Is Left Wing “Reform” of the EU possible?

22nd June 2016 / EU

By Thomas Helm – Hysteria, lies and exaggeration have characterised the Brexit debate. It appears too many politicians have too much at stake to allow a genuine conversation on the issue. Cameron is fighting for survival, Johnson for supremacy, Corbyn for legitimacy (none of this, coincidentally has anything to do with EU). Add to this rabble the Sun’s special brand of anti-EU poison, the brutal murder of a labour MP and stark warnings of the apocalypse and the conditions in which reason flourishes are nowhere to be seen.

Somewhere in the midst of this name calling and hair-pulling the debate that ought to interest the centre and the centre-left, that of the possibility of a left-wing “reform” of the EU – has dropped off the political radar. I hope to address or at least introduce the issue here.

“Reform” is one of the most overused words in the political dictionary. It is the staple of European politicians who play the game of pandering to their respective electorates’ hostility towards the EU and need to appear as though they are doing something.

David Cameron’s “reform” was a euphemistic smokescreen to shield a drive towards greater deregulation and protection of the City of London’s financial services. Evidently he has no intention of learning from the 2008 financial crash. Or rather, he simply does not care. In six years the conservatives have privatised more public assets than Thatcher’s government did in eleven years. If there is a neoliberal war on, make no mistake, they are winning it.

Jeremy Corbyn’s reform, on the other hand, is the type of reform vaguely expressed by Pablo Iglesias and Alex Tspiras. Their belief is that the EU is a neoliberal austerity enforcement machine and that reform means building a left-alliance within the structure of the EU from which to push for the introduction of left wing policies and the revision of policies with a perceived “neo-liberal” bias. It sounds good, but is it possible?

Here it is key to note that the Union European is only as great as the collective political will of its member states. If the sum of that political will leans towards neoliberalism, as it currently does, it is easy to write off the European Union as a neoliberal institution that puts pressure on its member states to commit to austerity and privatisation of public assets. But this is like defining a glass by the liquid that fills it. You do not like the taste. But does not that mean you should smash the glass?

Some think so. In a recent and controversial article in the Guardian, Owen Jones hinted that re-nationalisation of British railways is practically impossible while Britain remains in the EU because of EU legislation (he cites European Commission rail directive 91/440/EEC). But this is not completely correct. Britain would have to jump though various hoops as they sought to buy back sold off assets, but the EU itself would not make the process any more or less complicated. Nationalisation is a national decision.

What the EU does is create common rules for a common market in order to enforce a “level playing field.” This actually complicates the process of privatisation. If a state does wish to privatise a public service, it is obliged to accept tenders across the whole single market. That is how the UK has ended up with the paradox of some British railway lines being owned by a French state-owned company. It was however an independent British decision to privatise the railways – nothing to do with EU policy or legislation. Even if privatisation is encouraged by the EU, as certain documents indeed suggest, the decision remains a national one. This should be an obvious point, but in the current climate of hysteria, cool-headedness is difficult to locate.

Another prominent but this time completely legitimate concern is the EU’s tolerance of tax havens. Monaco, Andorra, Lichtenstein, to say nothing of British crown dependencies, the Cayman and the Channel Islands and so forth, enable tax-dodgers to hide their stash. The problem here is not the EU as a structure, but a lack of collective political will.

This is where the argument for Pro-EU left-wing “reform” feels strongest. A labour led government would hypothetically clamp down on tax havens. Outside the EU they would have a much more limited reach. But if they act in alliance with other left-leaning political parties they could theoretically enact Eurozone wide legislation to clampdown on tax havens and increase corporate transparency. This would also stop multi-nationals shifting their profits across borders to lower their tax bill by forcing them to declare profits in the country they were made as opposed to pooling those profits in countries like Luxemburg and claiming tax-free losses where the money was actually made.

Tax evasion is a global problem. An estimated three times the world’s GDP is held in corporate surpluses and private accounts. The neoliberal claim that excess profit generates greater investment and more dynamic economies is a false one. This is dead money syphoned off from wages, taken out of the economy and hidden. Even the IMF acknowledges a crisis characterised by excess credit and lack of investment. Whether we like it or not, we live in a globalised age. For changes to be lasting, they have to be big. A Eurozone wide clampdown on tax havens and loopholes would send out a powerful message: the biggest market in the world has started to play a different game.

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It is no mean feat to achieve. The tentacles of power are firmly wrapped around the EU dream as billions are spent on corporate lobbying in Brussels. According to Corporate Europe Observatory, an independent watch dog set up to “expose the power of corporate lobby in the EU”, the presence of industry “consultants” together with the phenomenon of the revolving door undermines the legitimacy of EU policy making. But such corruption is no less true for Westminster. It is everywhere, a global problem. Blaming the EU for corporate lobbying is like blaming the glass for the liquid. It is misdirected indignation.

That indignation ought to be reserved for national governments and national elections. After all, they’re the ones who fill the European parliament. No doubt absence of political will is one of the subtlest and most pervasive forms of corruption. Whether Westminster is more or less affected by corporate lobby relative to the EU is of less importance than voting in political parties who have the willpower to clean up the political establishment at home and to form international alliances abroad. There is no magic solution.

Collective action is more effective than individual action, especially in the context of globalisation. As a member of the EU, a labour led UK could potentially do both. Brexit is the equivalent of burying one’s head in the sand; it would not hasten the apocalypse, but it would hinder the UK’s ability for collective action.


Thomas Helm is a writer and journalist with special interests in globalisation, human rights, social issues, Latin affairs and inequality. Thomas also writes for Spanish newspaper La Vanguardia.

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