Monday, 8 May 2017

The EU is a dead man walking

So Macron has won. European elites are celebrating. The EU is safe. For now. Even in the popularity stakes the EU is riding high. Reports of its imminent demise are overstated. There is though, still that problem of democratic legitimacy - and it doesn't look like that is likely to be solved any time soon.

The main reason the EU survives is because as yet political challengers have been unable to present a credible alternative. The ragbag assortment of fascists and far right agitators have failed to offer a coherent platform that can carry a majority. Le Pen is the closest anyone has come and at 35% of the vote in a low turnout election, it's pretty underwhelming.

That said, it would be wrong to assume that that France is turning fascist any more than it is correct to say that Brexiteers are racists. Sometimes voters hold their noses as they vote simply because any change in the face of consensus establishment politics will do.

In order for conservative movements to navigate the minefield of political correctness in the media they have had to reshape themselves in the image of left wing progressive parties. That though has worn thin where electorates are no longer willing to tolerate it and will no longer be brow beaten by thought police. Gradually they are realising they represent a power in their own right which can be converted into a majority.

This is why the EU is a dead man walking. The only reason the EU survives is specifically because Europeans are not fascists or racists. Not enough of them can bring themselves to vote for somebody like Le Pen and will vote tactically to stop them. That very often means electing a walking centrist cliché like Macron.

Predictably, European establishments are taking this as a vote of confidence in them and their political constructs. Hence the international gloatfest. This though is a mistake. And one that will ultimately cost them.

These upstart movements may very well be defeated at the polls but it doesn't change anything. Their support collapses because of their obvious inability to win. The public sentiment behind that though remains as strong as ever. Electorates just lack a vessel with which to express that sentiment. This is why the political theme prior to the rise of Ukip was political disengagement and low turnouts.

Say what you like about the EU, it is not a loved entity. Many of those who voted to remain in our referendum did so out of either resignation or pragmatism. They call themselves Euro-realists. Sceptic remainers. It only takes a catalyst in global events for them to turn or in the case of Brexit, a political accident.

The truth is that the EU has no real demos and its strategy is to wait for its opponents to die out. It's not much of a game plan. At best the EU is tolerated, largely in the fear of the political vacuum that would exist in it absence. The only way the EU can ultimately avoid its own destruction is to do the very thing it fears the most. Change.

For whatever good the EU has done, the one thing it cannot do is speak to the many global problems we presently face. It has no real bold ideas and its solutions are technocratic tinkering unlikely to be understood by electorates. TTIP attracted widespread opposition when most people were only dimly aware of its existence let alone what it actually is.

There is then the obvious flaw with the EU in that the destination written into the EU's DNA, federalism, is not one supported or wanted by the majority of any European state. It is forever working in collusion with liberal left elites against the wishes of the people. The British are awake to this fact which is why we are leaving. The only real question is how much longer the rest of Europe will tolerate it.

I take the view that Europe will continue to tolerate the EU for about as long as it just about maintains the status quo. That is about as much as people aspire to for the moment. It's when they eventually tire of shrinking or stagnating wages and managed decline. Growth figures point to GDP but this is largely centred in larger cities and financial institutions, leaving the regions to rot. That is what drove Brexit and that is what will kill the EU.

The problems here are structural. The basics mission for any bureaucracy is to keep the middle classes suitably mollified enough not to grumble. Even the CAP was a device to keep people employed on the land and stop them moving to the cities and causing an uprising. Times have changed but the approach has not. Just look at the UK in how many people are employed by bloated programmes like Trident, Hinkley Point and Airbus where there are three managers to every engineer. This cannot be sustained.

For decades now, Airbus and Boeing have enjoyed virtually unchallenged monopoly over the airline industry but that cannot last. The Chinese C919 is a direct threat to the Airbus A320 single aisle family - already facing competition from Embraer. Beset by technical woes from their ill-conceived vanity projects like the A400m and the collapse in sales of the conceptually flawed A380, these mega employers can no longer afford to be the bloated behemoths they have been hitherto now. Infrastructure and state owned industry can no longer serve as warehouses for middle class engineers.

In every sector we see the rest of the world catching up and realising that it does not owe the Europeans a living. We can strengthen our outer frontiers against direct competition but ultimately the EU will continue to lose ground in its share of global trade. Keynesian socialist models, aka Ponzi schemes, only ever cannibalise themselves in the end. The collapse of the present economic order is a matter of when, not if.

In this the EU has confounded many of it s critics by surviving the Euro crisis by the skin of its teeth, but the question is whether it can withstand another and whether it can make the necessary structural reforms internally to cope. I don't think it can. Culturally, the UK can and will adapt because we always have. The French though, I cannot see them ever instituting the necessary reforms without taking to their ritual Peugeot bonfires.

This is ultimately why I am not all too concerned that banks are uprooting for Europe. For the time being there is profit to be made in servicing that economy. Moving to where the money goes is what multinationals do. The UK, however, has a political crisis to resolve. Nobody knows how that will pan out but we will solve it. Everything else is a secondary consideration. Once we have, we can pick up where we left off, hopefully having closed some of the economic and cultural disparities between London and the regions.

By the time the UK has resolved its internal fractures we will emerge in a better state to confront a number of global challenges when mainland Europe has chosen to limp on with a decaying model. London will no longer be the financial capital of Europe but it will still be a global city and its trade patterns will likely reflect that. It is this economic and political reinvention that ultimately hedges against the inevitable political implosion in Europe.

France has not voted for the politics of Macron. It has voted against a grubby holocaust revisionist. It is not an affirmation of belief in the EU and the underlying stresses are not being addressed, unlike Brexit Britain. They still have a political reckoning to come. Continuity Hollande is not going to cut it.

Though the Brexiteers have got some daft and singularly naive ideas about trade, the instinctive belief we all share is that we do not belong in the EU, and that the EU most likely will not survive. Sooner or later the EU will not be able to withstand its own internal hypocrisy. Already, if we look the the fringes of Europe, we see the Balkans once again on high alert, Eastern member states increasingly asserting their sovereignty and southern states continue to resist economic restructuring.

Just now, somebody tweeted at me that the EU is "a 300 year project hasten to completion within the lifetime of impatient, narcissistic political elites". I couldn't put it any better. Its lofty ambitions are entirely at odds with the political and economic reality of Europe and the wider world. It exists in a state of denial, piling on ever more "progressive" policy measures neither wanted by the public nor needed by business. In a world of ruthless competition, with China only too happy to subdue Europe and India actively waging an economic war, our politics needs an injection of realism that the EU simply does not allow for.

For the previous century Europe and the West have largely enjoyed prosperity without competition. It's political infrastructure was designed for that pre-internet era and maintains the same thinking - much of it embedded in the treaties of the EU. To this day the CAP stands much the same as it has always been. Without reform and reinvention what else can it do but implode?

For the moment, France has granted the EU a temporary reprieve and a period of stability for the purposes of Brexit. I suppose we should welcome that. We should also not be sorry that a specimen like Le Pen is not a leader of a great Western nation. That though should not be taken as a sign that all is well with either France or the EU. Until there is a democratic correction nothing has been resolved. This is why I am grateful for Brexit. It's expensive, inconvenient and risky. It does, however, beat the consequences of inaction. It may be that France, not for the first time, will pay the price we have narrowly avoided paying. They have kicked the can down the road once more.

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