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EU & Democracy

Democratic Impact of EU Measures

EU Exit – The Role of the Left

The left finds itself in a difficult position.  Its role is needed more than ever in the post-WWII period.  However, its internal divisions limit its impact on developments.  This state of limbo must be overcome, if the left is to be able to push forward and work towards putting an end to the crisis in favour of society at large.

Do the two cases of EU exit, BREXIT and GREXIT, whether actual or speculative, constitute critical junctures in the evolution of the EU?  if so, with what implications?  What is the role of the left in these circumstances? In order to provide some answers to these questions, a look is needed into BREXIT and the implications for a potential GREXIT – the modalities involved and the issues raised.

According to Art. 50 TEU, the process for a Member State exiting the EU is initiated with the state submitting a notification to withdraw.  A maximum duration of two years is then allowed, during which the EU negotiates and concludes an agreement with the departing state, setting out the arrangements for the withdrawal and taking account of the framework for the future relationship between the two.  The final agreement is approved by the European Council, acting by a qualified majority.  It must also have the consent of the European Parliament and, under certain circumstances (if it cuts across policy areas that lie within the competence of Member States), be ratified by the national parliaments of the 27 member states.   The issues raised by the negotiated withdrawal of a member state are numerous and complex.

In the case of BREXIT, the result of the British referendum was followed by a government crisis and the emergence of a more anti-EU, conservative administration.  Furthermore, political debate shifted to the right and far right, influencing government actions. It is generally believed that EU leaders wish to complete the negotiation process before the European Parliament elections in the summer of 2019 and the appointment of a new European Commission.   As the economy comes under increased pressure due to the uncertainty created by BREXIT, the effects will be felt by society at large, adding to the general upheaval.

On the European side, the withdrawal of the UK will disrupt the Union’s internal equilibrium, as the economic and political weight of non-eurozone countries in EU will be reduced considerably.  For example, in 2015 the share of non-eurozone countries in EU GDP was equal to 29%, of which 17.5% derived from the UK and the remaining 11.5% from eight countries (Sweden, Denmark, Poland, Romania, Hungary, Bulgaria, Czech Republic and Croatia).  This may well be expected to strengthen the political and economic supremacy of Germany. The Eurozone member states of Southern Europe will also be affected, as they come under intensified pressure by the financial markets.   In addition, populist insurgents of the right will be inspired by BREXIT and try to shape the political debate as their influence rises.

Overall, BREXIT opens the way to a long process of negotiation, the outcome of which is at best uncertain and at worst damaging, especially for Britain, as it will need to disentangle itself from 40 years of economic and regulatory integration with the EU.

What appears to be complex and uncertain in the case of BREXIT would in all probability be essentially chaotic in the case of GREXIT.  Assuming a euro-exit were legally possible under the EU treaties, the issues raised are many and considerably intricate.  Capital Economics, a London based think-tank, which in 2012 won the Wolfson Prize for the best proposal to ‘safely dismantle the Eurozone,’ concluded that a country contemplating leaving the euro would have to keep its plans secret until the last minute, introduce capital controls, start printing a new currency only after formal exit, seek a large depreciation, default on its debts, recapitalize bust banks and seek close co-operation with remaining Eurozone members.

This is a long list of requirements, which suggests that introducing a new currency is complex when done in a planned way.  If done suddenly and under duress, it is a disruptive process with multiple unintended consequences that cannot all be anticipated either on the domestic or the European levels.

So, if BREXIT is a long and complex process, while GREXIT is an intricate, if not chaotic one, what is the position of the left?  Should it be for or against EU exit?  What alternative route would it propose?  In what way should it participate in the political debate?

Both BREXIT and GREXIT will constitute turning points in the history of the EU.  EU Membership is rejected in the first case and threatened in the second one.  Business as usual is no longer possible. A new era has begun.

Since the inception of the EU, the left has argued against the EU’s three main deficits, viz. the democratic, social and ecological one, which cannot be overcome without peace and solidarity as overarching principles.  At each juncture in the history of the EU, a primarily economic project, which however did boost European-ness in the aftermath of World War II, the left has tried to intervene, making proposals for an alternative way of functioning of European institutions so as to better serve the public interest.  As the power of finance increased, the left fought against any antinomies and neoliberal policies that went with it.  The crisis has acted as a catalyst in terms of political developments.  Although many on the left could see it coming, the left as a whole was slow in responding.  The left’s structural weaknesses and its lack of political intermediation limited its role as a political actor.

The rise of SYRIZA in Greece was an exception, caused partly by the depth of the crisis, the evidently failed policies of the Troika and of the established major political parties, and the coming together of various factions within the Greek left.  The European left rallied around SYRIZA providing valuable support.  However, when SYRIZA was elected to government, and after a long period of negotiations that lasted 6 months (as a result of which SYRIZA agreed to many of the demands of the country’s creditors, choosing not to let Greece go bankrupt), the left both in Greece and in the EU was divided.  Should the SYRIZA government have taken Greece out of the euro and thereby default on its obligations?  The mandate of the January 2015 elections was not for default, rather for a new agreement with the country’s creditors which would be mutually beneficial.  This met with the creditors’ intransigence. Thus SYRIZA asked for a new mandate from the Greek electorate in the September 2015 elections, which was granted, forming the second coalition government SYRIZA-ANEL in 2015.  The hypothetical question however remains.  Only history will show whether the route followed by SYRIZA was the right one.

Lexit, i.e. the propagating exit from the EU by the left, came up in the 2016 British referendum.  The argument of Lexiters is that the current treaties and structures of the EU need to be dismantled and replaced by others within the framework of a new union, on the basis of a fundamental reconsideration of the foundations of the EU and its practices, as those stand.  This is a laudable ambition and political objective.  What is lacking, however, is a roadmap towards the goal to be achieved.  In view of the internal weaknesses of the left and its lack of political intermediation in the decision-making process, it is hard to see how these goals can be achieved.  Neither does the historical precedence of the 20th century offer many useful insights.

Overall, the left finds itself in a difficult position.  Its role is needed more than ever in the post-WWII period.  However, its internal divisions limit its impact on developments.  This state of limbo must be overcome, if the left is to be able to push forward and work towards putting an end to the crisis in favour of society at large.  In this respect, the SYRIZA experience can offer valuable insights.

Based on a paper presented at the ROSA LUXEMBURG FOUNDATION workshop on BREXIT in Berlin, 9-20 October 2016.

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