The problem with experts

The referendum on Britain's membership of the European Union is sometimes perceived as a revolt against experts and the political elite. In an interview, one of the lead campaigners for Brexit, Michael Gove, dismissed economists by pointing out they did not predict the economic crisis of 2008 and hence had a bad record of success.

Whilst some of the unease ordinary people have with experts overlaps with their disquiet about political classes, the problem with experts has additional dimensions that are mainly a product of our dependence on them. There is hardly any area of life where we do not gratefully and dutifully submit to the recommendations of experts, be it medicine or plumbing. Yet, at the same time, we also resent and relentlessly question the basis of their authority.

At the core of the argument against experts stands doubt about the source of their knowledge, expertise. In a world where everything is available at a click of a button on Wikipedia, expertise is seen as little more than accumulated and stored wisdom about how to do something, which is practical knowledge. What is unacknowledged in this view of the sources of authority is the fact that practical knowledge sits on a mountain of theoretical knowledge, which developed through formulating and testing models of how best to do something. This theoretical foundation is however constantly shifting ground, which in turn requires careful assessment and recalibration of opinions within a community of practitioners, be they plumbers or dentists. It is this dynamic nature of expertise that people feel uncomfortable with, as opposed the desired stability and certainty.

In a sense, the refusal to recognise the dynamic nature of expertise is a reflection of our impatience with knowledge production. As the referendum demonstrated, people wanted to know 'the facts' in a world where facts are socially constructed and constantly challenged. The hope that experts could pronounce authoritatively on the legitimacy or truth of those 'facts' will always remain just that. It mirrors the disenchantment of many people with political strife: the demand that politicians just find common ground and agree on something that can then be implemented. That view neglects the critical role of strife and argument in knowledge production as well as politics. To argue about something is to strengthen the foundation of whatever might ultimately emerge as the best way forward.

The 'heart' of Corbyn and Farage

Political strategists like using metaphors when discussing politics. The 'heart of Labour' is all the vogue at the moment. The purpose of metaphors is to signal apparently agreed and shared meaning. The trouble with metaphors is that most are probably nothing more than cognitive crutches, dissipating in thin air under close scrutiny. The 'heartlands' of a political party is another one much used these days, suggesting the ability of a party to draw on rock solid support, conjuring up voters who trot to the ballot boxes like sheep, eager to put their cross in the foreordained box.

If the recent elections have demonstrated anything it is that the time of 'heartlands' of political party support is well and truly over in Britain. Where once the mighty Labour Party dominated, the landscape of political allegiances appears fractured and uncertain. Behind this picture of fragmentation of political loyalty however lurk familiar patterns for those who care to look closely.

Take UKIP's rise in Wales and in the North of England, in Labour 'heartlands'. Previously inconceivable, UKIP, articulating a xenophobic and isolationist agenda, attracts significant number of Labour voters despite Labour's professed principles of solidarity, internationalism and economic equality. It seems that what binds Labour's working class support and UKIP's message together is not commitment to progressivism but notions of social order (or bemoaning the loss thereof) and socio-economic entitlements. The foe of Labour's and UKIP's voters is, so it seems, the assumed or imminent loss of control and of old certainties. In this respect, to be controversial, Jeremy Corbyn does not differ much from Nigel Farage. His windmill is societal change, brought about through socio-economic dislocation (capitalism) whilst Farage's windmill is immigration (European or otherwise). The irony is however that both party leaders battle this threat of impending change in their country with metaphors that belong to the past.

Back to the Future - Labour Leader Jeremy Corbyn on 1 May 2016
(Foto: AFP/Justin Tallis)

For Farage it is the vision of a bucolic English countryside, cleansed of foreign influences (whatever that may mean in a country that embraced migration for centuries). For Corbyn it is a country that conforms to the description of Marxist class struggle, with a disenfranchised working class pitted against a greedy capitalist elite (naturally wearing a top hat and waistcoat).

The latest elections however have shown that both Farage and Corbyn's versions of what is going on in Britain are largely fantasies based on flawed interpretations of reality. That is why Corbyn's speeches sound so hollow: struggling to meaningfully connect with reality. To be clear, this does not bother Corbyn, as his worldview had not been formed by looking at the facts in the first place. His mind, just like Farage's, appears to move effortlessly solely within the certainties of theoretical constructs, such as  antagonism between workers and capitalists. His thought, untrammelled by reality checks, appears to be buttressed by the logics of socialist wordplays.

For Farage it is 'the other' that is at the centre of social and cultural transformations that is to be feared. Remove 'the other', Europe or immigrants, and things will fall into place again. What neither Corbyn nor Farage would like to do at any rate is to embrace change in order to shape the future. For both, politics is about a return to a past that offer certainties.

Yet, for politicians without any interest in shaping the future, policies are irrelevant. That's why neither Farage nor Corbyn ever formulate anything beyond slogans. To articulate policies requires them to think about how to actively shape the future. Corbyn's and Farage's basic attitudes remain defensive, with a strong retrograde impetus. This speaks of a de-spiriting lack of aspiration on their parts, something that defines their 'heart'.

Put the fences up!

UKIP and the Brexiters have been very adept at conflating the migrant crisis in Europe with the issue of Britain's membership of the EU. Once the floodgates are open at Europe's outer borders, so the argument goes, Britain will be swamped by all sorts of folk from far flung countries.

Whilst this line of argument conveniently overlooks the fact that neither migrants nor asylum seekers (and these are two different groups indeed) won't be able to move about within Europe at will since they have no European Passport and can't gain entry to the UK unless they become citizens of a European country, it obviously resonates with many who feel frightened and worried about unchecked emigration. That moving around in Europe is easier said then done for migrants and asylum seekers does not matter much to the UKIPers.

Within this wildly distorted debate about Europe and migration, it may be useful to reflect on a similar episode in English history that fostered xenophobia and led to calls to uphold border controls. Here is Nicholas Fuller MP on the 'madness to tear down borders' between Scotland and England in 1607:

'One man is owner of two pastures, with one hedge to divide them: the one pasture bare, the other fertile and good. A wise owner will not pull down the hedge quite, but make gates and let them in and out ... if he do, the cattle rush in multitudes and much against their will return ...' (Davies, p.553)

Fuller's intervention proved decisive. The English parliament refused to approve the Instrument of the Union between Scotland and England for another hundred years.

The Trident trap

In his book The Conservative Heart, Arthur Brooks writes that those politicians win who 'scramble the categories'. What he meant is that political parties are perceived to be strong or weak in certain policy areas. To set out to reiterate their strengths is unlikely to add any new converts to their cause.

Conservatives are thought to be competent in running the economy and reducing a budget deficit. Labour politicians may be seen to be compassionate and concerned with social justice. The trick to win elections is not to focus on your strengths, Brooks argues, but to stray onto your opponent's field and steal their arguments.

The Labour Party under Jeremy Corbyn is moving further from this advice by the day. Whilst under Blair the party consciously placed their tanks on the lawn of the Conservative Party, under the present leader the party is withdrawing rapidly into its comfort zone. Part of this started under Miliband already. But Corbyn and his comrades are going even further. They are not just deliberately negating any policy aspirations in traditional Conservative areas such as the economy, but Corbyn also pushes issues that are of little importance to the wider public.

Political scientists call this the low salience trap. Members of all political parties are animated by certain issues that have symbolic significance for them and sustain their mobilisation strategies as the elections get close. The Conservatives have Europe, the left wing of Labour has Trident and NATO membership. The problem is that none of these issues have much currency amongst the wider public. Whilst they agitate a small minority of party members, the issues have so-called low salience amongst the electorate as a whole. Winning elections is predicated on reaching out from their own narrow party membership base to non-typical supporters and rehearsing topics that fail to captivate the wider electorate's imagination is unlikely to achieve that.

In essence, effective party leaders do not cultivate issues that have totemic meaning within the narrow membership base but actively seek out to neutralise these topics. Corbyn may currently enjoy the support of most of this members. But staying within the comfort zone of left wing activism is unlikely to produce electoral success.

The new normal in identity politics

One of the main criticisms of mainstream media is the lack of representation of those who think (and sound) differently. As thousands of people take to the streets in Germany under the banner of PEGIDA (something akin to 'Patriotic Europeans against the Islamisation of Europe') and UKIP steamroll from one by-election victory to another in England, there is much navel gazing amongst the chattering classes about the meaning of all this. Few commentators however note how exclusive their club of gazers had become, and even fewer mention the fact that the media circus has long been populated by the circle of the usual suspects, drawing on the same old interpretative formulas as they tried to make sense of the new.

In common perception, and in the US in particular, this is often called the dominance of the liberal elite, a theme that is supposed to draw gasps of contempt and connote pre-democratic attitudes: people just don't know what is good for them. I myself never thought that the media debate is sterile, although subversive voices are sometimes rare indeed. Yet, what PEGIDA, UKIP and tea party sentiments clearly indicate is that spaces of articulating divergence from the public mean are developing, and developing fast, just not within the usual spectator theatres. At the risk of calling a spade a spade, here is what I think is happening in the field of identity politics.

The common interpretation of (and anxiety about) identity politics is the ascendancy of particularistic identities at the expense of broader collective, unifying ones. As nation-states struggle to come to terms with migration and assertion of group identities, democratic politics becomes fragmented and the common good lost in a cacophony of voices. Yet, this is the interpretative frame of the 1970s and it owes much of its persuasive power to the strength of the social movements springing up around the issues of civil rights in the US. The new identities are less firm, faster to discard and more chameleon like than those formed in the furnace of the civil rights struggle. Plus, they are shaped and re-shaped in the scatter shot arena of new social media, where loyalties are shifting and belonging is defined by 'likes' of strangers. The most fundamental underlying difference to the identity politics of the 1970s is another phenomenon however. It is the refusal of the individual itself to adopt identity as a criterion of membership to a group. In essence, it is the person outgrowing the neat shapes and boxes we have conveniently produced in order to make sense of the world.

Identity is essentially a two way process, comprising of a passive and active strategy of connotation. The first is being described by others ('Fremdbestimmung', as the Germans call it) whilst the second is self-description. The two intersect and fight for dominance in identity politics. Wherever racial coding is particularly strong, strategies of self-description have long tried to mitigate the harm fremdbestimmung does by (partially) adopting and converting the meanings of racial language. The abundant use of the N-word in rap is an example of this. The boundaries of self-description and harmful description by others remain in tact however, as the hapless protestations to the contrary by white sport commentators using the N-word demonstrate. This is the core of the old identity politics where groups can develop collective power, and may collectively defuse the invidious effects of racial language within their own peer group. The main condition for this strategy to work however is a society that is clearly divided along identity lines, reinforced by daily and routinised discriminatory practices.

Who am I? KingBach's piece on J's and swimming skills of black people

The situation is not as clear in Europe or in other parts of the world. Again, social media is a catalyst and a reflection of the new realities at the same time. Vine's six second shots are full of racial coding bordering on the offensive, yet, fascinatingly, the identities of self-description fail to congeal into group politics. On one hand, this is probably due to the irrepressible yet vacuous nature of the internet 'like', a commitment that costs little and means little. Yet, below the surface something else is happening. The authors of vlogging (video blogging) appear to refuse to adopt identities for any significant time in the first place. Their dominant attitude is one of constant re-definition, rather than affirmation. Identity itself is becoming an ongoing project. The consequences are stunning. It is the demise of the old social movements based on group identities, and the emergence and (often contemporaneous) decline of a myriad of constantly shifting identities, including the subversive merging of self-description with fremdbestimmung. The semantic mode of these new shape shifting 'collectives' is playful, and non-commital.

So, what does that have to do with PEGIDA, UKIP and the tea party? As the main strategy of rebuttal to fremdbestimmung morphes from mitigation through appropriation of demeaning language into a void of core identities, interpretative frames built on we-them and same-different dissolve. And so do the chances of creating collectives around strongly felt values informed by group identities. The 'Islamisation of Europe' and the 'Europeanisation' of Britain is the last firm signpost in a landscape perceived to be of shifting sand. It's the associated uncertainty and the fear it evokes in most people that the liberal media is guilty of neglecting.

If this analysis captures something approximating what is going on, then perhaps we should be in a celebratory mood rather than despondent. As strong group identities thrive in cultures of routenised discrimination, their passing can only reflect progress in the fight for equality. Maybe PEGIDA and UKIP articulate problems of luxury, rather than desperate situations. Lest we forget however, they old ways are not gone completely yet. Fergusons still happen and it is the irony of the US as a simultaneous beacon of hope and despair that the old and the new exist side by side, probably for a long time to come.

The undemocratic pedigree of the European Union

For some the European Union cant do anything right at the moment. From austerity to the Ukrainian crisis, it's the European Union that is to blame. That does not bode well for the European election that are taking place in a few weeks. It appears likely that voters across Europe (that is, those who can be bothered to turn up) will send a strong signal of discontent to their national governments as well as the European political elite. What has happened to Europe? Where did it all go so horribly wrong?

There are several factors that encourage voters to send a 'fail' on the report card to Brussels. For a start, and despite what UKIP tells British voters up and down the country, it is the irrelevance of the European parliament that makes this a perfect mechanism to punish national governments for national policies. Voters in European elections are usually political anoraks through and through. Those who will turn up and cast their vote must have a serious gripe about something, since usually less than a fifth of eligible voters in many UK constituencies are ever bothered to make their cross on the ballot paper. Yet, insignificance of the vote makes it a perfect weapon for the expression of discontent with all things under the sun.

But there is a wider context which motivates people to use their vote for 'protest voting'. Many are genuinely fed up (rightly or wrongly) with the way in which Europe (allegedly) operates. It is widely perceived to be un-democratic, clientelistic and run as a club of bureaucrats far away from the real issues people face in their daily lives. At best, Europe features in the day to day business of ordinary people as a nuisance, telling them to do this or that (mainly things, like, to use metric measures or not buy bananas of a particular bent). The European Union has form in this patronising attitude (exemplified by the current president of the European Parliament Martin Schulz, nicknamed the 'Kapo', who prefers to shout at people and lecture them from above) and it is its history and origin that contributed to this largely parasitic existence of its institutions on normal European life.

Martin Schulz - nicknamed 'the Kapo' for his tendency to shout and talk down to people

At the beginning of Europe lie some pretty unsavoury debates about how to transcend nationalisms that ravaged Europe. I do not mean Nazi Germany's love affair with the idea of European integration, which should be enough to make you feel slightly queasy about the European project. More importantly, the real drivers for European integration were old liberal politician who instinctively mistrusted democracy and clung to an elitist vision of modern politics. This resonated well with the founders of Europe, such as Adenauer, who conceived of the European project after the war as a gentlemen agreement between the French and German political elites. The German Chancellor was on record saying that people (in particular, Germans) could not be trusted with politics anymore after having voted Hitler into power, so the 'enlightened' elites of France and Germany had to create an institutional bulwark against democratic decision making.

Europe as a project of integration between nation-states never recovered from this un-democratic impetus and retained its elitist thrust right up to now. Watch, as the 'European' elites fall over themselves to condemn those who vote for the 'wrong' parties in a few weeks' time. As political parties largely critical of further European integration may capture about 25 percent of the vote across Europe, the easy way out of this 'distraction' emerging from democratic decision making will be to stifle democracy even further. If only people could be so enlightened as their political leaders, the world would be perfect, wouldn't it.

The geographical realities of Europe

As the European elections are creeping ever closer, the debate about 'in or out' of Europe gathers momentum. The hapless leader of the LibDems, Nick Clegg, showed some guts to publicly slug it out with the UKIP leader, Nigel Farage. The result was pre-ordained, to say the least.

It is not just that Farage is a formidable debater, and Nick Clegg failed to update his schtick from the last time he appeared in a leaders debate ('Trust me, I am an honest politician'). More importantly, Europe is pretty low on the list of issues that concerns voters. Curiously, that works in favour of Farage, the eternal anti-European. Exactly because Europe is of little relevance to the day to day lives of ordinary people, it arouses heated debates. Nothing is more fun than to discuss something that allows people to let emotions rip without making it a substantial issue that splits families. Gay marriage is in the same category, something that will affect only a few thousand people in the UK, but evokes hot debates up and down the country. In the small matter of Europe, it may not help that its parliament is little more than a talking shop (what size for bananas?) and its bureaucrats are filling their pockets with dodgy expenses.

But what clinched it for Farage is ultimately something else. It is the lack of experiencing benefits (or anything else for that matter) through being in Europe. If you live in a border town in Belgium you will drive across a (non-existing) border and go shopping in French or German super markets. If you watch the news in Germany, you will be swamped with stories about your French or Polish neighbours. In short, on the continent, you live Europe, whilst in Britain, Europe is something far away. The prevailing sentiment that India or the US are culturally closer to Britain does not help.

Poor Clegg will have to face geographical reality, which is that Britain is an island, and so the pro-Europeans will always be disadvantaged right from the start. On top of that, and despite all the heat it generates in the media, Europe does not mean much to most ordinary people in this country, for better or worse.

The French view of Europe - solidarity one way

President Hollande has fired the first shot across the bow of the British Prime Minister. He said that Europe should not suffer from an 'a la carte' attitude of its members.

Without any doubt, Hollande is referring (not very subtly) to the desire of the British Prime Minister to give the British people a voice in the process of ever closer union in Europe. Presumably, for Hollande, Europe is not an affair that requires public support but something that is stitched up between the political elites of France and Germany.

Yet, his 'a la carte' comment is also of curious provenance given that France is doing exactly that when it comes to defending its own national interests in the annual budget negotiations. At present, French negotiators are celebrating because they are close to pass legislation in the European Parliament which will reward French farmers twice (yes, TWICE) for the same services. Which services? Not to farm anything.

Unbelievable as it sounds, it is true. French farmers want to receive European subsidies twice over for not farming their fields. British and German taxpayers will pay for this little extra for the French, but of course, asking British people whether they would like to do this, is an outrage in the mind of the French president. As always, for the French political class, solidarity is a one way street.

Yet, Hollande's real fear is not the referendum Cameron offered the British people. His real concern is that the paymasters of Europe, the Germans, will finally wake up and realise how they have been blackmailed by the French political class over the last 60 years to support an undemocratic and illegitimate political circus in Brussels and Strasbourg. Hollande does not want to put the European Union on a democratic foundation. After all, if they were ever asked, the peoples of Europe may decide to have no track with this 'free for all' for French farmers at the expense of everyone else.

Cameron calling the bluff of the other parties on Europe

Cameron is enjoying some good headlines in the newspapers after years of more or less open hostility from the press. Yet, the real issue he sparked off with his Europe speech is how the other parties will position themselves to the referendum call.

Labour leader Miliband has chickened out already. Nothing else to be expected from a largely timid leader of the opposition who is party leader only at the behest of the trade unions.

Yet, Cameron has also called the bluff of the Liberal Democrats and they are fuming. The former leader of the LibDems Charles Kennedy, struggled to keep his composure during an interview with Andrew Neill at the Daily Politics show yesterday when asked whether he would support a referendum on Europe. The background to this question: Kennedy vociferously demanded an in/out referendum for the last 20 years. Alas, he could only do so since the LibDems were never in government so they had no chance to get their wish.

Now, things are different. If Kennedy had the mettle he always pretended to have, he should join Cameron in his call for a referendum on Europe. It seems the chickens are coming home to roost.

More or less Europe, that is the question

The wait is over. After several delays, Cameron has finally delivered his lecture on Europe. He sketched the main parameters of Conservative European policy for the time after the next election. The shopping list is long, including the repatriation of powers from Brussels to the legitimate home of democracy, Westminster; and an 'in-out' referendum, once the new contract between Britain and the EU is drawn up.

Was this worth the wait? The lecture was certainly what most Brits expect their politicians to tackle: the nauseating interference of European bureaucrats in the daily life of British people, a flood of directives and laws from an unelected and illegitimate European Commission, and a promise to finally give people a say in the way in which Britain negotiates its relationship with Europe.

Whilst some of the reactions from abroad have been hostile to say the least, few politicians in Germany or France understand the real motives of Cameron. Most observers note that Cameron's chances to be re-elected depend on defeating the challenge from the right, that has emerged from some of his own back benchers and UKIP.

But the real motivation for Cameron's determination to re-negotiate the British bargain with Europe lies elsewhere. It is his deeply felt belief that European institutions lack legitimacy and have so for some time. This may not bother German or French politicians. Thomas Nipperdey, a German historian, wrote eloquently about the view of Germans to see 'the state and national bureaucracy as a true and impartial agent of freedom' (Nipperdey: Arbeitswelt und Buergergeist, p.592) as opposed to party political dispute which is widely perceived by Germans as bickering and an expression of narrow self-interests.

In other words, Germans may see European bureaucrats as the paragon of political altruism, where British people only see illegitimate and unelected pencil pushers. I have previously argued here that the Euro-crisis may force German politicians to think hard about the lack of legitimacy of the European Commission as it takes on budget-reviewing and monitoring powers. Yet, in any reform effort, the key element would have to focus on the weakest component of European institutions, the European Parliament, which hardly deserves the name given that its members are often elected with fewer votes than the local yacht club treasurer and have no power to hold the European Commission to account.

But a reform of the European Parliament would require political resolve from national politicians to transfer even more powers to an institution that has hardly left any positive impressions over the last 30 years. Such a move would be tantamount to political suicide. And so we muddle on.

Only, that Cameron has now put a stop sign up. He has clearly signaled that muddling through is not an option anymore for the British electorate. His courage to force the issue is to be commended. And although Labour is carping from the sidelines, even the leader of the opposition rushed to announce that a repatriation of some powers would be in order. The real question is whether Cameron has enough political capital in Europe to re-negotiate Britain's relationship with Europe. He will need strong allies with a similar agenda. Yet, of those there are very few indeed. It may be a sign how isolated Britain is with its wish for less integration. But then, you have to stand up for what you believe, and Cameron is about to do this.

European politics at turning point?

Whoever thinks that the recent defeat of conservative parties in local and presidential elections heralds the ascendancy of the left should pay close attention to the recent state elections in Germany. The received wisdom would expect an increase in votes for the LEFT party (or 'Linksparty') which has roughly similar policies to the Syriza party in Greece.

In fact however German state elections have catapulted an obscure and hardly 'left' party into the political limelight: the Pirate Party, an amalgam of right wing madcaps and computer freaks. The Left Party failed in all recent state elections to gain parliamentary seats, and dropped well below the threshold of 5 percent.

It seems that the most recent elections across Europe dance to a different tune than that cheerfully offered by Miliband and his socialist colleagues: it is incumbents that are being pushed out of office and the anti-establishment parties that garner a considerable protest vote. Politics and governments across Europe may become that much more difficult as voters look for alternatives outside the conventional party political spectrum.

Why Cameron's European policy is good for Europe

David Cameron’s veto on the European fiscal treaty in December last year has raised much debate. His recent wobble on this issue has prompted some commentators to accuse him of a U-turn, ultimately implying that his initial veto lacked purpose. 

A French contributor to the BBC programme Dateline London summed it up: ‘Sarkozy must be wondering what Cameron’s position actually is. It makes little sense. Either engage more closely with Europe or get out!’

I have articulated my view on the veto previously on these pages, so there is no need to repeat it here. However I do disagree fundamentally with the ‘either-or’ view that is often expressed in the media when it comes to Europe. 

First of all, let’s remember one thing: the British position has always been one of polite distance to the European project of further political integration. This is not a policy originating with Cameron’s coalition. Only months after his first election victory, Tony Blair noisily announced that he will take Britain to ‘the heart of Europe’, and promptly forgot about it. The best thing one can say about Blair’s engagement with Europe is that it was one of cautious engagement when it suited his domestic agenda. In fact, there is little evidence that much of what was going on in Europe was ever more than an annoyance to Blair. That was one of the reasons that his bid for the European Presidency failed. Britain under Blair was nowhere near the centre of Europe. 

And how could it be otherwise? The fact is that Europe is a two speed continent, and has been for some time: one part of Europe pursuing economic and political integration, while the other keeping its distance. 

So if Britain’s European policy has not changed much, why the call to ‘either join or get lost’ from some other European partners? Why the ire for ‘British intransigence’ when it came to the veto? 

The real threat to the European politicians who cannot wait to have powers transferred to an unaccountable bureaucracy in Brussels is that Cameron’s vision of Europe as an economic trade zone may gain track with some of the people across Europe who are tired of failed European institutions and backroom stitch ups for plum jobs for their clapped out national politicians. 

Just like Margaret Thatcher before him, Cameron has formulated an alternative vision that commands supreme legitimacy: the maintenance of national democracies combined in a free trading area across Europe. His insistence that such a Europe based on free trade and free markets is viable, forces Sarkozy, Merkel and others to articulate the advantages of their vision in much more detail. 

Without Cameron’s alternative vision, Europe would be driven by a political project that has little more to its name than the logic of the French-German relationship. For Britain this may never be sufficient as a basis of pan-European policy. And in that, Cameron is right. It is not a question of ‘in or out’. It is a question of what the ultimate purpose of Europe should be. Britain may continue to find a different answer to this question to other nations. 

Cameron's almighty gamble

After the party comes the hangover. Only it’s not been a party. More to the point, it was a car crash with the fatality of Britain’s role in Europe and the post mortem is in full swing in the British press. Of course, I am talking about David Cameron’s decision to veto the Merkel-Sarkozy plan for fiscal union, something that would have led to a new European Treaty. 

There has been plenty of navel gazing in the media, mainly about whether or not Cameron’s move will damage Britain. What received less attention is the question why on earth he did it in the first place. Yet the question about his motifs is an important one. Cameron himself points out that he had to protect the City of London and its financial services from a financial tax that would have come with the treaty. Louise Cooper agrees with Cameron in the Guardian today (you can read her piece HERE). 

Yet two questions remain. First, does Cameron’s veto mean that the city is now safer than it would have been with a new treaty? And, second, was this the only reason Cameron reached for the nuclear button? 

The first claim is questionable. The rest of Europe will now come together to design new rules and regulations for financial transactions which will affect London one way or another. Remember that any future rules will apply to all banks that are based in one of the treaty member states, hence to all but Britain. Politically, protecting British banks from sensible regulations which are being applied across Europe sounds tricky to me, to say the least. Is Cameron really going to block a financial transaction tax repeatedly over the next years that has broad popular support in Britain? This does not sound like a plausible strategy for which the voters will richly reward him in 2015. 

The second question however goes to the heart of the relationship between domestic and foreign policy for Cameron’s government. If his veto will not safeguard the City from future regulations, the question arises why he used it in the first place? Critics may point to a previous decision on European affairs that was less than surefooted: his withdrawal from the Conservative party bloc in the European parliament. Some may say Cameron simply does not care much about Europe. A more likely explanation however may be that his policy is mainly determined by preventing Europe to tear his party apart. 

After all, his veto stopped a new treaty for which he would have needed to campaign in a referendum; the new treaty ‘referendum lock’ would have been triggered by any new treaty. Seen from this perspective, Cameron’s veto looks more like a desperate attempt to prevent a referendum on Europe which may have jeopardised the unity of his party. By exercising his veto he may have saved Britain an early exit from the EU, at the cost of marginalising it. 

Time will tell if this almighty gamble will come off. Some of his Eurosceptic backbenchers are already calling for re-negotiating Britain’s relationship with Europe. Some political scientists call it the law of unintended consequences in politics: you aim to do one thing yet get another. Cameron may find it just as difficult to extricate himself from this iron law in politics as any of his predecessors in Number 10. 

If a victory, then only a pyrrhic one

So David Cameron got his victory and so did the Eurosceptics in his party. While they are undoubtedly busy celebrating, Labour only managed some pipsqueaks from the sidelines. And the Liberal Democrats are practicing public loyalty to their coalition partner by exercising a stony silence on Europe. 

But this is a serious issue and we should not leave it to the Eurosceptics. If you believe the UK papers, the Euro is bagged and tagged. Yet, they are wrong. The Euro will survive because the political spirit that sustains it, European solidarity, cannot and will not go away. 

As the Eurozone countries are struggling to find the right mechanism to address the economic imbalances between them, the spectre of a Euro breakup was raising its ugly head, but it was never a plausible scenario for anyone who knows what Europe feels like on the continent. That is something many Brits forget. Europe is a feeling as much as it is a political project. And there is no politician in the Eurozone who can ultimately wrest herself free from the main thrust of the European spirit: mutual solidarity and closer integration. 

To maintain that the Euro would survive was a questionable account as long as the economic crisis made it difficult for Merkel and others to dish out enormous sums to countries like Greece, Italy, Ireland and Spain. But pay they will. And that is why the gradual but steady distancing of Britain from the European integration project amounts to nothing less than the biggest foreign policy mistake of the last decades. As Europe finds a solution to the Eurocrisis and embarks on closer integration, it will strive to reform and strengthen substantially the European institutions that can deliver fiscal oversight, the European Commission and the European Parliament. 

The result will be that Britain will fail to have a seat at the table to influence the direction of future European integration. Thatcher’s legacy, to nail the Tory colours to the mast of a trading and tariff zone, will come to haunt Cameron. Europe will go the other way, towards fuller integration and Cameron will be hostage to the veto he so courageously wielded yesterday. The uncertainty of Britain’s position in the emerging Europe of the future will mean that business and the people of Britain will suffer in the long run. Cameron may celebrate today, but his victory will turn out to be a pyrrhic one. 

Why Nadine Dorries worries me

I am worried. And I am worried about something that I never thought I would be in my lifetime. I worry that the life I have built up here in the UK rests on precarious foundations. Let me explain. I am German. I have moved to the UK in 1996 and, by all accounts, settled here successfully. I work at a university, joined a political party and will stand for council elections in May next year. That's not a bad achievement in terms of integration I think. 

However, listening to Nadine Dorries on Newsnight yesterday (you can watch her exchanges with Sir Malcolm Rifkin HERE 9:30mins into the programme) I am not so sure anymore that I made the right choice. Her comments made me feel very insecure indeed. And I never thought I would ask myself the question: do I, as a German, have a future in the UK? 

All of this of course is a result of the Eurozone crisis and the moves by France and Germany to forge a closer union. I always believed (Euro or no Euro) that closer co-operation would happen. Europe was designed to contain some parliamentary and legal components which meant that nation states gave up some of their sovereignty. Don't get me wrong: I always recognised that there are huge problems with this transfer of powers to the European Union in some areas, not least the fact that there is still no elected government of Europe but only a motley crew of bureaucrats and clapped-out national politicians who decide what we eat, consume, trade and produce. 

Yet, I was never in doubt that the way to address these problems was to engage with others in the European Union and find a way forward. Yet, if it was up to Nadine Dorries, all bets are off. As the countries in the Eurozone will grow closer together, Britain may move away from European institutions. Yet it was these institutions that, by and large, have protected my legal status in the UK. It is because of Europe that I am being treated exactly the same as any British citizen when I apply for a mortgage or a job in this country. 

I could become a civil servant in Leeds, draw a local government pension and, incidentally, if I decided to move to Germany again at the end of my working life, I could transfer my pension pot to Germany without any hitch. It is this ease with which we are moving around in Europe that is remarkable, though often unnoticed. This wouldn't be the case anymore if Britain takes a step away from Europe, adopting a position more akin to, say, Switzerland. Arranging health care, pension arrangement and applying for work visa can be a nightmare for anybody from Switzerland or any other non-EU country living in the UK. 

In a way what I am saying I think is that I never really felt like a foreigner here. Living as a German in Cardiff or Leeds felt more like being in a different part of your home country where people somehow happen to speak a language different to your own. If Nadine Dorries and the Eurosceptic wing of the Conservatives have her way, this feeling may not last. Moving away from Europe and its institutions will create uncertainty in the minds of people like me. My position, and incidentally the position of tens of thousands of expatriates living in Spain, Portugal or Italy, will become precarious. That is why I am worried.  

Why the Eurozone crisis may bring about a more democratic Europe

While everyone talks about the Eurocrisis and the economic woes of some countries in the Eurozone, the need to forge a closer fiscal union between Eurocountries may in fact bring about some much desired movement in another area as well: Europe's democratic deficit. 

Over the last decades, the democratic deficit has mainly been a topic for academics and disgruntled Eurosceptics. Yet the problem is real and has always had the potential to undermine the entire European project. As Europe grew closer together and transferred some powers to Brussels, it was never quite clear how to ensure that Brussels' bureaucrats were held to account for what they did. A result of this has been that auditors have refused to sign off the books of the European Commission for the last 13 years. This may sound like an obscure argument but it goes to the heart of budgetary responsibility and democracy. 

In effect, the European Commission has been spending taxpayers money (contributions from European nation-states) without having to say HOW it spent it. Since the European parliament is at best a 'quasselbude' (a place to chatter), the European Commission has also not been held accountable by the elected politicians we sent to Brussels. 

The overall effect is complete impunity for budgetary decisions by the European Commission and Brussels' bureaucrats. This is no small feat in the history of democracy. The European Commission must be the first quango in history that can spend taxpayers money without ever being held to account. 

This may all change now. Why? Pretty much everyone is agreed that the Eurocrisis needs closer fiscal co-operation. Part of that co-operation is supervision of fiscal rectitude in countries that run a deficit and require a bailout such as Greece, Italy, Ireland, Spain and Portugal. 

The obvious choice would be to select those to monitor budgetary responsibility of bailed out countries who pay the bill: the Germans or the IMF. Yet, this is politically impossible. No Italian or Irish government would permit German civil servants to scrutinise the national budget. It would also raise some serious questions about the accountability of those governments to their own electorate. 

The proposal that is emerging instead is that the European Commission or a newly created body in Brussels will take up this task. This brings us back to the democratic deficit. Any monitoring of national budgets in Brussels will require robust democratic legitimacy. So as European leaders muddle through the economic crisis and try to devise a reliable mechanism for budgetary discipline and independent supervision, we may just see some significant progress on creating more democratic European institutions as well. Let's keep fingers crossed, for our sake and for the sake of Europe. 

Would Greek default bring Greek prosperity?

There have been few things that arouse people's feelings like the impending Greek default. The airwaves and the print media are full of informed and some less informed opinions and debates. Essentially there are two camps at the moment: those who feel that the austerity imposed on Greece is unjustified and creates unacceptable hardship for the Greek population and those who think that Greece has to pay for its sins.

I have advocated the latter but, I have to admit, there is little comfort in such a view. The Guardian comments pages carried an articulation of the first view, you can read it here http://www.guardian.co.uk/commentisfree/2011/sep/19/greece-must-default-and-quit-euro

The author essentially advocates a default of Greece and the re-introduction of the drachma in quick succession. He believes this will allow the government to de-value the currency and postpone the austerity programme, hence producing less pain for the Greek population.

The fascinating aspect of this view is that it operates with some of the conventional market-supply side frameworks it attacks. De-valuation is believed to bring about a quick recovery of the Greek economy, an increase in Greek exports and hence a significant rise in tax revenue.

This view is, strangely enough, as short sighted as all the IMF programmes of the 1990s were supposed to be. Yet, default is a favourite view of the opponents of reforms and austerity. Why?

There are several simplistic assumptions that would work against a successful recovery if Greece defaults and leaves the Euro.

First, a default will not only be bad for Greek credit in the future, but also for the rest of the European banking system, which, whether they like it or not, is the one that will have to lend the money to Greece once it leaves the Euro. A banking crisis will make quick lending on favourable terms and interests rates to the Greek economy or her government unlikely.

Second, a recovery of the Greek economy will depend on competitive industries and having goods to export. Greece has neither. It is essentially, as many observers commented, still a closed economy, importing goods from the Eurozone (on account of demand through high salaries in the bloated public sector) but able to export little since it has only a slender industrial basis. Being competitive in the world markets, in turn, would depend on attracting investment which, again, cannot come from Government since it is flat out broke, so requires the banks in the Eurozone to chip in. This is highly unlikely given the prior default.

Third, the default will remove any incentive to reform the tax system and to shrink the bloated public sector with massive pension liabilities. So, even after a default, the government will still face an enormous annual expenditure which will drive up inflation.

Last but not least, Greeks are saying they are hurting now since they cannot buy goods anymore as their wages are decreasing. However, things would be even worse after a default and the re-introduction of the Drachma. Since most goods are IMPORTED from the Eurozone, leaving the Euro will make these goods prohibitively expensive. The Drachma will not buy much in the way of IKEA furniture or French perfume. What will be left to buy are goods manufactured in Greece, of which there aren't many. Hence the Greek population will experience a far more serious decline of their quality of life after leaving the Euro than now.

The simplistic equation: leaving the Euro + devaluation = less austerity fails to recognise that Greece in future still needs an enormous amount of steady investment to improve its industries. Any short term relief from the postponement of the austerity and reform programmes are likely to backfire.

To have any chance of overcoming its problems, Greece needs to stay in the Euro and swallow the bitter pill of giving up its fiscal independence. This is a small price to pay for the chronic mismanagement, budget falsification and billions of Euros they received.

To pay or not to pay for other people's sins?

The Euro crisis is currently focussing some economic and political minds while we witness the possible default of Greece and other Eurozone countries in slow motion. As with all economic problems, there are just as many opinions as experts, but more and more people agree, that eventually, there is only one outcome: Greece leaving the Euro. Many people in the UK (including myself) just feel lucky that we didn't join the Euro, yet, being a German, I also feel for my countrymen in this difficult moment. The question raised all over the airwaves is: Why aren't Germans simply digging into their pockets and bail Greece out? The sums needed are ridiculously small compared to German's GDP. The current installment due this Friday is a meagre 8 billion euro.

However, there is something called 'moral hazard' and its absence in national economies has a fundamental effect on how governments are behaving. Although I am not an economist, here is what I think about the 'moral hazard' of unlimited bailouts.

It's commonly known that Greece, after joining the Euro, lived way beyond its means. It also suffers from a serious lack of economic competitiveness and deep-seated problems with tax-evasion and low revenue. The shocking examples of public sector employees retiring at the age of 55 in Greece with pensions at the value of almost 80% of their last salary are well known. More interestingly, the public sector has also expanded dramatically over the last decade. The reasons are obvious. Having joined the Euro, Greek bonds were gold-plated and desirable. No one thought that a Eurozone country could default. Hence interest rates were low and the Greek government went on a spending spree of enormous proportions. A curious side effect of the massive expansion of state services is often that private enterprises are crowded out, which in turn means less revenue and more borrowing. That does lasting damage to any market economy.

Interestingly, this is not just the story of Greece. This summer I was in a small town in Spain. I was looking for a gym to work out and was told that there used to be several private ones but they had all shut down. Instead the town now had a huge brand new leisure complex that was run by the council. Private fitness studios just couldn't compete with the subsidized prices of the council leisure centre and had to close. The leisure centre was indeed impressive. For a town of about two thousand residents, the centre boasted a 50m swimming pool and a fully equipped gym with various sports halls. This was all available for 2 euros a go.

Now, needless to say, most of the equipment was little used and the swimming pool was almost always empty when I was there. Yet, this was all built and run by the council at an enormous cost to the taxpayer. Well, actually not: it was actually run on borrowed money and it is this what I call the lack of moral hazard. The Greek government, just like the Spanish one, knew one thing. If they couldn't foot the bills anymore, somebody else would. The Germans would always pay up since they benefitted from the Eurozone by exporting to the Eurozone countries.

That in effect meant that countries such as Greece and Spain could spend money like a drunken sailor and never be held to account for it. Until now that is. Wolfgang Schaeuble, the German finance minister, says he refuses to throw more money into a bottom less pit and Angela Merkel is under pressure by her own party not to release the latest bailout installment to Greece.

People say that the Euro is doomed and Greece should default and leave the Euro. Yet this scenario is fraught with problems. Few spell out exactly what would happen to Greece if it indeed left the Euro. Who in their right mind would buy the Drachme if it is re-introduced? The most realistic scenario is that Greece would experience a far worst run on its currency and its banks then it does now. Also, where will the recovery come from once it has left the Euro? Greece does not have any competitive industries. In fact, it is, as one observer called it, even now still a 'pretty much closed economy'. Once outside the Euro, currency exchanges would add to the costs of any producer. Who would invest in a country like that?

The harsh truth is that Greece needs to pay for its party, one way or another. What Germany can do is to stabilise the situation temporarily until the Greek economy recovers. Until then it needs to do what all governments do in these situations: sell the family silver, reduce the extent of bureaucratic controls that stifle private initiative and scale back public services where they hold back free enterprise.

If the Greek government is genuine in their reforms, I am sure the Germans will be willing to pay the bill for now. Yet as we say in German: 'Erst die Arbeit, dann das Spiel.'

Localism or centralism?

There have been some significant changes in the way we are governed in this country over the last decades. Political scientists talk about a shift from government to governance. And politicians complain that, once in power, they can decide precious little, while unelected bureaucrats in Europe or impersonal market forces are the real diving forces of the political agenda.

Curiously, the current government has embarked on a fundamental reform of government that can, at first glance, only compound these problems: I am talking about localism, the desire to devolve decision making powers to the local level, away from London and its faceless civil service. It seems to me that there is little to be gained for the current government if it is successful in this reform. In fact, they have a lot to lose.

Conventionally, central government is held responsible for pretty much everything that goes wrong, from ill-thought out foreign adventures to burst pipes in the local street. Yet, political observers agree that central government has fewer mechanisms today to make decisions that affect people than it used to. A large number of laws are 'adopted' from Europe where European directives are taken over wholesale into the body of national law. On the other hand, national governments are no match for the economic might of international companies, not to mention hedge funds or banks as the recent liquidity crisis in the European Union reveals.

Yet here is the crunch point. Central government is also squeezed by the forces of devolution, transferring power to the four home nations, as well as by the principle of localism. Now, localism is nothing new. It was already the rallying cry of Blair's first government and even Margaret Thatcher talked about it. However, neither Thatcher nor Blair's governments actually put in place the mechanisms to devolve substantial powers to the local communities. The community regeneration partnerships under Blair are a good example. They were the attempt to let communities participate in decision making without quite giving up on pulling the strings, not least the purse strings. The fact is that genuine localism would involve the transfer of tax raising powers to local authorities (beyond council tax and some business rates), a step still unthinkable in the UK.

So, this government is stuck in the same conundrum as those before: between a rock and a hard place, increasingly unable to make decisions, yet held responsible for everything that affects people in their local community.

The latest example of this is the cut to the local authorities budgets by the Local Communities Department. While cuts are administered across the board (with some thought to differential need), it is up to the local authorities to structure their budget in such as way that public services remain viable. The reaction of local councillors have ranged from constructive co-operation to outright obstinacy. We will see who will be blamed if and when public services take a knock. My guess is central government will get it 'in the neck' whatever it does.