3 February 2014

A Common European Home



Cameron's meeting with Hollande last week underlined again our isolation from the central European debates, while last month's vote European Parliament indicates the strong majority in favour of total free movement within Europe. While it would be wrong to suggest that there is anything like consensus over this issue, since there are already many anti-immigration members of the Parliament and their numbers are likely to swell after May's elections, there is a centre of gravity around the idea that once within the Europen home, citizens are free to seek better lives in other member states.

The moral commitment supporting this position, although often unstated, is that everybody within the European Union has an equal right to a certain standard of living, usually measured in purely material terms. This position has been driven particularly by German members who extended their own sense of responsibility for their brothers and sisters in the East to make this a Europe-wide understanding that the countries of Central and Eastern Europe deserved a lifestyle similar to those in the West. After the fall of the Soviet Bloc it seemed churlish not to welcome Czechs, Bulgarians and others who had escaped communist domination into the wealthy and free culture of western Europe.

At an ideological level this position is fine, noble even; the problem arises when it runs up against the limits of political economy. We are being asked to share the wealth of Europe more equally between citizens who begin with wildly different levels of income. Yet this is not to be a managed process it is to be a process determined by ambitious individuals who follow their dreams in a random process. Aside from the financial transfers through the European Convergence mechanism, what was the policy to ensure and equalisation of incomes? Perhaps equally important, where was the questioning about quality of life, and about what the accession countries might be losing in their headlong rush to consumerism?

It adds to the complexity that the movement to equalise standards of living between very different societies has taken place against a backdrop of increasing corporate power, as trade unions have been attacked and governments have retreated from strong regulation. In this context the Enlargement made available to global corporations a skilled and yet poorly paid workforce, and whether these people arrived in our countries or stay in their own countries it is hard to argue that they do not put downward pressure on wages and cause jobs to move eastwards. Given that at the time of Enlargement many western democracies had socialist leaders, it is quite extraordinary that they did not include in the deal some requirements for minimum wages, even the transition towards an EU minimum wage. If the assumption behind policy-making is really that we seek a Europe where citizens are equal in civil rights and also in standards of living then such a policy was always essential.

The vision of Europe we were sold was one where our cousins to the east would rise upwards to meet us in our halcyon luxurious lifestyles. Yet such a vision always required rapid economic growth across the European economy, for without it equality was bound to mean those in the pre-2003 EU states facing a lower standard of living. Any growth that Europe experienced in the past decade was largely credit driven, and now that the bubble has burst growth is hard to come by and hence the pressure for equalisation has become a downward pressure on living standards in EU member states.

As a Green Economist I am entirely committed to equality but I must also recognise the limits of the ecological system on which we depend. I cannot share the irrational exuberance of a socialist politician I once discussed this with who told me 'I'm an old fashioned socialist: I believe everybody should have a Ferrari'. The widespread and growing evidence that we have reached the ecological limits, whether we are thinking about climate change or biodiversity loss, suggests that the earth simply cannot sustain Ferraris for all. The choice for European citizens is whether we follow the Nationalists in keeping our Ferraris and leaving the Romanians with Ladas, or whether we accept an egalitarian future even if it might mean rehabilitating the bicycle.
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