Emergency Europe

In Politics of Last Resort: Governing by Emergency in the European Union, Jonathan White delves into the European Union’s proclivity for emergency rule. When emergency politics takes over, as it did during the Euro Crisis, far-reaching policies are adopted outside traditional democratic forums and justified on the basis of the external crisis. Insufficient attention, he argues, is paid to how the measures taken in the emergency context shape the political system. It is necessary to view those actions as events in and of themselves, not simply for their instrumental outcomes. This mode of ‘emergency rule’ subverts democracy, quells opposition, and has a tendency towards authoritarianism. One might add that when those actions prove to be catastrophic – at least for the most vulnerable populations of the debtor member states – there is little scope for accountability or redress. The full impact of austerity across the EU will never be known: the increase in suicides in Greece during those years is a small window into the scale of human anguish inflicted on the public.Footnote ² Yet so much energy has been poured into constructing the dominant narrative of the Euro Crisis that, even after the passage of time, there is little for those in power to gain by admitting that austerity should never have happened. In fact, the most surprising aspect of the whole affair is that the Commissioner made the remarks in the first place. There is no question of public apologies, or reparations; the European Union has already moved on to its new crises. Brexit and the rule of law crises in Poland and Hungary, for all their headaches, have at least provided opportunities for Europeans to unite around common adversaries, and stir up some much needed pro-European sentiment. It is also a deft means of quelling any lingering criticism of the EU, by presenting a straightforward dichotomy of anti-pluralist Euroscepticism versus a liberal European Union. Two of its most recent crises – the Covid-19 pandemic, and the Russian invasion of Ukraine – have occurred since the publication of White’s Politics of Last Resort, meaning that this excellent book is more relevant than ever.

White begins by outlining some of the core indicators of the politics of emergency by concentrating on the events of the Euro Crisis. He adopts the example of the Troika as an encapsulation of the politics of emergency.Footnote ³ The Troika, composed of representatives from the International Monetary Fund, the European Central Bank and the European Commission, recommended intense programs of austerity in Greece, Ireland, Italy, Spain and Portugal. The Troika was a swiftly constructed, novel invention (at least within the European Union) that operated largely outside the EU’s existing legal framework, and at a remove from the all-encompassing political apparatus designed to govern the EU. The Eurogroup, which rose to prominence during these years, was an equally impromptu creation where ‘anything like a defining operate code was deliberately eschewed’.^{Footnote 4} Similarly, the operation of the Five Presidents was ‘centralised and informal’ embodying a ‘shape-shifting quality’.^{Footnote 5} As White writes, ‘when acting quickly is the condition of having influence, the virtues of debate, scrutiny, and deliberation fall away’.^{Footnote 6} Yet not all departures from existing rules and procedures deserve equal criticism, White tells us. Some may need to be reformulated to deal with unanticipated conditions,Footnote ⁷ and norms can be breached without being illegal.Footnote ⁸ White rightly saves his ire for the departure from more fundamental norms, such as state sovereignty, democracy, and the abandonment of any pretence of member state equality. It is often argued that an ‘unbound’ executive is needed to effectively tackle an emerging crisis; one who cannot be burdened by procedure or an obstructive opposition. Swift action in response to a crisis is, of course, White acknowledges, desirable. The near-unilateral imposition of a disastrous emergency response, however, highlights the limits of this approach. The Euro Crisis is now considered to have been so poorly handled that it hardly recommends itself as a decision making process.

The EU, he explains, is particularly vulnerable to descending into the politics of emergency at the first sign of crisis. As an organisation, it has always been geared towards the advancement and protection of the single market.Footnote ⁹ The furtherance and realisation of this goal, White argues, have always triumphed over any internal rules: the EU is prepared to break its own rules to realise what it views as its core purpose.Footnote ¹⁰ The more illuminating path, therefore, is to ask: which rules were the EU prepared to break and circumvent? The lingering public hostility towards the Troika and other groups was because they prized particular solutions with a normative premise that favoured one sector.^{Footnote 11} As White puts it, ‘measures were often adopted not on the grounds that they were intrinsically desirable, or the least [bad option]’ but instead, framed as ‘the only course of action that could protect certain valued ends’.Footnote ¹² Saving the Euro was certainly one of the valued ends during these years; it was certainly prioritised over other rival goals such as the wellbeing of the populations of the debtor member states. It is hard to disagree with White’s assessment that the EU’s ultimate priority during the Euro Crisis seemed to be the preservation of the existing status quo more so than its own rules and norms.Footnote ¹³ The purportedly apolitical European Central Bank issuing the ‘Trichet-Draghi’ letter to national leaders is just one stark example of how the achievement of those goals came to trump any other considerations.Footnote ¹⁴ This instrumentalism also dominates the EU legal system: Turkuler Isiksel coined the term functional constitutionalism to describe how the EU Treaties were geared solely towards the end goal of market integration, with little weight given to traditional concerns of constitutionalism, such as popular sovereignty.Footnote ¹⁵

Who rules in times of crisis?

Commentators have long been divided on where the true power lies within the European Union. This question arises with renewed importance in the context of the Euro Crisis: who really called the shots? There are a range of potential candidates. Was it the EU institutions, and if so, which ones? Was it national governments, and finance ministers in particular? Or was it the member states, in particular, Germany and France, that were leading the response?Footnote ¹⁶ There is also an arguable case that certain identifiable individuals dominated the EU’s response to the Crisis. Jean Claude Trichet, then-president of the European Central Bank persuaded Angela Merkel to change course on a number of critical occasions. When Angela Merkel and Nicolas Sarkozy, after their famous ‘walk on the beach’ in Deauville in the same year, agreed that any new debt assumed by member states would have conditions for early debt restructuring, requiring private creditors to bear most of the losses rather than the public taxpayer, Trichet persuaded Merkel to drop the plan.Footnote ¹⁷ The European Central Bank continued to obsess over preserving low inflation in 2010 and 2011 by raising interest rates, which benefited the German economy, but only made matters infinitely worse for the struggling debtor countries. To many, it was a reflection of the fact that the European Central Bank had implicitly absorbed the priorities of the Bundesbank and German national interests above the interests of poorer member states.Footnote ¹⁸ But these various options are not, White argues, mutually exclusive. He suggests that the multiple sites of power might be best conceived of as ‘de-institutionalisation’.Footnote ¹⁹ Power was spread across several different sources, as well as being ‘concentrated within institutions on individuals and sub-groups’.Footnote ²⁰ This aided the claims of multiple actors that they were, in fact, being forced to act by others,Footnote ²¹ an argument still repeated by those in government during this period.Footnote ²² This made the decision-makers hard to identify, and accountability could be skirted, as everyone claimed to be acting on the instructions of others, but it was not entirely clear whom.

Shock doctrine: transnational acquiescence

Naomi Klein’s Shock Doctrine argued that the urgency occasioned by a state of emergency provided political cover for far-reaching neoliberal policy reforms to be implemented, such as drastic cuts to the welfare state or the privatisation of public services.Footnote ²³ Opposition could easily be sidelined in the face of an exogenous emergency. White argues that this characterisation could be said to apply to the EU in the wake of the Euro Crisis. It is certainly true that it was the welfare programs that were the primary targets of cutbacks during the austerity years, and even countries such as the UK, which had no need to embark on programs of austerity, chose to implement them anyway, under the guise of a general aura of emergency.Footnote ²⁴ White avoids simplistic analysis, however, and develops Klein’s argument to point out that it was not simply a case of policies imposed on resistant or helpless national governments. Instead, it was a transnational combination of technocratic institutions and member state governments who operated in tandem. White also draws our attention to the role of another important actor in emergency politics: the influence of what he describes as external actors. These ‘spokespeople of the markets’ – market analysts, rating agencies, investors and banks – actively shaped the diagnosis of the Euro Crisis and the necessary political response. These actors are, White argues, ‘only too inclined to cite conditions of crisis, fostering an atmosphere conducive to emergency rule’.Footnote ²⁵ A significant degree of power was afforded to actors who do not hold democratic mandates to diagnose the ongoing malaise, establish priorities and identify the remedies. Deference to technocracy, as one economist has pointed out, can mask the degree to which political preferences and ideology guide expertise.^{Footnote 26}

These might be more accurately described as market actors: not all external actors, it should be pointed out, are afforded the same discursive influence. Too often, the interests of the marketplace and the interests of the public during this period were conflated as one and the same. The idea that these might be in conflict rarely seems to break through; even if that clash was acutely evident during the Euro Crisis. As White puts it, ‘the prospect of loan defaults is likely to eclipse other concerns to do with everyday standards of living’.Footnote ²⁷ Soothing market actors by prioritising their interests became the dominant priority. This chimes with the features of capitalist institutions identified by Wolfgang Streeck. Streeck described the ‘superior agentic capacity of the capitalist class’ – or, in other words, the resources to marshal particular actors, such as lobbyists, lawyers and think tanks, to defend and advance their interests.Footnote ²⁸ This is not a random segment of the population: it is correlated, as he argues, in line with class structure.Footnote ²⁹ Second, this grouping has so much accumulated wealth that their interests diverge from most of the public. They do not rely on state services for their wellbeing, and thus can ardently advocate for austerity, safe in the knowledge that they are shielded from its worst effects. Additional reinforcement from the private sphere can be a helpful means of furthering legitimacy in the eyes of the public and other influential actors, such as opposition politicians and key sectors of the media.Footnote ³⁰ This enables public acceptance (or at the very least, acquiescence) to unpopular political action.Footnote ³¹

Constructing the Euro Crisis narrative

Article 125 TFEU excluded the European Union from assuming any debt incurred by member states, seemingly ruling out the possibility of an internal European Union bail-out. Despite the fact that every single report which had explored the creation of the European Monetary Union had noted the need for a corresponding fiscal union – in other words, an ample central budget for member states in financial difficulty – this part of the plan was abandoned.^{Footnote 32} Thus member states would still bear the considerable burden of bailing out European financial institutions which were considered ‘too big to fail’. But the serious danger Europe had found itself in was that its banks were so colossally leveraged that they had become ‘too big to bail’. The ramifications of a major bank defaulting on their debt subsequently collapsing and wiping out consumer savings and deposits across the continent were considered too catastrophic to countenance. The United States’ decision to allow Lehman Brothers to fail had set off a spiralling panic in the American financial system, and there was widespread resolve not to allow another default to take place.^{Footnote 33} This approach directly contradicted earlier thinking from the Maastricht Treaty – that private creditors would bear the losses if any member state found itself unable to pay its debts.Footnote ³⁴ This situation was compounded by the limitations of the single currency, which meant that member states could not engage in quantitative easing or devalue their own currency. Instead of casting blame on the financial sector, or indeed regulatory institutional policies and governance, attention shifted to the national responsibility of the countries in question.^{Footnote 35} Distinct shifts in discourse by European leaders during the Euro Crisis have been identified: first the issue was presented as an American-inherited credit crunch which had infected European banks, but it was nothing more than that. After laying culpability at the feet of the American private financial sector, attention then shifted to the European ‘debt countries’.^{Footnote 36} The narrative laid the blame for the Eurozone crisis squarely at the feet of national government spending which, as Mark Blyth writes, amounted to the ‘greatest bait-and-switch in modern history’.^{Footnote 37} National governments had rescued the private banking sector from collapse which had resulted in major government deficits, which was then described as a sovereign debt crisis. While there were a great deal of structural flaws within Greece’s national policies and institutions, those had existed when Greece had been admitted into the EU and the Eurozone in the first place.^{Footnote 38} Suddenly ‘the perception of the risk… changed, rather than the underlying risks themselves, which [had] always been there’.^{Footnote 39}

The introduction of the single currency had encouraged the widespread purchase of Eurozone sovereign debt bonds, seemingly under the mistaken belief by investors that all Eurozone government debt was equally risk-free.^{Footnote 40} This was not, of course, the case: there was considerable divergence between member states. When Greece revealed in October 2009 that its budget deficit was far higher than anticipated, the EU could no longer claim that any mounting financial crisis was entirely an American problem. Trichet refused to countenance the possibility of a Greek default, on the basis that it would set off a contagion effect and caused widespread financial meltdown. But Greek borrowers and banks were relatively self-contained and were only minimally interconnected with the rest of the global financial system.Footnote ⁴¹ But by refusing to consider the possibility of a Greek default, serious situation was made infinitely worse.Footnote ⁴² Early debt restructuring and fiscal transfers would have helped halt a spiralling crisis, and importantly, would have avoided the devastating effects of austerity on the Greek public. Instead the EU chose to stall, compounding the problem. Far too late, the EU eventually capitulated and agreed, along with the IMF, to make loans to Greece to help repay its colossal debt in full.

As White points out, the effort to present austerity as the sole response to the financial crisis could not have succeeded without the co-operation of national politicians and institutions, who made concerted efforts to legitimise austerity in the minds of their constituents.Footnote ⁴³ Parties both on the right and left accepted the imposition of austerity, which, in many instances, obliterated support for Europe’s left-wing, social democratic parties who were traditionally seen to be the party of the lower middle and working classes. This legitimation took the form of a careful cultivation of a sense of collective responsibility. It was repeatedly stressed that there was no alternative to austerity– that austerity was the sole means of tackling the member state’s national debt.^{Footnote 44} Not only was that not true (there are far more effective means of tackling public debt)Footnote ⁴⁵ but its premise was also false: namely that national budgetary deficits had caused the crisis. It deliberately created the impression in the minds of the public that the meltdown of the global system had been caused – or certainly contributed to by – excessive public spending by national governments. Generous welfare programs had not caused the global financial meltdown. The reason that national governments had inflated deficits after 2008 was largely because they had shouldered the cost of bailing out the banking system. The use of the term ‘sovereign debt crisis’ was a misnomer, it was, instead, ‘a transmuted and well-camouflaged banking crisis’.^{Footnote 46} The crisis had been ‘generated by the private sector but [was] being paid for by the public sector’.^{Footnote 47}

As White writes, other non-state actors have the capacity to aid in the process of constructing public narrative. The media plays a vital role in shaping public understanding of events, and – ideally – critiquing and questioning the narrative presented by governments, technocratic institutions and other powerful actors. During the Euro Crisis, the media was a crucial instrument in cultivating public consent to the imposition of austerity. Even in the debtor member states, many prominent journalists and economists urged the public to accept the imposition of austerity as inevitable. Of course, this process is aided by the fear and panic amongst general members of the population who are left to grapple with the very real fall out of the crisis: unemployment, debt, homelessness and cuts to vital public services. They only have a limited amount of time to absorb – or even to challenge – dominant narratives, and remain largely reliant on the media and trusted authority figures for their understanding of complex events.

Resistance to austerity was characterised as a denial of reality: a failure to accept what was the only means of tackling the crisis. Criticism of austerity was met with furious response; most notably when the Vice President of the European Commission published a stinging rebuke of a paper by two American economists which found that fiscal stimulus was the most helpful means to tackle economic downturn.^{Footnote 48} More seriously, when the people of Greece rejected further fiscal austerity by referendum, Prime Minister Tsipras caved to European pressure to ignore the result. European leaders continued to refuse to countenance restructuring Greek debt, despite widespread criticism of the debt levels as being unsustainable. The political movements and actors that made commendable efforts to challenge austerity were labelled as anti-European radical populists. Then-President of the European Council, Donald Tusk, speaking to The Financial Times in 2015, remarked that opposition to austerity was ‘an economic and ideological illusion, that we have a chance to build some alternative to this traditional European economic system’.Footnote ⁴⁹ Criticism of the single market or the Euro was ‘anti-European … anti-market, anti-liberal’.Footnote ⁵⁰ What was absent from the prevailing narrative, as Farrand and Rizzi have pointed out, was ‘an acknowledgment that different analyses, and indeed, alternative solutions exist’.Footnote ⁵¹

Effective governance over representative democracy

A key problem, White identifies, is that the European Union had adopted a mode of governance that favoured successful outcomes over popular input and representative decision making. This presupposes that there is an apolitical, ‘right’ answer that can be identified without recourse to normative preferences. During the Euro Crisis, economic liberalism had become so hegemonic that its normative origins seem to have become obscured and repackaged as ‘common sense’ and objectivity. At the turn of the century, Richard Katz accurately predicted that basing the legitimacy of the European Union on the success of its outcome meant that as soon as things started to go wrong, its legitimacy, and public support for its existence, would start to crumble.Footnote ⁵² One might also add that striving for ‘success’ inevitably involves a value judgement as to what ‘success’ involves. The outcomes of the EU may look like a success to some sectors of society, but not to others. As White puts it, relying on one’s ‘problem-solving accomplishments’ as a leader can be challenging ‘especially when the accomplishments are in question’.Footnote ⁵³

The characteristics of emergency politics, he argues, extended well beyond the Euro Crisis, and are equally applicable to the crisis that emerged as thousands of individuals sought refuge within the EU. Once again, external institutions, operating outside of the constitutional framework of the EU, assumed new significance. He cites NATO as an example, as the organisation played a central role in facilitating EU negotiations with Turkey, which was a common exit point for those seeking to enter the EU. But with the involvement of an external institution, White writes that, ‘contentious goals such as deterring migrants at sea, along with delicate decisions concerning the distinction between migrants and refugees [could] be outsourced to a military organisation’.Footnote ⁵⁴ The EU’s existing legal arrangements for the reception of migrants could be sidelined in favour of new ‘temporary’ emergency responses, such as the relocation system between member states agreed in September 2015. Various institutions and agencies, such as Europol and Frontex (later the European Border and Coast Guard) assumed a new significance and were granted more robust powers. Much like the Euro Crisis, the European Union’s institutional structure meant there was no obvious entity to respond to what was occurring, meaning that executives could act with increased discretion, pick and choose which rules they adhered to, and adopt ad hoc arrangements.Footnote ⁵⁵ The preference for ‘governance’ remains; as White puts it, ‘a problem-solving ethos that licenses discretion, unmoored from political and legal restraints’.Footnote ⁵⁶ Crisis governance starts to look less like a state of exception and more like a perpetual mode of existence for the European Union.

The promise of agency

One of White’s most impressive feats in this book is a novel contribution to the discussion of ‘populism’, a term that has been used with such wilful abandon by academics and popular commentators that it has long since become meaningless. He is rightly sceptical of the merits of populism as an analytical framework, but he does manage to inject a fresh perspective into an often circular debate. Those parties often labelled populist, he argues, offer a ‘promise of agency’.Footnote ⁵⁷ A studied fatalism, or what White describes as a denial of agency, has become a dominant feature of modern politics, particularly since the gradual convergence of political philosophy amongst mainstream political parties. Certain actions – such as the robust welfare states of the post-War era – are dismissed as unrealistic and out-of-reach. The policies and proposals that are deemed to be politically impractical are not random; they are shaped by an internalised worldview that prioritises the desires of an evolving marketplace. White argues that there is greater scope for action in the European political sphere than has previously been claimed. It is time, he argues, for politicians to reclaim the language of agency from those they condemn as populists. Crucially, however, the EU must resist the tendency to lapse into perpetual emergency mode at the first sign of any challenging event. One means of clamping down on emergency politics is disentangling this governance management style from EU leadership by reinvigorating openly political commitments. White argues for strengthening transnational European political parties, persuasively arguing that the usual criticisms (they do not translate to the populations of multiple member states, or that the public are uninterested) are unconvincing. The EU desperately needs an opposition: as White points out, an opposition is too often dismissed as deliberative obstruction, rather than a crucial element of democracy to articulate political alternatives. The EU has tended to stress the novelty of each emerging crisis, which is designed to grant it a wide carte blanche in its response. It is one way, he points out, ‘to avoid justifying their decisions. To assert the particularity of the situation is to question the possibility of applying wider criteria’.^{Footnote 58} This is certainly convincing: if the EU insists on treating each new crisis as entirely sui generis by resisting comparisons with any other situation, it makes their actions harder to critique, as though there is no possible pathway to follow or lessons to be learned from history. It is an effective means of depoliticising the situation, and to obscure the normative value of the decision making.^{Footnote 59}

The radically different approach of the European Union during the pandemic is an implicit (and welcome) retreat from the policies adopted during the Euro Crisis. Yet the fact remains that any internal change of heart appears to have come from the same mode of emergency politics.Footnote ⁶⁰ The remarks of Commissioner Gentiloni are about as close as the European Union has come to apologising for its disastrous approach during the Euro Crisis. Without swapping governance for representative democracy, there will be no real political accountability when EU leaders get it wrong. There is little indication that there will be any major transformation in the balance of political power in the EU along the lines envisioned by White. Without any effort to remodel along more democratic lines, the new shift in approach could vanish as quickly as it appeared.Footnote ⁶¹ What the crises of the European Union demonstrate is that, as an organisation, it is capable of acting swiftly and effectively. Responsiveness is important, but there must also be genuine democratic debate as to the ends pursued in that response. Emergency politics stems from the rise of governance as a mode of politics: executive agents who evince efficiency, flexibility and pragmatism, but who fail to articulate their normative values. Yet is not possible to have value-free politics or economics: anyone who argues to the contrary has internalised those commitments so deeply that they mistake ideology for objective truth. The essence of the political is normativity: ultimately a choice must be made between competing options, based on the ends that we value the most. While each emergency situation that confronts the EU may be unique, the organisation must still grapple with the same political questions: what ends do we value, and whose interests will be prioritised – and compromised – in achieving them? The crisis may be framed as temporal, but it is the most vulnerable members of the public who must live with the legacy of the choices that were made during the period of emergency politics.