If economic malaise is now becoming a global phenomenon, with the slow-down in China and Japan, its most acute political manifestations are still concentrated in Europe. One reason for this is the severity of the slump in the Eurozone, where output and investment are still far below 2008 levels, unemployment is pegged at double digits and the combined effects of fiscal retrenchment and credit crunch have depressed demand still further, while surplus capital floods to London and Zurich. The fall in Italian and Spanish bond spreads has more to do with short-term central-bank liquidity than any improvement in underlying conditions: national debt levels are higher than ever, vulnerable to the least tremor of volatility; over-extended banks are exposed to emerging-market shocks; the German powerhouse is dependent on weakening external demand.

But Europe’s political imbalances are now at least as stark as its economic ones. The financial crisis caught the eu’s monetary and fiscal systems half-built, and emergency structures have been thrown up in the midst of the storm. Far from disintegrating, as catastrophists predicted, the eu has tightened and hardened, twisting its supra-national institutions to serve purposes undreamt of by their architects, while sharpening divisions between its citizens. Yet these asymmetries have a pre-history. Since the onset of the long downturn in the early seventies, the European polity has been subject to a set of structural torsions, encompassing three distinct dimensions: civic-democratic relations, between the rulers and the ruled; inter-state relations, between the member countries; and geo-political relations, characterizing the bloc’s external role. They have been structured in large part through European rulers’ attempts to grapple with a series of shocks exogenous to the eu: the collapse of the Bretton Woods system in the early seventies, the fall of the Soviet bloc in the nineties, and the world financial crisis that exploded in 2008.

Each in turn served as a ‘signal crisis’, to adapt Giovanni Arrighi’s term, ushering in a new political-economic configuration that would itself help to shape the subsequent shock: in the seventies and eighties, the neoliberal assault of capital against labour and the second Cold War; from the nineties, the era of globalization, financialization and the rise of China; since 2008, the new age of debt-logged stagnation, which doesn’t yet have a name. What follows will trace the forms the eu’s asymmetries have taken against this backdrop, arguing that the conventional solution to them—to bolster the position of the Europarliament—is a dead-end, if there is to be any hope of a re-democratization of the Union.footnote¹

The political scientist Walter Dean Burnham famously noted that, while the economic system of the United States had transformed itself with unparalleled energy, the American political system had hardly changed at all: the institutions designed by the eighteenth-century planter aristocracy were still in place. Much the same could be said of the eu. The architects of European integration were born in the age of the horse-drawn carriage: Monnet and Schuman in the 1880s, Adenauer in 1876. The institutions they designed—the Commission, an over-arching executive staffed by dedicated technocrats; the inter-state Council of Ministers; the supra-national court and parliamentary assembly—embodied a very 1950s view of a modern united Europe. They were built to oversee the partial but progressive pooling of sovereignty between three large states, France, Germany and Italy, whose populations were still in good part rural—peasant farmers made up nearly 40 per cent of the French electorate—and the three small Benelux countries. This strange institutional complex contained a finely balanced set of relations:

The first shock to hit the Europe of the Six was Washington’s revocation of the Bretton Woods compact and imposition of a fiat-dollar regime, against a background of intensifying economic competition in the seventies. The European response, still under French leadership, was to accelerate moves towards a unified monetary system, based on the Werner Plan, as a bulwark against international turbulence. To this end, Paris lifted the veto on British membership imposed by De Gaulle—who had warned that the uk would serve as a Trojan Horse for us interests—in the belief that the City of London would provide vital financial ballast for the new system. These changes—deeper economic integration, combined with enlargement—were complemented by a few tweaks to the eec’s institutional framework: regular summit meetings of the member-state governments in the European Council and direct elections to the supra-national Parliament, whose seats had previously been filled by representatives from the national assemblies.

The seventies’ monetary union foundered; the German economy powered ahead while the others weakened, and their currencies had to be devalued against the Deutschmark. But the conjuncture of the seventies and eighties altered the equilibria of the European Community in other, unintended ways. First, the entry of Britain brought Thatcher’s forceful advocacy for financial deregulation and social-spending cuts. Backed by Mitterrand and Delors, this neo-liberal approach was written into the treaty framework with the 1986 Single European Act, albeit accompanied by a paper charter on labour rights. (The monetarist turn had a debilitating effect in France and, above all, Italy, whose national debt soared from 60 to 120 per cent of gdp in the eighties, as a result of the central bank’s exorbitant interest rates; paying it down would put a long-term drag on the economy.) Second, with the overthrow of the dictatorships in Portugal, Greece and Spain in the seventies, the European Community discovered a new vocation: social engineering in its near-abroad, by building up capital-friendly centre-left parties—the Portuguese Socialists, psoe, pasok—often with money channelled through the Friedrich Ebert Foundation, and shepherding the new democracies into nato. What were the outcomes for Europe’s internal and external relations?

The second exogenous shock was the disintegration of the Soviet bloc in 1989. This offered a moment of refoundation for the European polity, which had been conceived and had flourished as a Western institution, within the framework of the Cold War. The most immediate question was the unification of Germany—how should it proceed, and would the new state be neutral, or a member of the nato alliance? How would a united Germany alter the internal balance of the eu, and what relation would Europe have to the other ex-Comecon states?