Extending the Brexit process would create difficulties for the rest of Europe that have not received sufficient attention. The EU might seek to resolve these difficulties in ways that create further problems for the UK.
The debate about whether Britain should remain a member of the European Union has taken place within a number of different rhetorical frames. Of these, ‘taking back control’ has been the most powerful. Anyone could understand what was at stake and take a position in the debate. As the debate about membership became a process of leaving, however, ‘taking back control’ became more confusing as a frame for the conversation. Over the past two years it has been hard to determine who is taking back control, how much control can be repatriated, and how much – under any circumstances – the British people will remain constrained and perhaps even powerless to shape their own destiny.
On 28 September 2018, Lorenzo Forni of Prometeia invited me to give a short comment on the relationship between ‘populism’ and economic policy-making. Although, I hadn’t thought about that relationship before, I came up with four things I think we might want to consider (in addition to what we might useful think of as ‘populism’ in the context of the question Lorenzo asked). My argument was that populists bring new people into the policy-making process. They also bring a healthy dose of unpredictability. Their messaging on policy issues is not great, which causes problems in a world defined by rational expectations, and they tend to be skeptical toward independent agencies like central banks. Finally, populists are disinclined to international policy coordination. The combination is not wholly bad — sometimes change is for the good! — but the results are often below the promises that populists make to the electorate. The text of the presentation follows.
The fast pace of change in European politics has everyone focusing on current events. Behind the scenes, however, politicians are manipulating how we view the past. Since change requires some kind of baseline or benchmark for us to appreciate its magnitude, we need to be very careful about how our memories are curated. The new ‘normal’ is only normalised when we forget just how far we have travelled and when we stop remembering (or appreciating) the lessons we learned through harsh experience.
Earlier this week, French President Emmanuel Macron gave a speech outlining his proposals to reform the European Union. And there were a lot of proposals in that speech. Surprisingly, though, not many of them focused on the euro area or on the process of European macroeconomic governance. Macron talked about creating some kind of common budget and naming a European Minister of Finance, but he did not touch on the major issues sketched in European Commission President Jean-Claude Juncker’s State of the Union address or the letter of intent and reflection papers that the Commission has produced as well.
On 21 August, I was invited to talk about the importance of ‘walls’ in a European context at an annual socio-cultural-political event called ‘The Meeting’ in Rimini. I sketched these notes as an aide for the interpreters who were supposed to render my unique version of the English language into fluent Italian. My host, Paolo Magri, insisted that I speak in Italian instead. What followed was probably more authentic as a set of off-the-cuff remarks using my one hundred and fifty mangled Italian vocabulary words, but it may not have delivered the full message. My central argument is that we should be wary of identity-based political mobilization. Any politician who wants to mobilize ‘us’ against ‘them’ is not your friend. That is as true in the United States as it is in Europe. Alas, Europe’s history with that kind of politics is a tragic one. Let’s hope we don’t have to experience it again.
The Belgian economist André Sapir used a background paper for the September 2005 informal summit of the European Union’s economic and finance ministers to make a provocative claim about the European social model: Europe’s heads of state and government do not need to choose between equity and efficiency or between a welfare state and a market economy; with the right reforms to welfare programs and market institutions, it is possible to have both equity and efficiency at the same time. The British held the rotating presidency of the Council of the European Union and were quick to take up Sapir’s challenge. The quest to achieve both equity and efficiency moved to the heart of efforts to relaunch the Lisbon Strategy and to re-energize the European project. Unfortunately, these efforts were soon overtaken by events.