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  • Nurmash Tokmukhamedov

Consequences of the EU's deep structural mistakes

BY NURMASH TOKMUKHAMEDOV

This article is not based on a particular event. On the contrary, it’s based on a variety of uncharacteristic and questionable developments within the world’s most successful economic and political union: the European Union. Of course, it’s impossible to cover such a complex topic in a short article, and a lot of research has already been done on the issues I will cover. However, I believe it is necessary to keep these critiques in consideration if we were to attempt to make governance more effective and fair.


Whether it’s the inconclusive result of the Spanish elections, Poland’s drives for increased sovereignty from the EU, increased popularity of radical parties in Germany and France, Giorga Meloni’s premiership in Italy or Victor Orban’s continued success in Hungary, all of this comes down to the inherent deficit of democracy in the union. The ability of member nations to determine their own political-economic goals and paths is frustrating, which is ironic given the EU’s historical emphasis on liberal-democratic values.


I believe there are three connected and deep-sitting structural forces that cause the continued discontent of the people across all nations of Europe. These are: the disparity of socioeconomic conditions between nations; rigid frameworks that the bloc ascribes to the nations, and the rushed and premature expansion of the bloc to the East. All this stems from the EU’s political dogmatism, overshadowing its economic bases.


To start off, when economically weaker nations are accepted into the EU and the single market, more often than not, the country sacrifices its capacity to determine their own path to development and long-term growth. Although the immediate benefits of the free trade system seem appealing, with a rapid influx of investment and access to one of the world’s biggest markets, the country risks sacrificing its own industries’ strength. A great example of this is Greece, where the country’s biggest industries are tourism, agriculture, food and beverages and shipping, all of which are directly linked to the country’s geography and it being relatively less productive and lucrative compared to the things core EU states specialise in. This trend is similar across some new joiners to the bloc, such as Croatia, Bulgaria, and Lithuania.


Interestingly, I had the pleasure of attending a lecture by an academic on the nature of the EU’s economic integration and its merits, where he praised the bloc’s economic benefits. I decided to ask him a question, something along the lines of “When an economically weaker country enters the EU trade agreement, it is immediately outcompeted by the most developed economies, such as Germany, France, Italy etc., which results in it being locked into less productive industries. Now do you think this issue is critical for these countries, take for example Greece?”. He replied, “Well, the country should specialise in other things they have a relative advantage in”. As outlined before, the sectors Greece has an advantage at are mainly agriculture and tourism, which I believe makes the response inadequate and unfair. Asserting that a nation should focus on less rewarding industries, even against its population's desires, undermines not only the long-term potential and well-being of its people but also Europe’s central principle of democracy and self-determination.


Linked to this, the rigid governing frameworks that the EU sets on its member states significantly disadvantages domestic decision-making, which has disproportionate effects on the general population. This is one of the main reasons the EU is puzzled by increasing populism and radical politics across the continent. The limits on defining their own fiscal, monetary, trade, state-aid, migration and labour laws bind a lot of governments in their capacity to respond to citizen’s needs. The system would work perfectly well if the political and economic conditions of member states were homogenous, but because they aren’t, the system leads to different consequences to different countries. The rise of radicals in Germany, Spain, Italy and France can be attributed to people’s needs not being addressed well by the governments. Immigration policy, for example, as well as, crucially, the inability of the government to provide the means to alleviate its negative consequences, are what feed into people’s discontent with the status quo. When the population wants access to better jobs, higher pay, better public services etc., while the elected government finds it difficult to provide the answer due to the structural rigidity of the governance system, people become disillusioned with conventional politics. This is why radical politics starts appealing more to the people, as their true needs and interests are not able to be satisfied through the politics that the EU constructed.


Lastly, the EU does have a framework for new joiners to reach certain economic and political standards to smoothly enter the bloc. However, it wouldn’t be far-fetched to argue that the process is rushed. Oftentimes, new joiners do not even possess the half the political views the EU attempts to promote - for example Poland - whereas the economic bases are often not taken seriously enough, as in the cases of Romania and Bulgaria. In the latter two cases, economic indices persistently show disappointing figures and the population tends to migrate for better pay, due to a combination of factors ranging from corruption and disadvantageous long-term trade relationships within the bloc. Within the structural constraints of the EU, it’s immensely difficult for the states to pursue nationalistic development policy, the type that all major world economies underwent to reach their goals.


I understand that the EU does this to induce quicker transformation and homogenisation of the national values and institutions, but it heavily complicates things both for new joiners and established members. Following the same logic, I believe the same will happen to Ukraine if it is to be fast-tracked into EU membership. The country, already torn by war, will find grave difficulty to rebuild on its own terms and local needs, which will likely result in mass migration away from the country, continued poor economic performance, and will likely lock the economy into providing cheap agricultural products for the rich western European customers.


Don’t get me wrong, I am not opposed to the EU’s existence in the slightest. I believe that generally economic and political arguments for the bloc are compelling, and united sovereign Europe is a great ideal. Given the great similarity in culture and socioeconomic structures between core members, it’s hard to deny that the union is mostly beneficial for most of its members. However, my concerns arise when the bloc begins to undermine the exact things it’s based on – democracy and self-determination of development paths. This is most vividly seen in the Spanish and Greek population calling for more state spending and active reform of the economy to induce growth, where a lot of the policy is limited by the EU’s rigid system.


To conclude, the answer obviously does not lie in complete rejection of the bloc, but calculated reform. The goal of it should be the attempt to make the system of governance more responsive and lenient to domestic needs, at least for short to medium term in cases where the socioeconomic bases are so different. Without addressing the deep structural problems of the organisation, we cannot expect the situation across the continent to magically stabilise. Increasing appeal to radical and populist politics, economic underperformance, persistence of anti-union sentiment and instability are likely to stay until the root of the problem is addressed.


Image: Flickr/bobbsled EU Flagga

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