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. 

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Will Euroscepticism prove an unbeatable advantage in the Conservative leadership race?

Conservative members who are eager for Brexit are still searching for a heavyweight champion - and they could yet inherit the earth.

Put your money on Liam Fox? The former Defence Secretary has been given a boost by the news that ConservativeHome’s rolling survey of party members preferences for the next Conservative leader. Jeremy Wilson at BusinessInsider and James Millar at the Sunday Post have both tipped Fox for the top job.

Are they right? The expectation among Conservative MPs is that there will be several candidates from the Tory right: Dominic Raab, Priti Patel and potentially Owen Paterson could all be candidates, while Boris Johnson, in the words of one: “rides both horses – is he the candidate of the left, of the right, or both?”

MPs will whittle down the field of candidates to a top two, who will then be voted on by the membership.  (As Graham Brady, chair of the 1922 Committee, notes in his interview with my colleague George Eaton, Conservative MPs could choose to offer a wider field if they so desired, but would be unlikely to surrender more power to party activists.)

The extreme likelihood is that that contest will be between two candidates: George Osborne and not-George Osborne.  “We know that the Chancellor has a bye to the final,” one minister observes, “But once you’re in the final – well, then it’s anyone’s game.”

Could “not-George Osborne” be Liam Fox? Well, the difficulty, as one MP observes, is we don’t really know what the Conservative leadership election is about:

“We don’t even know what the questions are to which the candidates will attempt to present themselves as the answer. Usually, that question would be: who can win us the election? But now that Labour have Corbyn, that question is taken care of.”

So what’s the question that MPs will be asking? We simply don’t know – and it may be that they come to a very different conclusion to their members, just as in 2001, when Ken Clarke won among MPs – before being defeated in a landslide by Conservative activists.

Much depends not only on the outcome of the European referendum, but also on its conduct. If the contest is particularly bruising, it may be that MPs are looking for a candidate who will “heal and settle”, in the words of one. That would disadvantage Fox, who will likely be a combative presence in the European referendum, and could benefit Boris Johnson, who, as one MP put it, “rides both horses” and will be less intimately linked with the referendum and its outcome than Osborne.

But equally, it could be that Euroscepticism proves to be a less powerful card than we currently expect. Ignoring the not inconsiderable organisational hurdles that have to be cleared to beat Theresa May, Boris Johnson, and potentially any or all of the “next generation” of Sajid Javid, Nicky Morgan or Stephen Crabb, we simply don’t know what the reaction of Conservative members to the In-Out referendum will be.

Firstly, there’s a non-trivial possibility that Leave could still win, despite its difficulties at centre-forward. The incentive to “reward” an Outer will be smaller. But if Britain votes to Remain – and if that vote is seen by Conservative members as the result of “dirty tricks” by the Conservative leadership – it could be that many members, far from sticking around for another three to four years to vote in the election, simply decide to leave. The last time that Cameron went against the dearest instincts of many of his party grassroots, the result was victory for the Prime Minister – and an activist base that, as the result of defections to Ukip and cancelled membership fees, is more socially liberal and more sympathetic to Cameron than it was before. Don’t forget that, for all the worry about “entryism” in the Labour leadership, it was “exitism” – of Labour members who supported David Miliband and liked the New Labour years  - that shifted that party towards Jeremy Corbyn.

It could be that if – as Brady predicts in this week’s New Statesman – the final two is an Inner and an Outer, the Eurosceptic candidate finds that the members who might have backed them are simply no longer around.

It comes back to the biggest known unknown in the race to succeed Cameron: Conservative members. For the first time in British political history, a Prime Minister will be chosen, not by MPs with an electoral mandate of their own or by voters at a general election but by an entirelyself-selecting group: party members. And we simply don't know enough about what they feel - yet. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog. He usually writes about politics.