special issue on European identity, Demos, London. planning, Town and Country 3. Cooper R, 1996, The post-modern Planning Association, London, state and the world order, Demos, March 1998. London. 11. See Department of Environment, 4. Leadbeater C,‘A hole at the heart of Transport and the Regions, 1998, the Third Way’, New Statesman, A revised UK strategy for sustainable 8 May 1998. development,DETR,London; 5. See note 4; Giddens A and European Commission, 1995, Hargreaves I, 1998 [forthcoming], European sustainable cities,CEC; Tomorrow’s politics, Demos, Local Futures Group, 1998, London. A strategy and action plan for London, 6. See note 2; Lloyd J,‘Fifteen nations (The London Study), Association of in search of a story’, New Statesman, London Government, London. 10 April 1998. 12. See von Weizsäcker E et al, 1997, 7. See also Leonard M, 1997, Politics Factor four: doubling wealth, halving without frontiers, Demos, London. resource use, Earthscan, London; 8. Leonard M, 1998, Rediscovering Jacobs M, ed, 1997, Greening the Europe, Demos, London. millennium, Blackwell/Political 9. Hewett C, 1998,‘Environment: the Quarterly, Oxford. undisputed European issue’ in 13. See Carley M and Spapens P,1998, Barrett E and Tindale S, ed, Britain Sharing the world: sustainable living in Europe,IPPR,London. and global equity in the twenty first 10. See European Commission, 1992, century, Earthscan, London. Towards sustainability,CEC, 14. Gray J, 1998, False dawn, Granta, Brussels; European Commission, London.

18 Demos Flexible integration Fritz W Scharpf

Regulatory options for Europe

Integration and the loss of problem solving capacity During the golden years from the 1950s to the mid-1970s, the industrial nations of Western Europe had the chance to develop specifically national versions of the capitalist welfare state – and their choices were in fact remarkably different.1 Despite the considerable differences between the ‘social democratic’,‘corporatist’ or ‘liberal’ versions, however, all were remarkably successful in maintaining full employment and promoting economic growth, while also controlling, in different ways and to different degrees, the destructive tendencies of unfettered capitalism in the interest of specific social, cultural and ecological values.2 It was not fully realised at the time, however, how much the success of market correcting policies did in fact depend on the capacity of the territorial state to control its economic boundaries. Once this capacity is lost, countries are forced into a competition for locational advantage which has all the characteristics of a Prisoner’s Dilemma game. It reduces the freedom of national governments and unions to

Professor at the Max Planck Institute for the Study of Societies, Cologne.

Demos 19 Demos Collection 13/1998 raise the regulatory and wage costs of national firms above the level prevailing in competing locations. Moreover, and if nothing else changes, the ‘competition of regulatory systems’ that is generally wel- comed by neoliberal economists and politicians may well turn into a downward spiral of competitive deregulation and tax cuts in which all competing countries will find themselves reduced to a level of protection that is in fact lower than that preferred by any of them. While economic competition has increased globally, the member states of the European Union also find themselves subjected to a wider range of legal constraints that are more effectively enforced than is true under the worldwide regime of the GATT and the WTO. These requirements of ‘negative integration’ are derived from the commitment, contained in the original treaties and reinforced by the Single European Act, to the free movement of goods, services, capital and workers, and to undistorted competition throughout the EU.As a consequence, national policy makers now find themselves severely constrained in their choice of policy instruments as they try to cope with rising levels of unemployment and other manifestations of a deepening crisis of the European welfare state. At the same time, there is now a deep scepticism regarding the original hopes, in particular on the part of unions and the parties associated with them, that regulatory capacities lost at the national level could be re-established through ‘positive integration’ at the European level.While negative integration was advanced, as it were, behind the back of political processes by the European Commission and the Court, measures of positive integration have always required the explicit agreement of national governments in the Council of Ministers. The Single European Act of 1986 was supposed to change this by returning, for harmonisation decisions ‘which have as their object the establishment and functioning of the internal market’ (Art. 100A), to qualified majority voting in the Council. However, rules are adjusted in such a way that the opposition of even small groups of countries united by common interests can rarely be overruled. In any case, the veto remains available as a last resort even to individual countries and the unanimity rule still continues to apply to a wide range of Council decisions. Thus, agreement is

20 Demos Flexible integration difficult to reach and disagreement and hence policy blockage are quite likely when positive integration is attempted.3 As a result, national problem solving capacities are reduced by the dual constraints of more intense economic competition and by the legal force of negative integration, while European action is constrained and often blocked by conflicts of interests under decision rules imposing very high consensus requirements. There is a real danger, therefore, that in the face of rising levels of crisis the manifest helplessness of governments at the national and the European level will undermine the legitimacy of democratic government as it did in some countries in the Great Depression of the 1930s.

European support for national solutions? There is thus every reason to search for options at both levels that could increase problem solving effectiveness even under conditions of international competition and high consensus requirements. This article focuses on the latter possibility. I am convinced, however, that the main burden must be carried by national governments which, even though constrained by the legal prohibitions of negative integration in Europe and by the economic pressures of regulatory and tax competition in the integrated market, are by no means helpless. As I have shown elsewhere, national solutions do exist in the critical fields of employment, social policy and taxation that are more robust to the challenges of economic integration and systems competition than is true of present policy patterns.4 It is also true,however,that many ofthese solutions would require far-reaching and deep cutting policy changes and institutional reforms on a scale that can only be compared to those brought about by the Conservative government in Britain. But eighteen years of single party rule is hard to imagine in other European countries – in many of which, moreover, multi-party government coalitions, federalism, corporatism, judicial review and central bank independence create many more ‘veto points’ in the political process than is true in Britain.5 Hence, even if national solutions are available in principle, it is unlikely that they could be speedily adopted and implemented everywhere.

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‘If it is important that the social achievements of the post-war decades should be defended under the conditions of globalised markets and European economic integration, then there is reason to search for solutions at the European level that can support national efforts and can be adopted even when near-unanimous agreement is required.’

In any case, high and rising levels of unemployment, tightening fiscal constraints, the growing pressure of political dissatisfaction and, in some countries, political radicalisation are not generally conducive to the longer-term perspective required by institutional reforms of a fundamental nature. Thus, if it is considered important that the social achievements of the post-war decades should be defended under the conditions of globalised markets and European economic integration, then there is reason to search for solutions at the European level that can facilitate and support national efforts and that can be adopted even under decision rules requiring near-unanimous agreement. The Treaty of Amsterdam has done little to increase the general capacity for ‘positive integration’ and effective European problem solving in the face of unresolved conflicts of interest or ideology among member governments. The president of the Commission, it is true, will be strengthened by having a voice in the appointment of commission- ers, and the European Parliament is strengthened by a considerable expansion of the items on which it has an effective veto under the co- decision procedure. But no agreement has been achieved with regard to voting rules in the Council of Ministers – instead, even countries like Germany and France, which in the past have promoted majoritar- ian decision rules, now seem to be more concerned about the risk of being outvoted in an enlarged Community. Nevertheless, the Amsterdam Summit produced some compromises that represent moves in the right direction – forward on employment policy and backward (or more cautiously forward) on negative integration. After considering the possible implications of these agreements, I will turn to European options not discussed, or not accepted, at

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Amsterdam – which should be sufficiently compatible with the interests of national governments to make their consideration worthwhile.

Coordinated national action on employment? The Amsterdam agreements on employment have generally been criticised as compromises on the level of the lowest common denominator or as exercises in symbolic politics. They may in fact turn out to be just that and they have certainly disappointed those among their promoters who had hoped for a commitment to Keynesian full employment policies, pursued through Community programmes initiating large scale infrastructure investments. But what was agreed upon may in fact have more positive implications than a return to the deficit spending philosophy of the 1970s could have had. A New Title on Employment will now be included in the Treaty of the European Communities. Its Article 1 commits the member states to ‘work towards developing a coordinated strategy for employment’; Article 2 defines ‘promoting employment as a matter of common concern’ and Article 4 requires each member state to provide the Council and the Commission with an ‘annual report on the principal measures taken to implement its employment policy’ – on the basis of which the Council may ‘make recommendations to member states’.Moreover, the Council will establish an Employment Committee that is to ‘monitor the employment situation and employment policies’ in the member states and to formulate opinions in preparation for Council proceedings. Together, these provisions hold three important promises. First, by declaring national employment policies a matter of common concern of all member states, and by creating the organisational and procedural conditions for monitoring and evaluation, the Amsterdam Treaty may, for the first time, provide some safeguards against the temptation of all countries to protect domestic jobs through ‘beggar- my-neighbour’ policies, competitive deregulation and tax cuts. Second, the commitment to compare and evaluate national policies with a view to sharing information about ‘best practices’ and promoting ‘innovative approaches’ (Article 5) creates conditions that are conducive to the joint discussion of structures and causes of employment

Demos 23 Demos Collection 13/1998 problems, and to the joint exploration of employment policy options at the national level. Given an active role of the Commission, and opportunities for ‘deliberative’ interactions in a permanent committee of senior civil servants, there is a chance that an understanding of the causes of the ‘European employment gap’,and of potentially effective employment strategies,could emerge that will go beyond the ubiquitous recipes of the 1994 OECD Jobs Study for labour market deregulation, public sector retrenchment and the reduction of social benefits. Last, but by no means least, the explicit postulation of an employment goal, coequal with the fundamental commitment to the four freedoms of the internal market, may have beneficial effects against the dominance of neo-liberal interpretations of what European integration is about in the practice of the Commission and in the decisions of the European Court of Justice. At any rate, it will now be harder to argue that, as a matter of positive law, the Community should be strictly limited to achieving and protecting the ‘four freedoms’ and undistorted market competition.

Limits on negative integration At the Amsterdam Summit itself, some sort of agreement was reached on three issues arising from the extension of European competition law into service areas ‘affected with a public interest’. The first, and potentially most far-reaching, will include a new Article 7d in the Treaty whose delicately diplomatic formulations are worth quoting in full:

Without prejudice to Articles 77, 90 and 92, and given the place occupied by services of general economic interest in the shared values of the Union as well as their role in promoting social and territorial cohesion, the Community and the Member States, each within their respective powers and within the scope of application of this Treaty, shall take care that such services operate on the basis of principles and conditions which enable them to fulfil their missions.

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The Amsterdam Summit sent a similar signal regarding public service broadcasting which, rather than amending the text of the treaty, reminds Commission and Court that ‘the system of public broadcasting in the member states is directly related to the democratic, social and cultural needs of each society’ and then goes on to formulate ‘interpretative provisions’ according to which the treaty does not rule out the funding of public service broadcasting. Again, however, the assertion is qualified by the proviso ‘that such funding does not affect trading conditions and competition in the Community to an extent which would be contrary to the common interest’. The same is true in the third instance of a Declaration to the Final Act in which the Intergovernmental Conference (IGC) notes that ‘the Community’s existing competition rules’are not violated by the existence of, and the facilities granted to, public credit institutions in Germany – an assertion which again is followed by the qualification that such ‘facilities may not adversely affect the conditions of competition to an extent beyond that required’ by the infrastructure functions of these institutions.In other words,the Commission and the Court will retain their role in balancing competing principles in specific cases but they are aware of the importance of some of the countervailing values to be considered.

‘There is reason to think that political sensitivity to the risks associated with the single minded maximisation of free market competition has increased among member governments and in the Commission.’

Finally, a number of cases have shown that either the Commission or the European Court of Justice is beginning to limit the reach of negative integration and of European competition law,especially in the public service areas. In fact, the Amsterdam declaration on the status of German public banks took note of ‘the Commission’s opinion to the effect that the Community’s existing competition rules allow services of general economic interest provided by public credit institutions existing in Germany’.In other words, the Commission itself had refused to intervene against the distortion of competition that allegedly follows

Demos 25 Demos Collection 13/1998 from the fact that the operation of these public banks is secured by assets of the local and regional governments that own and use them for industrial policy purposes. There is reason to think, therefore, that with the completion of the internal market programme and its extension into core areas of existing (and highly diverse) public service solutions of nation states, political sensitivity to the risks associated with the single-minded maximisation of free market competition has increased among member governments and in the Commission. At the same time, the European Court of Justice has also begun to develop conceptual instruments that allow it to consider the relative weight that should be accorded, in light of the circumstances of individual cases, to the competing concerns of undistorted competition on the one hand and the distributive, cultural or political goals allegedly served by, say, postal monopolies, subsidised theatres or public television on the other hand. My conclusion is, therefore, that the dangers arising from the direct (legal) effect of negative integration on national problem solving capacities are now better understood and less likely to get out of hand than could have been expected a few years ago. That, however, does not reduce the indirect (economic) effect of increased transnational mobility and competition on the regulatory and taxing capacities of the nation state. Elsewhere I have discussed national policy options that might be more robust against the economic pressures of regulatory competition than existing solutions.6 But these will only go so far and the interest in positive European integration remains alive among those groups and political parties that in the past have benefited from state intervention in the capitalist economy. In the remaining sections, I will therefore discuss strategies that might increase the European contribution to problem solving in ways that are less likely to founder on conflicts of interest or ideology among national governments in the Council.

Differentiated integration At least since Willy Brandt’s suggestion of a two-tier or two-speed Community was taken up in the 1975 Tindemans Report, the idea that

26 Demos Flexible integration positive integration could be advanced by some form of differentiation among the member states has been on the agenda of the European Community. But the notion of what criterion should be decisive for assignment to the metaphoric upper or lower echelon, or to the core and the periphery of European integration was always oscillating between an emphasis on the political willingness of countries to renounce national sovereignty and to commit themselves to closer integration on the one hand, and an emphasis on the economic capacity of countries to cope with more intense competition or to meet more demanding standards of performance. Since these conflicting perspectives were never resolved one way or another, the notion of differentiated integration retained its connota- tion of second class citizenship, even after ‘opting out’ from common European commitments had achieved a degree respectability from the British and Danish precedents. At any rate, the results of the IGC leading up to the Amsterdam Summit, which had ‘closer cooperation’ and ‘flexibility’ as one of the major items on its agenda, turned out to be very disappointing. With regard to matters within the domain of the European Community (as distinguished from the second and third ‘pillars’ of the European Union), closer cooperation among members states is now possible within the institutions, procedures and mechanisms of the treaty but its potential range is closely circumscribed by the requirements that cooperation: must always include at least a majority of member states and that any other member state may later join on application to the Commission must be authorised by a qualified majority in the Council and even then can be vetoed by a single government must not affect Community policies, actions or programmes, and must not constitute a restriction of trade or distortion of competition between member states. If these conditions are to be respected, closer cooperation will not provide new opportunities for positive integration in policy areas where

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European solutions are presently blocked by fundamental conflicts among member governments. There are three types of such conflicts that may involve either:

ideological disagreement over the proper role of the state vis-à-vis the economy and the proper role of the European Union vis-à-vis the nation state, or fundamental conflicts of economic self-interest arising from very large differences in the level of economic development as well as from structural differences in the ability to profit from unrestrained competition, and disagreement over the content of common European policies arising from fundamental differences in existing institutional structures and policy patterns at the national level.

In the past, these conflicts have impeded or blocked European solutions in a number of critical policy areas where national solutions are impeded or blocked by negative integration and the economic pressures of regulatory competition. These policy areas include:

environmental process regulations that significantly increase the cost of production of products which are exposed to international competition industrial relations regulations that are perceived as interfering with managerial prerogatives or as reducing the flexibility of labour markets social policy regulations that are perceived as raising the cost of production or increasing the reservation wages of workers the taxation of mobile factors of production, of capital incomes, and of the incomes of internationally mobile professionals.

It is not obvious that any of these issues could be dealt with more effectively under the rules and procedures of closer cooperation and flexibility as they were adopted at Amsterdam. In the following sections, I will instead discuss a number of strategic approaches that could

28 Demos Flexible integration allow progress to be achieved on conflict prone issues even within the present institutional structures and procedures of the Community.

A floor under welfare spending? The harmonisation of European welfare states is extremely difficult as a consequence of the structural and institutional heterogeneity of existing national solutions. Under these conditions, any attempt at European harmonisation would require fundamental structural and institutional changes in most of the existing national systems and we should expect fierce conflicts over which of the institutional models should be adopted at the European level. In the countries that lose out in this battle, it would be necessary to dismantle, or to fundamentally reorganise, large and powerful organisations from which hundreds of thousands of employees derive their livelihood and on whose services and transfer payments large parts of the electorate have come to depend. Thus, no government, opposition party or special interest group is presently demanding that the harmonisation of social policy be put high on the European agenda. But does that also rule out a positive European role in the reorganisation of existing welfare systems which is presently on all national agendas?

‘Regardless of how much they differ in the patterns of social spending and in their welfare state institutions, the member states are remarkably alike in their revealed preferences for total social spending.’

There are indeed options for a reorganisation of European welfare states that could reduce mass unemployment and maintain aspirations to distributive justice even under conditions of an internationalised economy, including, for example, the reorganisation of rules covering the sheltered sectors of European economies to price low and unskilled labour into work and the adoption of a negative income tax to offset the consequent loss of income by such workers. But these solutions are difficult to design and to adopt.7 Under the pressures of regulatory

Demos 29 Demos Collection 13/1998 competition and acute fiscal crises, chances are that the changes which are in fact adopted will amount to nothing more than a piecemeal dismantling of existing social benefits. As all countries are now competing to attract or retain investment capital and producing firms, all are trying to reduce the regulatory and tax burdens on capital and firms8 and are then tempted to reduce the claims of those groups – the young, the sick, the unemployed and the old – that most depend on public services and welfare transfers. But, how could European decisions make a difference here? If there is any reason for optimism at all, it arises from the observation that, regardless of how much they differ in the patterns of social spending and in their welfare state institutions, the member states are remarkably alike in their revealed preferences for total social spending (measured as a share of GDP). By and large, the richer member states (measured by GDP per capita) have proportionately larger public social expenditures than less rich countries and they commit proportionately larger shares of their GDP to welfare expenditures than do poorer countries (Figure 1).

35 DK NL LUK 30 F D B 25 I SP UL 20 IRL GR 15 PO

5 Social spending as a percentage of GDP in 1993

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 GDP per caption in 1994 in US dollars Figure 1 Wealth and social spending in 12 EU member states.

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These figures suggest the existence of a latent consensus among the member states of the Union according to which, regardless of structural and institutional differences, the welfare state should increase in relative importance as countries become more affluent. Beyond that, the figures also suggest the possibility that the latent consensus might be transformed into an explicit agreement among European governments. All countries would then avoid welfare cutbacks that would push their total welfare expenditures below a lower threshold which might be defined at, or slightly below, a line connecting the locations of Portugal and Luxembourg. If such a rule were in force now, it would limit the extent to which countries could reduce overall expenditures on social transfers and services but it would leave them free to pursue whatever structural or institutional reforms they consider necessary above that threshold. Such an agreement would eliminate the danger (or the promise) of ‘competitive welfare dismantling’ from the mutual perceptions of European countries and it could thus help to liberate national policy choices from the tyranny of regulatory competition.

Coordinated institutional reforms? By itself, however, agreement on a lower threshold of welfare spending would be merely a holding operation that could buy time for the inevitable structural transformation of European welfare states. These transformations will have to be performed at the national level but they could benefit in various ways from coordination at the European level. Even if welfare state reforms must be adopted at the national level, it is important for the future of social policy in Europe that the present institutional heterogeneity among national social policy systems be reduced. The institutional status quo positions seem too far apart to make negotiated agreement on common solutions a practical proposi- tion. But it might nevertheless be possible to proceed in two steps. At the first stage, one might attempt to reach agreement ‘in principle’ on the future contours of European welfare systems that would be able to assure high levels of employment together with social protection against the risks of involuntary unemployment, sickness and poverty, under

Demos 31 Demos Collection 13/1998 conditions of demographic change, changing family structures, changing employment patterns and intensified economic competition. The difficulties of agreement would, of course, be immensely greater if it came to the second step of designing ways for getting from here to there – from the divergent status quo conditions and political constraints of individual countries to a functionally superior and more convergent model of the future European welfare state.9 But here, the Community might take advantage of the fact that structural and institutional heterogeneity, while extremely great across all member states, is not universal. As Harold Wilensky, Peter Flora, G°sta Esping- Andersen and others have shown, European welfare states can be grouped into institutional ‘families’ that share specific historical roots, basic value orientations, solution concepts and administrative practices, and whose path dependent evolution has required them to cope with similar difficulties in comparable ways. Without going into any more detail here, within the present European Union it is possible to identify at least four such ‘families’:

Scandinavian welfare states, which are mainly financed from general tax revenue and which emphasise generous income replacement together with universally available and high quality public services, including public health care Continental systems with relatively generous, income maintaining, social transfers and health care financed primarily from employment based social insurance contributions, and with a relatively low commitment to social services Southern systems which represent less comprehensive and less generous versions of the Continental model and the British-Irish system which emphasises egalitarian and tax financed basic pensions, unemployment benefits and health services, while leaving other forms of income replacement and services to private initiative and the family.

These groupings are certainly not clearly separated from each other. The Netherlands, for instance, combines elements of the Continental

32 Demos Flexible integration and the Scandinavian models, and while Italy corresponds most to the Continental model, its health care system was reformed along British lines in the 1970s and it also shares some of the characteristics of the Southern model. Nevertheless, there is reason to think that among the present members of the Union, there are relatively distinct groups of countries that share important aspects of their welfare state structures and institutions, are likely to face similar problems and will therefore benefit not only from examining each others’ experiences, but also from coordinating their reform strategies. If these discussions are managed and monitored by the Commission, it should at least be possible to initiate moves towards greater institutional convergence over the longer term.

Needed: opportunities for sub-European coordination If the Amsterdam decisions on ‘closer cooperation and flexibility’ had allowed for the formation of groupings that comprise less than half of all member states, it might have been most promising to use the institutional infrastructure of the Community, and especially the analytical and coordinative services of the Commission, to assist the development of reforms suited to the specific conditions of groups of countries. At the same time, this would represent convergent moves towards the common longer-term perspective of European welfare states. That would have been a most effective arrangement for coun- teracting any tendencies towards ‘competitive welfare dismantling’. Moreover, and even more important, in the domestic politics of each of the participating countries, the reform of existing welfare systems could have benefited, in the face of ubiquitous opposition, from the legitimacy bonus of internationally coordinated solutions and perhaps even from the legal force of EC directives. At present, however, the institutional infrastructure that would most facilitate coordination is not in place. The heterogeneity of existing national structures and institutions, and of the specific problems they must face, is far too great to allow the development of uniform

Demos 33 Demos Collection 13/1998 reform strategies. At the same time, purely national reform efforts are operating under constraints of international regulatory competition that are likely to allow only suboptimal solutions to be adopted by uni- lateral reform. Under these conditions, it is important to point out that coordinated reform strategies among countries that share critical institutional preconditions are more promising, in principle, than uni- lateral coping strategies at the national level. There is a need, therefore, for institutional arrangements that allow countries sharing similar problems to coordinate their reform strategies. Conceivably, some of these benefits could be achieved through Schengen-type arrangements outside of the institutional framework of the Community; but that would not only lose the organisational support of the Commission, it would also presuppose a greater degree of prior consensus among the participating governments than could be expected before the beginning of the work that must be done to identify common solutions. But perhaps, as was true of Schengen as well, if ‘closer cooperation’ is initiated by some countries outside of the Community framework, then perhaps the next IGC will again find a way of incorporating such arrangements in the constitution of the European Union.

This article will appear as a policy paper of the Robert Schuman Centre of the European University Institute, Florence, and is based on the con- cluding chapter of a book-length study of multi-level policy making in Europe, also to be published by the Robert Schuman Centre.

34 Demos Notes

1. Esping-Andersen G, 1990, The three Presidentialism, Parliamentarism, worlds of welfare capitalism,Polity Multicameralism, and Multipartism’, Press, Cambridge. British Journal of Political Science, 2. Scharpf FW,1991, Crisis and choice no 25, 289–325. in European social democracy, 6. See note 4. Cornell University Press, Ithaca. 7. See note 4. 3. Scharpf FW,1996,‘Negative and 8. Sinn H-W,1996, The subsidiarity positive integration in the political principle and market failure in economy of European welfare states’ systems competition, CES Working in Marks G et al, Governance in the Paper No. 103, Centre for Economic European Union,Sage,London, Studies, Munich; 15–39. Sinn S, 1993,‘The taming of 4. Scharpf FW,1997, Employment and Leviathan: competition among the welfare state: a Continental governments’, Constitutional Political dilemma, MPIfG Working Paper Economy, no 3, 177–221. 97/7, Max Planck Institute for the 9. Esping-Andersen G, ed, 1996, Study of Societies, Cologne. Welfare states in transition,Sage, 5. Tsebelis G, 1995,‘Decision making London. in political systems: comparison of

Demos 35 Choosing Europe Simon Hix

Real democracy for the European Union

Introduction: democracy and policy choice The essence of democracy is ‘choice’. Democracy requires that we should be able to replace the holders of political power as well as the content of the policy agenda.1 First, we should be able choose ‘who governs’ until we decide to replace them. Democracy requires that we should be able to ‘throw the scoundrels out’.Second, we should be able to decide ‘what politics is about’.This is the direction and content of public policy. In most democratic systems, policy objectives are presented in the form of a manifesto, which its signatories promise to implement if they win public office. Alternatively, and increasingly across the world, citizens can decide on policies in referenda. These are either used to propose new legislative initiatives or to block existing legislation.2 There is a lack of truly European content to the existing structures of EU governance; we need new mechanisms of electoral choice that will overcome the EU’s ‘democratic deficit’.Three new ideas for democratic contests are proposed below that will give EU citizens the power to choose.

Lecturer in European Union Politics, London School of Economics and Political Science.

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European contests but national policy choices We can choose who governs at the European level. In national elections, we choose governments to represent us in the Council of Ministers, in European elections we choose MEPs to represent us in the European Parliament, and (since the Maastricht Treaty) via the investiture of the Commission by the Council and the Parliament we indirectly choose the Commission President and the individual members of the Commission. But we are unable to exercise any choice about the direction of the EU policy agenda. This is because none of the contests in which we choose the holders of political office in the EU are about EU policies. At no point did we vote for the single market, or the social chapter, or harmonisation of environmental standards, or economic and monetary union, or an independent European Central Bank, or the Schengen Accord, or a Common Foreign and Security Policy. Governments always claim that these decisions are democratic because they were made (in the Council) by democratically elected governments. However, no national general election has ever been fought on any of these issues. National elections are not about the policies governments will pursue at the European level; they are about the political agenda of national governments and parliaments in the domestic arena. Analysis of the general election manifestos of all political parties has shown that, in the past twenty years in all the countries of the EU, on average less than 2 per cent of these documents is devoted to issues relating to European integration or the institutions and policies of the EU.3 As a result, the Council of Ministers could be said to have virtually no electoral mandate to act on our behalf in setting the policy agenda of the EU.

‘We are unable to exercise any choice about the direction of the EU policy agenda because none of the contests in which we choose the holders of political office in the EU are about EU policies.’

In the parties’ defence, election surveys repeatedly show that citizens care much more about the National Health Service, education

38 Demos Choosing Europe policies and employment policies than vague and abstract European issues. On the other hand, voters are unlikely to tell opinion pollsters that they are interested in Europe when the subject of the electoral contest is national government office. What about European elections – surely these are about Europe? Do not be fooled. Ironically, European elections are no more about EU policies than are national general elections. Ever since the first direct elections to the European Parliament (EP) in 1979, European elections have been about national political office and the national policy agenda. In a famous article following a detailed study of the first EP elections, Karlheinz Reif and Hermann Schmitt described EP elections as ‘second- order national contests’.4 And this it what they have been ever since. The impact of this ‘second-order phenomenon’ is twofold: (1) because EP elections are less important than general elections, there is less incentive for people to vote in EP elections; and (2) because the elections are really about the performance of national governments, people will vote differently than they do in a national election – either sincerely instead of strategically (‘vote with the heart’) or to punish governing parties (‘put the boot in’).5 Reif, Schmitt and their team have confirmed these propositions in successive studies. For example, Figure 1 shows that in the 1989 and 1994 EP elections, electoral turnout in all member states (where voting is not compulsory) was much lower than in national elections. And about 20 per cent of voters supported parties they would not have voted for at national level. This explains the success of the Greens in the 1989, extreme right parties in France, Germany, Italy and Belgium in 1984 and 1989, the Labour Party’s landslide in 1994 in Britain and the unusually high votes for the Scottish National Party and Plaid Cymru in all EP elections. The only exception to this rule is Denmark, where EP elections actually are about Europe, which produces completely different party systems for national and EP elections. Elsewhere, the victors in EP elections (the MEPs and the EP party groups) have equally as weak a mandate to represent voters in the EU policy process as national governments in the Council.

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Figure 1 Lower turnout and protest voting in EP elections.

Percentage turnout Percentage who in EP elections voted for a different compared to the party in the EP previous national election than the general election party they would support in a national general election

Member State 1989 1994 1989 1994

Belgiuma Ϫ3 Ϫ31319 Denmark Ϫ38 Ϫ36 35 43 France Ϫ17 Ϫ25 27 41 Germany Ϫ22 Ϫ18 12 14 Greecea Ϫ4 Ϫ98 12 Ireland Ϯ0b Ϫ24 29b 24 Italy Ϫ10 Ϫ11 20 21 Luxembourga Ϫ3b Ϯ0b 15b 14 Netherlands Ϫ38 Ϫ43 12 20 Portugal Ϫ22 Ϫ33 10 13 Spain Ϫ16 Ϫ18 22 13 United Kingdom Ϫ39 Ϫ41 13 16 Average Ϫ18 Ϫ22 18 21

Notes: a = member states where voting is compulsory; b = cases were national elections and EP elections were held concurrently. Source: Data from the 1989 and 1994 European election voter surveys, cited in Van der Eijk C and Franklin M, eds, 1996, Choosing Europe? The European electorate and national politics in the face of Union, University of Michigan Press, Ann Arbor, Michigan.

This was illustrated more than ever in the 1994 elections, when for the first time there was a possibility of connecting EP elections to the process of selecting the Commission President. The Maastricht Treaty had given the EP the power to vote on the candidate for Commission President immediately following the European elections. However, different candidates for Commission President were not put to the electorate. Instead, Jacques Santer was chosen by national governments in

40 Demos Choosing Europe the Council and the parties in national government enforced this candidate on their MEPs in the subsequent vote in the EP.6 Most countries hold referenda when the EU makes major policy or institutional changes Surely these are about Europe? Not so: even referenda tend to be as much or more about the popularity of the national government. The famous Danish ‘No to Maastricht’ was a vote against an unpopular Danish Conservative government. The subsequent ‘Yes’ in the second referendum was proposed by the Social Democrats, who had just won a landslide victory in a general election. Had the national election been closer and the Conservatives formed a minority government, the second referendum would probably also have been ‘No’.

Possible remedies to choosing Europe’s leaders and policies Will we ever be able to choose clearly for or against new steps towards European integration or a particular EU policy proposal? The answer is yes but not through any of the means currently available. What is needed is the introduction of different kinds of political contests, in which citizens are able to chose between rival candidates for EU political office and rival projects for political action at the European level. Here are three proposals for such contests.

A genuinely ‘European’ EP election The fact that EP elections do not work does not necessarily mean that they should be consigned to the scrap heap. Through successive treaty reforms, the EP has become an equal player in the EU legislative process with the Council. The real issue is how to connect the policy actions of the party groups in the EP to choices made by voters in EP elections. The only way is through a genuinely ‘European’ electoral contest, whereby voters make choices between rival European candidates on the basis of European party manifestos. This may sound far-fetched but could happen if European elections work as follows:

there is a single electoral system, which is (a) proportional and (b) allows voters to choose individual candidates rather

Demos 41 Demos Collection 13/1998

than just parties – for example through ‘open list’ proportional representation or single transferable vote the role of national parties in controlling the selection of candidates is minimised, for example with (a) regional constituencies/party lists and (b) the order on the list determined by internally democratic, regional party organisations parties which are members of transnational party federations fight the campaigns with European rather than national manifestos.

Some of these practices could be established through a uniform electoral procedure, which introduces regional rather than national constituencies. However, this by itself would be insufficient. What is also needed is a regulation under the Treaty on European Union ‘party article’ (Article 191 [ex 138a]).7 This Regulation providing for the establishment of parties at the European level should state that a ‘Euro-party’ can receive a major subsidy from the EU budget (relative to the total number of votes for that party in the previous EP election) to fight an EP election campaign, if:

the Euro-party accepts the principles of liberal democracy, as defined in the European Convention on Human Rights and the constitutions of the EU member states the Euro-party has member parties (or individual members) in at least three quarters of the member states of the EU the Euro-party adopts a common manifesto for an EP election all the candidates from the member parties of the Euro-party sign the EP election manifesto no member party of a Euro-party issues its own separate election manifesto in an EP election campaign the Euro-party chooses candidates for EP elections in regional party units via internally democratic means (such as one member, one vote)

42 Demos Choosing Europe

the EP group of the Euro-party contains only those MEPs from the member parties of the parent Euro-party.

The likely result of such a regulation would be that only the Party of European Socialists, the European People’s Party (of Christian Democrats and conservatives), the European Liberal, Democrat and Reform Party, the European Federation of Green Parties and the European Free Alliance (of regionalist parties) would qualify as ‘Euro- parties’.8 The member parties of these alliances would then be required to contest EP elections as non-national contests and could be held accountable to their EP election manifestos. Other parties would still be free to fight EP elections on national,anti-European or regional manifestos. But there would be incentives for the ‘core’ parties in every member state to join a Euro-alliance.And once they had done so, their ability to fight EP election campaigns on national issues and to control the selection of their MEPs would be dramatically reduced. MEPs in all the major political groups would be dependent upon common European-wide policy commitments and a devolved system of reselec- tion. As a result, there would be a real connection between voters’ choices and EP policy stances for the first time.

A separate election of the Commission president A second contest could be held over who gets to control executive power at the European level. Executive power in the EU single market, in terms of the monopoly on legislative initiative and monitoring policy implementation, is exercised by the European Commission. The Commission is currently selected by national governments and is subject to a simple majority vote in the EP.This guarantees that the Commission president is inevitably a lowest common denominator candidate of the EU governments (remember that Jacques Santer was the British Conservative’s choice, after vetoing the ‘federalist’ Jean-Luc Dehaene). And because national governments are not elected for the purpose of choosing a Commission president there is no connection between voters’ choices and the individual who holds this powerful office.

Demos 43 Demos Collection 13/1998

Choosing a Commission president by a majority of governments would overcome the lowest common denominator problem and produce a contest for the office. But with several member states opposed to the Commission, this would provoke a serious legitimacy crisis. A section of the EP consequently argues that, following the logic of the parliamentary model of government, the selection of the Commission should be shifted to a majority in the EP. But the parliamentary model at the European level is neither desirable nor appropriate. First, as in all parliamentary systems, the majority in the EP would be forced to support whatever the Commission proposes. This would reduce the ability of the EP to amend legislation and scrutinise the Commission. There would be no point in introducing genuine elections to the EP, only to hand over the policy agenda to an unaccountable Euro-government.Second,and linked to this issue,a fusion of executive and legislative power in the EU would create a ‘federalist’ alliance between the Commission and the EP. To prevent incremental centralisation of policy by Commission–EP subterfuge, the two institutions should be pitted against through the establishment of separate electoral constituencies, which would democratise the current balance of powers.

‘Opinion polls repeatedly show that across Europe there is no longer a “permissive consensus” in favour of European integration taken forward by government ministers, unaccountable politicians and unelected technocrats in Brussels. This is a potentially explosive situation that is already provoking widespread public opposition to the EU.’

To establish a connection between voters’ choices and policy action in the executive arena, therefore, the only solution is a separate electoral contest for the Commission presidency. This could be done by a direct election for the Commission president.9

44 Demos Choosing Europe

An alternative could be an electoral college composed of all national MPs and the MEPs. Such a college could be based on an allocation of votes to each MP and MEP across in proportion to the population of their country. The contest could then be conducted as follows:

candidates for the Commission president are nominated with the signature of at least 10 per cent of the MPs and MEPs in every, members state of the EU each candidate is required to propose a manifesto of policies he/she will pursue as Commission president one week after the EP elections, MPs and the newly elected MEPs cast their votes for one or other candidate for the Commission president in a secret ballot if a candidate gains a simple majority of all votes cast he/she is elected if no candidate gains a simple majority, the two highest ranking candidates go through to a second round (perhaps a week later) the maximum period in office of a Commission president is two five year terms.

If a candidate is backed by a section of the MPs and MEPs in every member state, a section of the élite in every country would be responsible to their electors for the actions of the winning candidate. This would be give more legitimacy to the Commission president than allowing a Council majority to chose. Moreover, such a contest would most likely be between a centre-left and centre-right candidate, with competing agendas for EU action rather than about national policy issues. In other words, this contest could not be a ‘second order national contest’. Finally, the individual members of the Commission could still be nominated by each national government, to ensure national participation in the EU executive, under the overall policy guidance of the president. For the first time, the post of the key holder of executive authority over the overall policy agenda of the EU would be contestable and democratically legitimated.

Demos 45 Demos Collection 13/1998

Europe-wide referenda Finally, in addition to allowing European voters to choose their legisla- tors and executors, why not allow them to vote on specific policy issues relating to the EU? These should be different to referenda on EU membership, treaty reforms or EMU, where European issues tend to become mixed up with contests for national office. To maximise the disconnection from national policy questions, EU policy referenda could be held simultaneously in all member states of the EU, for example at the same time as the EP elections. There could be two types of referenda:

a legislative proposing ballot – where a new legislative issue is put on the agenda of the EU, upon which the Commission, Council and EP are legally bound to act a legislative blocking ballot – where an existing piece of EU legislation is overturned.

The procedure for these referenda could operate as follows:

a ‘Europe referendum’ could be held if a certain number of signatures (as a percentage of population) are collected in three quarters of EU member states a referendum must secure a ‘double majority’ to be adopted, where (a) there is a simple majority of all those who voted in support of the proposal and (b) there are majorities in support of the proposal in a majority of EU member states.

Moreover, different types of majorities could be required for the different types of referenda, such as a two thirds majority for a legislative proposing ballot as compared to a simple majority for a legislative blocking ballot. Overall, these provisions would provide a ‘safety valve’ against an intergovernmental consensus which is very different from the generality of European public opinion. On the one hand, such referenda could be used to unblock the EU policy process, where one or two governments

46 Demos Choosing Europe continue to veto a major policy change that is supported by a majority of Europe’s voters (such as a European-wide ban on tobacco advertising). On the other hand, these referenda could be used to prevent unpopular measures being adopted by governments without public support. Either way, Europe’s voters would be able to decide their own destiny.

Let Europe’s citizens make the choice Europe is about to enter a fundamentally new stage of economic and political integration with the process of EMU, the removal of internal barriers to the free movement of people (as a result of the Amsterdam Treaty), and the enlargement of the EU to the countries of Central and Eastern Europe. However, opinion polls repeatedly show that across Europe there is no longer a ‘permissive consensus’in favour of European integration taken forward by government ministers, unaccountable politicians and unelected technocrats in Brussels. This is a potentially explosive situation that is already provoking widespread public opposition to the EU. The solution is neither to abandon European integration nor to ignore the European public. Instead, it is to use the renewed public awareness of the significance of the EU to its maximum potential, by allowing European citizens to choose between rival policy agendas for the EU. But this can only work if there are contests over EU political office and the EU policy agenda that are disconnected from petty national partisan competition for national governmental office. Some citizens will inevitably be losers in these contests: with their candidates and policy choices being defeated. Through successive choices, however, ever larger sections of Europe’s public will see the institutions and policies of the EU as channels for their own political desires.

Demos 47 Notes

1. Klingemann H-D, Hofferbert R and University of Michigan Press, Budge I, 1994, Parties, policies and Ann Arbor. democracy, Westview Press, Boulder, 6. Hix S and Lord C, 1996,‘The Colorado. European Parliament and the 2. Butler D and Ranney A, 1994, confirmation of Jacques Santer as Referendums around the world, President of the Commission’, Macmillan, London. Government and Opposition, no 31, 3. Carrubba C, 1998,‘The electoral 62–76. connection in European Union 7. The party article states that:‘Political politics’,manuscript, Stony Brook parties at the European level are College, New York. important as a factor for integration 4. Reif K and Schmitt H, 1980,‘Nine within the Union. They contribute second order national elections: to forming a European awareness a conceptual framework for the and to expressing the political will of analysis of European election the citizens of the Union’. results’, European Journal of 8. On the development of these parties Political Research, vol 16, see Hix S and Lord C, 1997, Political no 2, 3–44. parties in the European Union, 5. Oppenhuis E,Van der Eijk C and Macmillan, London. Franklin M, 1996,‘The party 9. Laver MJ, Gallagher M, Marsh M, context: outcomes’ in Van der Eijk Singh R and Tonra B, 1995, Electing and Franklin, eds, Choosing Europe? the president of the European The European electorate and national Commission,Trinity College, politics in the face of union, Dublin.

48 Demos Eastern approaches Heather Grabbe* and Kirsty Hughes†

Social and cultural issues for EU enlargement

Enlarging to embrace the countries of central and eastern Europe (CEE) could be the biggest challenge the EU has ever faced. It means extending institutions and policies designed for fairly wealthy, developed societies to 100 million people with an average income of less than a third of Western European levels. More than this, it involves integrating societies with four decades or more of communism behind them, and still in the throes of major economic and political transformation.

‘Enlarging to embrace the countries of central and eastern Europe could be the biggest challenge the EU has ever faced. It means extending institutions and policies designed for fairly wealthy, developed societies to 100 million people with an average income of less than a third of Western European levels.’

*Research Fellow of the European Programme at the Royal institute of International Affairs. †Head of the European Programme at the Royal Institute of International Affairs.

Demos 49 Demos Collection 13/1998

Both EU and CEE élites have signed up to enlargement, at least in principle. Formal accession negotiations are underway with the Czech Republic,Estonia,Hungary,Poland and Slovenia,along with Cyprus, and more money has been pledged to another five (Bulgaria, Latvia, Lithuania, Romania and Slovakia) to help them prepare for eventual accession. Only a few politicians in either member or applicant countries publicly oppose enlargement but there are more doubts behind the scenes as the more controversial implications begin to emerge.Will enlargement prove to be the undoing of the whole European integration project? Will the EU unravel as its institutions and finances come under strain? The political and economic implications are enormous but there are also other, often neglected, dimensions of cultural and social change. A dark legacy of the communist period is the endemic lack of trust in societies that lived for so long in a climate of fear. The process of integration into the EU will be hampered if mistrust and uncertainty in relation to state institutions and structures are not reduced. And these problems are part of the wider question of how stable and well embedded democracy is in the different CEE countries. Although they have passed the point of no return to the communist past, tendencies towards authoritarianism have emerged in Slovakia and clientelism has emerged across the region; it is not a foregone conclusion that all of CEE nation states will end up looking like West European forms of democracy. There are social and cultural questions for the EU side, too, particularly given the EU’s failure to develop its own legitimacy and a sense of collective identity among its populations.Will the enlarged EU remain relevant to its citizens – especially those who feel they are losers in the contest for access to subsidies and structural fund monies – during the difficult process of reforming its budget and decision-making processes for enlargement? And what will its new Eastern citizens want out of integration? The enlarged EU looks set to face the same problems of legitimacy as the current Union. For post-communist societies, it is particularly ironic to be told how to democratise by an inherently undemocratic organisation like the EU. But it is difficult to remedy the democratic deficit in

50 Demos Eastern approaches

EU decision-making processes, given the lack of a European demos. Moreover, people across the EU identify with being ‘European’for different reasons and to very different extents. French citizens looking for a Europe puissant to counter American influence identify with the EU differently from Catalans who see it as a way of preserving a specific regional identity. And then there are those awkward countries like Britain, where ‘Europeanisation’ of national identity has hardly happened at all. This combination of ‘cultural deficit’and ‘democratic deficit’ will be even more problematic for the EU as enlargement proceeds. The enlarged EU will have to try to forge a sense of belonging among the populations of CEE if it is to integrate such different economies and societies. At first, this looked straight forward: many East and Central Europeans were enthusiastic about ‘returning to Europe’ after 1989 and, at that time, joining the EU was widely seen as an important part of regaining their European identity outside the Soviet sphere of influence. But now, almost ten years on, there is anxiety that the EU’s embrace might prove suffocating, especially in countries that are only just refounding their identities as independent states. The process of Europeanisation is already having a pervasive effect on post-communist economies and societies. From the progressive alignment of national laws with Union legislation to the arrival of EU products on the supermarket shelves, accession will mean that these countries look increasingly like their Western neighbours. This is a welcome process if Europeanisation means participating in the EU’s stability, security and prosperity. But there is also widespread awareness of the dilemma of how to retain different identities of ‘how to be European without at the same time dissolving in Europeanness like a lump of sugar in a cup of coffee’, as former Czech prime minister Vaclav Klaus put it.1 This question has a familiar ring in EU debates about whether a homogenous ‘European’ culture will emerge and overwhelm national idiosyncracies. For central Europeans, there is a lot more at stake than losing national sausage varieties and licensing hours. The role of nationalism in post-communist politics and the large minority populations left in several countries make identity a central theme in

Demos 51 Demos Collection 13/1998 domestic debates. It is understandable that many Central and East Europeans fear being overwhelmed by larger, richer EU countries. They could thus bring new perspectives on EU cultural policy. Issues like protection of minority languages through audio-visual policy and building a ‘Europe of the regions’ could be very important – and controversial – in countries which are still debating what it means to be Slovak, Slovene, Hungarian or Estonian.

‘Élites in the prospective member states are unwilling to speculate on what kind of EU they would prefer for fear of jeopardising their chances of joining, while their publics still have only hazy notions of what joining the EU will involve.’

The importance of the politics of identity across Europe is reflected in public attitudes towards enlargement, which show a mixture of hopes and fears. Overall, six in ten EU citizens think more EU member countries will make Europe more important in the world, culturally richer and more peaceful and secure.2 But there is opposition to paying for enlargement, with an average of 77 per cent thinking it should not be costly. And Austrians, German and Greeks on the border with CEE are worried that enlargement will increase unemployment in their countries. There is a great deal of uncertainty about the costs and benefits of enlargement, with public opinion polls in both current and prospective countries showing large numbers of ‘don’t knows’ on key questions. There are also potential barriers to the integration of new member states because of general attitudes to foreigners. CEE citizens will eventually be able to travel and work freely throughout the Single Market (even if transitional periods are imposed at first), but how will they integrate socially and culturally? Already 45 per cent of EU citizens think that there are already too many foreigners living in their country, and migration is a particularly sensitive issue for countries on the EU’s eastern border. This anxiety about the arrival of ‘foreigners’ is shared by central and east Europeans.Worries about rich westerners buying vast tracts of land

52 Demos Eastern approaches and property are already an important feature in political debates in Slovenia, Poland and the Czech Republic. And the populations of CEE are aware that joining the EU might have costs, even if the details are unclear as yet. Public support for eventual accession to the Union is now lower than in the early years of transition. On average, two thirds of those CEE citizens who have the right to vote would vote ‘yes’ on a referendum on EU membership.3 But this average conceals a major gap between the two most enthusiastic countries, Romania and Poland, where around three-quarters support accession, and the rest. In the other eight countries those who would vote for EU membership accounted for less than half of the total, ranging from 49 per cent in Bulgaria down to 29 per cent in Estonia.Around another quarter to a third of respondents in Slovakia, the Czech Republic and the Baltic states were undecided, although the number who would vote ‘no’ remains small. What effect will enlargement have on EU policy making? One way to explore this is to ask: ‘Which member states will the CEE countries resemble?’ Most of the CEE countries are small, like the strongly integrationist Benelux countries, which found advantages in seeking a larger role in the world through the EU and protecting national identity through its larger framework. The new members are also likely to share the poorer Mediterranean states’ central concern about budget- ary transfers. They might also become difficult partners: Poland and the Czech Republic have already had a number of trade disputes with the EU,and their response to the European Commission’s demands has been rather less quiescent than the other applicants’.Might they be the new ‘awk-ward squad’,resembling Denmark or even Britain under the Conservatives? New member states will also bring their own specific interests, too. So far, they have had to accept whatever the EU asked of them, but as member states the CEE countries will have a role in shaping European integration. At present, CEE debates about the specifics of European integration are still in their infancy, although of course there has been considerable debate over NATO membership in the Czech Republic, Poland and Hungary. Élites in the prospective member states are unwilling to speculate on what kind of EU they would prefer for fear

Demos 53 Demos Collection 13/1998 of jeopardising their chances of joining, while their publics still have only hazy notions of what joining the EU will involve. But there are some indications about preferences on specific EU policy approaches. The ten applicants have rather different experiences of regional–centre relations which could affect their attitudes to subsidiarity and multi-level decision-making. Terms like ‘federalism’ and ‘union’ have negative resonances in states which only recently left the Soviet Union, the Yugoslav federation or the dissolved Czechoslovakia. By contrast, Poland and Hungary seem more pro-integrationist. In Estonia and the Czech Republic, the countries which have taken the most avowedly free-market approaches to transition, there is criticism of the EU’s protectionist tendencies and social-democratic elements of EU policies. These stand in sharp contrast to the speed of radical economic reform in much of CEE. There has also been some debate on this issue in Poland between those who see the EU as overly beholden to social democracy and those who see it as too free-market. The process of economic and political reform will also affect attitudes to integration in the years preceding accession. Populations might start to blame the EU if their political leaders cannot resist the temptation to argue that the Union has forced painful reforms on them. Opposition to EMU can already be found in some of the right-wing parties in Poland and the Czech Republic, but there is little debate as yet in other countries. CEE élites recognise that joining the single currency is inevitable, not just because of accession but because of trade links with the prospective Euro-zone, yet national currencies are important symbols of hard-won independence in the region. Disputes and crises over the implementation of EMU will have implications for, and impacts on, opinion in the CEE zone as well as within the Union. Politics is all about choices, not necessarily maintaining a consensus, and an encouraging sign of the CEE countries’ democratic development is that differences in political preferences are beginning to emerge, both between and within post-communist societies. But this means that the debate about membership of the EU looks set to be more hotly contested over the years ahead. Potentially, there will be continuing opposition to aspects of the integration project even if majorities vote for membership

54 Demos Eastern approaches in referenda. For the EU to be legitimate and relevant to its new citizens, it will have to accommodate their interests and preferences. Even if the EU can dictate terms to its poorer eastern cousins during this period of negotiations, it will eventually have to take account of their preferences as full members, and to cope with the resulting diversity.Whether it will do so more successfully after enlargement remains an open question. EU enlargement will also have wider implications for European integration. Central and eastern Europe will bring new perspectives into the EU, and new members’ stronger and rather different links with the former Soviet Union could open out the EU to a wider range of countries and outlooks. But it is critical to ensure that the process of integration into the EU does not cut the links the applicants have been forging with their eastern and southern neighbours. If accession creates new dividing lines between the ‘ins’, ‘pre-ins’ and definite ‘outs’, it will be detrimental to cultural and social integration across the region.Already there are proposals to block free movement of workers from new member states for a decade or more, and countries like Poland are under pressure to restrict access to their borders for Russians, Belorussians and others. Extending the EU’s borders eastwards will be of limited benefit if it simply means the development of a bigger ‘Fortress Europe’. The enlargement issue has taken a back seat in recent debates on the future of the EU, dominated as these have been by controversy over economic and monetary union. In turn, discussion of enlargement has been largely concerned with the politics and economics of making eastward expansion palatable to the EU’s members. As a result, major social and cultural dimensions of enlargement and integration have been neglected. If enlargement is to be successful, the EU must address the complex and thorny issues of social and cultural identity, mission and legitimacy and the doubts and anxieties they provoke across Europe – in the CEE and in the EU itself.

Heather Grabbe and Kirsty Hughes are authors of Enlarging the EU eastwards, published by RIIA/Cassell in March 1998.

Demos 55 Notes

1. Klaus V,1994, Ceskà Cesta, Prague, 3. CEE public opinion polls published 136. in the European Commission’s 2. EU public opinion polls published Central and Eastern Eurobarometer in the European Commission’s no. 7, March 1997. Eurobarometer no. 48, March 1998.

56 Demos Euro-capitalisms John Plender

Diversity and convergence in EU enterprise cultures

The stereotype is familiar. There are, as we all know, two cultures of European capitalism. One, dubbed Anglo-Saxon or Anglo-American, is individualistic, highly transactional and geared towards equity ownership. It is the British model of the free market and the shareholder firm and it is closely allied to American enterprise culture. The other culture of capitalism, prevalent in continental Europe, is characterised by social cohesion, a model of the firm in which ‘stakeholders’ or ‘social partners’ play a key role in governance, and high levels of debt, while banks play a more important role in the economy than capital markets. These models are frequently held up as the basic choices available to European enterprise culture:as globalisation proceeds,will the Anglo-American model, whether in its ‘Blairite’ or ‘Thatcherite’ form, come to dominate Europe or will the ‘Rhenish’culture of the ‘social market’ retain its hold over the major continental economies? This categorisation of the European Union’s enterprise cultures is, of course, an over-simplification, most notably in relation to the very diverse systems of continental Europe. Yet if we look at European

Leader and feature writer, Financial Times.

Demos 57 Demos Collection 13/1998 capitalism through the narrow but vitally important perspective of pension provision, it is the stereotypical view of the British system that is potentially more misleading. Analysis indicates how complex the cultural patterns of European capitalism actually are and reveals unsuspected affiliations between the UK model and the financial cultures of other EU states.

‘Analysis indicates how complex the cultural patterns of European capitalism actually are and reveals unsuspected affiliations between the UK model and the financial cultures of other EU states.’

Over 60 per cent of the equity shares quoted on the British stock market are owned by institutional investors, the most important being pension funds. Their investments are usually recorded in official statistics as assets of the personal sector. Yet members of the standard British occupational pension scheme have no ownership rights in those investments. Their only asset is an intangible one: the promise of a retirement income related to final pay. If accounting practice reflected substance rather than legal form, employers would disclose a liability for the pensions of the workforce in their balance sheet, together with the value of the assets set aside to finance that earnings- related obligation. While this would increase the aggregate liabilities of the corporate sector, much of the equity would cancel out because of the cross-holdings. Seen in this light, the British capital markets have more in common with the Japanese model than the ‘Anglo-Saxon’ stereotype. And the British corporate sector turns out to be as highly leveraged as much of continental Europe. This underlines the point that the important distinctions in capital market structures and corporate governance in post-war Europe have turned not so much on equity versus debt as on the wider approach to pension provision. They are also bound up with the nature of the support – or lack of it – offered by financiers to industry and commerce. In Britain, managerial failure has been addressed

58 Demos Euro-capitalisms since the 1960s through the mechanism of a market in corporate control. The continental approach has relied more on intervention by banks or the state. There are other respects in which the British culture is less differentiated from that of its ‘Rhenish’ counter-parts in the EU than is generally assumed. It has obvious similarities, for example, with the Netherlands, in that both countries rely heavily on private funded pensions. This seems counter-intuitive, given the solidaristic and corporatist Dutch ethos, which might naturally point in the direction of a bigger role for inequality-reducing pay-as-you-go public provision. But the Dutch also have a deep-rooted mercantile and financial tradition, which in pensions policy has pre-empted a bigger role for the state. Nor is the standard characterisation of British capitalism as inherently ‘individualistic’ entirely accurate. It is true that the emphasis on private pensions resulted partly from a failure to achieve political consensus over second-tier state provision. Yet the result is that social cohesion finds expression at the level of the company. The form is paternalistic, with worker-trustees usually enjoying only minority representation. But that nonetheless comes closer to the German view of the company as a community than it does to the corporate ethos found in much of Southern Europe. The big and very un-German flaw in the British patchwork of public and private provision is that it permits extremes of inequality in retirement. In other respects Britain is closer to Italy. For while Italian corporate governance is of the ‘insider’ type, with control of quoted companies being exercised by a tightly-knit group of inside shareholders, the most dynamic part of the Italian economy consists of unquoted family businesses that depend heavily on the banking system for financial support. Italian bankers, like their British counterparts, do not go in for German-style relationship banking. Their distrustful corporate clients also prefer to borrow from a wide group of banks. Note,too,that the British approach to corporate governance is becoming less of an ‘outsider’ system because of the growing concentration of ownership among British investment institutions. This was well demonstrated in the recent takeover bid by a US company for

Demos 59 Demos Collection 13/1998 the industrial group T&N, where four institutions alone held 48 per cent of the equity of the British company. The remaining shareholders were thus in a situation not unlike that of a disadvantaged minority group in continental Europe. Concentrated ownership also gives British institutional investors a greater incentive to engage in shareholder activism, which will increase polarisation between powerful insiders and free-riding outsiders. So Britain’s enterprise culture has many elements in common with that of continental countries. But if the culture of Anglo-Saxon capitalism is not as remote from the rest of Europe as is sometimes assumed, continental Europe does remain distinctive in showing a stubborn reliance on state pensions funded on the pay-as-you-go principle. This raises major problems for the future, with large implications for social cohesion and solidarity between and within EU member states in the next century. For much of the post-war period the generosity of the benefits has permitted substantial trade-offs within society. In Germany, for example, returns to savings were held low in order to provide industry with subsidised capital. These subsidies were part of an intricate set of stakeholder relationships which encouraged non-opportunistic, long-termist behaviour by employers, employees and banks.

‘Today savers can take their capital abroad to seek out the highest global return. Employers can create jobs wherever in the world unit labour costs are low. Capital is thus reasserting its global dominance over labour. With lifetime employment also becoming a rarity, institutional forms of stakeholding involving cooperation at national or regional level are under severe strain across the EU.’

At the other extreme, high levels of household savings in Italy provided more direct subsidies to the state. In an economy surrounded by exchange controls, Italian savers invested in government bonds on which the real return was eliminated for substantial periods by unanticipated

60 Demos Euro-capitalisms inflation. In neither case was there any need for an active market in equity shares. Germans acquired their sense of a stake in national prosperity through workplace arrangements that delivered an efficient and humane form of capitalism where ownership played little part. For Italians the stake was restricted to those who enjoyed the benefit of family ownership in firms. Globalisation and disinflation have now reduced the scope for such cross-subsidies. In northern Europe the post-war compromise between capital and labour is being eroded because the system was conditional on limited mobility of factors of production across national borders. Today savers can take their capital abroad to seek out the highest global return. Employers can create jobs wherever in the world unit labour costs are low. Capital is thus reasserting its global dominance over labour. With lifetime employment also becoming a rarity, institutional forms of stakeholding involving cooperation at national or regional level are under severe strain across the EU. At the same time the growing sophistication of financial markets is undermining relationship banking and imposing a more transactional culture. Big corporations now routinely cut out the banking middle- man and go direct to the market to raise money more cheaply via IOUs. The financial sectors of Europe are less able to operate as national utili- ties and the banks are losing their incentive to correct managerial failure. Because there is no large pool of pension money seeking out equity returns in the newly liberalised markets of continental Europe, foreign investors take an ever-increasing stake in the small pool of European equity. Aggregate foreign shareholdings of 40 or 50 per cent are now common in large French and German companies. Meanwhile, the financing of welfare is becoming increasingly difficult – witness the structural budget deficits all across Europe. The difficulties can only increase. In most of continental Europe the proportion of retired people relative to those in work is set to rise dramatically in the early part of the twenty first century.Yet contribution rates in predominantly pay-as-you-go pensions systems have been set at levels which cannot meet the bill for the current high levels of benefit. In effect, the generation that lived through the war has extracted a

Demos 61 Demos Collection 13/1998 price from its children, in the form of a welfare state whose generosity is not sustainable beyond the lifetime of the wartime generation. The natural response of some governments is to shift more of the burden of pension provision onto the private sector. But the notion that countries can save their way out of demographic pressure is economically controversial; and there is no escaping the fact that a greater number of retired workers will wish to consume more of the output of a smaller workforce regardless of how pensions are financed. The better argument for private funding is that it might provide a more legitimate mechanism for defining the relative entitlements of these two groups. And in northern Europe where institutional stakeholder capitalism appears to be unravelling, there must be a case for finding new ways of giving people a stake through ownership. If private pensions take the form of ‘money purchase’ or defined contribution arrangements, workers who cannot hope for lifetime employment would at least have a personal, identifiable stake in national and global prosperity. It would provide some incentive for employees to commit themselves to the firm in the knowledge that the labour-capital compromise had acquired a transferable market value. The growth of an equity culture through pooled pension arrangements would also pave the way for institutional investors to play the monitoring role from which the banks are retreating. Any move in continental Europe towards this more individualistic culture of capitalism will be a slow process. The universal coverage and generosity of many state pension systems means that there is no political constituency for change except in extreme fiscal crisis. Yet the market pressures are plain: they point to increasing convergence in the EU heartlands on the Anglo-Saxon model, as personified by Tony Blair if not by Margaret Thatcher. That is not to say that it will cease to be possible in future for European capitalism to reflect divergent national preferences. But those preferences will probably be expressed more through differences in the distribution of ownership rights among stakeholders and less through the institutional bargains and trade-offs that have characterised much of Northern European capitalism in the past fifty years.

62 Demos European multiple currencies Dave Birch

The e-Euro and monetary union

European Union finance ministers recently rejected a call by the European Parliament for the introduction of an electronic Euro (the e-Euro) as part of the preparation for the single currency.1 Why? From a technological perspective, the e-Euro looks like an interesting idea. It raises a subversive question. Never mind the e-Euro as a precursor to Euro notes and coins: does the Euro need to exist physically at all? Is there really any need to spend enormous sums of money on replacing the 17 billion banknotes and 76 billion coins in circulation in the EU? In Europe today there are more than 100 million stored-value ‘smartcards’ in use. Some two thirds carry electronic cash2 of some description (these are known as electronic purses, or e-purses) and most European countries will be moving their plastic ‘dumb’ magnetic stripe payment cards to smartcards in the short to medium term. Surely it makes sense to exploit Europe’s advanced use of this technology in the context of significant innovation in the EU countries’ means of exchange? In a country such as Germany, where there are already more than 40 million e-purses in use, the natural way to manage the shift to the Euro would be to introduce a wholly virtual currency: a currency

Director, Hyperion Systems Ltd.

Demos 63 Demos Collection 13/1998 that is as real as any other but only ever exists in electronic form. Even if other countries don’t, couldn’t the UK deploy the world’s first twenty first century currency? This article explores some the possibilities and implications of this.

Smart solutions Europeans are becoming increasingly familiar with the smartcard, which is a plastic card with a computer memory and microprocessor on board. It can combine many functions – credit, debit, identification and more. Credit and debit cards are being converted to smartcards in most countries (in France they have all been smart for some years). Increasingly, loyalty schemes are moving over to smartcards (in the UK, more than 9 million Boots Advantage cards and Smart consor- tium cards have been issued). As phonecards and pay television cards, inside digital mobile phones and in many other applications, smartcards are becoming ubiquitous and consumers seem happy with them. No wonder that in the UK alone there will be some 200 million in use in the year 2000. Around 2 billion will be in use Europe-wide in 2002 at the end of the Euro transition period,3 during which the Euro and national currencies will be in parallel circulation. Suppose, then, that the decision were taken to issue the Euro in electronic purses only. Would this impose a severe penalty on retailers and banks? I don’t think so. Across the continent, automated teller machines (ATMs), cash registers and telephones are being converted to handle smartcards anyway.4 As things stand, in the next year or two these devices (as well as vending machines, parking meters and so on) may well have to be converted twice: once to handle stored-value smartcards and then a second time to handle the Euro. One might expect suppliers and customers alike to opt for one change only – either to Euros or to smartcards – and since in the long term the use of smartcards will minimise costs, a single transition to support electronic purses would make life easier for all concerned.5 Since the rapidly increasing number of smartcards in use inevitably means a rapidly increasing number of smartcard interfaces – in TV set-top boxes, PCs,

64 Demos European multiple currencies payphones, vending machines and (of course) at retail points of sale – the smartcard interface will become universal. So, if consumers have the cards and the retailers (real and virtual) have the interfaces, why bother with paper and metal? It isn’t just about cash cost savings: the issuing of an e-Euro would have additional benefits, including the issuers of e-purses having more incentive to work towards interoperability and cross-border acceptance. This would hopefully mean that consumers would use their cards throughout the EU (whether in retail shops or on the Net), thus stimulating trade.6

Ready for change Consumers seem to be expecting such a change anyway. A recent Gallup poll found that almost two thirds of the UK population thought that notes and coins would vanish in the future and almost half of those interviewed thought that physical cash would disappear within a decade.7 One fifth thought that they would wave good-bye to the folding stuff within five years. Much of the agonising over EMU throughout the European Union has centred on supposed public attachment to national hard currencies. But many citizens – with the UK in the vanguard – are already accustomed to carrying out a high proportion of their transactions with credit and debit cards. There is already a growing social acclimatisation, therefore, to radical change in the use of money. In light of this, one might even take the discussion further and say that if there are sections of the population that want to continue to use notes and coins, then they should pay for them. This could be achieved easily and painlessly by allowing financial institutions to differentially price physical and electronic value. This might be achieved transpar- ently, so that withdrawing e-cash from your bank account would be free whereas withdrawing banknotes would attract a fee, or it might be achieved through ‘back door’ differential pricing so that consumers withdrawing e-cash would get air miles or Sainsbury’s Rewards and customers withdrawing bank notes would not.We are seeing this kind of incentivisation in embryo in the Barclays’ Progress loyalty scheme,

Demos 65 Demos Collection 13/1998 which has been running in pilots since October and rewards customers for banking activity including the use of debit cards, direct debits, standing orders and loans.8 This kind of initiative could wean people away from notes and coins and we could then just let the existing stock die a natural death after joining the single currency. People would get used to loading up their e-purses with Euros, seeing their bank account in Euros and paying their credit card bill in Euros, even if they were never to see a Euro note or coin. There might still be a profit for central banks in the issuing of Euro notes and coins in the e-cash world and that is as commemorative or souvenir issues. In the same way that you can today, purchase a mint set of Sterling coins in a presentation case, so people might purchase sets of Euro notes and coins to hang on their wall, give to children as presents or stash away in vaults as some kind of investment. This vision, of an e-Euro with purely ceremonial physical notes and coins, seems to be an eminently sensible balance between practicality and symbolism. Realising this practical and symbolic implementation of the e-Euro would require cooperation and effort but certainly no more than is required anyway for EMU without e-cash.9 It’s not as if money already spent will be wasted, since almost two thirds of UK companies have yet to start preparing their IT systems for EMU. To give an idea of the costs that will be involved, Phillips, the Dutch electronics company, has estimated that the cost of upgrading its systems to conform with the requirements of a single currency will be more than triple the cost of preventing problems associated with the ‘millennium bug’.10 Against this, the cost of installing smartcard readers in PCs, TVs and telephones looks fairly reasonable.

Many bodies The e-cash world might then develop in even more interesting ways. Suppose that Europeans are required to pay their taxes in Euros. Actually, this would be a headache at present. Many tax authorities are not planning to accept the Euro as payment until the end of the

66 Demos European multiple currencies transition period in 2002, which means that businesses will have to keep two sets of accounts because their customers will be using Euros but their governments will not.11 Does this necessarily mean that all transactions would then be conducted in Euros? No. There remains plenty of scope for trading in air miles or anything else. The technological platform used to ease the transition to the e-Euro may have much wider consequences. Just as smartcards reduce the cost to the European Central Bank of creating a new currency, they would similarly reduce the cost to anyone else of creating a new currency.12 Two categories of potential entrants into the money business, who might want to take advantage of the reduced cost of issuing, spring to mind: these are geographic regions and multinational companies.

Local exchange It is not easy to operate monetary policy on averages across a currency area. Indeed, it is difficult enough running a country like the UK under a single currency, even though it has relatively well integrated regions.13 How do you set interest rates: according to conditions in Reading or in Runcorn? Why not allow regions to issue their own money and set their own monetary policy? Once consumers have their smartcards, the cost of creating ‘Wessex Shillings’ or ‘Yorkshire Brass’ is trivial. The overwhelming majority of personal transactions are local. Therefore, as a consumer I must consider the longterm value of ‘Surrey Snobs’ in relation to paying for my mortgage or buying a car but I need not have to calculate exchange rates in my head every time I park the car at Woking BR station because the prices there would be quoted in Snobs. Thus, the dreams of the local exchange trading system (LETS) enthusiasts could be realised but in a more practical and efficient way than any of the hundreds of schemes operating in the UK have been able to create so far.

Company cash This isn’t the place to go into the subject of privatised money in detail but it is worth observing that the steady evolution of corporate loyalty

Demos 67 Demos Collection 13/1998 schemes has already introduced new forms of ‘money lite’ that consumers show no sign of rejecting. If my employer were to propose paying part of my salary in Sainsbury’s Rewards because he or she were able to buy Rewards in bulk at a discount (part of which would, of course, be given to employees) that would be fine by me since my family goes to Sainsbury’s every week and spends lots of money there. If the Rewards were held on stored-value cards instead of as pieces of paper and there was a reasonably liquid market for them on the Net, I might well find them preferable to Euros. Perhaps Sainsbury’s Bank could stimulate competition by allowing, from 1 January 1999, consumers to open accounts in Sterling, Euros or Rewards. It is not only about retailers and banks, of course. Britain’s biggest stored-value issuer is BT, which sells some 25 million phonecards every year and has a ready made retail network of more than 60,000 cardphones in place to handle transactions.14 Suppose they decide to issue phonecards denominated in BT Talking Points or Disney Euros? What evidence is there that consumers would refuse to handle alternative units of account (created by non-bank bodies) if they were easy to understand and convenient to use?

The multiple currency future Debate on the future of economic integration of Europe has been fix- ated, understandably, on the mechanics and politics of EMU. But the arguments over the Euro have largely ignored the wider technological, social and commercial context. Technological change means that the key ‘monetary union’in progress is the convergence of the form of currencies on a common electronic format. The social dimension is the growing habituation of the citizens of EU states to card based payment systems and the realisation that electronic cash is inexorably taking the place of hard currency. And the commercial dimension is the growing capacity of corporations and localities to issue their own currencies in a common electronic format. This suggests that, whatever the fate of the Euro, there is not going to be a single EU currency. The hard Euro will operate alongside – and

68 Demos European multiple currencies will ultimately be replaced by – the e-Euro; and it will co-exist with multiple business and local electronic currencies. The future of policy for EU financial integration will not simply be about regulating a single European currency but about consumer protection and fair competition between public, private and voluntary sector currencies.

Demos 69 Notes

1. ‘EU reject e-Euro for EMU’ in 9. Brown D, 1998,‘E-commerce, e-cash Financial Times Virtual Finance and Europe’ in Europe Quarterly, Report, vol 3, no 2, 2. January, 49–50. 2. Birch D, 1998,‘Purse wars’ in 10. Banerjee J and Fersht P,1997,‘EMU Financial Times Virtual Finance threatens massive change for Report, vol 3, no 2, 8–9. finance’ in Management Accounting, 3. Penrose P,1997,‘Faith in the future’ October 1, 36. in Banking Technology, September, 11. ‘Bureaucrats drag feet on Euro 56–58. switch, posing hurdle to Common 4. Birch D, 1997,‘Do you take cash?’ in currency’. Wall Street Journal Europe, The wealth and poverty of networks, 4 February 1998. Demos Collection, issue 12, 22–24. 12. Birch D and McEvoy N, 1997, 5. Kouwenhoven J, 1998,‘Make or Electronic cash – technology will break’ in Banking Technology EMU denationalise money in financial Report, 15 February. cryptography, Springer, Berlin, 6. Pettitt J, 1998,‘EU refusal to go 95–108. digital with euro is missed 13. ‘Merseyside’s message for Helmut opportunity’ in Computer Weekly,19 Kohl’, Daily Telegraph, 23 February February, 12. 1998. 7. ‘Spider brain makes web innovation’, 14. ‘Plastic Treasure’, Guardian,25 Scotland on Sunday, 15 February September 1997. 1998. 8. ‘UK banks finally recognising concept of customer retention’ in Loyalty, February 1998, 10.

70 Demos Virtual Europe John Browning

Integration and the Internet

The European integration project knocks down borders; the Internet dissolves them. It’s hard to think of two late twentieth century trends that appear to be more complementary. Unfortunately this synergy only goes skin deep. There is a vast difference between bringing together and making whole. The sad and largely unnecessary truth is that – on present EU policies – the Internet is now more likely to enable Europeans to argue more vehemently about their differences than it is to help them find new dimensions ofunity.Europe may find itself squelching development of the Internet in the name of unity, or perhaps even vice versa. The heart of the problem is that the EU is building Europe from the top down while the Internet is growing from the bottom up. From monetary union through food-safety regulations, the European Union’s projects are often unpopular among European citizens. They are instead driven forward by European governments, who are determined to bring their citizens into harmony whether they actually agree or not. For now, at least, it’s possible to argue that this steamrolling over dissent

European Editor, Wired, and consultant.

Demos 71 Demos Collection 13/1998 demonstrates the essential nobility of the European project – its ability to ignore petty differences in the name of the higher calling of unification. But if that argument is to have any validity, then one key assumption must hold: preemptive unification must increase the chances that Europeans can later resolve the conflicts which they ignore in order to unify. Otherwise unification is at best futile and at worst a social and political time bomb. Unfortunately it is precisely this assumption which the Internet calls further into question.

‘The European integration project knocks down borders; the Internet dissolves them. It’s hard to think of two late twentieth century trends that appear to be more complementary. Unfortunately this synergy only goes skin deep: there is a vast difference between bringing together and making whole.’

The Internet – and the broad set of economic and social changes which come with it – challenges the conventional wisdom on the project of integration for Europe at several levels. Instead of regional markets, it is creating global ones. Instead of creating pressure to conform to social and cultural norms, the Internet creates new opportunities for each person or organisation to participate electronically in a community – or communities – that matches their interests. Instead of a bureaucracy dedicated to serving the citizen, the Internet promotes government that enable citizens to serve themselves. Taken together, such changes are already forcing new issues on to the European Union’s agenda. More important, though, they undermine the process by which Europe’s politicians are now pursuing their collective goal. To understand why the Internet and Europe are heading for a collision – and what can be done about it – we need to start by unpicking the impact of the Net in three spheres: economics, culture and politics.

Everybody’s an export The most manageable of the challenges to Europe created by the Internet is economic. For most of its history, the European Union has

72 Demos Virtual Europe concentrated on achieving the free movement of people, goods and services.And it has achieved a great deal. But now the Internet is changing the rules, in two ways. First, everything and everybody are now exportable – not just things that can be stuffed in a box and shipped across borders but also bank loans, investment advice and any number of other services that used to sell only face to face. It’s possible to deliver work in a different country from the one you sit in while working. Such new capabilities inten- sify existing debates on harmonisation of consumer-protection laws and the liberalisation of cross-border delivery of services. They also create new issues about labour and employment law and working conditions. So far, so routine. But raising the pressure is not all that the Internet does on trade issues; it also changes the shape of the playing field. The borders it dissolves are not just those which separate European countries from each other but also those which separate them from the rest of the world. And that has profoundly unsettling effects on the European Commission’s role in breaking down barriers to trade. As a regional entity, the EU has often and understandably been willing to trade off regional freedoms for global limitations. In order to convince, say, the French to lower national limits on the import of cheese or sit-coms, it has been willing to put up European controls on the free flow of goods and ideas.As the economy becomes increasingly globalised, however, that sort of trade-off becomes less viable. Worse, the EU’s own role in creating regulation becomes more muddled. When the World Intellectual Property Organisation met in Geneva in December 1996 to update copyright legislation for the digital age, a European Union delegation sat alongside delegations from its 15 member countries. On some issues the Union voted on behalf of its members; on others the members voted individually.This to-and-fro was the global face of the EU’s principle of subsidiarity – that is, to give nations control over issues that have only local impact within their borders, while taking cross-border issues into the hands of the EU itself. In practice, the division of responsibility confused everybody. And, judging from the results of WIPO – not to mention the EU’s ongoing debates

Demos 73 Demos Collection 13/1998 over copyright reform – the split leaves the EU removed from popular debate, and thus more susceptible to corporate lobbying. On a purely economic level, such problems might well remain manageable annoyances, But the Internet effects culture and politics as well as economics. And a green paper has already been published on precisely the area in which the Internet will do most to shake together culture and economics to create something new, different and, very likely, sufficiently powerful to bring to critical mass the lurking tensions between the EU and the new world which technology is creating. This is the issue of convergence.

Free speech is free trade The basic notion of convergence is simple. Because all media – TV, telephone, publishing and everything – increasingly create and distribute their products in digital form, and bits are bits, then the technological barriers which once separated these industries are tumbling down. But the consequences of this technological change are immense. In the realm of culture, convergence forces writers, television reporters, artists and just about anybody expressing themselves to try to devise new ways to combine video, text and interactivity. In business, it leaves telephone companies, newspapers and broadcasters facing new competitors and new rules of competition. In regulation – as Ithiel de Sola Pool first pointed out in his prescient 1983 book, Technologies of freedom – convergence creates a collision of three very different regulatory regimes.

Common carrier regulation is what has typically applied to telecoms. It assumes a clear distinction between the provider of the transmission facilities and the creator of the content. The owner of the transmission facilities has no responsibility for content. Indeed, his only duty is to ensure that transmission is offered on equal terms to anybody and everybody who might want it. Broadcast regulation, by contrast, assumes that content provider and broadcaster are one. Further, it assumes that

74 Demos Virtual Europe

the broadcast spectrum is limited and so only a limited number of voices will be allowed to speak. So broadcast regulation focuses on ensuring that those voices speak in the interest of the community.At a minimum, that typically requires them to avoid indecent or offensive material, and to provide news and other public service messages. In Europe, traditions of public-service broadcasting also include state funding of programmes deemed to promote national or cultural interests and identity. Press regulation imposes minimal restrictions. Like regulation of broadcasting, but unlike common carrier rules, it assumes that publishers are responsible for the material they distribute and so subject to penalties under the laws of libel and slander. But unlike broadcasting it further assumes that there is no fundamental shortage of printing presses – and thus no need to regulate press content in the public interest.

Reconciling these diverse regimes is very difficult. In Europe it is made all the harder by the fact that different countries have already reached different compromises between their conflicting demands – and those compromises are deeply ingrained in notions of civic behaviour, government duty and fair play. Britain prides itself on the values of free speech embodied in its rambunctious press. Many Germans, by contrast, argue that it is government’s duty to regulate all forms of content – print, broadcast and Internet – to prevent hate speech or other offensive materials from corrupting civil society. The French also regulate content, but on the basis of promoting French culture and protecting privacy rather than that of safeguarding public morals. They care little about what is said, so long as it’s in proper French. For its part, America seems to have decided that, because shortage of bandwidth is not an issue on the Internet, any regulation of converged media will draw its models from press and common carrier regulation only. The EC green paper on convergence, available on the Web at www.ispo.cec.be/convergencegp, reaches no conclusions. But many of the options it discusses give a prominent role to broadcast-style

Demos 75 Demos Collection 13/1998 regulations – particularly the notion that the EU and national governments have a role in ensuring that converged content reflects the concerns and values of European communities in ways that the market acting alone would not do. Particularly in Britain, many fear that the EU will use convergence as an opportunity to start regulating content on the Internet. Graham Smith, head of the new media law practice at Bird & Bird, argues that the thinking of the green paper is ‘shot through with strands of thought drawn from the worlds of telecommunications and broadcasting, where licensing and discretionary regulation are the norm.’ If carried through, he fears, it might effectively reinstate licensing of the press – which, in Britain at least, was abolished in the seventeenth century. The EU’s record on free electronic speech provides little reassur- ance. As part of a broad anti-piracy initiative (strongly backed by, among others, BSkyB, which has a problem with people hacking its satellite receivers) the EU proposes to outlaw ‘the provision of information and measures facilitating unauthorised access’ – a very blunt instrument which would seem to ban just about any technical discussion of the pros and cons of various electronic security schemes. Meanwhile, in the realm of copyright, the EU proposes to extend copyright protection to temporary copies made in the process of transmission. WIPO rejected this proposal because, among other unfortunate side effects, making carriers liable for the content on their wires would encourage them to censor it – and to violate privacy in the process. Hollywood studios, Microsoft and big music companies are keen on the regulation for precisely those reasons; it would force telecoms companies to monitor traffic for any signs of pirating – and so do their policework for them. And their lobbyists have succeeded in getting their views back on the agenda in the EU even after they were rejected everywhere else in the world. Although free speech is potentially the most explosive issue to come out of the proposed regulation of convergence, it is far from the only one. Socialist Euro-politicians are particularly keen to extend traditions of public-service broadcasting to the Internet by levying charges on the media in order to pay for government-approved European content.

76 Demos Virtual Europe

The French also want to limit the influx of American content, just as they already do in television. Leave aside for the moment the fact that – by focusing on what people should be told rather than what they can say for themselves – this misguided notion of public service neatly squanders much of the potential of new media to expand and enhance European culture. Levies raise barriers to entry on media that would otherwise make it easier for Europeans to entertain each other and encourage more European productions by expanding access to American and other markets. In terms of practical politics, the EU is jumping willy nilly into a position where it will be expected to arbitrate on what is or is not ‘European’culture, and thus eligible for subsidy, or unacceptable speech to ‘Europeans’, and thus liable for censure. This seems an impossible task if ever there was one.

Is everybody sitting comfortably? Regulations inspired by convergence will effect people where they live, sitting on the sofa in front of the TV. That makes it among the most intrusive areas of EU regulation, and therefore potentially among the most controversial. It is also one of the hardest to defend. Most other intrusive policies, from the euro to consumer regulations, are pushed on to the agenda by economic forces.Yet in the field of convergence, the EU is regulating well in advance of market forces. While national markets for telecoms services are already merging into a single global market, both print and broadcasting are still largely national. European markets are separated by language and further separated by ingrained differences in media usage. As surveys of media usage show, various European nationals have different habits in watching television, in renting videos and in electronic shopping. Markets for advertising are still largely confined to national borders. In theory, it is tempting to try to regulate pre-emptively for regional convergence as well as technological convergence, to try to eliminate inconsistencies in national law before they can become a problem for regional trade. In practice though, such policies are self-defeating, if not

Demos 77 Demos Collection 13/1998 downright self-destructive. The EU’s approach to convergence regulation threatens to quash free speech on the Internet underneath new bureaucracy, while the extra costs imposed by regulation will further slow take-up of the technology (and, with the exception of Finland, most European countries are already lagging behind the US). Without strong market forces to back its push into convergence, the EU leaves itself in a weak political position when the inevitable opposition arises, which will open the door to a carve-up of markets and opportunities by established forces seeking to protect the status quo. And, to add insult to injury, the EU’s own efforts to promote development and take-up of Internet and other information technologies have been ineffective. Speed is of the essence in information technology markets in general and on the Internet in particular. Product lifecycles average eighteen months. Traffic on the Internet is doubling every year – and as it does so it drags on new participants, new markets and new demands. The EU has spent billions through ESPRIT and other programmes to help researchers develop new Internet technologies and to help both companies and governments to apply them in new ways. But it wraps that support in a bureaucracy which ensures that aid takes at least a year from application to grant – and sometimes as much as two years. This ensures that most – if not all – of the aid is wasted. By the time the project starts up, the market has already moved past it.

Go with the flow The good news is that there is a better way, an approach that can align European integration and the Internet so that they work in harmony rather than at cross-purposes. But it requires a fundamental change in approach from the EU. Instead of treating the Internet as another technology for people to consume, it should instead think of it as the environment in which people will work. That way the EU can harness the Internet’s own inherent power to dissolve borders, and ally it with its own ends. But it will require both a change in approach and a change in thinking. So far, the policy lead on the Internet has been taken largely by the Commission’s DG III (Industry) and DG XIII (Telecommunications

78 Demos Virtual Europe and Information Technology), with help from DG X (Culture and Audiovisual). A more productive approach would be to shift the emphasis to DG XV (Internal Market) and DG IV (Competition). The point is to acknowledge that the development of the Internet and broader convergence is itself a powerful force for unification. Instead of trying to pre-empt the technology – to decide in advance what it will and will not be allowed to do, and so enmesh the Internet in the status quo of EU politics – such an approach would align the EU with the economic and technological forces working to break down borders. Where the Internet bumps against barriers to unification, then the EU can apply principles of the Treaty of Rome and competition law to knock them down. The Internet is already doing its work, largely unheralded. Dell Computer uses the Web to take orders from across Europe for personal computers custom-built from its plant in Ireland. Networks of scientists across both Europe and the world use email to coordinate research, and networks of citizens use it to discuss anything they reckon to be worth discussing. Through its electronic version on the Web, the Daily Telegraph has garnered readers across Europe. At one point over half of the readers of the Electronic Telegraph lived outside of Great Britain. Now Libération is gaining a similar international audience through www.liberation.fr – as are other newspapers from Helsinki to the Hellespont. To its credit, the European Union is itself one of the leaders among European governments in use of the Web. The European Union Web site at europa.eu.int provides all sorts of information about regulatory and legislative proposals – including that all-important resource for the committed European, a guide to who actually does what among the 24 Directorates-General of the Commission. Indeed, one of the reasons that the EU proposals to regulate convergence are set to become so controversial is that 43,000 copies were downloaded between December 1997 and March 1998. That way lie the best hopes for the European Union to break down the barriers to a truly integrated ‘virtual Europe’.Use the Internet. Use competition policy and the Treaty of Rome to break down the barriers

Demos 79 Demos Collection 13/1998 that entrenched interests might set up to others using the Internet. Applaud the efforts of Europeans to build Europe anew. Indeed, given a bit of trust in the efforts of ordinary Europeans to build their own Europe, and with enough self-discipline to leave them room to do so, the Union’s politicians may yet find that the broad sweep of change that comes with the Internet delivers more than mere regional unity. Together with other trends reshaping late twentieth century capitalism – a more educated workforce, easier access to capital and more widely spread productive capacity – the Internet is fundamentally changing the balance of power in markets. Firms are shrinking and increasingly large portions of the economy trade in ideas rather than the production of goods. Because those ideas exist in the heads of workers, that shift creates a fundamentally more egalitarian economy. And because those ideas must be communicated and continually improved upon in order to hold their value, it also creates a more inclusive one. As in the economy, so in government. By allowing information to be shared more broadly, new technology is creating the opportunity for governments to give people information they need to decide for themselves instead of having top-down regulation decide for them – and along the way to encourage broader participation in ‘governance’ by creating new partnerships between public sector and private. Therein lies the real opportunity for building a new Europe. But grasping it will mean pushing back entrenched interests both in government and the private sector. With the rise of the Internet, that process has already begun. One way or another, the EU must now choose sides – to buttress existing bureaucracies by pre-emptive regulation or to use the Treaty of Rome to harness the power of the Internet and associated technologies to help in forging a new settlement between Europeans themselves. One way lies a Europe which at best will unify governments,the other lies the hope of a Europe which will unify peoples. Surely it is the second result which the founders of the European project dreamt of. Unfortunately it is the first which present EU policies threaten to deliver. Time for a change.

80 Demos Europe of the cities? Dr Mark Hepworth

Cities, regions and the limits to ‘sustainable development’

Introduction Globalisation of industrial competition combined with technological change – an array of forces leading to the rise of the so-called ‘information society’ – is producing a greater concentration of economic power in the world’s leading cities.1 Even Finland, Europe’s most Internet intensive and egalitarian society, is changing from a regionally balanced,‘home grown’,information economy into one that is increasingly dominated by Helsinki (and a small élite of second-ranked cities).2 At the same time, Helsinki is witnessing the growth of an ‘under-class’ for the first time in its history.3 Finland is not exceptional. Major cities dominate wealth and job generation in the European Union (EU), but they also contain the greatest concentrations of unemployment and social deprivation. More than 70 per cent of them do not meet the World Health Organisation’s standards for air quality.4 Quite simply, the majority of Europe’s cities (if not all) are not ‘sustainable’ in the sense that they are economically

Director, The Local Futures Group.

Demos 81 Demos Collection 13/1998 competitive, socially cohesive and environmentally sustainable. If local, national and EU policy makers are seriously committed to ‘sustainable development’ as a strategic goal, how relevant is the European Commission’s long-term vision of a federated ‘Europe of the regions’? Should this be replaced by a vision and policy agenda that focuses on a ‘Europe of the cities’?

A ‘Europe of the regions’ The term ‘Europe of the regions’ encompasses three EU agendas.5 First, it reflects a political commitment to preserve the cultural diversity and identity of regions in the face of the homogenising forces of Economic and Monetary Union (EMU). The global information society and the corporate empires that dominate its economy will surely test this commitment to the full. As James Carey points out, Time- Warner sees ‘The World as Our Audience’. The transformation of Europe’s many publics and places into digitised and closely observed audiences is now part of a global process.6 Local regional cultures may be under threat from the prospective development of globalised electronic media spaces. Europe’s major cities will, however, continue to play their historical role as unique and highly creative generators of culture.7 As production rather than consumption centres of Europe’s new cultural economy, cities or metropolitan regions are the strongest guardians of local cultural diversity and identity in the Union. Second, and less obvious, there is the proposal for a Community charter to encourage regional autonomy in relation to national governments and to strengthen local representation at the European level. The region, rather than the city, has been promoted through the application of the subsidiarity principle in EU social and economic programmes administered under the Structural Funds. This has given a strong impe- tus to the formation of local partnerships in European urban and sub- urban areas; however, current EU policy makes regional strategies a preferred framework for local – urban regeneration initiatives.8 Part of the rationale for setting up the English Regional Development Agencies

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(RDAs) is to exploit this thrust towards regionalisation in EU economic development and regeneration policies. EU policies as presently designed and conceived will create greater tensions between the city and the region, between one region and another and, in metropolitan regions like London, between the different sub-regions and local authorities that make up a large conurbation. The geopolitics of regionalisation will vary across Europe: in Germany, the richer Länder (provincial governments) are seeking to end the traditional system of regional transfers to poorer Lander; in Denmark’s ‘negotiated’ democracy, it will be necessary for the country’s stronger cities and local municipalities to share power more equally with the regions; and in Finland, ‘city versus region’ dilemmas will probably be resolved through the creation of an urban – rural coalition government after the autumn 1998 elections. The same tensions and rivalries sur- round the creation of the English RDAs. The third element of the ‘Europe of Regions’ agenda relates to tackling regional disparities in order to maintain social cohesion. The bulk of EU spending on telecommunications infrastructure has gone into upgrading the local telephone systems of the Less Favoured Regions (LFRs). In telecommunications, cities have benefited more from the Telematics Framework research and development programmes – covering computer network applications in health, transport, education, business support, and other services. These research and development funding streams are minor, however, compared to investments made in the basic telecommunications infrastructure that are channelled through the Structural Funds.9 Universal service is, quite rightly, a cor- nerstone of the EU’s Information Society plans – as set out in the ‘Bangemann Report’.10 The issue remains as to the appropriate balance of funding between LFRs and the ‘less favoured urban areas’ (LFUs) of Europe. Inside these LFUs, the telephone is a luxury good for many and the basic ‘cyber-skills’needed to participate in a projected ‘European information society’ are scarce. If the aim is to promote social cohesion and ‘ever closer Union’ through information society policies, then a balance of support is needed between regions and cities. LFRs and

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LFUs should be given equal treatment in EU programmes. This principle of equal treatment should apply to the entire spectrum of economic, social and physical regeneration policies that fall under the Structural Funds and other EU programmes.

The rise of the knowledge economy The regionalisation of structural policies, as part of the EU agenda and through the creation of national regional development agencies as planned in the UK, is politically driven – the economic rationale is flimsy. Researchers have found little hard evidence to support the argument that we are seeing a renaissance of the regional economy in the shape of post-Fordist spatial formations, Alfred Marshall-style industrial districts or localised ‘production clusters’ that could function as viable platforms for competing in the emerging global economy.11 For most areas of Europe, it will be a long and hard struggle to create ‘the learning region’ – a pattern of knowledge-based economic development promoted by bottom-up partnerships between enterprises, public agencies and diverse social partner, as envisaged in the model currently in favour with the Commission.12 De-industrialisation has rendered manufacturing regions unsustainable in the sense that the critical mass of production needed to reproduce knowledge related externalities has declined. This has happened to a terminal extent in depressed industrial regions such as South Yorkshire and to a significant extent in ‘powerhouse’ engineering regions such as Baden- Wurttemberg. Like great forests and trees, manufacturing networks, institutions and cultures as forms of social capital that sustain industries can not be brought back to life as a matter of course.13 If the political drive to create a Union of regional economies is maintained, what we are most likely to see is a hierarchical Europe of ‘city states’, not a pattern of even development creating a democratically dynamic, economic landscape of ‘region states’.This scenario will become a reality because metropolitan dominance is a historical feature of Europe’s knowledge economy. Today, global cities that boast a critical mass of financial institutions, specialised business services,

84 Demos Europe of the cities? corporate head offices, top-class universities and cultural industries form the backbone of Europe’s knowledge economy.14 These existing urban power houses have most to gain from the increasing centrality and importance of knowledge in the economy owing to its relationships with:

finance: the uncertainties surrounding EMU, the liberalisation of continental European capital markets and the privatisation of state monopolies across the Union have all created a huge premium on tacit and technical, codified knowledge in global and EU financial markets technology: the phenomenal expansion of the world’s ‘information highways’ has also put a huge premium on new knowledge (or ‘content’) and on design and control of key infrastructures as sources of added value in mass markets for information products and services (for example, the royalties on Beatles music and Microsoft software) marketing: the overall tendency towards globalisation (or greater regional integration in Europe) has put a premium on knowledge of diverse local, regional and national markets – for example, how different local cultures of consumption may influence brand development and which local businesses partners to choose in merger, acquisition and strategic alliances culture: the creation of the knowledge that is embodied in the products and services of the cultural economy – fashion, music, cuisine, theatre and film, urban design and architecture – is a historical and universal social process; however, it is the financial and commercial know-how and elite consumers in the major cities that create and drive mass markets in these cultural commodities (Milan for fashions, Paris for cuisine, London for theatre).

By defining the knowledge economy in this way, it is possible to look at structural change not from a final product-centred perspective

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(the manufacturing versus service dichotomy; the way that the official statistics are arranged), but from a process-centred perspective which captures the real dynamics of change in all sectors. The economies of twenty first century cities need to be modelled differently from those of the past in order to do justice to the pivotal role that knowledge, information, networks and other soft factors of production play in competitiveness and sustainability.15

City states in a global village The spatial dynamics of the knowledge economy are at once global and local. The growing importance of tacit knowledge encourages firms to cluster or maintain geographical proximity, because trust is gained and maintained through face-to-face contacts and continuous interaction.16 The ‘coffee houses’ of the City and the wine bars of Soho’s advertising and multimedia community indicate that tacit knowledge is embedded in particular places or districts within London, even though open financial markets and computer networks have made London the most globalised city in the world. All big cities contain ‘industrial districts’ that are founded on knowledge-based externalities relating to technology, finance, culture and marketing – for example, New York’s so-called ‘Silicon Alley’ or Hollywood in Los Angeles. Thus, the knowledge economy is characterised by informal and formal ‘networks’ linking a cosmopolitan elite of highly skilled professional workers and senior managers. These networks are sustained in the emerging global economy by rising levels of international business travel and migration.17 The second aspect of ‘networking’ in the knowledge economy is globalised and virtual, rather than localised and physical. Networks of computer networks are enabling multinational corporations to ‘glob- alise’ their markets and operations; the core of their financial, market and technological knowledge remains under tight central control.As a source of competitive advantage, Intra-nets and Extra-nets are being rapidly introduced by the ‘global firm’ to mobilise the local knowledge of distant workers, customers and suppliers. The result is a global

86 Demos Europe of the cities? knowledge economy which transcends national frontiers and gener- ates undetectable, tax-free information flows that the EU and national governments know they should regulate but cannot.18 The rise of a networked knowledge economy may lead to a ‘Europe of cities’ located within a ‘global village’.In the Baltic, for example, the combined forces of globalisation and technological change are creating Europe’s fastest growing regional economy based upon historical political and commercial relationships and investments in electronic infrastructure linking the largest cities and capitals. Here, in the ‘transition countries’ (Estonia, Lithuania, Latvia, Poland, Russia) and in Europe’s prosperous Nordic countries, we are seeing signs of a new wave of urbanisation characterised by the increasing dominance of ‘gateway’ capital cities as centres of economic and population growth. However, the emergence of embryonic ‘global cities’ such as Helsinki has been at the expense of Finland’s smaller town centres and peripheral urban centres, as indicated by the country’s present struggle with mass urban migration and the highly uneven distribution of unemployment problems between the regions. Quite simply, large numbers of Finland’s urban communities are no longer economically and socially sustainable without national government intervention, even if their natural environments are still intact.19 In the more highly urbanised and larger EU countries, the impacts of globalisation and the rise of the technology-intensive knowledge economy have taken a different form, although the social and economic impacts are still far-reaching. Here, we see a combination of metropolitan sprawl – driven by the locational preferences of the information industries and middle class knowledge workers-commuters – and the emergence of local ‘regeneration economies’ that range from so-called ‘pockets of deprivation’ (public housing estates and run-down neigh- bourhoods) to entire sub-regions of the metropolis. London stands out as Europe’s model global city – a place where extreme examples of wealth and poverty can be found across the road from one another. The rise of the knowledge economy, with its escalating demands for high-level skills and ‘insider’ networks of power and influence, threatens to deepen these existing social and spatial divides.

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The limits to sustainability The EU’s Fifth Framework Programme (1998–2002) for pan-European research and development is based on a ‘green techno-economic’ paradigm that attempts to bridge the information society and sustainable development agendas.20 It envisages an IT intensive economy of hi-tech goods and services that will generate economic prosperity and many jobs while reducing the impact of industrial growth on the environment. This overdue linkage may help to breathe life into European Commission’s vision of the information society (95 per cent of EU citizens are not familiar with the term). However, the real challenge ahead lies in marketing and implementing sustainable development policies at the local level. At the local level, the key to a sustainable European knowledge society is social marketing and practical implementation of policies on a number of broad fronts. These policies should address the strategic resources of the knowledge economy – networks and knowledge – and its main transforming resources – finance, information technology, marketing and culture. The priorities should be as outlined below (and some entail the Commission and its partners going over old ground).

Strategic resources Knowledge: create open and continuous learning systems in schools, colleges, universities and work-places that equip people of all ages and all backgrounds with the technical, methodological and social competences needed to participate fully in twenty first century economic, social and political life. Networks: create local partnerships that are transparent and democratically accountable (to avoid élitism); strengthen community networks as ‘social capital’; and develop policy networks and cross-sectoral ‘action-based networks’21 that are regional, national and global in scope (to avoid the dangers of ‘city statism’ and discussed above and to follow the true geography of the relevant development structures and processes).

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Enabling resources Finance: create a wide spectrum of financial options for individuals, small businesses and public-private sector partnerships, and introduce financial innovations to strengthen local governance and services in economic development and regeneration Technology: create an open and affordable local information society in terms of infrastructure, skills and regulatory institutions Culture: create a wide diversity of economic cultures – such as local exchange and trading systems (LETS) using a variety of local currencies for barter of goods and services, Internet trade and commerce and the ‘global firm’ – and promote the cultural economy as an ‘engine of sustainable development’ (not just an ‘engine of growth’) Marketing: create local and regional marketing infrastructures to promote local firms and local economic milieux, including brand development and new product development to communicate the distinctive offers of places and other communities of interest.

At the local level, the task of creating a sustainable knowledge-based pattern of economic development should be based on genuine partnerships between the public, private and community – voluntary sectors. These local partnerships should be open and outward-looking in every sense. We should note that, centuries ago, an network model of regional development – the Hanseatic League in the Baltic region – collapsed due to an absence of central coordination. This history les- son should remind policy makers at all levels that Europe must not be allowed to break up into a mosaic of ‘unsustainable’ city states and region states. At present, powerful forces in the globalising markets of the information society are reinforcing the advantages of some key cities at the expense of their regional economies; they are also exacer- bating social and economic divisions at the level of the city and region.

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These tendencies threaten to undermine EU strategies for balanced and sustainable development. The sustainable development agenda of the EU should be a ‘borderless’ pursuit that seeks to reconcile the tensions now emerging between policies for regional development and those focusing on cities.

90 Demos Notes

1. Hepworth M, 1994,‘City States in a 8. The Local Futures Group, 1997, Global Village’in Babe,R,ed, Sustainable urban regeneration: Information and communication in partnership and delivery economics,Kluwer,Boston. mechanisms, The London Study, 2. Hepworth M and Kuusisto, J, 1998, Association of London Government. The Baltic information society: focus 9. Landabaso M, 1997,‘Some on Finland, report for the Finnish considerations regarding the Minstry of Trade & Industry and deployment of the information Telecoms Finland, European society from the European Research, Helsinki. development policy perspective’, 3. Castells M, 1996, The rise of the paper presented at the RISI- network society,Blackwell,Oxford. PARADDIS meeting, Tampere, 4. Communication from Mrs. Finland, 4 February. Wulf-Mathies,‘Towards an urban 10. European Commission, 1994, agenda in the European Union’, Europe and the global information European Commission, society,Brussels. COM/97/197, Brussels. 11. See, for example: Piore M and Sabel 5. Amin A, 1993,‘The globalisation of C, 1984, The second industrial divide, the economy: an erosion of regional Basic Books, New York; Porter M, networks?’ in Grabher G, ed, The 1990, The competitive advantage of embedded firm: on the nations,Free Press,New York. socioeconomics of industrial 12. Morgan K, 1996,‘The learning networks,Routledge,London. region: institution, innovation and 6. Carey J, 1994,‘Communications and regional renewal’, Papers in Planning economics’,in Babe, 1994 (note 1). Research, No 157, Dept of City and 7. Scott A, 1997,‘The cultural Regional Planning, University of economy of cities’,School of Public Wales Cardiff. Policy and Social Research, 13. Gertler M, 1996,‘Culture and the University of California, limits to regional systems of Los Angeles. innovation’,paper presented at

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the Conference RESTPOR 96, 17. For application of the local milieux Brussels, 19–21 September. concept to London, see Hepworth M, 14. Batten D, 1995,‘Network cities: 1998, Skills for sustainable creative urban agglomerations for development: local competitiveness in the 21st century, Urban Studies, a global city, report prepared by the vol 32, no 2, 313–327. Also see: Local Futures group for the London Sassen S, 1995,‘On concentration TEC Council, London. See also and centrality in the global city’ in Landry C and Bianchi F,1995, The Knox,P and Taylor,P,eds,World creative city, Demos, London. Cities in a World System,Cambridge 18. Hepworth M and Ryan J, 1997, University Press, 63–78. ‘Global firms and local information 15. The seminal work on the ‘knowledge societies: work and employment economy’ was Fritz Machlup’s book, issues for Europe’, European Planning The production and distribution of Studies, vol 5, no 5, 573–595. knowledge in the United States 19. Hepworth and Kuusisto, 1998 (Princeton University Press, New (note 2). Jersey, 1992). Also see OECD, 1996, 20. See the special issue ‘The The knowledge-based economy,Paris. information society and sustainable 16. Lorenz E, 1992,‘Trust, community development’, Journal of World and cooperation: toward a theory of Transport and Development, industrial districts’ in Storper M and vol 2, no 1. Scott A, eds, Pathways to 21. See Carley M and Christie I, 1992 industrialisation and regional [2nd ed forthcoming], Managing development, 195–204, Routledge, sustainable development, Earthscan, London. London.

92 Demos Consumer movements in Europe Colin Brown

Where are the activists?

Two years ago Michael Young, founder of the Consumers’ Association in the UK, startled a European convention of consumer organisations in Berlin when he said that the vast majority of people and groups involved in consumer campaigning were not represented at the conference. Most of us that day, preferring to think ourselves to be at the heart of things, let it go without comment. But his argument stung, because it was irrefutable: outside the traditional magazine-based organisations that consider themselves to be the consumer movement in Europe are many other groups pursuing consumer interests, and they account for huge numbers of people. In the UK the list is long and extraordinarily varied, ranging from single issue campaigns over hospital closures and local planning decisions, to semi-professional services such as the Citizens’Advice Bureaux, law centres and neighbourhood projects, and long-established charities representing specific groups, such as the RNID and RNIB. It includes groups of pensioners, parents and football fans, the green activists and

Consumer research consultant, formerly Deputy Research Director at the Consumers’ Association.

Demos 93 Demos Collection 13/1998 local food co-ops. It includes the Terence Higgins Trust and the Mothers’ Union. It also includes the myriad self-help groups who pool experience and support, embracing both campaigning and do-it-yourself service delivery. The same kaleidoscopic range of organisations, large and small, exists across Europe. But those usually asked to speak for general consumer interests, however, are the national organisations with few active members. In Western Europe and throughout the northern hemisphere, many national consumer organisations are based on magazines, such as Which? (UK), Consumer Reports (USA) and Consumentengids (Holland), which have built deserved reputations as consumer champions over decades of independent product testing, focusing on performance, quality and value for money. The same organisations have also campaigned for legislation to establish and consolidate consumer rights. They draw on two sources of consumer power at opposite ends of the spectrum of political activity: improving the shopper’s knowledge in the market-place and professional lobbying to influence government and corporate decision making. Neither source depends on an involved, active membership. In some countries the magazines and the campaigns are run by separate, parallel organisations, but the political model is the same. Information is provided for individuals to help them shop better, coupled with professional lobbying to change things from the top. This article argues that consumer activism is potentially a powerful force for social and cultural integration in Europe but that it is unable to achieve its potential while consumer organisations remain unwilling to take on the wider political questions raised by their consumer issues. A new model of activism is needed that links consumer bodies to the broader voluntary and community sector in Europe.

The abstract consumer Behind the prevailing model of European consumer politics stands a passionately individualistic and nation based idea of the good life. Value-for-money magazines are aimed at a shopper whose aspirations are entirely selfish and whose behaviour is ruthlessly economic.

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Few real-life consumers fit this stereotype, but its value is in counter- balancing the truly ruthless economic behaviour of manufacturers and suppliers and their endless flow of advertising ‘information’.‘Brand X is better than the rest’? We’ll compare their performance under laboratory conditions. ‘New and improved’? We’ll analyse the contents. ‘Cheaper’? We’ll do a price survey and see. Taking the consumer’s side in the battle of information, the magazines have no choice but to pitch their own product at an abstract, super-rational shopper whose only concern is the best buy.Armed with these objective data, real shoppers can make their own real choices, taking into account other factors as they wish, adding irrational but important considerations like style, fashion, status and taste, along with any judgements over the social value and social cost of the products and services.

‘Behind the prevailing model of European consumer politics stands a passionately individualistic and nation based idea of the good life. Value-for-money magazines are aimed at a shopper whose aspirations are entirely selfish and whose behaviour is ruthlessly economic.’

The problem is that the abstract economic consumer has not stopped there, but has escaped from the pages of the magazines and gone into politics. The approach which underpinned product assess- ments has come to define a supposed group of people in society: the consumers, whose best interests in respect of any economic, social or political issue can be determined by axioms derived from the market place. Although extension of the argument from product to politics makes sense when tackling shopping law, its value has withered the further it has travelled from the check-out. The movement holds dear its set of ‘consumer principles’, derived originally from a speech by John F Kennedy in 1962 but augmented since, which encapsulate the consumer interest and can be applied to any issue. Kennedy’s principles were information, safety, choice and the right to be heard, but the list has grown to include redress, access, transparency, value for money, and sometimes equity and non-discrimination.

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The principles have proved their worth but some of the biggest consumer issues of our age now defy their analysis. Moreover, many of these issues are common to EU states and to the would-be members of the Union. Two powerful examples which have resonance across Europe are fossil fuel emissions and care in old age.

The limits of consumer analysis Fossil fuel emissions now present a major threat to consumers’ safe and comfortable lives over the long term. If the scientific consensus about global warming is correct, the need to reduce carbon use is urgent, and in any case air pollution by poisonous emissions continues to cause health problems, especially in cities. But consumer principles offer little strategy for defending people from these threats beyond nibbling at the edges by providing information on cars that are a little less damaging than others and advice on reducing energy usage to the minimum needed to run a house full of best buy appliances. The problem will not budge unless there is a broader political challenge that can effect a shift in individual and corporate energy consumption patterns across Europe. A political debate already rages in the UK over provision for income, support and care in old age, and it is hard to imagine a consumer issue of greater importance: under what conditions will people live during the last quarter of their lives if there will be too few earners to support current pension systems and if the caring services cannot deal with the sheer numbers? Consumer organisations have produced excellent recommendations on the future of personal pensions but the larger questions of care and support for the majority of people remain unanswered. In these examples consumer principles get into difficulties because they have little leeway to give priority to long-term social benefits over short-term individual gain, or to understand social provision in a situation where market economics do not apply. The same problems arise in many other areas, from the quandaries of education provision and health service rationing to the growing exploitation of ‘unspoilt’holiday

96 Demos Consumer movements in Europe destinations, from the seemingly insoluble equations of transport policy to the loss of mutuality in the UK’s finance industry. To answer them we must think about the kind of society we want, rather than the conditions of its retail transactions.

Consumers are not an interest group Another reason why the analysis sometimes flounders is that consumers are not a discrete interest group at all, because everyone is a member.We all consume and we all shop, so there is no group here with specific needs vying with others in a plural society. ‘The consumer’ is not a person, but an aspect of a person’s daily life, and odd things happen if that aspect is filleted out from the rest. A curious illustration was the problem of plastic replica guns. Five years ago a boy in the UK lost an eye in an accident caused by a technical quirk of a pistol which fired plastic pellets – even when its magazine was removed, a single pellet remained in the gun, primed to shoot. But it was impossible to publicise the design fault without raising the wider issue of the availability of replica guns to children – a matter of law and order, rather than product safety. The story was never brought to light as a consumer campaign because, after hours of deliberation and exchanges of memos, my colleagues and I concluded this was, on balance, a ‘citizen issue’, not a consumer issue, and therefore not in our patch. Our analysis couldn’t cope with the subject, so we turned it round and declared the subject off-limits: it was too big to matter. Another example is out-of-town shopping. The consumer movement in the UK and elsewhere in Europe has grappled valiantly but vainly with the contradictions between shopper choice and the quality of community life. People flock to retail parks and malls. But the impact of these developments on the viability of local shops and on road traffic volumes has been so alarming that even the last British Conservative government stepped in to slow things down. Even if the special problems faced by households without cars are ignored, most people would say that ridding society of its high streets is a big price to pay for the warm convenience, choice and pile-it-high value provided

Demos 97 Demos Collection 13/1998 by the retail palaces. But to stop the trend would clearly fly in the face of the principle of consumer choice and would be interfering with the market, in support of old, unpopular, inefficient retail outlets – anath- ema to the consumer movement. Individual shoppers are just as torn: they love the malls but also want to keep their high streets.

Consumers cannot have it all Similar difficulties are beginning to ensnare the daily lives of ordinary people across Europe and the rest of the affluent world. In the past, anyone who tried to lead a life of insulated consumption – in other words, to behave like the abstract consumer – could make a fair fist of it,providing they had enough money.Home,car,shopping,eating out, theatre and cinema, sports club, holidays – a life could be woven from the threads of pure individual consumption. Once home from work, you could raise the drawbridge. The realm of spending was free of obligations and free of consequences. And the future could only get better, as personal spending power rose and as society became more tuned to the ethic of insulated consumption. But in the most advanced consumer societies of Europe and North America that vision of the future has begun to sour, because the world outside the individual consumer haven is making itself felt, unpleasantly. Motorists find the previously open road impossibly choked with other cars, especially at times when leisure opportunities beckon. The same growth in car numbers and engine power means that streets are now off-limits for our children. Excessive energy use brings daily alarms about climate changes, some in distant countries which we can still pretend are none of our business, but others in our own parched back yards. Shopping itself is losing its comfortable excitement to worries about street and car crime. Even our food seems to be paying us back for seeking ever cheaper, more convenient meals, with the horrors of CJD, E. coli poisoning and residues of hormones and pesticides. Recreational shopping and acquisition still delight those who can afford it, especially in the new market democracies of Central and Eastern Europe, but it is becoming increasingly evident that you cannot

98 Demos Consumer movements in Europe spend your way out of connections with society or the consequences of your own consumption. The strategy of insulated consumption, which treated shopping and leisure as the arena of ultimate, essential freedom and self-definition is now beginning to fail even as a selfish strategy for the good life.

Don’t throw baby out with the bath water The consumer cause, as it has been traditionally defined, is plainly worth fighting for. The steadfast work of the European consumer movement, warts and all, has prevented manufacturers, suppliers and governments getting away with all manner of shoddy goods, poor service, inadequate protection and downright swindles. More posi- tively, the movement has won a legal environment in countries such as the UK which has made retail purchasing just about as fair is it can be, and has helped make our lives unprecedentedly safe from physical danger.We should remember that, in the UK, the consumer movement voiced a lone, early warning of the likely link between BSE and CJD, and that it battled from the start against the massive fraud of personal pensions mis-selling. No one could deny the value of this activity and the thinking that drives it. It also provides a powerful basis for social and cultural integration in Europe: there is an obvious sense of common cause in tackling bad practices and protecting citizens. But the purity of approach which was once the strength of the consumer movement is now its weakness. Its principles do not, on their own, provide a good guide for dealing with problems of life beyond the retail transaction, nor do they provide much help in resolving the local, national, Europe-wide and indeed global problems that arise as a consequence of modern production and consumption.

It could get worse in Europe Traditional consumer organisations have successfully co-operated throughout Europe by sharing product testing costs (largely through their joint organisation International Testing) and in joint lobbying for directives protecting consumer rights and for consumer interests to be

Demos 99 Demos Collection 13/1998 taken on board in other directives (coordinated by the Brussels based Bureau Européen des Unions de Consommateurs). To that extent, the consumer principles have brought benefits in the European arena as well as within national economies. But dealing with the outside world – in all its senses – is going to be one of the biggest issues for European consumer politics just as it will be for European politics in general. The growth of ‘problems without frontiers’ and the development of EMU and other aspects of European integration present problems for ‘pure’ consumer analysis. Effective long-term policy on energy usage and on the huge social problems facing Europe will be hard for consumer organisations to agree upon. As an example, Michael Young also said in Berlin that the European consumer movement has an immediate responsibility to tackle two social issues: first the changing boundaries between work, leisure, unpaid work and unemployment, with all the changes to the nature of consumption that they imply, and secondly the particular problems faced by immigrant workers and their families: no one in the audience was interested in either. Yet EMU, globalisation and the fast changing structure of European commercial and labour markets will make these issues ever more salient for consumers across the EU. The ideal would be for the European consumer movement to build on its strengths and successes but to shake off the narrow perspectives that can only limit its future effectiveness. An alternative strategy would be to accept that the consumer analysis can do no more than illuminate one facet of social or political problems, and should contribute that perspective within a wider movement. To come down from the mountain and enter working alliances with organisations that reflect other facets of people’s lives – organisations with active memberships, local groups and networks, where campaign politics rise up from those members as well as deriving from bare aprioriprinci- ples. In that way,it might be possible to move consumer politics on from the insulated, market-oriented paradigm exemplified by the agenda of the northern European consumer magazines towards a ‘con- vivial’ paradigm embracing a European and global global outlook, as demanded by today’s consumer problems.

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Look south Outside northern Europe and the USA, it is more common for consumer organisations to have active memberships and involvement with other causes. It seems that the further south you go, the less restrictive things get. The traditional northern consumer movement has always been rather disdainful about the chaotic alliances and affiliations of consumer organisations that exist further south, an attitude that on the face of it might seem justified: there are, for example, over fifteen national consumer organisations recognised by the Italian government, some linked with the trade union movement and the cooperative movement, and in Spain seven national and regional consumer organisations are recognised. Elsewhere, many consumer groups are inextricably tangled up with food co-ops, women’s organisations, environmental campaigns and self-help groups – and even political parties. As champions of the pure consumer principles this makes them imperfect, but they often have the crucial involvement of voluntary and community sector activists.

‘The consumer “movement” has few ground troops, while throughout Europe people are getting involved in their tens of thousands with voluntary, campaigning, self-help and cooperative organisations that lack a “pure” consumer focus but have everything to do with consumption and consumer politics.’

Northern consumer campaigning has largely been funded by the production of magazines for well-off consumers, and even where funding has come from other sources, the magazines have been the organisational spine of the movement. In smaller and poorer countries, consumer activism cannot be supported in the same way because magazine revenues will never be sufficient to divert a surplus to campaigning, and changes within modern consumption mean the time has probably passed for value-for-money magazines to grow into a focus for national organisation. Southern consumer organisations have no

Demos 101 Demos Collection 13/1998 choice but to build their movements in less formal ways, but I suggest that ultimately those ways will be more effective than ours in the north. Would we be taking a risk by changing direction and trying to learn from the south? Northern organisations might fear that the movement would become a rabble of small, penniless, corrupt organisations with little of the influence it now enjoys. The positive vision would be a network of diverse, well-supported organisations linking people, campaigning on their behalf and providing a range of resources to empower them as individuals and groups. Getting involved with mul- tifarious interest groups across civil society in Europe would certainly endanger one of the hallmarks of the northern consumer organisations – the purity of the consumer perspective. But how valuable is it in practice? The consumer ‘movement’ has few ground troops, while throughout Europe people are getting involved in their tens of thousands with voluntary,campaigning, self-help and cooperative organisations that lack a ‘pure’ consumer focus but have everything to do with consumption and consumer politics. Perhaps industry regulators and the guardians of competition policy ought to hang on to the abstract notion of a consumer interest derived from classical economics, but that purity of concept has failed to mobilise ordinary people and now leaves professional consumer activists stranded.We have confined consumer politics to an oddly narrow strip of organisational territory, while at the same time trying to stretch its analytical tools too far, failing to cope with issues outside the market place. A movement in the true sense requires active members, and a movement that can handle Europe-wide and global issues in the twenty first century requires a broader vision.

New countries, new consumers In the countries queuing up for European membership, the European Commission is funding a set of structured programmes for developing government consumer policy and active consumer organisations. It would be a pity if those programmes generated an Eastern European consumer movement too committed to the traditional northern

102 Demos Consumer movements in Europe magazine based model. They need to keep open the possibility of learning from the many different kinds of consumer organisations in Europe and in their own countries. Above all, when helping to develop existing eastern consumer organisations, the Commission should avoid pushing them towards an entirely professional movement devoid of activist members. For groups that are weak, the prospect of replacing hard-to- organise volunteers with professional staff is inviting but if taken too far the process will disconnect them from their constituencies.

The European Commission can help I have argued that to make further progress, the traditional consumer movement in Europe has to surrender its elite status and recognise the consumer credentials of other organisations. But what of the European Commission? It has always tended towards a broader view of the consumer interest and has tried to include in its consumer consultative machinery the voices of the trade unions and cooperative movements and family organisations. The Commission should actively pursue this broad vision by promoting connections and cooperation between organisations working for consumer interests in the widest possible sense. A good start would be a programme of pilot projects linking the resources of various groups to tackle specific problems areas, bringing together their different perspectives, experience and memberships. One immediate possibility would be projects on health and diet, which could be generated jointly by family organisations, health charities, food campaigns, neighbourhood projects, green campaigners and others. A second area for pilot projects would be practical options for the support of elderly people, which could be explored by care charities, family organisations, mutual financial institutions and housing associations, working with the appropriate state agencies. Projects of this sort would achieve two things: they would produce new practical options for tackling difficult social and economic problems and they would begin to build connections among the currently fragmented consumer organisations of Europe.

Demos 103

Easing the transition? Éva Kuti

NGOs and EU integration for Central and European Europe

Despite its unquestionable economic success, the European Union has remained a distant and bureaucratic political machine for most of its citizens. In the long and complicated negotiations national interests were defined and represented by the governments, while ordinary citizens were neither properly informed about, nor involved in, the development of the integration process. Technical details were available for experts but the negotiations often resembled a ‘tug of war’ and the outcome was simply compromise, rather than a well thought-out element of the European integration strategy. Although it was called the ‘EC’for some years, the EU has never been emotionally considered a community by its citizens; it has developed from a common market into an economic and political union without raising a feeling that EU membership is a synonym for being a member of a special European community. Wherever the membership became an issue, economic and political considerations, concrete advantages and disadvantages were the focus of attention. Western European citizens do not seem to think that their European status depends on if their country has joined the European Union or not. Ironically enough, this

Researcher, Non-Profit Research Association, Budapest.

Demos 105 Demos Collection 13/1998 symbolic meaning of EU membership emerged only in Eastern Europe when the collapse of the Soviet empire opened up new perspectives for the former communist countries.

From ‘Euphoria’ to Euro-scepticism? The countries of Central and Eastern Europe have traditionally had a strong pan-European identity, with strong cultural, political and economic links westwards as well as eastwards. The more this was chal- lenged by political and military pressures and divisions, the more this identity was cherished and defended. Under socialism, it seemed the gap between these aspirations and the peripheral position widened. Western Europe, with its political democracy, modern, industrialised economy and social welfare, was within sight but out of reach for a long time. This was a source of frustration and several heroic but ridiculous and desperate efforts. The failures of these efforts trauma- tised the societies of Central and Eastern Europe but could not destroy the idea of European identity. That is how and why ‘joining Europe’ became emblematic of the irreversible political and economic changes in 1989 when Eastern European societies were in a state of euphoria. Everything seemed possible, even quick, generous and efficient support from European institutions. For a rapturous moment Eastern Europeans imagined that Western Europe would welcome them and the inevitable transformation of their economy could be carried out with the help and guidance of the European Community.1 Disillusionment was prompt and cruel. Eastern Europeans had to face the brutal truth that their countries were not developed enough, were not considered ‘civilised’enough and were not sufficiently economically attractive for many in the European Union. EU officials distrusted the somewhat chaotic Eastern European institutions and Western producers were fearful of new competitors and were equally reluctant to promote the enlargement of the Union. Frustrated as they are, Eastern Europeans can hardly afford to bear a grudge against the West and remain outside the EU but they have lost their initial optimism and

106 Demos Easing the transition? enthusiasm about integration. Euro-scepticism may spread across Central and Eastern Europe well before the first of those countries accedes to full membership of the Union. No doubt, Eastern Europeans could not have kept their head in the clouds for long. They had to return to the realities of life after the transformations of 1989–90. This is obviously the first step towards any positive development, including their accession to the EU. To identify the problems and find the solutions, develop feasible strategies and change behaviourial patterns is an extremely complex task which can be performed only through mobilisation of forces in civil society as a whole. The voluntary sector has a potential role in helping Central and Eastern European societies make the social, cultural and psychological adjustments needed in preparing for EU entry.What part can it play in identifying common interests and bridging barriers between citizens and communities in the East and West?

Voluntary organisations and European integration The burgeoning independent literature on the European Union and voluntary organisations2 offers a view of the relationship between EU policy and voluntary action which is largely at odds with that presented in the EU’s own documents.3 While the official documents acknowledge the social, political and economic importance of non- profit organisations, researchers and other observers point out that prevailing EU policy fails to engage fully with the voluntary sector. When deep social transformation is needed, voluntary organisations are always of crucial importance because they are able to reach segments of society that governments and business often cannot and can help people to orientate and organise themselves under the changing conditions. Their role is especially important in Central and Eastern Europe given the inherited distrust of state agencies and the relative underdevelopment of business and enterprise culture. The enlargement of the EU is an important challenge for the Western part of the continent and for its voluntary organisations, as well. The

Demos 107 Demos Collection 13/1998 events of the past decade put big question marks over the future of some basic values of the European culture, such as solidarity and equality. Developing cooperation and partnership across Europe as a whole is probably the only way of restoring a ‘European identity’in the long term. The tension between the present EU members and the candidate countries of the East is partly based on conflicting interests and is partly an outcome of mutual ignorance and misunderstandings. As far as interests are concerned, voluntary organisations could do a great deal in mediating between the different players and raising awareness of conflicts of interest. There is no hope for reconciliation until the players understand and appreciate each others’ perspectives much better. Once positions are clarified and a dialogue has started, it may be possible that a compromise can be achieved. Indeed, it may turn out that long-term interests of EU members and candidate countries are much less in conflict than the short-term ones are. If Leonard4 is right that ‘Europeans want the EU to solve “problems without frontiers” (72 per cent see protecting environment and solving international crime and terrorism as priorities; 68 per cent support a common defence and military policy)’, then they must be fundamentally interested in enlargement in the long run. Similarly, close contacts and cooperation may dispel prejudices resulting from the lack of knowledge or from fear and distrust of ideas different from our own. It is astonishing but prejudices can lead a foreign observer to believe almost anything. Here is one example:

‘In the 1970s, the combination of increased centralisation and the growth of Budapest and one or two other cities meant that villages were excluded from the decision making processes. Local people, for example, were forbidden to enter a local forest or use the road and tracks leading to it because it was managed centrally.’5

The problem with this statement is not that the author of the case study misunderstood something and developed an image of Hungary which

108 Demos Easing the transition? would have been exaggerated even in the Middle Ages. The problem is that nobody involved in editing and producing the book found the story inconceivable or at least suspicious enough to be checked. There is an extraordinary contrast between the strong European identity to be found among many citizens of the CEE countries and the image of the ex-communist societies held by Western Europeans. Much more direct contact and a wide range of personal experiences are necessary in order to give citizens on both sides a more accurate idea of each others’ lives. To encourage and organise this dialogue is obviously one of the most important missions of voluntary organisations.

Developing solidarity Whatever image they manage to develop and communicate, Eastern European countries need both financial and technical assistance in building up the capacity of the voluntary sector. Many foreign donors decided to support the democratic transition in Eastern Europe after 1989. Several Western non-governmental organisations (NGOs) opened offices and established local NGOs, support centres and even umbrella organisations. The EU’s Phare Programme has also made an important contribution to the social and economic transition. These programmes of assistance are important for Eastern Europe for two reasons. First, they can play some role in the solution of social problems. Second, they express solidarity, symbolising the union of European nations. Their underlying message is that Eastern Europeans are not alone, they can count on their more affluent counterparts all over the continent. At the same time, through their minor contributions Western European donors may become emotionally involved in the unification of Europe, which may well strengthen their own sense of having a European identity. I believe that this second solidarity building, identity building function of aid programmes from the EU is even more important than the first one. In order to fulfil this social function a growing proportion of foreign donations should be shifted towards support for voluntary

Demos 109 Demos Collection 13/1998 organisations in the transition countries which are more likely to meet local needs and become financially sustainable than international bodies and foreign non-profit organisations are. Fortunately, there are some indications that several Western donors are increasingly turning their attention to local skills and needs and shifting from technical assistance to work with grass-roots, community based organisations.6 Besides mobilising and strengthening civil society and encouraging participative citizenship, voluntary organisations are also expected to tackle the problems in the transition countries which constitute serious obstacles in the way of accession to the EU. Most of these problems – such as environmental pollution, regional inequalities, social and economic exclusion, unemployment – are of the same kind. They cannot be alleviated (not to mention be solved) without active and creative participation by citizens’ organisations. In order to promote European integration, voluntary organisations must learn to play equally important roles in introducing, shaping and implementing social policies. If the EU really wants to achieve its strategic goals of developing a peaceful, prosperous and democratic community of European citizens with a strong European identity, then the same challenges face voluntary bodies within both Western and Central and Eastern Europe. They must both respond to both the direct needs of citizens and the complex challenges of the transition and integration process. Thus they are obliged to behave as actors rather than objects of policy development. Their tasks are diverse and challenging. They embrace the creation of dynamic new community initiatives, the provision of alternative, innovative services (or simply services that have not been catered for by the state or business), the provision of feedback on government proposals and the classic role of advocacy, both defensive and protective and also strategic and provocative. Enlargement of the EU raises major issues of social and cultural integration for the new democracies of Central and Eastern Europe. The role of the voluntary sector must recognised by the EU: not only is the work of the voluntary sector essential for reviving civil society in

110 Demos Easing the transition? the transition countries, it can make a key contribution to preparing them for EU accession. Programmes of support for voluntary organisations and collaborations with them by their counterparts in the EU are vital elements in the development of a true European community that spans the old divides of East and West.

Demos 111 Notes

1. Balázs, P,1997, Integration ‘traps’ in 3. Communication from the the relationship between the Commission on Promoting the role European Union and East Central of voluntary organisations and Europe, Közgazdasági Szemle, 44/11. foundations in Europe, 1997, 2. Anheier, Helmut, K, and Kendall, J, Commission of the European 1997, The non-profit sector and Communities, COM97241, Brussels. European Union policies: What are The cooperative, mutual and non- the issues?, paper presented at the profit sector in the European Union 1997 Voluntas Symposium, London 1997, European Commission DG School of Economics and Political XXIII and EUROSTAT, Brussels and Science, London. Luxembourg. Gjems-Onstad, Ole, 1995,‘The 4. Leonard M, 1998, Making Europe proposed European Association: popular: the search for European a symbol in need of friends?’ identity, Demos, London. Voluntas 6/3. 5. Harvey B, 1995, Networking in Eastern and Central Europe. A guide Taylor, M, 1997, The voluntary sector to voluntary and community at the cross-roads: the European organisations, Directory of Social Union, paper presented at the 1997 Change, London. Voluntas Symposium, London 6. Siegel D and Yancey J, 1993, The School of Economics and Political rebirth of civil society: The Science, London. development of the non-profit sector 6, P,1992,‘European competition in East Central Europe and the role of law and the non-profit sector’, Western assistance,The Rockefeller Voluntas 3/2. Brothers Fund, New York.

112 Demos Islam and Euro-identity Yasmin Alibhai-Brown

Muslims, diversity and inclusion

An estimated 17 million Muslims live within the European Union. What they think and what others think of them will determine in part how the massive project of further European integration develops into the next century. While European leaders worry endlessly about coins, bureaucrats and flags, feelings about this fundamental question about relationships are burning away within the diverse Muslim communities of the EU. They do not yet see themselves as part of the project in any meaningful sense and many of those in the wider community remain unconvinced that this group can ever be incorporated into their ideal vision of the Union. Even in the most egalitarian social democratic states (or actually especially in these), such as Sweden and Denmark, Islam is seen as the a massive blot on the landscape of the future. On the other side, even the most westernised Muslims – including myself – feel that post-Bosnia Europe only holds terrors for us. Such paranoia and mutual mistrust will indeed become a self- fulfilling prophecy unless we can develop a more positive and inter- active dynamic between European Muslims and non-Muslims. This

Research Fellow, IPPR, and journalist.

Demos 113 Demos Collection 13/1998 cannot be based on ‘celebrating diversity’ or ‘tolerance’ or other such anodyne concepts, but on informed conversations about the new identity of Europe in the next century. We must all begin to understand firstly that Islam is now an essential and intrinsic part of the West. Secondly, we need to acknowledge that European Muslims, even in the most conservative communities, have themselves been transformed after generations of living in the West. And there is no going back. Muslim women in Europe, for example, would never submit to the version of Islam propagated by Iran or fanatics in Pakistan and Afghanistan.

‘We must all begin to understand that Islam is now an essential part of the West and we need to acknowledge that European Muslims, even in the most conservative communities, have themselves been transformed after generations of living in the West’

The identity of Europe can no longer simply be structured around assumptions of a shared culture based on Graeco-Roman roots and Judaeo-Christian ethics and Beethoven’s Ninth Symphony. Nor is it feasible for European Muslims to requisition or request enclaves within states or in the pan-national context of the European Union.As Fuad Nahdi, the editor of ‘Q’ News, a newspaper for young British Muslims, wrote recently: ‘Muslims here cannot operate as if they are a majority; they have to rediscover a theology and Islamic jurisprudence suited to a minority living in a multi-faith and multicultural society.’1 More important than these sensible limitations on aspirations on both sides and beyond the contested spaces and ideas, there are extraordinary possibilities available which European and Muslim leaders have failed to grasp. Unfortunately, even Demos did not adequately address this vital issue in its recent well received publication, Making Europe popular: the search for European identity, although there was a recognition in this document that ‘neither a narrative of cultural highlights nor a banal unity based on regulating the noise emissions of European

114 Demos Islam and Euro-identity lawn mowers’ will provide a meaningful Europe-wide identity which we can all buy into. What do we need to do in order to nurture the positive aspects of Islam in the West? The first step would be to reject the prejudice which has become dangerously commonplace when one is discussing the subject: that Islam is a new enemy and a threat. White Europeans and Muslims have too easily and lazily accommodated this prejudice, partly because it is so easy to gather evidence to back their views and partly because there is political advantage to be reaped out of these binary con- flictual descriptions.We need to believe you see us as a threat in order to heighten our own sense of grievance and separation. The advantages the other way are even greater. Influential Europeans who speak out on this ‘threat’ have a lot to gain, especially as our more enlightened leaders seem trapped in an embarrassed silence on the issue, which somewhat reflects how they themselves share the anxieties. It is not simply political cowardice which is responsible for this shifty approach, although there is no doubt now that Le Pen and others like him are a force to be bro- kered with in France, Germany, Denmark and other countries in which ‘Islamophobia’ is proving a great vote catcher at local elections. But the problem is more complex than this. There is no awareness among the ruling élites in European countries and the Commission about what European Muslims are doing, saying or thinking. How many of us (and I speak now as a British Muslim) circulate among those with power and influence? How aware therefore can the leadership be of both the real dangers of the self-selected or imposed exclusion of so many people and the extraordinary opportunities that this can throw up? A couple of years ago I was asked to chair a Council of Europe conference on diversity and gender equality. The level of ignorance about Islam among even these well meaning and highly intelli- gent European intellectuals was terrifying. Without intimate, ongoing knowledge, all we are ever likely to get is a tendency towards fear and loathing, which in turn encourages certain vocal sections of European Muslims to promote their own hateful and resentful messages. As Fred Halliday wrote in his thoughtful book, Islam and the myth of confrontation, this in the end helps

Demos 115 Demos Collection 13/1998 nobody at all:

‘regrettably, for politicians, popularizers and demagogues, the reality is far more complex than they normally imply. There are very real issues underlying the rise of Islamic movements, their relationship with Western Europe and the formulation of a European policy in regard to them. These genuine concerns can only be reached by cutting away some of the jungle of misconception that normally surrounds them.’2

Unfortunately, it is often intellectuals who contribute most to the gath- ering misapprehension of Islam. When the highly regarded defence correspondent Claire Hollingworth writes of ‘fundamentalist’ Islam ‘fast becoming the chief threat to global peace and security … akin to the menace posed by Nazism in the 1930s and then by communism in the 1950s’3 and Samuel Huntington speaks ominously of ‘the clash of civilizations’4 and the writers who support Rushdie denounce us as dangerous barbarians, what hope is there for enlightenment among ordinary Europeans? This is not to suggest that the sense of threat which is felt by white Europeans is simply foolish. There are historical reasons why it seems to make sense to many citizens. Not only do traces of the fear of Islam which fuelled Crusades linger on; one of the most potent binding forces in the past for this continent – which excelled at blood letting within its own borders – was the idea of overseas conquest and the innate superiority of Christendom. When she made her powerful speech on Europe at Bruges in 1991, Margaret Thatcher spoke of how Europeans needed to be proud because ‘we’ conquered and civilised the rest of the world. This speech is revealing for several reasons. There is no attempt made here to pretend that her vision of Europe’s cultural identity is anything other than white. Her use of the word ‘we’ and the assumptions that follow make this clear enough. She epitomised what many across Europe truly believe to be true. The word ‘European’ conjures up an image of whiteness.‘Multiculturalism’ always refers to those who are not white.

116 Demos Islam and Euro-identity

‘The word “European” conjures up an image of whiteness. “Multiculturalism” always refers to those who are not white. The great challenge for the European integration project is to turn these terms around and make them more inclusive.’

The great challenge for the European integration project in relation to Islam (and the rest of Europe’s non-white ‘others’) is to turn both these terms around and make them more inclusive. It can be done but the political will needs to be in place and the minorities, especially Muslims, must want it to happen too and not merely on terms of rights and religious privileges. Interestingly, young, highly educated Muslims are developing a new sense of superiority through victim-hood. Many are attracted to the idea of intifada and of an unworkable, though romantic, pan-Islamic identity, and the notion that they can live within their own ideological and religious imaginary territories. They would like nothing better than to be attacked for this so they can develop even stronger mental fortresses for themselves. Unless EU leaders understand this, they will unwittingly engender more than enough xenophobia for this process to escalate. This is why, although it was enormously important to bring out some of the hatred and discrimination targeted at the Muslim community in Britain, the Runnymede Trust report on Islamophobia needed to do more than just that.5 It needed also to show,just as we now do for the Jewish community or black and other Asian Britons, the strengths and talents of Muslims.We cannot be just victims – and we are not. Do Muslims want to be a part of Europe or a part within Europe? That is a key question and whatever the answers, there will be a thou- sand variations. A recent IPPR seminar provided some information on what young British Muslims are saying about this, although here too there is healthy disagreement.One group of highly vocal,well organised, young Muslims was convinced that their Islamic identities mattered to them rather than the ‘ethnic’ identities that were foisted on them. They were young mothers, fathers, journalists and so on. They had their own

Demos 117 Demos Collection 13/1998 self-help groups, Saturday schools, marriage guidance services and a political agenda which was assertive and well thought through. They were resentful that funding organisations refused to recognise their distinct and separate needs. Integration – even of the most local kind, even with other Asians – was the last thing on their minds. But unlike their parents, who identified themselves in terms of their original countries, they said they were British. The ironies are obvious. At the other end of the spectrum were young Muslims who saw themselves as part of a wider movement of other disenfranchised groups seeking a place for themselves in society. Dr Yunus Samad from the University of Bradford has carried out extensive research among Muslims in Bradford. He concludes that although rhetoric rather than reflection still formed the basis of much discussion within the young British Muslim communities, there was no doubt that they identified themselves as British and Muslim in ways which were dramatically different from their parents.6 This all indicates that modernisation is taking place but not in the direction that was once expected. There other trends emerging. British Muslims have more rights, ease of existence and a degree of cultural autonomy than their counterparts in France and Germany. This is not is not producing confidence that we might be more able to integrate on our own terms. Instead, many Muslims see an abyss ahead. They reinterpret their lives, settle their descriptions at the lowest common denominator and do not think strategically. For example, the fact that Muslims have won the battle for state funded Muslim schools is creating a queue for more schools.We might use this moment of victory to take stock of what this might mean in terms of our further alienation and demonisation. What, then, can be done to integrate Muslims into the new Europe? Why should they wish this to happen? How can they be persuaded that it is in their interests to join in? And what would they gain by doing this when they see a potential loss of their faith, clarity and self- respect? On the other side, do white European leaders have the capacity, energy and idealism to cast out their Islamophobia and develop something more wholesome in its place? And how might we begin to bring about change?

118 Demos Islam and Euro-identity

Firstly, we must enable white Europeans to educate themselves on their Muslim neighbours and to understand how vital this is. The ill thought-out treatment of Turkey by the EU – which may in a short time become another Algeria – proves how superficial and short- sighted awareness still is. Secondly, it would be helpful to establish a Europe-wide Muslim task force which would include Muslim historians, political scientists, scientists and others. This group might for- mally and informally work with EU institutions as well as national governments. Most university departments in this country, even in the top universities, have Muslim academics and post-graduate students. Many are dynamic women who are prepared to fight for gender equality on their own terms. These individuals could also create an important forum for young Muslims and encourage a sense of a more complex and integrated identity than that which is being asserted at the moment. It is only through such steps that we will be able to understand how we now have, across Europe, the flowering of a new Muslim intellectual movement which is unique because it is both Islamic as well as self-consciously part of the West. If European Muslims were part of the informed decision-making processes they might have been able to offer political ideas which would have helped our thinking on Bosnia and might still help to avoid the impending disasters in Kosovo. Western Muslims have produced architectural masterpieces like the mosque in Paris or in London (opposite the Victoria and Albert museum). There are impressive Muslim art publications now on offer, as well as poetry, plays and intellectual tracts like the recent book, Post- modernism and the other, by the prolific writer Ziauddin Sardar.7 In a dreamy mood, I can even imagine a recreation of the glory of the Islamic and Christian cultural masterpiece of Granada; if only Europe had the imagination to encourage such a thing. Many Europeans imagine a future of distrust and conflict with Europe’s Muslims and the world of Islam beyond the continent. Many EU Muslims share this dark anticipation. It need not be so. But to create a truly integrated Europe the talent and energy of Muslim cultures must be properly nurtured and incorporated into the new identity of Europe.

Demos 119 Notes

1. Paper presented at an IPPR seminar 4. Foreign Affairs, summer 1993. in March 1998, to be published in a 5. Runnymede Trust, 1997, forthcoming report. Islamophobia,Runnymede Trust, 2. Halliday F,1996, Islam and the myth London. of confrontation, IB Taurus, 112. 6. Paper presented at IPPR seminar. 3. Internation Herald Tribune,9 7. Sardar Z, 1998, Post-modernism and November 1993. the other,Pluto Press,London.

120 Demos Global flows David Goldblatt

Cultural globalisation and the European project

At first glance the connections between cultural globalisation and the European project seem limited. After all, the European project is the exemplar of regional economic integration and regional governance. And while in recent years a flurry of cultural initiatives have been launched by the European Commission, the European debate has been overwhelmed by issues of economic policy and political and legal organisation. Press a little further and both the global and cultural dimensions of the European project reveal themselves. The project of European regional integration is itself a considered response to wider processes of globalisation. The establishment of European institutions allows individual nation-states greater leverage and control over global processes that they would otherwise possess. Similarly, while the European agenda has been dominated by economic and political affairs, these processes are inevitably altering patterns of European cultural interaction and raising important cultural questions. These questions are emerging both externally and internally.

Lecturer at the Faculty of Social Sciences, The Open University.

Demos 121 Demos Collection 13/1998

Internally, the cultural politics of identity revolve around the relationship of nation-states to the supranational institutions of the Union and of the place of national culture, identities and allegiances within it. In short, the proponents of European unity have argued that the creation of supranational economic and political institutions requires, for their effective functioning and long-term stability, the development of a distinctive European identity and allegiance. It was, after all, the triumph of aggressive and exclusionary nationalism in the nineteenth century and inter-war Europe that precipitated the inferno of two world wars. The European project was, first and foremost, designed to quell the distrust and animosity that existed between Europe’s nations. Eurosceptics and nationalists argue that the ersatz and élitist Euro- pean identity that has emerged is no substitute, practically or morally, for the deeply held and deeply entrenched national affiliations of the people’s of Europe. From this perspective, not only should the attempts to create a European identity be abandoned but where and when the European project’s economic and political dimensions infringe upon, threaten or undermine national cultural identities they should be limited or terminated. It seems to me that these debates are locked into a model of culture and cultural politics that is, at best, antiquated. First, it assumes that the basic unit of cultural action and affiliation is the nation.While national identities and national cultural organisations are of course powerful and significant, this model of culture ignores the extent to which cultural life in contemporary Europe occurs outside of this frame of reference; people identify with and live within an enormous array of local and regional cultures, urban subcultures, the multiple worlds of popular culture, transnational elite and professional cultures and so on. Second, it assumes that political institutions, be they national or supranational, are the central players in cultural debates. In the era of European nation-building in the nineteenth and early twentieth centuries, states were central political actors – systematising language, creating national educational institutions and curricula, using conscription as an instrument of national integration. However, in the late twentieth century the role of the state in cultural politics is diminished if not

122 Demos Global flows eradicated; for the vast majority of cultural flows within and across national borders are mediated or created by private corporations, many of them multinational. Third, the focus of debate is on the content of cultural messages, not on their infrastructure of distribution. The models of cultural change on which these debates rely arose in a period when the technologies of communication and transportation were much less geographically extensive, more expensive and less easily available to most people. The tele-infrastructures and transport systems of the present and the next century change the context for the debate in profound ways. Fourth, these models tend to assume that assimilation or homogeni- sation into a singular European identity are the only possible alterna- tives to separate nationalisms. Fifth, their concern with the insular dynamics of European cultural integration plays down or ignores equally important processes of external change and external context. This is worth considering in more depth. As the role of the European Union in international organisations grows, the place and identity of Europe in the world becomes increasingly significant.While the actions of the EU in institutions such as the WTO remain firmly embedded in notions of European economic interests, the idea of a distinctive European cultural identity and contribution to global processes has proved attractive to politicians and institutions seeking public and international legitimacy. For much of the past few centuries much of that global contribution has been delivered through the medium of colonialism – an identity and legacy that the Union has not been enthusiastic to engage with. The expansion of the EU poses the question of a European identity in a different form. The incorporation of selected Baltic, Central and Eastern European states appears to have been decided on broadly economic lines. Russia’s size and great status ensure its exclusion but Turkey is another matter. While there are sound economic reasons for delaying Turkish entry to the EU and questions of human rights and the Kurdish situation remain unresolved, there is among many Turks and European politicians a lingering sense that, above all, it is the issues of culture,

Demos 123 Demos Collection 13/1998 religion and identity that make Turkish membership of the EU problematic. Whatever the merits of either case, the difficulties surrounding the Turkish quest for EU membership demonstrate that the cultural politics of European identity are intensifying. But perhaps, most impor- tantly, the changes in the external presentation and definition of European cultural identity are paralleled – and even overshadowed – by change in the currents of global cultural flows. It is worth, therefore, framing debates over the European project and cultural integration in the context of wider and deeper process of cultural globalisation. By cultural globalisation I mean the development of infrastructures of communication and transportation and the establishment of cultural flows (ideas, artefacts, practices, texts) and relationships at an inter-regional or inter-continental scale. Cultural interaction has an immensely long history. Today’s proliferation of global imagery, icons and brands pale when measured against the historical impact of the spread of world religions across regions and the establishment of multi- ethnic ruling cultures in ancient empires. In the mid nineteenth century, the confluence of European global empire building and the development of new technologies of transportation and communication transformed the pattern and form of cultural globalisation. The 70 years before the First World War saw the development of international and transoceanic telegraphy and the early development of radio; the emergence of international publishing houses and international news agencies; regularised and cheap international mechanised shipping; the creation of European imperial, political and cultural infrastructures in Africa and Asia. Paradoxically, in this era European societies created both more closed, homogeneous, national cultures and cultural institutions, at the same time as they massively extended the reach of European cultural influence outside of Europe. Those influences were, of course, bitterly contested but it is undeniable that Europe was the main creator and diffuser of four transnational discourses and practices that have irrevocably transformed the culture and politics of the world: science, nationalism, socialism and liberalism. Since the end of the Second World War the characteristics of cultural globalisation and Europe’s place within it have altered. The past

124 Demos Global flows

50 years have seen older technologies mature and achieve global diffusion (television, radio, cinema, telephony, containerised shipping) as well as the development of new technologies (oceanic telephone cables, digitisation and computerisation, the Internet, satellite and cable technologies, cheaper jet airliners). Together these innovations have helped create a global infrastructure of communication and transportation which, although uneven within and between countries, is more extensive in its reach than in earlier epochs, capable of faster – indeed instantaneous – transmissions at much higher volumes and far more difficult to police and control at national borders. While earlier phases of cultural globalisation occurred in an era dominated by European empires, post-war cultural flows have been dominated by predominantly American based multinational cultural corporations. Although local cultural tastes and preferences remain strong in many areas, and local cultural producers continue to survive and thrive, the leading media conglomerates of the era have unprecedented control over much of the world’s TV,film, recorded music, telecoms, software and publishing industries. Finally, while the cultural interactions of the inter-war era took place in the context of increasingly ethnically homogeneous European states, the post-war era has seen a wave of extra-European migration that has irreversibly altered the ethnic and cultural composition of most of Western Europe. What are the implications of this changing pattern of cultural globalisation for the European project and the debate over European cultural integration? First, Eurosceptics and nationalists should probably worry less about the European Commission and more about other agencies and sources of cultural identity. The impact of these elite efforts to foster a nascent European identity is probably less important than the impact of mass tourism, travel, audio-visual saturation and the diffusion of consumption habits and practices across the continent. Similarly, Euroenthusiasts and internationalists need to recognise the very small contribution that their efforts can make to shaping the course of cultural life. They would, perhaps, be better occupied nurturing and promoting indigenous ‘cultural industries’, regulating the global oligarchy of multinational corporations in the cultural sectors and harnessing the

Demos 125 Demos Collection 13/1998 new communications infrastructures to ensure that as wide a diversity of European voices as possible can be heard,rather than finding new ways of amplifying their own voices. Second, while Euroenthusiasts forget the potential pull of national identities at their peril, nationalists need to ask themselves, which national identity? Most Eurosceptics seem wedded to notions of nationalism that are predominantly ethnic rather than civic and exclusionary rather than inclusionary. Whatever the limits of a European identity, it is at least one that embraces more universal and plural conceptions of citizenship and membership in a political community. In a world that is increasingly interdependent and where the political ‘community of fate’ crosses all national borders, narrow conceptions of national identity are both a moral and practical hazard. In any case, all of Europe’s imagined national communities are inven- tions and creations, be they rooted in elements of a real and tangible shared history and experience. They can be – and will continue to be – reinvented, not least because European societies are increasingly ethnically heterogenous and their patterns of cultural production and consumption fragment and divide across the many domains of popular cultures, élite cultures and subcultures. Third, both nationalists and internationalists, Eurosceptics and Euroenthusiasts, need to turn their gaze outward from Europe. European institutions increasingly represent us to the rest of the world, which is profoundly shaped by the unequal environmental, cultural and political interactions of four centuries of imperialism. This calls, I think, for a little less hubris and a little more humility, and for an identity and a presence that spends less time telling the world about the virtues of EU integration and more time exploring the place of a small, if immensely wealthy, continental promontory in an increasingly dense and diverse mix of global cultures.

This article is based on the ESRC research project, Globalisation and the advanced industrial state, to be published in autumn 1988 as Global transformations by Polity Press, Cambridge.

126 Demos In search of Euro-citizens Tilo Fuchs

Globalisation, socialisation and European identities

‘Identity’ is currently a much-debated issue, in academic circles as well as among the wider opinion-forming élites. The process of economic globalisation and the insecurity accompanying it for many individuals, organisations and communities are felt to have a strong impact on the question of who we are and what we identify with. The present arguments in the UK over the Labour Government’s attempts to ‘rebrand’ Britain and reinvigorate national identity can be seen as a reflection of this tide of feeling. European integration is another development which gives rise to that question: debates similar to that under way in the UK are brewing up across the European Union, and monetary union may soon give these arguments a harder political edge in Germany and France, where anxieties about globalisation and national identity are growing. At the same time the traditional answers seem no longer to apply: religious community has (in Western Europe) mainly disappeared; sites of social networking such as the workplace are undergoing radical changes and seem not yet to have found a new stability; and family

Masters student in Political Science at the Free University of Berlin.

Demos 127 Demos Collection 13/1998 or neighbourhood ties have also lost their accustomed form.Other roots of identity have simply dried up and it will not be possible to revive them again. The most prominent example of this is a sense of ethnic community which has forever been made meaningless – no matter how hard Le Pen and his like try to dispute this – by migration and cultural interpenetration. The current resurgence of xenophobic populism in parts of the EU as well as in the dislocated societies of central and eastern Europe could be seen as a rearguard action to defend one of the last apparently stable points of reference for personal and communal identity. The first site of the loss of identity is the individual lifestyle. One of the attempts to theorise these changes is the notion of a ‘reflexive modernity’ (or a ‘second modernity’), mainly developed by Anthony Giddens and the German sociologist Ulrich Beck.1 They emphasise the force of modernisation and with it the development of a pervasive critical attitude to social norms and traditions. The obvious disparities between traditional social knowledge and the individual’s own experience, coupled with the ready availability of alternative conceptions of life, produce lifestyles based on individual choice. These are subject to frequent and flexible change as individuals and organisations apply knowledge about social change ‘reflexively’ to their own choices and strategies. This leads to more negotiable forms of social interaction on a variety of levels: from ideas about more rewarding work to alternative conceptions of family life. This, it could be argued, leaves little room for a shared sense of identity: an extrapolation of the relentless process of reflexive modernisation might lead to a state of society in which community will become a network of individuals without fixed positions, neither for themselves nor in relation to each other; the demands of the community can no longer rely on altruism or at least a sense of obligation, but will have to hope for accommodation in a sufficient number of individual life concepts. A second element, relevant for the sphere of politics, of the fleeting sense of identity is the feeling among many citizens and communities that key influences on, and aspects of, their lives are out of control. The global economy appears no longer to be contained or meaningfully

128 Demos In search of Euro-citizens influenced by national governments, thereby rendering outdated much of our habitual view of politics as a process whose most vital arena for debate and decision is the national one.And European integration in its current form seems to be an exercise – at least from the viewpoint of most citizens – in transferring vital decisions from visible (and thus potentially accountable) national governments to a mysterious set of bureaucrats behind closed doors.

‘European integration in its current form seems to be an exercise – at least from the viewpoint of most citizens – in transferring vital decisions from visible (and thus potentially accountable) national governments to a mysterious set of bureaucrats behind closed doors.’

In sum, it appears that at a time when particularly forceful waves of change engulf us, our old lifelines have become disconnected – our sense of agency and control is being undermined in many subtle ways. This causes problems for politics, as the representatives of nation- states find it hard to maintain their credibility as they are no longer perceived as in line with what is going on in our lives. The spheres of personal and political identity are no longer congruent. In the light of these arguments, I will try to point to some of the problems in identity formation that I think lie at the heart of the current pervasive sense of disorientation among citizens in the EU, and I will go on to hint at some possible ways to build up a viable and useful ‘European identity’.

Socialisation A sense of identity means that we have command of a set of procedures and labels that allows us to define ourselves as members of a variety of groups while excluding others. But the labelling does not only provide us with a sense of who everybody is and how we should treat them, but also reflects on ourselves. By assigning importance and meaning to others we also define where we belong. This process is inextricably coupled with socialisation. It is socialisation that provides us with our labels and

Demos 129 Demos Collection 13/1998 also teaches us where to place them and how. Parents and so-called significant others (our peer-groups, teachers etc.) guide us through the first phase of this process, which is later continued by colleagues at work, university lecturers, or, more generally, social exchange and experience.2

Identity and socialisation in the national era For the last century or so, this process of socialisation was embedded in the institutions of the nation-state. National school curricula and national media provided the framework and the cue-words for individual socialisation. This evidently did not lead to populations marked by total uniformity, but it did produce people who spoke the same language – in both senses of the expression. Apart from a standardised means of communication, the nationalist phase produced a set of symbols, rituals and procedures that allowed all citizens to imagine themselves as a community: within a given territory, one could be sure about how things were done, knew how to speak to people and be understood, and what to expect in certain situations. This certainty ranged from the small, everyday things – such as forms of politeness – to larger issues such as knowing how elections were held. This standardisation was one of the important elements of modernisation. Whereas in medieval times, status was largely or wholly fixed and only very narrow social strata required a wider range of knowledge, with the onset of modernity came mobility. And with it came the fact that now virtually every person in a state would have to be able to potentially fill every conceivable position. To rise in social status had become possible, even desirable and the competition for the best position was deemed necessary for further development. This obviously required a standardised set of rules, to let the individual know how to play and to make individual achievements comparable. The competition was on the whole limited to national territories. To be sure, merchants, diplomats and other specialists whose job it was to communicate with what lay beyond the national border had to be skilled in other languages and had to know about other cultures. But they were specialists, and their jobs existed precisely because the vast

130 Demos In search of Euro-citizens majority had such a limited knowledge (and limited necessity to acquire it) of foreign ways and means. Therefore, most of the national procedures and rites changed quite significantly when one crossed a border.What was right in one country could in others be looked at with incomprehension or even offence. To sum up: individuals became citizens of a state and members of a national community by acquiring a certain – sometimes quite idiosyn- cratic – set of rules and skills. This process was controlled by national institutions such as schools and media. Both process and contents varied from nation to nation and only a small caste of professionals had a knowledge encompassing more than one set.3

National Politics So far, I have only considered the first component of the term ‘nation- state’.But the development of the state coincides with that of the nation and is closely linked to it. Some of the procedures and symbols mentioned above were directly related to the political sphere. Was there a constitution or not? Was a country led by a president or (at least for- mally) by a monarch? Two symbols that explain quite a lot of the difference between the political and national cultures of, say, Britain and Germany. On a more practical level, different approaches to the election procedure or civil service recruitment contributed to national differences. The choice of procedures formed distinguishable political cultures and state systems which coincided with the different national cultures. An important feature of the nation state is the notion of sovereignty. A state rooted in the national culture, shaped by nationally specific institutions has absolute control – or at least an absolute right to control – over what is happening within its territory. It is doubtful whether this ever held quite so true as theory has it – small states could hardly do as they saw fit, given the watchful eyes and more or less subtle influence of more powerful neighbours. But the notion was very true and powerful in terms of identity: French citizens elected a French president to govern France, knowing how he would see the world, and

Demos 131 Demos Collection 13/1998 expecting him to do what was in the interest of France. And they believed that he had the power to do so.

Globalisation

‘It is now obvious that national governments do not have the power to control everything that happens within their territory and ensure that it conforms to national expectations.’

With globalisation, some of these assumptions no longer hold. It is now obvious that national governments do not have the power to control everything that happens within their territory, and ensure that it conforms to national expectations. This is not simply true of small and less powerful states, but even of rich and powerful ones. The state of North Carolina, for example, had to change established procedures and accept that a transnational company – in this case BMW – held more power than itself. To attract inward investment by the company, the state guaranteed the desired standard of training of future BMW workers, sold the land for the factory site at a symbolic price and finally waived taxes for an extended period.All this was done precisely in its own interest and that of its citizens: to attract jobs. This is the more successful and tacit side of the erosion of sovereignty. In this case, the citizens’expectations were fulfilled, if at the price of a poorer government – which means the state will not be able to fulfil future demands – and less control for themselves (the absence of trade unions was another of BMW’s conditions). So even the winners have a feeling that victory was somewhat pyrrhic. But the flip side is far more visible: Germany as BMW’s home base has not won a single new job, and the unemployed there feel that their government is obviously powerless to provide them with one. The consequence is a loss of confidence in the state. And there is substantial evidence across Western countries that citizens have lost a good deal of confidence in the state and trust in the political process. And

132 Demos In search of Euro-citizens this disillusion erodes the feeling of identity, at least in so far at it is linked to the state and its institutions. Personal experience teaches us, that some of the things we learned in socialisation are no longer true, in this case the power of the state is but a shadow of what we were told and confidently assumed it was. At the same time, the conditions for socialisation – and with it the states’ ability to at least maintain the affective side of national identity – have substantially changed. The ready availability of non-domestic media products allows citizens to see the world through others’ eyes.4 From a very early age we have a second source of information with which to compare what the traditional agents of socialisation tell us. Here lies one of the reasons for the emergence of a ‘reflexive modernity’. When there is no coherent story about life, why should we believe the one that our parents, teachers and national media tell us? It is likely that for a growing minority personal identity will be built around an individual choice of what is available worldwide in terms not only of goods and services but also aspirations, ideas and allegiances. Instead of becoming another constitution-respecting, football-loving and beer-drinking German, we now have the possibility to shape ourselves into European or even global ‘cosmopolitans’,pursuing international work, and perhaps watching US basketball on cable TV while sipping Chilean wine, feeling confident and unthreatened in the face of integrating forces beyond the nation-state. Given the economic and social basis for the gradual spread of this kind of eclecticism (and it comes in far less stereo-typed forms), it is evident that any recreation of the supposed homogeneous and cohesive national communities of the past is out of the question, although populists of the nationalist far Right will resist such a conclusion. But this cosmopolitan and reflexive self development will not come easily to the mass of citizens, for whom the Euro- or global mobility and transferable social and work skills of a well-educated elite are not available.

Lessons for European integration Given these developments, what are the prospects for the project of European integration? Some of these changes point in a direction that

Demos 133 Demos Collection 13/1998 is quite favourable for the EU: if many people are losing faith in the problem-solving capabilities of their national states, the EU would be the most obvious agent to step in and try to act as a replacement in the areas where it has most credibility as a political actor. By delivering the goods in these areas, it could greatly boost its appeal to the citizens and begin to build up an identity of its own, at least in a rather utilitar- ian and political sense. To achieve this end, the EU will have to claim some areas of policy for itself, and make this very visible to avoid having the credit taken by national governments. There are some areas where this seems possible – because citizens want and expect the Union to deal with them and national governments have either professed or amply proven their inability to help: environmental issues, organised crime and immigration are among the possible areas of activity. To provide citizens with a new anchor for their personal identity is vastly more difficult. But the EU is potentially in a position to develop over the long run into a credible alternative to old national bearers of identity. Europe is marked by a vast richness of cultures, lifestyles and sources of identity. Union policy needs to make citizens aware of these differences not as threats but possibilities, resources that can add to the quality of life of all its citizens.

‘Europe is marked by a vast richness of cultures, lifestyles and sources of identity. Union policy needs to make citizens aware of these differences not as threats but possibilities, resources that can add to the quality of life of all its citizens.’

As has been pointed out, socialisation is a key factor in forming an identity. EU activities in support of cultural and social integration should take this into account by focusing on education and personal development, providing people with ‘European’ experiences in a common cultural space. Through regulation, special programmes for cultural development, support for language learning and the encour- agement of contacts between individuals, organisations and communities at the micro level across the EU and the applicant states of

134 Demos In search of Euro-citizens

Central and Eastern Europe, the Commission and its agencies can promote a gradual acclimatisation to a sense of common cause and shared interests across the continent and thus to an acceptance of an emerging European identity. While Commission programmes such as Lingua (promotion of language teaching) and Comenius (joint projects between schools) have contributed to this goal, competition for resources is fierce, application processes are complex and the overall sums involved are paltry compared with those available for schemes such as agricultural subsidy. The EU could take advantage of the development of content on the proliferating broadcast and narrow-cat media made possible by the convergence of digital technologies and television – one of the major means of socialisation and identity building for individuals. By subsi- dising translation of programmes, establishing more pan-European channels (Euronews and the Franco-German ‘arte’ are widely seen as successes) and finally by opening up national cable and satellite systems to channels from across Europe, TV can be made a more European experience. It would, for example, make for much diversity if Germans were able to have access to some French, British, Spanish or Swedish programmes instead of more than 30 German ones. In education, a first step would be to coordinate national policies, not by introducing a uniform European curriculum (indeed this is exactly the wrong way, as it would erode diversity and generate huge resistance), but by making the multiplicity of European ways of life a core feature of national curricula and not just the elements that are of particular relevance to national developments. A key aim of EU policy must be to continue,not only through more accessible information and marketing initiatives, to strengthen second language learning throughout the member states and to underline the multiple benefits to individuals and organisations that can flow from it. Other routes to a stronger sense of European identity and common cause would be increased and more widely accessible and publicised forms of support for student exchanges, language teaching and also an exchange of teachers. These policies already exist in the form of EU programmes such as Erasmus but, so far, they only target those (in this

Demos 135 Demos Collection 13/1998 example students and university staff) who are more likely to see themselves as enjoying a European (or at least post-national) identity alongside their national one in any case. Ways will have to be found to include many more working age adults and less mobile social groups. In border regions or between twinned towns (of which there is already a large number) exchange schemes could beset up for manual or service workers, promoting exchange of practices and ideas as well as providing a European experience. The democratisation and normalisation of swaps, learning experiences and work placements needs to follow the democratisation of holiday travel access the continent if the gradual development of a European identity is to be reinforced among Europe’s citizens.

136 Demos Notes

1. Beck U, 1992, The risk society,Sage, 2. Berger P and Luckmann T, 1966, London; Giddens A, 1991, The social construction of reality, Modernity and self-identity, Polity Doubleday, Garden City, Press, Cambridge; New York. Giddens A, 1994, Beyond Left and 3. Gellner E, 1997, Nationalism, Right,Polity Press,Cambridge; Weidenfeld & Nicholson, London. 4. Morley D and Robins K, 1995, Beck U, Giddens A and Lash D, Spaces of identity,Routledge, 1994, Reflexive modernisation,Polity London. Press, Cambridge.

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Europe’s legitimacy gap Mark Leonard

Understanding the EU’s ‘cultural deficit’

The European Union is preparing for its most ambitious phase of integration yet, embracing economic and monetary union and the planned enlargement to the East. But at the height of its economic and political ambitions and success, it seems more distant, more mysterious and less popular with many of its citizens than ever before: according to opinion polls, fewer than half support their country’s membership, while eight out of ten feel ill-informed about it. A continent-sized gap has emerged between the EU’s success and popularity outside its borders, and its lack of legitimacy at home. The EU’s problems are not rooted solely in an institutional democratic deficit, but rather in a series of omissions relating to political identity and cultural resonance which 40 years of progress towards ever deeper and closer European Union have failed to rectify. The EU has paid too little attention to the three elements that give national governments legitimacy. First, the public will support a regime if it addresses their priorities and is seen to be effective. The EU fails on both counts.While seven in ten Europeans see protecting the environment, solving international

Senior Researcher, Demos.

Demos 139 Demos Collection 13/1998 crime and terrorism, and common defence as priorities, the EU devotes the majority of its time and money to the CAP and EMU – priorities for just one in ten. The high profile given to fraud, waste and the costs of the Common Agricultural Policy, coupled with the failure of important EU initiatives, such as its attempts to intervene in the former Yugoslavia, have also dealt serious blows to the EU’s image – making Europeans increasingly sceptical about the efficacy of Euro- pean institutions. In fact, just one in three (36 per cent) thinks that they can rely on European institutions.1 The result is that only four in ten Europeans think that their country has benefited from EU membership, while 36 per cent believe their country has not benefited.2 Second, people will support a regime that has a clear sense of direction – even if they disagree with specific policies. The problem is that there is no sense of direction or mission for the European project. The original clarion calls – peace, prosperity and democracy – have been muted by developments in the 1990s. The claim to be a guarantor of European peace has been undermined by the bloody fiasco of Yugoslavia’s break-up; the claim to be a foundation of European prosperity by the impact of economic recession and fears about the implications of EMU for jobs; and the claim to be a force for democracy by the opaque decision making processes of the Union and the contro- versies over the passage of the Maastricht Treaty.Above all, day-to-day decisions have become detached from strategic goals. In their place there is a sense among the public that the European project has no ambitions beyond its technocratic agenda. The final problem is that many citizens do not identify with Europe or its institutions. Forty five per cent do not feel any kind of European identity and barely one in ten sees their European identity as stronger than their national identity. Even the 50 per cent who feel ‘European’ cannot give it any definite meaning – it is just something they might feel if confronted with, say, Japanese or American people. There is no Europe-wide equivalent to the set of myths or stories that make up national identities – a set of characteristics common to all Europeans. This matters because it is a shared sense of identity that allows governments to take ‘tough decisions’ or bring about major change. It short

140 Demos Europe’s legitimacy gap circuits the debate about whether an institution should exist because people will unconditionally support the existence of an entity to which they see themselves belonging.

‘There is no Europe-wide equivalent to the set of myths or stories that make up national identities. This matters because it is a shared sense of identity that allows governments to bring about major change; people will unconditionally support the existence of an entity to which they see themselves belonging.’

Rather than tackling these problems, the EU’s attempts to build legitimacy have concentrated on building up institutions, developing a political identity and selling an élitist cultural identity. Though many of these initiatives have their merits, each one has failed to make the EU more popular. They represent a classic case of the EU playing to its weaknesses – highlighting the things that turn people off and playing down the aspects that are most likely to resonate with its citizens. First, they have tried to fill the ‘democratic deficit’ by giving more power to the European Parliament. However, it seems perverse to pin too much hope on the European Parliament’s ability to deliver legitimacy when voter turnout has fallen at each successive election and its existence has barely registered in most citizens’ hearts and minds – particularly at a time when political institutions and structures are increasingly unpopular and distrusted at the national level. Attempts to promote a common European citizenship have proved equally unsuccessful. The value of citizenship lies in providing access to previously restricted rights and freedoms. It has little resonance when the rights already exist. Rights to vote and work in another EU country, though vital to mobility, at present only offer concrete benefits to the one in 50 Europeans who already live in other EU countries. Least effective have been attempts to construct an Esperanto identity out of cultural highlights from Plato to Beethoven and abstract political principles. More recent initiatives such as an EU passport, anthem, flag and ‘Europe day’ have helped raise the visibility of the EU

Demos 141 Demos Collection 13/1998 as an idea and an entity but have failed to build up a European cultural identity because they have no content and do not relate to most people’s lives and problems. The irony is that while the EU’s institutions have become less popular, people have become more open to the idea of Europe. Beneath the apathy and ignorance of its citizens lies a latent legitimacy which the EU has consistently failed to tap into. First, Europeans see an increasing role for Europe in the governance of their countries – they have a natural sense of subsidiarity. Though 60 per cent say that they would like ‘the EU to be responsible only for matters which national governments cannot deal with’, opinion polls tell us that they count the environment, international crime and terrorism, common defence and military policy, common foreign policy and job creation as problems beyond the grasp of national governments.3 As most of these problems are in policy areas which are still operating on an inter-governmental basis, this presents the EU with a real challenge to upgrade its operations and gives it an opportunity to pursue integration with the support of the vast majority of its citizens.

‘While the EU’s institutions have become less popular, people have become more open to the idea of Europe. Beneath the apathy and ignorance of its citizens lies a latent legitimacy which the EU has consistently failed to tap into.’

At the same time people are more European in their everyday lives than ever before: in the food they eat, the places they travel to and the languages they learn. This latent legitimacy can be found in the convergence of consumer habits and lifestyles across the EU. It is particularly evident in the increase in intra-EU travel and the development of language skills among young people – over seven out of ten can hold a conversation in a second language. It is from this patchwork of sounds, smells, pleasures and fears that make up our lifestyles that a workable identity for an integrated and democratic Europe can emerge.

142 Demos Europe’s legitimacy gap

It is true that there are important structural barriers to the formation of a European identity. The fact that over half of Europeans are incapable of having a conversation in a second language has made the development of a common media and cultural life impossible so far, as well as hampering mobility. Only 1.6 per cent of EU citizens are resident in another EU country,4 and less than a third say that they would accept ‘a good job’ elsewhere in Europe.5 National education systems also fail to bolster any sense of a common European ‘mythology’ or shared sense of transnational purpose. But the key barrier to securing legitimacy has been the culture of European integration. The ideal of ‘spill-over’ and integration by stealth has made it difficult to communicate the importance of the European Union to citizens, deprived it of a sense of strategy, and made it impossible to rally people round a commonly desired end- point. The heart of the problem is not so much a democratic deficit as a political deficit – the fact that politicians have not offered competing visions of European integration. Instead the debate in the European Council and Council of Ministers has been between different conceptions of the national interest, or has been artificially polarised between arguments for ‘more Europe’ or ‘less Europe’.This has meant that people have had no opportunity to debate or to vote for the type of Europe they want. While power has continued to flow to a European level (European institutions are now responsible for half of all national legislation and 80 per cent of economic and social legislation) political debate has remained trapped at a national level. Though the European Parliament has grown in importance and provides effective accountability, it does not set the European agenda, cannot initiate legislation, and has no power or sanctions over its executive,the European Council of Ministers. One way of changing this, in the medium term, would be to reform political parties at a European level so that they can express socioeconomic divisions, as well as divisions of national interest, in the European Council and Council of Ministers. But strong European parties will not appear overnight, even though their emergence does not depend upon building a federal Europe or massive change to EU institutions.

Demos 143 Demos Collection 13/1998

In the short-term European leaders must talk to the Europe that exists beyond the institutions, rather than focusing exclusively on EMU. To begin building trust with its citizens the EU must:

1. offer leadership and a sense of mission and demonstrate that it knows and cares about the big picture rather than just technocratic minutiae or the mechanics of integration, by linking all negotiations – no matter how technical – to strategic aims 2. make integration relevant to its citizens’ priorities by tackling the ‘problems without frontiers’: long-term unemployment, environmental pollution, international crime and terrorism, drug trafficking, and defence 3. deliver and communicate practical benefits to EU citizens by continually linking the negotiations on enlargement and EMU to practical benefits, as well as reassessing the use of Community budgets to make their use more visible and effective 4. develop an identity and a narrative that links the EU and European integration to the Europe that people live, eat, read and travel in.

If European leaders do not develop a convincing story of European integration before embarking on their ambitious programmes for EMU and enlargement, their failure could haunt them for years to come. If, however, they can build on the emerging social and cultural identity and shift the focus of European integration to reflect people’s priorities, then the idea of the ‘People’s Europe’ could be transformed from soundbite to reality.

144 Demos Notes

1. Directorate General X, 1997, 4. Eurostat Yearbook 1995, Office for Eurobarometer: public opinion in the Official Publications of the European Union, report no 47, European Communities, European Commission, Brussels. Luxembourg. 2. See note 1. 5. Henley Centre, 1997, Frontiers, 3. See note 1. Henley Centre, London.

Demos 145

The myth of a Euro-identity Cris Shore

Why European cultural identity will remain fragmented

‘If a European identity could be established and its elements clearly identified, the institutions of the European community would have a much stronger point of reference from which to gather loyalty from its citizens and build up a much needed legitimacy. We have now to evaluate whether this is a realistic expectation and under what circumstances it could be feasible’.1

Over the past decade the issue of ‘European identity’ has come to dominate the political agenda. Questions that were once deemed academic and esoteric – what is ‘European identity’? What are the conditions that favour the creation and diffusion of ‘European consciousness’? – are now widely discussed among Europe’s political and financial élites. There are two main reasons for this interest in identity, one political, the other commercial. First, as European political leaders increasingly realise, the credibility of the European Union as a democratic political system ultimately hinges on the development of a more coherent and tangible sense of European identity among the peoples whose interests

Senior Lecturer, Department of Anthropology, Goldsmiths College.

Demos 147 Demos Collection 13/1998 the EU institutions claim to serve. European consciousness is crucial for mobilising people, winning consent, and for creating the ‘social cohesion’ and feelings of belonging that EU politicians say are needed to underpin further steps towards economic and political integration. The problem is that the European Union is an embryonic state without a nation. Despite the massive transfer of powers from the nation-states to Brussels, there is still no self-recognising ‘European public’ to lend legitimacy to European institutions. The people of Europe, says Herrero de Miñón,‘are remote from the decision making process because there is no such thing as a ‘European people’. The lack of demos is the main reason for the lack of democracy. And the democratic system without demos is just cratos, power’.Without the underpinning of a European public and a transnational democracy the ‘self-denominated political needs and reasons of Europe’s institutions’ become little more than ‘a new version of “raison d’Etat”’.2 Second, business leaders and market analysts increasingly acknowledge that lack of ‘fellow feeling’ among Europeans is both a source and a symptom of a deeper commercial malfunctioning that is undermining the evolution of a single European market and damaging Europe’s long-term competitiveness.3 The problem is that ‘European consumers do not feel European in a political or legal sense’, and this absence of European consciousness is identified as a major obstacle to the formation of a European ‘home’ market, which Europe needs if it is to compete with Japan and the United States. Despite the laborious legislative efforts to open up European markets, nationalism in consumer preferences remains a key barrier to free trade within the EU. It is within this context that the British government’s recent emphasis on creating a ‘peoples Europe’ begins to make sense, although how to translate this populist jargon into policy remains far from clear. Overcoming the legacy of complacency, élitism and dirigisme is a start. EU leaders now admit that their approach to European unification has been characteristically technocratic, managerial and top–down – an admission prompted less by remorse than recognition that attempts to invent Europe by fiat have failed. Until the 1992 Danish referendum on Maastricht, European political élites felt little need to involve the

148 Demos The myth of a Euro-identity public, whose passive consent was all that was deemed necessary to legitimise further measures towards integration. As Pascal Lamy, Jacques Delors’ powerful political fixer summed it up:‘The people weren’t ready to agree to integration, so you had to get on without telling them too much about what was happening’.4 EU policy-makers have learned that they can no longer rely on this ‘permissive consensus’.As Jacques Santer warned, pointing out the dangerous gap that has emerged between Europe’s institutions and its citizens, ‘the Community can no longer remain the prerogative of a select band of insiders’.

‘EU leaders now admit that their approach to European unification has been technocratic, managerial and top–down – an admission prompted less by remorse than recognition that attempts to invent Europe by fiat have failed.’

Unfortunately, this is precisely the way many people perceive the EU. The 1997 Eurobarometer report makes grim reading for advocates of ever-closer union. Support for EU membership across the Union has plummeted from 72 per cent in 1991 to just 46 per cent. Seldom has the EU appeared so unpopular or irrelevant to the needs of its citizens. Forty years of institutionalised attempts to ‘build Europe’ have had little impact at the level of popular consciousness and the transfer of loyalties from the nation-state to supranational European institutions in Brussels predicted by neofunctionalist integration theories has simply not happened. If the nation-state is ‘historically obsolete’, as some political scientists and sociologists argue, most Europeans nevertheless remain stubbornly wedded to their national identities, against which the concept of ‘Europe’ pales into insignificance. But is this necessarily the case? Could political actors in the Member-States ‘be persuaded to shift their loyalties, expectations and political activities’,as Ernst Haas argued over four decades ago,‘towards a new centre, whose institutions possess or demand jurisdiction over pre-existing national states’?5 As EU officials and Euro-federalists often ask, what can be done to encourage people to abandon their parochial

Demos 149 Demos Collection 13/1998 attachments to the nation-state and to promote feelings of pride and belonging to ‘Europe’? As historians like to remind us, the nation-state is a relatively recent phenomenon: an ‘imagined community’ whose existence at the level of mass popular consciousness was forged (in many cases as recently as the last century) largely through modern communication technologies and state apparatuses. Modern nations were ‘invented’ using various nation-building strategies, from the newspaper and the novel, mass education, conscription, taxation and the standardisation of vernacular language, to the mobilisation of myths and symbols, the re-writing of history, and the ‘invention of tradition’. If these ‘political technologies’ proved so effective for creating the nation-states in an age of industrialisation, so some argue, why not use them to engineer a Europe identity appropriate for the post- colonial, post-industrial age? Within the European Commission there are many who advocate this approach, arguing that identities are segmentary and multifold, therefore creating an overarching ‘European identity’ is simply a matter of ‘stimulating awareness’ of our shared cultural heritage to form a new pan-national tier of identity and solidarity.6 Underlying this ‘Chinese Box’ theory of identity-formation are two key assumptions, both of which are deeply flawed. First, is the functionalist idea that because social identities are fluid, shifting and contextual and because individuals invariably have multiple identities, they will necessarily fit together harmoniously, like so many nesting Russian dolls, neatly bounded and hierarchically arranged ‘in concentric circles which encourage compatible loyalties from the local to the European level’.7 The problem with this analysis is that it is ignores politics; once identities are politicised (as most national identities are), tiers of loyalty

‘The problem is that those cultural elements which give shape and form to existing national identities (including language, history, religion, myth, memory, folklore and tradition – in a word, “culture”) are precisely those factors that most divide Europeans.’

150 Demos The myth of a Euro-identity become enmeshed in sensitive issues of power and sovereignty. If nation-state formation provides a model, one should remember that decades of conflict, state violence, and authoritarianism were also preconditions for forging national communities. The second flaw is the assumption that a European identity can be created simply by exploiting existing ‘patterns of European culture’.8 Many writers wax enthusiastically about European ‘core values’ – which are invariably located in the Greco-Roman tradition, in Judeo-Christian ethics, Renaissance humanism and individualism, Enlightenment ration- alism and science, traditions of civil rights, democracy the rule of law and so on. Leaving aside the criticism that these ‘core values’ are highly selec- tive, élitist and ‘Eurocentric’, the problem is that those cultural elements which give shape and form to existing national identities (including language, history, religion, myth, memory, folklore and tradition – in a word, ‘culture’) are precisely those factors that most divide Europeans. EU élites have tried to get round this dilemma by using the slogan ‘unity in diversity’ as the official formula for discussing in European culture(s), and by tacitly evoking the old Gestalt idea that ‘European culture’ is a whole greater than the sum of its parts – i.e. therefore ‘naturally’ transcendent. The problem, however, is that few people get the big picture, so to speak. Moreover, who defines what constitutes ‘European culture’ is itself a politically loaded issue that most EU leaders are reluctant to address. There is also a major contradiction between attempts to mobilise public support for further integration by evoking populist rhetoric about a ‘people’s Europe’ and ‘citizenship’,and the more traditional attempt by many EU leaders to depoliticise integration process by portraying it as a legal- rational and primarily ‘technical’ process that has more to do with history, evolution and destiny than with political will.

Surreptitious integration While many sociologists are sceptical about the European Union’s supranational quest to reconfigure the cultural bases of political allegiance across the continent, some observers detect signs that this is already happening despite the EU’s declining popularity. This argument is given its clearest expression in Mark Leonard’s report Making

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Europe popular: the search for European identity. ‘Beneath the apathy and ignorance of EU citizens’, he writes, ‘the EU enjoys a powerful latent legitimacy – one that it rarely taps into’.9 What is this ‘latent legitimacy’? Leonard’s answer is delivered with poetic gusto:

‘Far away from the Europe of regulations and institutions, the fragments of a cultural identity and European life-style are secretly emerging. This surreptitious identity is carefully stored away in holiday snapshots and memories of art, literature, music, buildings and landscape. It has been captured and promoted in institutions and schemes that allow people to experience Europe directly – unmediated by governments and EU institutions. The most visible ones are the ERASMUS exchange programme, the Eurovision Song Contest, Inter-rail and the Channel Tunnel.’10

Leonard’s point is that the EU must be seen to concentrate on its citizens’ priorities and on ‘concrete examples’ of integration rather than grand designs or abstract principles. If EU institutions base their identity on ‘this patchwork of sounds, smells, pleasures and problems that make up our lifestyles, it will bring much more legitimacy than any new institutions’.Exactly what is ‘European’ about these sounds, smells or pleasures is an open question (the smell of a Brussels’ drain or the sound of a passing Eurofighter jet, perhaps?). Leonard is correct in one thing: EU leaders’ fixation with legal and institutional agendas has blinded them to the process of European integration occurring at the micro-level. Europe has undoubtedly become more homogenous than it was even a generation ago.Seen from afar, there are many factors that unite Europeans, from demographic trends (the downsizing of the European household) and growing trade between Member-States, to shared fears about unemployment, AIDS, crime and the environment. However, environmental issues apart, these problems exacerbate not unity but cultural chauvinism and xenophobia – exactly as Bosnia and the Gulf War exposed the fault-lines underlying the dream of a common European foreign and security policy.

152 Demos The myth of a Euro-identity

Nonetheless, experience of Europe’s cultural diversity has become a key dimension of everyday life in myriad ways, from supermarkets and cinemas to fashion and food. People take more foreign holidays, more ‘weekend breaks’, make more business trips, more phone calls, watch more European television stations than at any time in the past. The level of cross-border flows is unprecedented. Mass sports like football have become increasingly ‘Europeanised’ both at the level of players and managers and television coverage. Eric Cantona, Jurgen Klinsmann, and Luciano Pavarotti have become household names in Britain. Branches of Benetton and Bata now appear in almost every British high street, while Marks and Spencer have opened up shop in Strasbourg and Brussels. Balsamic vinegar, sun-dried tomatoes, cala- mata olives, porcini mushrooms and freshly baked French baguettes are now available in Tesco. But does all this add up to an emerging European identity? The danger is to confuse patterns of consumption with processes of identity-formation. People consume products but their cultural meanings vary according to context. The British preference for Indian food or German cars does not lead inexorably to an identification with India or with Germany. English Football fans may worship Eric Cantona and still hate the French. The question is at what point does experience of Europe spill over into ‘European consciousness’? Jacques Delors recognised this in his comments about the need to give Europe a ‘soul’ and his frequent warnings that people do not fall in love with a market. Evidence from opinion polls suggests that we are still a long way from the kind of European identity he has in mind. Take mobility – one of the key indicators of the success of the European project. According to EU surveys, less than one third of Europeans ‘would take a job elsewhere in Europe were they offered one’,and only a negligible percentage of the population of each Member-State is made up of other EU nationals: 5 per cent in Belgium (the highest), 2.8 per cent in France, 2.1 per cent in Germany falling to 0.6 per cent in Spain and 0.2 per cent in Italy.11 The possibility of cross-border mobility has not yet motivated many Europeans to travel. It is all very well to highlight the increase in transnational tourism, but the mass tourist experience is

Demos 153 Demos Collection 13/1998 two weeks in a packaged holiday resort or touring party, safely insulated from any real contact with the ‘natives’. Language remains a key barrier to further integration. While EU surveys report growing linguistic dexterity among young Europeans, other surveys give a different picture. Despite the increasing emphasis on language acquisition in schools, relatively few Europeans speak or read foreign languages. A survey of language skills conducted by the Institut für Demoskopie Allensbach in 1994 found that some 52 per cent of all West Germans do not speak or read any foreign language (rising 72 per cent for East Germans), and 86 per cent never read any foreign literature.12 Even among the 20–30 year age range almost 69 per cent do not speak or read any foreign language. If only 31 per cent of Germans speak English fluently, we can expect even less from countries such as Italy and Spain, which even more so than Germany dub television programmes and films. Significant in this respect are the findings of the 1995 NOP survey carried out for the BBC. On the key question ‘how European do you feel?’,84 per cent of all British adult respondents answered ‘not at all’ or ‘a little’.Asked ‘with which country do you feel you have the most in common?’, 7 per cent chose Germany and 5 per cent Spain, while a massive 23 per cent chose the USA, 15 per cent Australia and 14 per cent Canada.13 What these figures indicate is that for most Britons, identification with the Anglo-Saxon or ‘English- speaking’ world still far out-weighs identification with Britain’s European partners. This confirms the argument that the key elements of identity- construction are language, a sense of shared history and memory, and kinship.

Conclusion Leonard’s solution to the challenge of ‘making Europe popular’ is to create new narratives that will ‘grab the popular imagination’; to do for Europe what the narrative of ‘liberty, equality, fraternity’ did for revo- lutionary France, or what the idea of ‘God’s free Englishmen’ did for Cromwell’s army during the English civil war. Transcending the nation-state and nationalism is simply a matter of joining up the dots

154 Demos The myth of a Euro-identity between the scattered fragments of European identity, now carefully woven to create a compelling story about our shared European identity. Unfortunately, this leaves unanswered the fundamental question of what the content of these new European narratives should be. To supersede nationalism and create a Europe nation-state at the cultural level is a formidable task which some would say ‘is actually impossible’.14 For many EU supporters, ‘Europe is a project whose time has come’, but that ‘narrative’ depends on how one reads history. To more historically orientated observers it would seem that the processes of vernacular mobilisation and nationalism that have been sweeping various parts of the world since the seventeenth century are far from exhausted. If that is the case, then talk of Europe’s ‘federal destiny’ is not only a dangerous myth, it is also profoundly anti-historical.

Demos 155 Notes

1. Soledad Garcia and Helen Wallace, campaign see Shore C, 1993, 1993,‘Conclusion’ in Garcia S, (ed) ‘Inventing the People’s Europe, European Identity and the Search for Critical Perspectives on EC Cultural Legitimacy, Pinter, London, 172. Policy’ Man 28 (4):779–800. 2. Herrero de Miñòn M, 1996,‘Europe’s 7. see note 1, 172. Non-Existent body Politic’ in 8. Smith A, 1991, National Identity, Herrero de Miñòn, M, and Penguin, Harmondsworth, 174. In Leicester G, Europe: A Time For his later work, Smith is far more Pragmatism,European Policy sceptical about the possibility of Forum, London, 1–5. pan-European nationalism 3. Henley Centre, 1996, Frontiers, succeeding. Henley Centre, London, 10; 70. 9. Leonard M, 1998, Making Europe: 4. Cited in Ross G, 1994, Jacques Delors the Search for European Identity, and European Integration,Polity Demos, London, 7. Press, Cambridge, 94. 10. See note 9, 27 5. Haas E, 1958, The Uniting of Europe, 11. Cited in Henley Centre, 1996 OUP,Oxford, 16. (see note 3), 78–79. 6. During the 1980s, the EC sponsored 12. See note 3, 80–81. various initiatives for inventing new 13. NOP Survey on Europe carried symbols of ‘Europeanness’ to boost out for the BBC, May 1995, Europe’s image and identity. The NOP/43415. result was the creation of the 14. Schlesinger P,1994,‘Europeanness: European flag, anthem, passport, car A New Cultural Battlefield?’ in number-plates, and numerous other Hutchinson J and Smith AD, eds, ‘cultural actions’.For a detailed Nationalism,Oxford University analysis of this ‘People’s Europe’ Press, Oxford, 324.

156 Demos How European are we? Alex McKie

Citizens’ perceptions of identity and diversity in Europe

New research by The Henley Centre on popular perceptions of the European Union and citizens’ sense of a personal relationship with the process of European integration is shedding light on the potential for, and barriers to, growth of an EU identity.1 The research was conducted in 1997 and 1998 via a major survey of citizens in Britain, Germany, France, Spain, the Netherlands, Italy, the Czech Republic and Poland. Focus group interviews for in-depth qualitative data were also carried out. The aims of the fieldwork included an exploration of how far people identified with Europe as well as with national, local and regional interests and allegiances and what the barriers were to a greater sense of common European identity. This article outlines some of the results, focusing on:

the degree to which people feel comfortable with a ‘Euro- identity’ along with other sources of meaning and loyalty attitudes to cultural diversity in Europe the remoteness of EU activities the sense of common risks and insecurities

Director of European Consumer Research Programme, The Henley Centre.

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the need for a new approach to communicating a sense of European purpose.

Mixed identities? It is a strange irony that those who claim to feel most ‘European’ are those currently outside the European Union. The Czechs and the Poles are the only people who say that their European identity is stronger than their national identity. As many as 59 per cent of Poles and 45 per cent of Czechs report feeling as much citizens of Europe as of their nations. At the other end of the spectrum, the British retain their leading Eurosceptic position with only 18 per cent saying they feel as European as they do British and 71 per cent disagreeing. (There may be some small comfort for integrationists in the fact that the figure of 18 per cent in 1998 is up from 12 per cent in 1996.) It remains a point of debate as to whether the British view is based on a deep rooted island mentality or whether it is a hangover of the negative outlook on the EU project during the Thatcher years. In Germany, often the driving force towards an integrated Europe, there appears by contrast to be a significant proportion for whom identity is rooted in neither Europe nor nation. What emerges from the Henley research is a very mixed picture of fragmented and overlapping identities and allegiances. For many, there is neither a strong sense of national nor European identity but rather a focus on local or regional loyalties and interests. But national identification, unsurprisingly, is still strong overall in the EU and only notably weaker than average in Germany compared to other Western countries. Will this pattern continue to hold or are rising generations more likely to embrace mixed identities and a stronger sense of belonging to a European community? Younger people (particularly those in the fifteen to 24 group) do indeed tend to be more positive about Europe than do older groups – in terms of feeling European and supporting both a united Europe and the single currency. However, even among this age group they do not account for the majority of the population except in Germany and Poland. There is a slight tendency for under 35s, and especially under

158 Demos How European are we?

25s, to express as much identification with Europe as with their nation state. But this finding may reflect a growing sense of a multiple ‘cosmopolitan’ identity as much as it does a potential trend towards more ‘European-ness’ of sensibility. Young people are also more likely to define themselves as ‘global citizens’; they see themselves as more tolerant than older generations and feel a pride in their ability to see beyond national boundaries. They like to think of themselves as having ‘layered lives’: they can juggle many different roles and enjoy being able to step between those different roles. Thus nation is only one source of identity. Being European or being a citizen of the world has equal power – as indeed does identification with their city or region, their support of a football team, or membership of a club. All are felt to be part of their identity and supporting one aspect does not diminish others.Among many older generations, where resistance to Europe is greatest it seems to spring from a concern that new sources of identity will lead to a loss of the traditional sources and thus diminish the individual, which they see as threatening. In some ways, it is surprising that so many people feel their European identity as much as their national identity. Much of the time, the Union is ‘immobile’ in most people’s experience. When asked what it means to be European, most find it difficult to define; other than a general sense of common geography, it is bound up with a vague notion of membership of the European Union and a need to think of the future.

Community is not the same as conformity The positive sense of having a European identity as reported in Poland and the Czech Republic gives an interesting insight into the sources of identity and the continuing power of the past. When asked about how she felt about the idea of ‘joining Europe’, a Polish woman in a focus group pointed out that Poland had been at the heart of Europe for hundreds of years, whereas the European Union was an economic entity which had been in existence for a mere 50 years. For her the issue of European integration was less about Poland joining the EU and more about Europe ‘coming home’ at last. History lives on in people’s minds

Demos 159 Demos Collection 13/1998 and, despite the impact on their lives of increasingly global markets, the influence of local cultures remains strong. There appears from our qualitative research across Europe to be little desire for homogeneity – too often, people felt, the idea of community has been linked to conformity. The people of Europe like the fact of European diversity; for instance, one of the consistent criticisms of towns and shops is that there is too great a desire to make everywhere look the same. Europe should take pride in its diversity and see it as part of its richness and not as a problem.

Chocolate fudge Faced with the immense difficulty of trying to foster a common identity, the EU has focused on the more tractable task of developing common systems. Unfortunately, this often has the result of creating greater division rather than a common purpose. Euro directives are often pilloried in the popular press and reinforce the feeling that the EU understand little about the people. Straight bananas, chocolate reduced to ‘non-cocoa vegetable fat’ and tomatoes having to conform to standardised sizes; myths and realities mingle in the media and all reflect the underlying fear that this is really what the EU would like to do to the people of Europe. The lack of a ‘face’ for the EU and a clear vision for the project of integration is likely to become still more of a problem with the launch of the Euro. When people actually have to deal with the new currency the prevailing fudge as to whether the EU is about economic union or political and social integration will have a real impact on people’s day to day lives. Their response is rather more difficult to predict, but it seems likely that the Euro will be blamed for all manner of problems, whatever the real consequences of its launch.

A community of common risks One of the major difficulties for the EU’s public relations is that much of the debate about Europe has focused on institutions and process and appears to forget about the people. Our qualitative fieldwork

160 Demos How European are we? across Europe revealed remarkable similarity and consistency in citizens’ hopes and fears. All worry about getting and keeping jobs, the pressure on family, the increasing level of crime and perceived lack of punishment. It seems that in the age of instant world news we all worry about the same things (whatever the likelihood of them happening to us). There is a widespread feeling that people are less concerned about those around them and more concerned with themselves. Many respondents take the view that these days you are on your own and have to be prepared to fight for your own interests. There is a lot of talk about the loss of community and a feeling that, although we have greater opportunities and choices than in the past, something of our humanity has got lost along the way.

‘We have more choice than my parents did, but it seems that everyone is so busy there is no time to enjoy it. There is no time to sit and talk with people, always rushing’ (30–50 year old, Italy) ‘At least in the past you knew that there was a rat race, you could jump off if it all got too much and know you could get back on. Now we don’t even know if the rat race will still be there later, there’s so much uncertainty’ (20–30 year old, UK)

One of the consequences of this is that trust in institutions has declined and respondents tended to feel that today ‘you can only afford to trust people you know’. Even where trust exists, it is more volatile and fragile than in the past. To trust is to leave yourself vulnerable. When the economy is booming people seem to feel more expansive and prepared to take risks; where times are hard the tendency is to close the doors, see everything as a potential threat and, where possible, to avoid change. For many EU citizens, the nascent sense of ‘Europeanness’ has been hit particularly hard by the end of the 80s boom and the 90s recession. Now an air of suspicion is more likely to

Demos 161 Demos Collection 13/1998 be encountered than optimism about the economic and social future. Optimism is to be found – but there is an underlying view that it needs someone to articulate a vision of the future towards which everyone can move. The European Union, with its ruling triumvirate of politicians, bankers and lawyers, is not immediately associated with trust and this kind of inspiration.

A new language The language of the Union is, for many of the respondents, the language of the old social and political world: telling people what to do, issuing directives. It is the language of parent to children, not the language of equals. It may describe people as ‘citizens’but even this creates problems. Across Europe the word ‘citizen’ has different meanings and associations. In the UK it is a relatively neutral word – partly because it has little real constitutional meaning. In France it is associated with the revolution and thus with the past rather than the future. In Eastern Europe it has very negative connotations because it is how the police and state officials would refer to you in the communist era. Only in Italy does ‘citizen’ appear to have a positive power and to be used by people when they describe themselves and the roles they play; but even here they are more likely to describe themselves as ‘citizens of the world’ than citizens of Europe. Citizenship is seen as a relationship with the state involving rights and responsibilities. But the feeling that the state is reducing its responsibilities means that many people feel that the state can make fewer demands of its citizens. Citizenship seems to imply rules, limited choice, being told what to do – all things that people see as a part of the past they are glad to have lost. The current view of Europe evokes little positive passion among people. On the basis of our research, what what many seem to want is a Europe not of citizens, nor representatives, but a Europe which is meaningful to individuals like themselves who are struggling to make sense of what seems to be a new and con- fusing world.

162 Demos How European are we?

There is a great opportunity for a European identity to evolve. We share many of the same fears, face similar challenges and all dream of leading happy and fulfilling lives. An identity comes from the people and cannot be imposed by any outside force. If there is to be a people’s Europe it will grow from people’s behaviour and not as a result of politicians’ current grand projects for integration. The Union needs to find a new idiom for its communications which connects with these common elements of individuals’ lives across Europe and which builds on the embryonic cosmopolitan feeling which we can detect among the young.

Note 1. The Henley Centre, 1998, Frontiers: planning for consumer change in Europe, The Henley Centre, London.

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Branding Europe? Carol Samms

Elements of a positive European identity

It has been apparent for many years that there is a considerable distance between the business community’s perspective and the average citizen’s view of Europe. This distance is still growing despite potentially beneficial developments such as the election of a relatively Europhile government in the UK and the unexpectedly smooth run- up to the launch of the Euro. This article explores the driving forces shaping each constituency’s view and outlines possible ways to overcome this dissonance. This understanding is important given the rise of debate over the identity of the European project, which increasingly is being called into question as it appears to offer little scope for engagement among the citizens of the EU. At the beginning of the 1990s, senior businessmen in Europe were asked to rank key issues on their business and marketing agenda.1 ‘Europeanisation’ of strategy was an overwhelming priority. Since then, building a framework for business to compete in Europe has become a sine qua non for the EU and the private sector’s major players. Even the SME (small and medium enterprises) sector has been enabled rather than disabled. Driving forces for the business community include travel

Director, Through the Loop Consulting Ltd.

Demos 165 Demos Collection 13/1998 and therefore greater contact, shared media and interests in common such as the health of the economic environment and reciprocal trade. As a result, there are many shared values and attitudes in the business community across Europe despite genuine and perceived national differences.

‘The gap between the relatively coherent business perception of why “European-ness” matters and the fragmented images through which the general public perceive Europe is the most striking aspect of the failure to establish an identity for the EU’s grand projects.’

The big business community has also bought into the EMU project as a strategic necessity. ICI, for instance, has declared that all links in their supply chain, including SMEs, will be required to tender in Euros. In this respect as in others, decisions by major industrial concerns promote a process of Europeanisation that is largely unaffected by political negotiations and by citizens’ concerns. The Euro is here to stay whether the UK likes it or not. In stark contrast to this level of engagement by the big business community, people across the EU tend to have a very different view of the Union. Few would choose to call themselves European but rather see themselves as belonging to their home country/nationality, region or even their home community.2 This gives them a stronger sense of control over their own destiny which has been sadly neglected by institutions and politicians alike in Europe. Being ‘European’ holds no meaning at the moment. Neither has a European identity been built for the future. The people’s view of Europe embodies many myths and stereotypes, often shaped by national media interests. A preliminary content analysis of national newspaper articles would show a series of pervasive myths about the EU which if anything are fostered rather by the aloof and dismissive stance of the European Commission. The dis- engagement of the Commission from the debate on identity and mission for Europe is counterproductive.3

166 Demos Branding Europe?

The forces of change which determine the people’s view of Europe include media, quality and style of life, national interests, travel, food, fashion and so on. The weakness of the EU’s identity and public image thus has several dimensions. The gap between the relatively coherent business perception of why European-ness matters and the fragmented set of views and images through which the general public perceive Europe is perhaps the most striking aspect of the failure to establish an effective identity for the EU’s grand projects. There is a lack of a clear set of cultural and economic associations that would give coherence to the idea of ‘European business’ or ‘European brands’. At present, American and Japanese enterprises have a distinct set of cultural associations and identities on which they can trade in promoting their goods and services. US brand values can draw on a rich array of images and perceptions generated by American culture and others’ experience of it. Similarly, Japanese enterprises can exploit elements of a relatively coherent national image at home and abroad. During the 1990s, more Japanese brands have begun to trade on the associations of Japanese-ness for domestic and export market consumers. But although many major firms are committed to the project of EU integration, it is not the case that they are able to associate themselves and their products with a European business culture, the elements of whose identity will have wide resonance among EU states and beyond. Through the Loop has recently carried out research on the processes involved in the construction of national identities. A tentative model has been developed to show the richness of national associations which could be used as a possible template for construction of a possible European identity. This is shown in Figure 1. Using this model, it is possible to develop a series of associations that could contribute powerfully to a ‘national identity’ for Europe, although such a project is a task that can only be accomplished over the longer term. Let us take two examples which show considerable potential for development as elements of a European identity. Consider the positions of many European countries in two international rankings of development: the Human Development Index and the Global Competitive Index. Not many Europeans know just how far their quality of life

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Economic Historical competencies Current competencies context products/services products/services

National symbols/ Country Attributes/ Traits of associations heritage Associations nationality

Associated Traits of people Media imagery character

Figure 1 Template of perceptions of nationality and culture. surpasses that of most countries and regions. The Human Develop- ment Index prepared by the United Nations supplements GDP rankings with quality of life measures such as longevity, literacy and education. Six out of the top ten countries and, furthermore, fifteen out of the top twenty are European. Neither do European countries fare badly at all in the Global Competitive Index prepared by the World Economic Forum.Although the leaders of the index are Singapore, Hong Kong, US, Canada and New Zealand, eight European countries appear in the top twenty. European economic and social achievements implicit in these rankings, along with the rich seams of cultural associations that can be mined in all European countries within and without the EU, could be powerful components of a European identity for ‘home’ and overseas competition. Any serious effort by the European Commission or individual European countries to promote the development of such an identity would surely make use of these elements. This approach, however, contrasts vividly with the latest juvenile efforts by the European Union’s member to sell the Euro to the public through appealing to children. Just one example of this is a German book, The Eurokids, which follows a troupe of fifteen children as they travel around Europe to find out if ‘people really want the new money.’ In this book, to quote Time magazine, ‘as the children trek across Europe, they encounter one national stereotype after another.’ In Ireland, they visit a pub where rugged sailors huddle around a corner

168 Demos Branding Europe? table, their beer mugs brimming with Guinness. In Spain, they catch a bus with a peasant – and so on. We might compare this with the sophistication of the recent dis- course on European union in the 1998 Benetton publication, Enemies.

‘Conflicts aside, people want to live, buy and sell, fall in love. That which is divided by politics and religion, is united by the daily, normal qualities of life and relationships … so here is the search for real people and real stories, here is the discovery of beauty without stereotypes; here is diversity highlighted by uniqueness.’4

This kind of rhetoric could be dismissed as vacuous ‘Euro-speak’.But the willingness of many major businesses to take the risk of addressing themselves to their diverse European audiences in this way offers lessons to the Commission, national governments and other agencies which have yet to offer European citizens a set of aspirations and visions of the future continent that do justice to the projects of EMU, enlargement and deeper integration. In this task, some emerging ideas in business – notably in strategies for brand development and understanding consumers’ diverse values and concerns – can be of assistance. An example is the emerging idea of consumer value of ‘fusion’. Fusion is an exciting consumer ‘value set’ as it can help bring into balance forces which could develop as conflicts or contradictions. Examples of fusion are the blurring of traditional roles between men and women, the boundary between work and leisure and the prospective enlargement of the EU, with far greater interchange and mutual learning between East and West. The richness of the fusion concept has ready application to building a new identity for Europe. Can the Commission, national governments and other proponents of European integration succeed in constructing an identity and vision for a more unified continent? Not without going back to the driving forces of change and looking very hard at the media’s role in shaping attitudes to such a complex institution as the European Commission

Demos 169 Demos Collection 13/1998 and Europe as a whole. There is an immense communications challenge not being seized by the European Commission or the Euro- pean Union. If this challenge is not taken up, it will have fundamental implications for Europe. More powerful visions will surely be articulated by competitor regions, states and corporations in the emerging globalised market- place; and by anti-integrationist interests within European states. ‘Identity competition’ is not trivial. It is a key feature of globalisation and the politics of a diverse and rapidly changing Europe. The template of European identity must be developed as a fundamental element of the programme for a deeper, wider Europe.

170 Demos Notes

1. Survey by INSEAD, 1990. See 3. Based on research completed for Ten Strategic Issues for the The Japanese Challenge: Year 2000,Strategy,March Confrontation vs Adaptation. 1998. 4. Benetton L, 1998, Enemies,United 2. Eurobarometer, various years. Colours of Benetton.

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Book marks

Citizenship, nationality and migration in Europe Eds. David Cesarani and Mary Fulbrook This collection of essays examines the various constructions of national identity and its rhetoric of inclusion and exclusion. Identity understood through the dynamic of citizenship requires redefinition in the new European (and global) context and this book attempts this using a refreshingly interdisciplinary approach. Despite the varied approaches, these essays try to understand the relationship between migration, citizenship, nationality and national identity. However, the contexts are disappointingly familiar. For a study whose raison d’être is the need to re-examine nationality in the new enlarged Europe, the national contexts that are covered are the major Western European ones. However, this intelligently constructed collection of essays certainly adds to the debate on identity politics which appears to be something of a contemporary obsession. (Routledge, London, 1996)

European political cultures: conflict or convergence? Ed. Roger Eatwell Eatwell covers a fascinating and somewhat neglected area of European studies – the political cultures of some of the countries that make up Europe. ‘Europe’ is covered on a large scale – there is even a chapter

Demos 173 Demos Collection 13/1998 devoted to Russia. Each chapter looks at the way in which national identity and nationalism developed in a particular nation state and at the ideas and social structures which have influenced recent developments. The analyses tend to be somewhat introductory but what is interesting is the breadth of the study and the attempt to delineate a dynamic map of the European family of political cultures. (Routledge, London, 1997)

Banal nationalism Michael Billig This book opens with a demonstration of the kind of nationalism that is fundamental to the ideology and structures of established, Western European states. Billig argues that this ‘banal’ nationalism is endlessly replicated in the seemingly benign symbols of state and that notions of nationhood are deeply embedded in contemporary ways of thinking. Despite some interesting sections, the repetitious arguments render the reading of this book a banal experience. (Sage, London, 1995)

Nationalism Ernest Gellner ‘Nationalism’ was posthumously published by Gellner’s son, sum- marising most of his theory of nationalism. His approach is principally functionalist, claiming that the development of national cultures was crucial for modernisation. And as nations developed at different speeds, enlightened universalism could make little headway, leaving the field to the nation. In this highly readable incarnation of his theory, Gellner stresses two other developments: the requirement of homogeneity, which must either be abandoned or will lead to ethnic cleans- ing, and the persistence of Islam in a world of nations. These are, according to Gellner, due to the specific development of the regional (despotic) states and the non-hierarchical nature of Islam, respectively. Even for those new to theories of nationalism or Gellner’s approach

174 Demos Book marks this is an accessible book which provides a very good overview of one of the most important figures in the study of nationalism. (Weidenfeld & Nicholson, London, 1997)

Myths and Nationhood Eds. George Schöpflin and Geoffrey Hoskins This work begins by developing the idea and the role of myth in nation formation: how it contributes to the sense of reality within a community, its functions in social interaction and the idea of the ‘Golden Age’ that figures prominently in the construction of national myths and self-images. A theoretical model is built up which finds the right balance between expertise and accessibility for non-specialists. It is then applied to a range of countries: the United States, South Africa, the EU (here the emphasis lies on attempts at building identity so far and what might provide a possible basis), the former GDR and a selection of Eastern European cases. All the case studies manage to obey the boundaries of the theoretical framework, which facilitates comparison and makes for short chapters. However, some studies lack in historical elaboration, thus causing some difficulties for the non-specialist. Nevertheless, a very readable and insightful book, definitely compulsory reading for people with an interest in nationalism. (Hurst, London, 1997)

Toward a European nation? Eds. Max Haller and Rudolph Richter This book details the proceedings of the First European of Sociology, held in Vienna in 1992, which discussed the future of the continent after 1989. It begins with general questions of the emergence of European nationhood and looks at opinion and social values data. The EU is then analysed as an international system and a technocratic regime, linking its development to the problems it is facing now. Four articles on Eastern European countries discuss rebuilding of civil

Demos 175 Demos Collection 13/1998 society and nationhood with a view to developments in the rest of Europe The book closes with four empirical studies on change in religious and moral values in Europe, internationalised education, Turkey’s position vis-à-vis the EU and possible European super- nationalism – they are all detailed and specialised but cover most of the current trends. This work – although based on an event six years ago – is very up to date and provides useful information for the current enlargement talks and their problems. (ME Sharpe, Armonk, New York, 1995)

Democracy, sovereignty and the European Union Michael Newman Although title and blurb boast the offer of deeper insights into the debates around democracy and sovereignty, the book does not keep this promise. Only the first chapter deals with these issues and only rather superficially. The attempt to get a grip on integration by explaining it in terms of classical social contract theory might be a new idea – but its execution is too patchy and Newman turns to rehearsing most of the traditional theories of integration. The decision-making structure of the EU and some of its major problems are dealt with, followed by a description of the European economic system and the possible role the EU could play in economic regulation and social policy. The ‘Europe of the Regions’ is discussed as are citizenship and democratic deficits. The main point Newman makes here is that the former has to be meaningfully developed to resolve the latter. The book offers a comprehensive and accessible introduction to the issues at hand and the debates on European integration so far. (Hurst, London, 1996)

The history of the idea of Europe Eds. Kevin Wilson and Jan Van der Dussen Part of an Open University course, this book offers insights into the development of the perception of Europe over the past centuries.

176 Demos Book marks

It traces the idea from ancient Greece, through the age of explorations and early map-makers to the First World War, showing the shifting emphasis from Christianity to democratic civilisation. It then discusses projects for and theories of Europe in the inter-war period, emphasising the new nationalism in Eastern Europe and the (German) reservations about the whole European project that would later contribute to Nazi ideology. Finally, the period after 1945 is analysed, including the effect the Cold War had on the intellectual concept of Europe and the development of the EU as the new embodiment of Europe. Overall, this work finds the right balance between detail and readability, between scientific standards and accessibility. Recom- mended reading. (Routledge, London, revised edition 1995)

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Facts

Europeans drink 11.2 litres of pure alcohol and smoke 1741 cigarettes per year – each (alternatively: European drink 4.1 billion litres of pure alcohol and smoke 649.7 billion cigarettes – each year).1 The principal European airports handle 491 million passengers each year (for EU: 451 million).2 EU citizens recycle 48% of their glass and 42% of paper and cardboard (US figures 22% and 34%).3 In Belgium – home to the EU institutions – as many as 16% of young people feel uneasy with foreigners; this a figure almost five times higher than the EU average.4 Communication overkill: In Finland there are 1003 radios (EU average: 822) and 500 TVs per 1000 population (EU: 43) – and 45 in 100,000 males commit suicide (EU: 21).5 There are 12.1 PCs for every 100 population in the EU – in the US and Canada the figure is 28.6; Internet access in the EU is four and a half times lower than in North America.6 In Greece, 79% of young people are in favour of military service, just under three and a half times EU average.7 20% of 15–24 year olds in Europe would prefer their MP to be a man; for airline pilots the figure is over 40%.8 In Iceland, 61% of births are outside marriage – for Greece, the figure is 3%.9

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The number of fatal road accidents in Portugal is two and a half times higher than EU average – and more than four times higher than in the UK, home of the safest drivers in the EU.10 Italian products are considered well designed by about 75% of people, but under 50% think they are reliable – and a mere 10% consider them environmentally friendly.11 Around 70% of Eastern Europeans do not trust citizens of other nations.12 In 1996, more than 46,000 Turks became German nationals, compared to 2,000 in 1990. In Berlin, one quarter of 40,000 requests were accepted.13 The greatest possible amount of EU enlargement (excl. Russia) would result in a Europe incorporating 39 states and 625 million people.14 For each member state, 50% of all legislation and 80% of all economic and social legislation are currently decided in Brussels.15 There are only three areas of national legislation in which the EU has virtually no involvement – housing, civil liberties and domestic crime.16 Less than 4% of parliamentary questions and 2% of Early Day Motions in the UK are on Europe.17 90% of European legislation is made by unelected national civil servants.18 There are 10,000 lobbyists in Brussels – twice the number of Senior Commission administrative staff.19 Only 7% of British MPs took up their free Commission- funded trip to Brussels which they are entitled to.20 There are now 1821 twinning arrangements between the UK and other countries.21 40% of UK voluntary organisations are either active or planning to be active across frontiers in the EU.22

180 Demos Facts

Less than half of the 108 reports on EU matters produced by the committees in House of Commons and the House of Lords were ever mentioned in either House.23 There is no requirement to teach people about the EU in the UK national curriculum – even in the constitutional part of the politics A-level. 27% of British people think that Jacques Santer is the French minister in charge of nuclear testing in the Pacific.24

Demos 181 Notes

1. Eurostat Yearbook 1997, Office for Commons Session 1994/95, The Official Publications of the 1996 Intergovernmental Conference: European Community, the agenda, democracy and efficiency Luxembourg. and the role of national parliaments, 2. The Economist Diary 1998. 239/1, xxiv. 3. United Nations, 1997, Human 16. Nugent N, 1995, The government Development Index,United Nations, and politics of the European Union, New York, 221. Macmillan, London. 4. Eurobarometer, 1997,Young 17. 1994/95 Parliamentary session, Europeans Survey, European House of Commons library. Commission, DG XXII, 28. 18. Westlake M, 1996, The Council of the 5. See note 3, 211, 213. European Union, Cartermill, 6. See note 3, 211. London. 7. See note 4, 85. 19. Interview with Dr Sonia Mazey, 8. See note 4, 93. Cambridge University,August 1996. 9. See note 1. 20. See note 17. 10. See note 1. 21. Information from the Local 11. Wolff Olins, 1996, Made in Italy, Government International Bureau. Wolff Olins, London. 22. 6 P and Vidal I, eds, Delivering 12. Mattei Dogan in Hauer and Richter, welfare: repositioning non-profit and eds, 1994, Toward a European cooperative action in western nation?, ME Sharpe, Armonk, European welfare states, CIES, New York, 31. Barcelona. 13. Prospect, 5/98, 5. 23. See note 17. 14. Electoral reform of the European 24. European Movement data in Britain Movement,European Movement and the European Union,MORI and Federal Trust, 1996, London and research study, August 1996, Brussels. unpublished. 15. Select Committee on European Legislation 24th Report, House of

182 Demos Demos news

Update 1997 was a year of expansion for Demos. We completed some of the biggest projects we’ve undertaken so far, brought in new staff and secured several new sources of funding. Over the past few months, we’ve contributed fresh ideas to debates on issues such as the future of the EU, welfare reform and social exclusion. We are continuing to bring our long-term and independent perspective to the major political issues of the future. Demos is celebrating its fifth birthday in July. We have now published over 150 reports and staged numerous conferences and semi- nars. We’d like to thank all our subscribers for their support over the years – we couldn’t have done it without you.

Publications The end of 1997 saw the publication of Guaranteed electronic markets by Wingham Rowan, which sets out detailed proposals for harnessing the electronic trading revolution to tackle economic and social exclusion. Family learning by Titus Alexander draws up plans for how we should fund learning through the family as an individual sector of the education system and Democracy in the digital age by Roger Freeman advocates a radical overhaul of government to bring it into line with the digital age.

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In January we published a short Commentary by Julian Le Grand and Bill New, Fair game: tackling monopoly in sports broadcasting. It makes the case for a new government body to regulate sports broadcasting, acting as a ‘viewers’referee’to ensure that the public retain affordable access to key sporting events. The report was covered on the Today programme, Radio 5 Live, BBC News24, a number of regional outlets and by the Guardian,the Financial Times, The Times and the Economist. February and March were busy months at Demos with the publication of three new reports. Making Europe popular: the search for European identity by Mark Leonard was launched at a packed event featuring European Commissioner Neil Kinnock and chaired by Peter Kellner. The report catalysed a mass media debate on the role of the British Presidency. Reasonable force: the place of compulsion in securing adequate pensions by Ben Jupp was profiled in The Times, The Sunday Times and across a range of specialist press. Access denied? Preventing information exclusion by Danny Kruger was also covered by a number of broadcasters. George Lawson’s NetState: creating electronic government,published in early April, shows how the state can creatively use new technologies to transform itself. In early May we launched Civic entrepreneurship by Charlie Leadbeater at Politico’s bookshop in Westminster with the support of the Public Management Foundation. This report pro- files five innovative and radical public sector entrepreneurs and shows what can be learned from their experiences. Meanwhile, on May 5, National Parenting Day, Demos launched Relative Values by Ed Straw which suggests that the government should initiate a programme dis- seminating good parenting and relationship skills. We also have launched a bimonthly update – the Demos Diary – which gives journalists and forward planners notice of what we’re up to over the next few months.

Staff The last few months have seen a few staff changes and some promo- tions at Demos. Senior Researcher Helen Perry has left to work at the BBC World Service, while Siân Gibson, previously from MORI, joins

184 Demos Demos news us as a Researcher. Tom Hampson, who joined as an intern in October, has been made Press Officer. Mark Leonard has been made a Senior Researcher and has also been appointed to the Foreign Office’s Panel 2000 – the government body charged with modernising the way Britain presents itself to the world. Tom Bentley, one of our Senior Researchers, is to become a part-time advisor to David Blunkett at the DfEE and his book, Learning beyond the classroom, will be published by Routledge in September. Building on his work published in Reasonable force, Senior Researcher Ben Jupp is spending six weeks on the Government’s Pensions Review. Mark has been supported in the Europe Project by a team of temporary researchers: Kay Chung and Tilo Fuchs. Alison Beeney has left to take up a new post at the Industrial Society, Kendra Pearce has joined the systems team and Gavin Mensah-Coker has been working on the Education and Exclusion Project. Thanks are also due to Emma Garman who has been with us for a short time but has lightened Marketing Manager Debbie Porter’s workload phenomenally. Helen Wilkinson more than half way through her year’s sabbatical at the Families and Work Institute in New York. Director Geoff Mulgan remains an adviser at the Prime Minister’s Policy Unit.

Research Projects Demos is currently carrying out four major research projects:

Young people beyond the state This fifteen month project is funded by the Camelot Foundation and run in association with Save the Children, Centrepoint and Pilotlight. It focuses on practical ways to reconnect disadvantaged young people with mainstream society. Recommendations will come out of qualitative work with socially excluded young people throughout the country. The first publications will be available from this autumn.

Tomorrow’s government This two-year project is funded by ICL UK, Sequent Computers and the Esmée Fairbairn Charitable Trust. The project will use a number of

Demos 185 Demos Collection 13/1998 case studies from Britain and abroad to develop a new holistic vision of government encompassing strategic planning, budgeting, preven- tive approaches to social problems, information systems and the culture of government. Some policy recommendations will be released in the autumn with the full report published during 1999.

The Europe series During the British presidency of the EU, Demos is producing reports on European identity and aspects of social and cultural integration. This series is also featuring a number of events in association with the identity consultants Interbrand Newell and Sorrell and with the Institute for Contemporary Arts.

Virtually social This series has seen three outputs this year. First, Access denied? examines how information technology could be used to break down social exclusion. Secondly, NetState looks at how government can be radically reformed to become more responsive, effective and legitimate in the digital age. On 18 May we launched a major report which lays out detailed recommendations for policy on The future of privacy, including chapters on the press, data protection and the Internet.

The next few months The publication schedule for the summer and autumn is as packed as ever. Mark Leonard’s report Rediscovering Europe concludes our programme of work on European integration, coinciding with the UK Presidency of the European Union. It will present new ideas for the vision and strategic goals that could revive popular support for the EU. The rest of the summer programme reflects three of Demos’ core preoccupations: the place of the family in modern society; the challenges for government and employment of the Internet and the new knowledge economy; and the future of learning. In June and July we will be launching The family in question by the leading sociologist, Stein Ringen, and two Demos Commentaries –

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Principles for governing the Internet by Steve Bowbrick and Managing the Recession by Perri 6 and John Browning. Professor David Hargreaves will be writing an Argument for us on Reform and innovation in education in August. ‘The Future of Education’,a lecture by Professor Michael Barber, the Head of the Standards and Effectiveness Unit of the Department for Education and the Environment, will be held on 18 June in London. Demos is heavily involved in the emerging debate about the so- called ‘Third Way’ for politics. Ian Hargreaves and Anthony Giddens, Director of the LSE, will be publishing a Demos Book on Tomorrow’s politics in the autumn, setting out a comprehensive analysis of a Third Way for the radical centre. Demos will also be hosting three fringe meetings at each of the party conferences in the late summer. These will cover the Third Way and tomorrow’s politics, racial equality and the modernisation of the UK (with the Commission for Racial Equality) and the needs and aspirations of socially excluded young people (with Save the Children, Centrepoint and Pilotlight, and hosted and supported by Brunswick).

Subscriber slot Demos is always interested in what you have to say. There is a feedback slot on our Internet site or you can write to us at the office. In particular, do contact us if you have any ideas to contribute to our next Collection: The good life, which will focus on quality of life, con- sumerism and ethical living.

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Related publications

Making Europe popular: the search for European identity by Mark Leonard (£2.95) An interim report on people’s feelings about Europe and European identity. Finds that although Europeans are now more sceptical about the EU than ever before, there is a latent desire for a more cohesive Europe and citizens see an important role for the EU particularly in dealing with continent-with problems.

Rediscovering Europe by Mark Leonard (£5.95) Presents research into Europeans’ feelings about the EU, the meaning of ‘European identity’ and the future of the European project. New data and analysis highlight seven ‘stories’ which could form the the basis of a new European identity and provide a sense of direction for the next phase of European integration.

The post-modern state and the world order by Robert Cooper (£5.95) Argues that the world is dividing into ‘pre-modern’ areas without fully functioning states, ‘modern’ nation states concerned with territorial

Demos 189 Demos Collection 13/1997 sovereignty and ‘post-modern’ areas, which have transcended the old definitions of state power and security. These areas pioneering a new kind of state with radical implications for the future of politics.

After social democracy: politics, capitalism and the common life by John Gray (£5.95) Analysis of why social democracy is now obsolete and why a ‘commu- nitarian liberalism’is needed to succeed it. In place of the social democratic belief that there is a single goal of social justice or equality, Gray argues that there are distinct priciples of fairness appropriate to different circumstances.

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