Europe Isn’t Working is a valuable resource for the arguments against the neoliberal austerity machine that is the EU, argues Richard Allday

Europe Isn’t Working is an entertaining, informative, iconoclastic but ultimately exasperating examination of the EU and (they argue) its doomed experiment in creating a common currency. Moreover, it is explicitly targeted at:

‘those on the left who feel uneasy about voicing their concerns about the euro, in the main because of the political company they have to keep. This book explains why those misgivings are unnecessary. The single currency was not, is not, and never will be a progressive project’ (preface, p viii).

In fact, this statement right at the start, and their summation at the end of the book, is precisely the strength of this contribution to political economy and the cause of my exasperation.

Forensic in its analysis, the authors (both respected financial journalists) start from basics, giving a brief resume of earlier attempts at some form of monetary union, starting with the shibboleth of the gold standard, and its failure. They never fall into the trap of econo-speak; the book is written in everyday language, and where there is a need to refer to technical terms, they ensure the reader is given an English translation. Perhaps this is due to their professional background as journalists, but equally persuasive is the argument that they are consciously writing for the lay reader rather than their fellow economists. In this they succeed admirably. So admirably indeed, that my second criticism is in fact a backhanded compliment.

Each chapter is based on a specific conceit, developed through the chapter, which makes for entertaining reading, but also means their critiques tend to lodge securely in the reader’s mind. Thus, their third chapter (‘The French Vice’) examines the economic history and theory behind the gold standard, explains its fundamental flaws and locates (pp.61-2) the same drawbacks within the economics underpinning the euro. The last two criticisms they level are that the single currency and the gold standard both required:

‘deflation for countries that were running balance of payments deficits. And it put no pressure on creditor countries to help weaker countries.’

These criticisms are reiterated ten pages on, with a quotation from Robert Skidelsky’s biography of Keynes:

‘Adjustment, he [Keynes] wrote, was “compulsory for the debtor and voluntary for the creditor”. This allowed creditor countries to hoard their surpluses while obliging debtor countries to deflate their economies’ (pp.72).

A more precise analysis of the ‘choices’ imposed on Greece, Portugal, Spain, Ireland, and the others by the European Central Bank is hard to imagine – even though the analysis predates the euro by half a century.

In case readers of this review are worried that the book is just another turgid tome, I must emphasise that most of it is written in a lively and provocative style. Chapter Four, examining the different expectations for the euro within the countries making up the Eurozone, is presented as the clash between the educational philosophies underpinning the Spartan approach of Gordonstoun (symbolising the dour business-like approach of the Bundesbank) versus the freewheeling approach of Summerhill:

‘Only gradually did it become apparent that the Gordonstoun approach did not suit all European countries. A decade went by before the Germans realized to their horror that there was more than a little of Summerhill about the place, particularly in the way that countries developed at their own pace and were free to skip the lessons they did not fancy that much. By the time the penny finally dropped, much of Europe had been laid low by the … crisis that began in 2007. At that point, belatedly, and disastrously, Berlin insisted that the cure for a bad dose of influenza running through the school was cold showers and cross-country runs for everyone, even those pupils confined to the sanatorium’ (p.91).

The following chapter, by examining the responses to, and recovery (or not) from the 2007 crisis in Ireland and Iceland, comprehensively debunks the myth that membership of the EU provides any sanctuary superior to that available outside the club. Chapter Six deals with the fortunate escape we in Britain had, in that Tony Blair’s fall from grace allowed us to sidestep membership of the euro.

Chapter Seven examines Greece’s appalling treatment as a consequence of membership of the Eurozone, and the politicaldecisions taken to constrain economic self-determination of the member states. The authors are particularly scathing in their summary that ‘… all the Left’s fantasies about the euro were to be played out to their tragic conclusion’ (p.176).

And so on. Chapter by chapter, the authors build an inexorable case against the economic strategy of the EU.

So, to my criticisms (a trifle churlish perhaps, after the enjoyment the book provided): the first is the timing of publication. When I first read it, I had to look at the publication date. Yup, 2016. Indeed, the preface was written in March 2016. So, the work pre-dates the referendum. Why, oh why, oh why was this not published a year earlier, to give it time to register with all those good-minded people on the left who (as Elliott and Atkinson so percipiently remarked) ‘shied away from the Leave campaign, in the main because of the political company they would have to keep’. This book provides, to my mind, an almost unanswerable case against the euro project. Indeed, if the strength of a theory derives from its ability to predict, then their prediction (some fifteen months ago) of the current state of the Greek economy and its credit rating should worry the bookies if they turn their attention to the gee-gees.

Criticism Two: for all their trenchant (and highly amusing!) criticism of the ‘Europhile left’ (‘hopelessly isolated from ordinary working people, preferring to make what there is of policy at each other’s dinner parties rather than in trade-union meetings or mass-movement gatherings’ [p.176]; ‘People who liked the euro were civilized, supported the arts, mingled … at the Royal Opera House, and holidayed in Tuscany or the Dordogne. People who didn’t like the euro preferred sliced white to ciabatta, couldn’t tell a burgundy from a claret [and] watched games shows on commercial television…’ [p 151]), I found their snide sideswipe at Varoufakis for employing domestic help (‘Their maid? Ah, that sort of erratic Marxist’) cheap.

More revealing is their ‘supra-class’ analysis, to the Greek crisis and its causes:

‘To the European left, the initial focus was not on the euro but on two interlinked features of the crisis: the grand-scale tax-dodging and influence-buying by a super-rich elite …; and the savage cuts … which ensured that ordinary people paid the price for the looting and betrayal of Greece by plutocrats and corrupt politicians’ (pp.190-1).

Pretty uncontentious you would have thought. So figure out the very next sentence:

‘This analysis ignored the fact that tax-dodging was endemic at most levels of Greek society, and that a reluctance to hand over money to public authorities in any circumstances extended to widespread free-riding on the Athens metro system’ (my emphasis).

To my mind, there is no moral equivalence between people at the bottom of society, believing their state structures to be fundamentally corrupt, resenting handing over money which they think will end up in the plutocrats’ offshore accounts, and the plutocrats who have an ideological hostility to the idea of a penny of their ‘hard-earned’ (!) wealth being used to the benefit of the common good. Plus, I don’t think fare-dodging on the metro was a significant causal factor in the Greek crisis.

This might seem petty, but it does raise the question in my head, about why these (talented) writers and analysts pussyfoot around the elephant in the room. To my mind, this whole book reads as an indictment not of the euro, but of the EU. Explicit in the book is the political decision to remove economic policy from democratic control; it exposes the fundamentally undemocratic, indeed anti-democratic, structure of EU governance. It reveals the EU, in its very conception, as designed to promote free-market economics and render any attempt at social-democratic restraint unsustainable. It illustrates the economic illiteracy of the project, but also demonstrates our rulers’ complete lack of interest in criticism. Self-interest is all.

I mentioned in the first paragraph of this review the authors’ explicit intention in writing this book, to persuade persons on the left that it was incumbent to oppose the euro. In the final paragraphs of the book, there is a sentence that to me, sums up why this book is so exasperating:

‘From today’s perspective it is clear that the euro was the centrepiece of what amounted to a huge wrong turning for the European Community after the 1989 fall of the Berlin Wall’ (p.283).

It is as if they have wilfully ignored the narrative they have written in the previous nigh three hundred pages. There was no ‘turn’, right or wrong; there was the continuation of a course already steered, merely the pace was altered.

Nevertheless, exasperating or no, this is a valuable resource for anyone wishing to ground their arguments against the EU in hard facts, told in an easy-to-read and engaging fashion. It is a great pity it wasn’t written three years earlier – and that is intended as a compliment, not a complaint.