The European Union as a neoliberal coup

Maike Gosch: Dear Thomas, could you start by telling us a little bit about yourself and your background?

Thomas Fazi: Politically speaking, my baptism of fire was in the late 90s/early 2000s with the anti-globalisation movement. That’s really what got me involved in politics. I was part of what you may call the radical left, or the socialist left, when the left still hadn’t gone completely bonkers — even though some early markers were already there. That was a very exciting time to be involved in politics. It was the first mass movement that had sprung up in the West in more than a decade. And, I would also say, it was the last big left-wing mass movement that we’ve had in the West, and that continued for a few years, evolving into an anti-war or peace movement after 9/11, and the beginning of the post- 9/11 wars.

After that, in the mid 2000s, the movement died out for a number of reasons. And a lot of us kind of dropped out of active politics. There was a fall back into our private individual lives as a result of the movement collapsing. I also dropped out of politics for a while, until the financial crisis it. That reignited my interest in what was happening around the world, especially as the crisis hit Europe and evolved into the so-called “sovereign debt crisis”. I realised that even though I’d been interested and involved in politics for a very long time, I didn’t have much of an understanding of what the financial crisis or the euro crisis was all about, but I realised that the official narrative didn’t make much sense. So I embarked on an intellectual journey to study economics in order to better understand the politics of it. And that’s what led me to write my first book, The Battle for Europe, which came out in 2014 and was a sort of counter-history of the euro crisis from a heterodox economic perspective. From then on, economics became my big passion and I started writing more about it. And that’s how I got into writing and being a journalist full time.

And then I grew more and more aware of how the system works, and especially, the very negative role of the European Union from a social and economic perspective, that led me to become kind of estranged from the left, which had become strongly pro-EU. Instead, I started identifying the EU as the cause of many of the problems that we face in Europe today. And then, of course, the Covid crisis struck, and that marked my official divorce from the left, because I found myself looking at what was happening from a completely different perspective than 99 percent of people on the left. I explain my view of that event in the book The Covid Consensus: The Global Assault on Democracy and the Poor—A Critique from the Left, co-authored with the British historian Toby Green.

Maike Gosch: Was there a time when you were enthusiastic about the European project or the EU?

Thomas Fazi: I was never really enthusiastic about it. It’s more like I didn’t really think about it much before the euro crisis, as most people on the left. Which is problematic in itself, in terms of not realising the importance of working politically at a national level and the role that nation-states play in political change. I think we were very naive about this. We wanted to change the whole world (the slogan of the anti-globalisation movement was “Another world is possible”) without realising that you can’t really “change the world” — I mean, at best you can maybe help change the country you live in. But because of this naive view, we also ended up completely ignoring what the European Union was, and the constraints it placed on any form of radical change at the national level.

So, for a long time I didn’t think about the EU that much. And then, when the euro crisis hit, at first, I kind of subscribed to the left-wing view of it, which was that the European Union remained a noble project that had to be saved but which had gone kind of astray and had to be set back on the right course, because it had simply gone off track. But I subscribed to the idea that, on a fundamental level, the project in itself was a good thing, and was something to be preserved. Because, like a lot of people on the left, especially the people on the radical left in the late 90s/early 2000s, I had a very negative view of the nation-state, of national sovereignty, which I kind of associated with something reactionary and intrinsically bad. And so, coming from this kind of anti-state bias that was very common on the radical left, I automatically assumed that a project that wanted to overcome nation-states had to be good, because nation-states are bad, reactionary, fascist, or so the prevailing narrative went. I was very naive in that respect as well.

I changed my views later, but there was a moment when I completely subscribed to that view. And it again goes to show the power of propaganda. We’ve been propagandised about the European Union for decades. And so, it’s not surprising that many of us held these positive views of the EU, and that a lot of people still do, because they’ve used some very good narrative techniques to promote the idea of the European Union, leveraging a lot of European history as well. Like the notion that the EU is this big peace project — and who doesn’t want peace? In Europe it was quite easy to sell to people the idea that nation-states are bad, coming from two disastrous world wars between European states. They were very clever, leveraging that history to promote a project that was never really about peace, or international collaboration between peoples. I mean, it was always something very different. But it took me a while to figure that out.

Maike Gosch: So, before we get to your report, how did you come to see the EU after that and up to the present?

Thomas Fazi: I think, when you start really looking into the history of the European Union and its nature, you realise that it’s something very different from what we were told it is. It’s something that has very little to do with the official story of an “ever closer union among the peoples of Europe” and you realise that, actually, it was always an elite project, right from the start. And it was a project that had both political and economic ends. When you take your rose-tinted glasses off, you realise that the European Union is really the most extreme manifestation of the neoliberal project. When you look at what the neoliberal project was about, ultimately it was a reaction to the breakdown of the post-war consensus, which had become unsustainable from a capitalist standpoint, both economically and politically, because profit margins had started to shrink more and more in the mid-70s, as a result of a number of reasons. But the bottom line was, that the system wasn’t working in the interests of the capitalists class anymore. A lot of political contradictions had emerged as well in terms of the working class, of working people and organised labour becoming too powerful from the perspective of the capitalists. This was a time of great political upheaval in which mass political parties, including socialist/communist, social-democratic and labour parties, were becoming stronger and stronger. So there really was a fear in some elite circles that the masses would be able to slowly transcend a certain capitalist logic through the democratic process.

This led to a very strong pushback by the elites, in what has come to be known as the “neoliberal counter revolution”, which was both an economic and a political project. It was an economic project in terms of rolling back the power of organised labour and re-establishing profit margins. But it was also a political project in terms of finding a solution to this excess of democratic participation. In a way the neoliberal project provided a response to both aspects: on the economic front, you’ve got all the economic reforms and the attacks on unions, the liberalisation and the deregulation of the economy, and all that. But then you also have this political response, where the elites tried to find ways of maintaining the formal aspects of democracy, while at the same time hollowing democracy out from within. And one of the solutions they came up with was: how do we depoliticise the decision-making process? How do we make it so that, even if people have a chance to participate in elections and vote for whatever party they want, we will ensure that they won’t be able to actually affect policies on the issues that really count, especially economic policy and social policy, but also foreign policy?

And one of the solutions was this kind of “supranationalisation” of politics, where you shift the locus of the decision-making process from the national level, where people theoretically can have a say over what policies are pursued, to the international organisations, like, for example, the WTO when it comes to trade, and similar organisations, but also supranational organisations like the European Union, which are virtually insulated from democratic accountability and democratic control. Essentially, people have very little say over what is decided at that level. Because there is no actual democracy at a supranational level.

Democracy has only existed — and, I would argue, can only exist — at the national level. And so, when you start to look at things from this wider historical perspective, you realise what the European Union’s project was all about: it really was a way of responding to the crisis and a way of implementing neoliberalism on an unprecedented scale, by essentially hollowing out national democracies and national sovereignties by creating this supranational institution that would prove impervious to any form of democratic pressures.

So that’s the political aspect of the neoliberal project, and at the same time this institution would be used to then re-engineer societies in line with the neoliberal agenda.

So, I think, this is the essence of the of the European Union’s project. It’s an elite-led capitalist project, aimed at reinforcing the power of capital at the expense of workers and citizens after the crisis of the 1970s. And, I think, in this respect — from an elite perspective — it’s been a huge success. It has managed to depoliticise politics and the decision-making process to a greater degree than anywhere else in the West. It’s been an utter disaster for workers. It’s been a very powerful tool in dismantling a lot of the “European social model” that we pride ourselves on. So, the European Union, far from being something that has promoted that model, in fact, has been the primary tool to dismantle the kind of European post-war social-democratic model, which we all prided ourselves on. I think, this is what the European Union is: it’s a fundamentally anti-democratic elite project that exists to entrench corporate and an elite power in Europe. I think this is what it’s always been. And this is what it is today, more than ever, except that today we’ve also got an added geopolitical twist that wasn’t there just a few years ago, which is this effective fusion between the European Union and NATO, which makes the European Union even more dangerous than it was before. Because now not only do you have an institution that essentially is designed to wither away democracy and wither away at people’s social and economic rights. Now you’ve also got an institution that is completely committed to the US-NATO geopolitical strategy, which today happens to include essentially waging war on Russia, which is, of course, something that all Europeans should be very concerned about.

What’s happening now also completely debunks the idea of the European Union as a peace project, which was maybe the last myth that was left standing, even though one could argue that the EU’s role in the bombing of Yugoslavia had already kind of debunked that myth. But today, that myth is more debunked than ever.

Maike Gosch: This analysis, as you lay it out, seems like the polar opposite of what the mainstream depiction is nowadays, in which criticism of the EU is more often than not framed as a right-wing, authoritarian, populist, and nationalist position. What you are putting forward sounds actually more like a left-wing critique of the EU.

Thomas Fazi: Yes, I would consider my critique as completely consistent with a left-wing analysis, which, of course, should always place democracy at the forefront. Because it’s only through democracy — through substantive democracy, not just formal democracy — that people can hope to counter the elite power block, which is a tiny minority in society, but one that wields huge economic and political power. So, it’s only by acting collectively that people can hope to challenge that power. You can only do that at the democratic level. That’s why, historically, socialists in the West have been at the forefront of the fight for democratic rights, because they’ve always understood that democracy is a precondition for challenging the power of capital. So, you would assume that anyone on the left would be immediately sceptical of any project that tends to hollow out democracy and really render it meaningless, because that’s what the European Union does. I think not enough people realise that being in the European Union means that you effectively lose any actual ability to truly engage in the democratic process, for the simple reason — and I think we’ve got ample examples over the past few years for that — that, regardless of who you elect, ultimately that government will be powerless to implement a program that’s alternative to the status quo, especially on the economic front, because in order to do that, you need to have a set of economic tools to regulate and intervene into the economy, which today governments don’t have, because we’ve delegated all these powers to the European Union.

I think people don’t really appreciate just how much of a challenge to democracy the European Union is. You can vote for a party that has any kind of program, but at the end of the day, they lack the means to implement any systemic change. Because all those tools are now held in Brussels and Frankfurt. This is a huge challenge to democracy, to the point that being in the European Union, and especially in the euro, almost annuls any notion of our countries being democracies in a substantive sense. And so yes, you would think that this is something that would concern people on the left. And for a long time it actually did. Even though today criticism of the European Union is associated with the right, in fact, for a very long time, most of the criticism came from the left. Up until the 1970s and 1980s pretty much all socialist, communists and social-democratic parties were strongly opposed to the European Union for very much these reasons. They understood that it was a threat to democracy, and thus to workers’ ability to influence policy to their advantage through the democratic process. I mean, this is not rocket science. In fact, if you look at my country, Italy, the most “sovereigntist” party that’s ever existed was the Italian Communist party, which is the only party that voted against all the European treaties, from the treaty of Rome of 1957 up until the treaty of Maastricht in in 1992. But you can look at the history of the socialist and communist parties in France or the Labour Party in the UK and a very similar pattern emerges, where it was the left-wing parties that opposed the European Union, because they realised that it was this elite, corporatist, anti-democratic project, while it was the conservative parties, the liberal parties, that were supportive of the European Union. So, another extraordinary feat of propaganda is that they’ve managed to somehow turn any critique of the EU into a right-wing thing, when, in fact, for a very long time, it was the exact opposite.

But of course, the left also bears a big responsibility, because the left itself has shifted its views on the EU, and, of course, once the left embraced the European Union, it became much easier for the establishment to accuse anyone that wasn’t a huge fan of the EU of being a right-winger. This transformation — almost an anthropological mutation of the left — was a long time in the making. The Australian economist Bill Mitchell and I go over this history in our book that we published in 2017 called Reclaiming the State. And a lot of what we talk about in that book is this transformation of the left, and how the left went from having an understanding of the importance of national sovereignty as the only locus where actual democratic politics can take place, and how, beginning in the 70s, the left started moving away from this view and embracing an increasingly negative view of national sovereignty, and embracing this ideology of supranationalism from a left-wing perspective. Ultimately, this ended up lending a huge support to the neoliberal project. I think a lot of people on the left supported this transformation in good faith. They just didn’t realise what was really behind it. But that’s how you get to the situation we are in today, where the left is completely opposed to the idea of national sovereignty. But when you start thinking about this, you realise that this hostility to the idea of national sovereignty makes absolutely no sense.

Ultimately, democracy, historically, has evolved within the confines of the nation-state, because, of course, democracy, as the name implies, requires a demos. So, it requires a community that views itself as a political subject, that views its members as sharing to some degree a common identity, that’s usually defined by common language, values, norms, etc.. This is how democracy has evolved historically, and so once you start selling the idea that you can have democracy at a supranational level, you’re actually selling a lie, because really the concept of nation-states and national sovereignty is far from being this reactionary concept; it is in fact a precondition for any form of radical democratic change. So, once you understand that, you also understand just why the European Union is such a nefarious project. It’s funny, really, how they’ve managed to sell this, not just the EU, but how they’ve also managed to completely reframe what it means to be opposed to the European Union.

Maike Gosch: You’ve recently written a report called The silent coup: The European Commission’s power grab. Listening to you now, it sounds like that’s been going on for a while, but maybe has speeded up recently. Could you tell us about your report and what it’s about?

Thomas Fazi: Well, I think the European Union as a supranational project is anti-democratic in itself. But, of course, it’s also very important to understand how it works and how this threat to democracy has changed over time. It’s important to understand that the European Union was a project that was strongly promoted by national elites. It didn’t will itself into existence. It was a project that was actively promoted by national elites, and that may appear paradoxical. Why would national elites accept to give up their own powers and transfer these powers to a supranational institution, over which of course they would have limited influence themselves, let alone ordinary people? This relates to what I was saying earlier in the way the European Union, especially from Maastricht onwards, was used as a way of sidestepping these democratic pressures that national elites didn’t know how to manage anymore. And they saw the European Union as a convenient way to escape those pressures.

They realised that by transferring these competences to a supranational institution they would be able to implement policies that they themselves wanted to implement — neoliberal policies that were aimed at sabotaging democracy, at weakening the power of organised labour, at dismantling the welfare state, etc. — but which they knew were very unpopular, for good reason. And so, national elites realised that by transferring power to the European Union, they would have been able to implement these policies by scapegoating the European Union, by saying: “This isn’t something that we want to do, it’s something the European Union is telling us to do”. I think this logic of “blameshift” is very important in understanding why national elites lent their early support to the European Union. They saw it as a tool, that they could deploy against their own people, against their own electorates. Especially in my country, Italy, that’s a narrative that we’ve heard repeatedly over the decades. And it’s a very strong narrative, and it did work to a large extent in facilitating the implementation of a lot of these policies, because it meant that politicians weren’t as accountable to those policies and could avoid being seen as responsible for those policies by shifting the blame onto the European Union. And so, it’s pretty clear to me that the European Union, especially in its early years, was used as a kind of Trojan horse to implement a lot of policies that otherwise would have been much harder to implement. So, you can see it ultimately as a project where national leaders from all over Europe kind of came together to conspire against their own people.

Even though, of course, there were different logics at play in in every country. The reasons Germany, for example, joined the euro, were very different from the reasons Italy joined the Euros. But you can see this kind of anti-democratic thrust across countries. And in this context, the Commission, as this kind of “supranational government” within the European Union, has, of course, always existed, and has always had quite a big influence, especially as the only institution that can initiate legislation within the European Union, and, of course, as an institution that is largely insulated from external pressures — not only democratic pressures, but even the pressures of governments. It has always enjoyed quite a lot of leeway in this sense. For example, the Delors Commission in the 1980s played an important role in paving the way to the monetary union. But within the framework I was describing, you could argue that it was still to a large degree nation-states (and the elites therewith) using the institutions of the European Union to advance what they perceived to be their own interests. And in this context the European Council, which is the institution which comprises all the heads of state or government of the European Union, has played an important role alongside the European Commission. This didn’t necessarily make the European Union more democratic per se, because those Member States themselves weren’t that committed to democracy in the first place and in fact were using the European Union to kind of sidestep democracy, as I explained above. But still, national governments played an important role through the Council and I think we saw this very clearly for example during the euro crisis, even though the European Commission also expanded its powers at the time. We all remember just how important the role played by national governments, such as Germany, through Angela Merkel, and France, through Sarkozy, played in that crisis. It’s pretty clear that this was still a time when national governments were strongly involved in the EU’s decision-making process. Again, not necessarily acting in line with the will of the people in their own countries. But still, you could argue that a process that involves negotiations between democratically elected national government is still more democratic than a process that is concentrated in the hands of a completely unelected and undemocratic institution, such as the European Commission.

However, especially over the past 10-15 years, beginning with the euro crisis, what we see is a slow but steady expansion of the powers of the Commission, which has slowly expanded its power over areas of competence and even over the affairs of Member States, including in areas where it previously had no competences, and even ones over which it has no formal competences based on the European treaties.

I see this as a two-track process: one could be described as “competence creep”. And that’s the way in which you see the European Union, through the Commission, slowly expanding its influence and control over more and more areas of decision-making. And that’s something that is always happening behind the scenes. This can happen through rulings of the European Court of Justice, which always tend to assign more power to the European Union, or through small legislative changes that most people don’t even know are happening. Some scholars have also called this “integration by stealth” or “covert integration”. That’s an integration that doesn’t happen through democratic deliberation, it doesn’t happen through treaty change. It’s something that happens behind the scenes away from prying eyes, which most people aren’t even aware of. So, it’s a very devious form of integration, because initially limited powers were assigned to the European Union, but over the years these powers have massively expanded.

But then you’ve also got another way in which the Commission has expanded is powers, and that’s by what I in my report call “integration by coup” (or coups). In moments of crisis, when people are afraid, disoriented or confused, it’s much easier to implement rapid and even radical institutional changes, it becomes much easier to re-engineer institutions and even societies. And so, what you see is that, opposed to this slow, competence creep that’s always ongoing, in moments of crisis, you have almost these quantum leaps, where the Commission seizes on the window of opportunity provided by these crises to implement sudden increases in its powers — almost as you would expect to see in in a coup, which is a term that I use quite a lot in in the paper, because I think it describes quite well the nature of these power grabs. Not a violent coup — it doesn’t involve the military, it doesn’t involve the police — but nonetheless, it is something that is akin to coup to the extent that moments of public disorientation are used to suddenly seize power, often in ways that even go against the European treaties and European law itself, with no democratic deliberation whatsoever. Under von der Leyen this process underwent a massive acceleration.

End of part 1.

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