Rethinking European Integration in Times of Crisis

The book by Perry Anderson, a renowned American philosopher, historian, and sociologist, is an inspiring, though not an easy, read. The difficulty stems from the multidimensionality of the diagnosis the author makes in the four interconnected essays. They can serve as a kind of mirror in which Europe, and more broadly the world, is reflected in the face of recent crises. The author's main area of interest runs along the US-Europe axis, while in each of the four parts of the book the emphasis is placed on a different set of factors affecting international interdependencies, primarily in relation to these two dominant powers.The contemporary international order is being redefined. Anderson's erudite analysis contains ample references to the work of a number of contemporary thinkers, such as British historian Adam Tooze, Dutch historian and political philosopher Luuk van Middelaar, and French economist Cédric Durand. The essays are thus a kind of multilogue. The author adds his own reflections upon the observations of others in relation to the recent crises that have undermined faith in the stability of the international order that emerged after the end of the Cold War. While this approach allows the reader to refer to important, contemporary readings in the field of political and economic analysis, it makes it somewhat difficult to follow the author's own message. This is especially true in the case of complex references, for example, when Anderson refers to Adam Tooze's considerations, citing how they are understood in Cédric Durand's work (e.g., pp. 11, 36, 40).The first essay deals with the economic factors that have contributed to this redefinition of the existing order. Financial markets nowadays create a connection between the United States and Europe that is difficult to break. This means that, in the event of a crash, the crisis will be transmitted globally. On the other hand, American capital will certainly then become involved in Europe to restore liquidity: In the crisis, one monetary innovation which the Fed did claim as its own was its swap lines supplying dollar liquidity to European banks, . . . which was an unadvertised transgression of its domestic mandate. Yet the very interlocking American and European financial systems . . . make it clear that, once embarked on bailing out US banks and insurance companies, the Fed had no option but to follow suit with European counterparts, so intertwined were the two—the latter indeed dominating the market in the riskiest layer of securitized mortgages in America. There is no call to make heroism out of such necessity. On the other side of the swaps, it seems fairly clear that European central banks, rather than being startled and overwhelmed by the generosity of US largesse, counted on it in advance. (p. 46)The neoliberal system created a kind of financial machinery or, to quote Tooze, "apparatuses of financial engineering" (p. 3), which gave the illusion of stability and equilibrium based on an unquestioning faith in free market economies. The financial crises, however, show that faith in the self-regulating power of the financial market is illusory—especially when the financial system mutates, adopting ever more complex forms of financial instruments whose logic is understandable only to the initiated (p. 6).Financial markets are governed by different laws than those that govern the ordinary markets for goods and services. Anderson, referring to Durand's argument, points to the speculative character of financial markets. The price of financial products does not result from their use value but is conditioned by people's desire to obtain surplus value in a short period of time and to resell the product at a higher price. The more the prices of financial securities rise, the faster the demand for them increases. "(T)he self-sustaining price rise fuelled by agents" is not due to real money in the market. It is supported by credit. This leads to speculative bubbles. The boom phase usually ends in a crash (p. 5). An additional problem is the strengthening of processes that are detrimental to national economies in the long term, which also result from the desire of investment companies to obtain the highest possible revenues. Capital accumulation does not take place in domestic economic systems, but in the so-called periphery, in underdeveloped countries (p. 8).1Neoliberalism has made it possible to build such complex transnational financial systems through deregulation, which in practice means the removal of administrative and legal barriers to capital flows. Deregulation is implemented consciously and deliberately. It originated in nineteenth century liberal thought, which assumed the freedom of unfettered enrichment and maximization of profit.2 Deregulatory actions reduce the involvement of regulatory and supervisory bodies in the financial market and strengthen competitive market forces, but this is not supposed to weaken financial stability, which is undergoing progressive normalization (especially within the EU system). On the contrary, the main idea behind deregulation is to improve the functioning of markets. Greater freedom for financial institutions should allow for wider involvement of the financial sector in sectors of public interest (e.g., public utility companies). This in turn should lead to greater efficiency in the sector as individual entities become more competitive, improving their financial services and instruments.3Moreover, deregulation does not mean a complete abolition of supervisory and control mechanisms. A key assumption is the creation of a so-called "loose corset" in the form of, inter alia, micro-prudential norms, which constitute a basic form of security allowing financial institutions to develop and evolve while maintaining the most important safeguards. However, such assumptions do not work when there is a deformation of the system, as has been observed as markets have progressed towards globalization and integration, to the creation of a global financial system connected by a network of diverse links, within which it is easier to create speculative bubbles and spread pathogenic behavior. When there was a meltdown in 2008–2009, even interbank markets, which had previously served to stabilize the system, turned out to be a transmission belt that transferred systemic risk among regional markets.4The only entity that can restore stability is the state. The irresponsible policies of financiers can be balanced by the state intervening in the event of a crisis. The costs of restoring stability are borne by citizens. In this understanding, financial stability is not a public good, but the good of a narrow group of system beneficiaries. This is quite an iconoclastic statement, for it opposes the basic justification for introducing financial supervision law in various sectors of the market. The creation of the so-called financial safety net, in which financial supervision plays a special role, is justified precisely by the common good, that is, financial stability. Financial stability understood in this way, however—in Anderson's interpretation, which refers in this context to Durand's observations—is only a mirage as far as the ordinary citizen is concerned. In reality, it only serves to reinforce the hegemony of finance (p. 10).In the case of Europe, the economic system is particularly strongly rooted in the German economy, which has been the engine of European integration for several decades. Interesting in this context is the diagnosis made in the book of the role of economic factors in building the potential of the Third Reich. Referring again to Tooze's considerations, Anderson analyzes the policy of Nazi Germany, which in his opinion was based largely on a misperception of the role of the United States. After the defeat of the Third Reich, West Germany implemented Konrad Adenauer's concept of Westbindung, that is, close ties with the West, and above all with the United States (p. 19). A natural consequence of this has been Germany's strong involvement in the development of European integration structures. Germany consciously plays a leading role in the EU structures, understanding their quasi-federal character, which is similar to its own model. This similarity is evident in many elements of the functioning of the "European organism"; for example, what is known as European integrated administration is understood in the German legal doctrine as being parallel to the solutions known in Germany (Europäischer Verwaltungsverbund).5 However, it is difficult to fully accept Anderson's interpretation that in this context Germany exercises hegemony in the European Union—this would frighten Jürgen Habermas himself, a proponent of European deliberative democracy (p. 49).The second essay is devoted to the European order. In this part, Anderson analyzes the political factor in relation to the mechanisms that regulate the complex institutional system of the European Union. One cannot agree with the author's rather one-sided judgment that the process of European integration has so far been written about only in a boring and inaccessible way for the layman. It is also untrue to say that inspiring studies on the subject have been written only by American, or possibly British, scholars, or that only in the last decade have Europeans from the continent "finally" joined the group of contributors who have something interesting to say about integration processes (p. 69). This truncated view fails to reflect the true state of affairs, overlooking other academic centers outside Anglo-Saxon countries having centuries of tradition. For many decades, lawyers and political scientists from Western Europe have been analyzing European integration (often in cooperation with American centers, and often cited in the works of authors mentioned by Anderson). They include, in random order: Eberhard Schmidt-Aßmann, Christian Joerges, Antonio and Sabino Cassese, Fritz Scharpf, Matthias Ruffert, Armin von Bogdandy, Tanja Börzel, Markus Jachtenfuchs, Arndt Wonka, Berthold Rittberger, Fabian Amtenbrink, Herwig H.C. Hofmann, Martijn Groenleer, Rob van Gestel, Jean Paul Jacqué, Dominique Ritleng, Renoud Dehousse, Jacint Jordana, Jarle Trondal, Morten Egeberg, Martti Koskenniemi, and many others.6Against this background, Anderson now sees Dutchman Luuk van Middelaar and his book The Passage to Europe: How a Continent Became a Union (New Haven, CT: Yale University Press, 2013) as the standout. Anderson's admiration for this study goes on for dozens of pages (beginning on p. 70, especially p. 85). Irrespective of the undeniable value of the book (it was placed on the European Parliament's list of 100 books on Europe to remember),7 many of the observations expressed in it, for example, on the jurisprudential activity of the CJEU in the context of modeling the legal order of the EU, have been debated for many years, not only in academic circles (e.g., as a subject of doctoral dissertations),8 but also in media that deal with EU issues (e.g., EuroActiv publications of the last 15 years).Van Middelaar divides the development of integration structures into three phases, with Germany playing a different but significant role each time. In the first phase, the Germans attempted to redeem themselves for the actions of the Nazis. In the second phase, Germany grew into an economic power, and in the third phase led to the unification of Europe —which, after all, began with the reunification of Germany (pp. 90–93). It is also Germany that is said to have initiated the creation of an artificial identity legitimizing the activities of EU institutions (the so-called institutional identity), as expressed in specific symbols created (the EU flag, colors, anthem, etc.), an echo of German nineteenth century nationalism initiated by such philosophers as Herder and Fichte (p. 94).Certainly, the creation of a common European identity has occurred at many levels of the European Union and is a permanent component of its functioning. This is a direct result of having deepened sectoral integration and expanded the catalogue of issues on which both executive and regulatory attention is focused. There has been a detailed and developing literature on this topic since the 1990s,9 so there is nothing particularly surprising here. What is debatable, however, is whether Germany has really been the sole initiator of building such a common identity, and whether this integration stems directly from the traditional German understanding of the nation. This concept grew out of the idea of an ethnic community, or community of origin (Blutgemeinschaft, "community of blood"),10 and does not apply to the constructed EU identity, which is based on the merging of various entities (as Anderson also notes in reference to Schicksalgemeinschaft, see p. 100).From the second essay, one may get the impression that Germany is the main actor "pulling the strings," that is, through the European Commission (e.g., p. 125; see also p. 160 ). The Commission, as the guardian of the Treaties (Art. 17 TEU), actually plays an initiating role when it comes to draft legislation and is the basic body in the EU administrative system (in the political science literature, the term executive order—or European administrative space —is used increasingly in this context), consolidating other bodies such as committees and the decentralized agencies around it.11Germany is one of the highest ranking players in the international system due to its potential; its role is therefore very important. And German decision-makers understand perfectly well how European deliberative supranationalism works. Rather than imposing their opinion, they work out effective compromises in the complex coordination of EU structures. The European Commission functions through a variety of formal and informal instruments that consist of consultation, information, dialogue, etc. Most solutions are the result of lengthy negotiations involving various potentially interested actors (from inside and outside the EU institutional system). These mechanisms have also already been scientifically analyzed by European scholars (e.g., based on numerical data).12The third essay in the book is devoted to what might be termed the "institutional factor." Anderson analyzes the organs of the EU. Particularly interesting in this context is the fragment on the influence of judges of the Court of Justice of the EU on the formation of the European legal order. In his reflections, Anderson refers to Vera Fritz's research on the qualifications and professional lives of the first judges of the Court.13 Taking into account their often controversial past in terms of creating a new normative order in post-war Europe (e.g. their involvement with the regime of the Third Reich), in Anderson's opinion their legitimacy to act in this area was political in nature. It did not result from professional preparation, but rather from the need of the moment, that is, to make a dynamic response—in the form of a united Europe—to the growing threat from the East. Anderson recalls the most important decisions of the Court in the first decades of its functioning, which became the foundation for the legal order in the integrated structures (pp. 154 ff.). Judicial law (Richterrecht) interacts in all democratic states and within various institutional systems in international organizations. This is not a fact of major controversy. If one were to accept the argument of analyzing the life stories of those involved in the creation of various international and national institutions, one would have to question the functioning of many of these institutions, created as they were from the ruins of a Europe that had been destroyed during the war. More beneficial than retrospection would be an analysis of contemporary CJEU rulings from the perspective of how the EU legal and institutional system is modeled, for example, in relation to the role of EU decentralized agencies.14Anderson draws attention to the special position of the Court in the EU institutional system (in his opinion, the control mechanisms in relation to the Court are weak), and also to the inaccessible form of information about its activities (pp. 156–158). The hermetic nature of the language of the judiciary, and more broadly of legal language (the language of legal doctrine), is a characteristic feature of their, as it is of other professional languages.15 One could argue that such professional jargon should be modified and made more understandable to the public. However, the specific decisions of the Court are of a specialist nature and require at least a basic knowledge of European law.The book closes with the fourth essay, which neatly ties up all that has come before. It concerns the "crisis factor"—using the example of Brexit, which was one of the most serious shocks to the process of European integration since the beginning of its development. Brexit was an offshoot of a number of overlapping trends characteristic not only of British society—most notably, a progressive distaste for neoliberalism, with which the EU system is simplistically identified (p. 212). Britain's withdrawal from the European Union was part of a whole series of difficulties that followed in quick succession, beginning with the financial crisis of 2008, and ending with the pandemic that the world, including the EU, has been facing since 2020. The UK left the EU on January 31, 2020—concurrent with the outbreak of the pandemic. Brexit took a lot of people by surprise, though in fact it was a logical consequence of the UK's stance on the progressive integration process. The British took a skeptical view of the progression of the law towards maximum harmonization in an increasing number of specific sectoral arrangements (e.g., financial law). They were also reluctant to see intensive institutionalization at the pan-European level, as is expressed in the creation of administrative bodies equipped with specific decision-making powers over national bodies. This skepticism had been expressed for years by British policy makers from different political options and defined explicitly in the public debate (see, e.g., Ferdinand Mount's argumentation pp. 218–220). Anderson calls these processes of capturing more and more powers at the European level a "dilution of the sovereignty" of the Member States, and concludes that, with weak legitimizing instruments, in practice the tightening of the Union may lead not to its becoming stronger, as planned, but to its end (p. 238).Anderson's essays, which dynamically address current events without shying away from the broad historical context, are well worth reading. His analysis has a lively, journalistic quality. And since it raises many issues that are relevant to the development of the international system, it is a pity that Anderson does not refer to the considerations of contemporary international relations theorists, such as constructivists, postmodernists, and postcolonialists. It would also be interesting to be given a more penetrating interpretation of Antonio Gramsci's concepts in relation to contemporary Europe. Anderson evokes Gramsci only symbolically, by analyzing van Middelaar's book. The concept of hegemony and emancipation could be applied to an analysis of the situation of the so-called new members of the European Union, including Poland, who, as "late comers," often find it difficult to fit into this complex, multidimensional system.