The EU isn't too big to fail, but it is too important to

Contrary to Nigel Lawson, the EU is not a monstrous bureaucracy, but the policy mix of austerity and reform is failing.

I spoke at the Annual European University Institute "State of the Union" conference yesterday. It takes place in the Palazzo Vecchio in Florence, adorned with 500 year old frescoes commemorating the first Florentine Republic after the expulsion of the Medicis – a good reminder that the process of European integration has deep roots.

There was a lot of realism – about the continuing challenge of the euro crisis, about the long-term nature of structural reform, about the gulf between too many citizens and European governance. But there was also a deep determination to preserve the gains of the past – for example in President Barroso’s speech – and wherever I went, a desire to see Britain as part of the European future. In my contribution, in the session on governance and institutions, I made five points.

First, that the debate about legitimacy and efficiency/delivery is happening all over the world. The Chinese are thinking about it; the Americans are debating it in the discussion of 'gridlock'; it is part of the debate in the Arab world as governments elected after the revolutions of 2011 are faced with real economic and social choice. In Europe, legitimacy has two elements – the 'one nation one vote' principle embodied in the European Council, and the 'one person one vote' principle in the European Parliament. The danger for the EU – as elsewhere – is whether legitimacy AND efficiency is missing.

Second, the protest politics in Britain, Italy and elsewhere, is not just (or primarily) about frustration with the EU; it speaks fundamentally to frustration with the traditional politics of centre-right and centre-left, and the desire for a new political alternative. For me, that is about rejuvenating social democracy, but there is no point in hiding that a traditional social democratic offer of social justice through state redistribution is not going to work or sell.

Third, the EU’s biggest problem is its delivery deficit, not its democratic deficit. This is not a new tune of mine, but while some of the EU’s work is very good indeed – I have just spent two days in Brussels preparing for my International Rescue Committee role and learning about some outstanding European development work in crisis-hit places – the policy mix in response to the economic crisis is still some way from bringing closer the light at the end of the tunnel. I don’t buy the Nigel Lawson argument that the EU is a monstrous and marauding bureaucracy, but the policy mix of austerity and reform is out of kilter with the economic needs in a balance sheet recession.

Fourth, there is a pressing and outstanding agenda for Europe’s soon to be 28 members, beyond the euro crisis. I won’t rehearse again what this covers, but the sense that there is traction on youth unemployment and migration is encouraging.

Finally, the twin narratives of Europe’s development so far – peace on the continent, and reunification after the fall of the Berlin Wall - need to be supplemented by a clarion call that Europe’s purpose is to help its citizens achieve prosperity and security in a 21st century marked by shifts in global power. This cannot be done at national level alone, nor by ad-hoc alliances around the globe to take forward trade promotion or security cooperation.

I don’t buy the argument that Europe is 'too big to fail'. But I do buy the case that it is too important to fail.

David Miliband is the incoming President and CEO of the International Rescue Committee

This piece originally appeared on his blog

The EU flag flies in front of the European Parliament in Strasbourg. Photograph: Getty Images.

David Miliband is the  President and CEO of the International Rescue Committee
He was foreign secretary from 2007 until 2010 and MP for South Shields from 2001 until this year. 

Getty Images.
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Is anyone prepared to solve the NHS funding crisis?

As long as the political taboo on raising taxes endures, the service will be in financial peril. 

It has long been clear that the NHS is in financial ill-health. But today's figures, conveniently delayed until after the Conservative conference, are still stunningly bad. The service ran a deficit of £930m between April and June (greater than the £820m recorded for the whole of the 2014/15 financial year) and is on course for a shortfall of at least £2bn this year - its worst position for a generation. 

Though often described as having been shielded from austerity, owing to its ring-fenced budget, the NHS is enduring the toughest spending settlement in its history. Since 1950, health spending has grown at an average annual rate of 4 per cent, but over the last parliament it rose by just 0.5 per cent. An ageing population, rising treatment costs and the social care crisis all mean that the NHS has to run merely to stand still. The Tories have pledged to provide £10bn more for the service but this still leaves £20bn of efficiency savings required. 

Speculation is now turning to whether George Osborne will provide an emergency injection of funds in the Autumn Statement on 25 November. But the long-term question is whether anyone is prepared to offer a sustainable solution to the crisis. Health experts argue that only a rise in general taxation (income tax, VAT, national insurance), patient charges or a hypothecated "health tax" will secure the future of a universal, high-quality service. But the political taboo against increasing taxes on all but the richest means no politician has ventured into this territory. Shadow health secretary Heidi Alexander has today called for the government to "find money urgently to get through the coming winter months". But the bigger question is whether, under Jeremy Corbyn, Labour is prepared to go beyond sticking-plaster solutions. 

George Eaton is political editor of the New Statesman.