IIPPE 7th International Conference in Political Economy ‘Political Economy: International Trends and National Differences’ School of Economics & Management, University of Lisbon, Portugal September 7-9, 2016 ‘The Political Economy of the EU: an imperialist project in crisis’ Stavros Mavroudeas Dept. of Economics University of Macedonia smavro@uom.gr Abstract This paper studies the Political Economy of the EU and Marxism’s position towards the latter. First, it surveys the different approaches – Mainstream, Heterodox and Marxist – that analyse the European integration process. Second, it proposes a Marxist value-theoretic analysis of the EU. Third, it proposes a periodization of the evolution of the European integration. Finally, following from the periodization of the previous section, it studies the current crisis of the EU. The paper’s central thesis is that the European integration is an imperialist project, organised by the dominant capitals of the Western European countries and aiming initially to stabilize the Western European economies under the US auspices but later to create a competing global pole that challenges US global supremacy. An essential part of this project is the exploitation of weaker economies through a mechanism of transfers of value. This mechanism operates, albeit in a differentiated manner, both within and outside the EU. Thus, it is argued that the European integration is basically divided in two groups of countries: a dominant euro-centre and a dominated euro-periphery. Furthermore, it is argued that the European integration project is constituted on the abovementioned basis and cannot be reformed towards a ‘social Europe’ direction. Following from these, it is argued that the Left should struggle to dismantle this imperialist project instead of trying to reform it. This analysis is based on a classical Marxist understanding of the theory of imperialism that rejects the ‘globalization’ thesis and maintains that nation-states remain the main agents of the international system. The analysis of the politico-economic structure of the European integration and the value transfer mechanisms (economic imperialist exploitation) follow from this thesis.

1. Stavros D. Mavroudeas
Dept. of Economics
University of Macedonia
e-mail: smavro@uom.edu.gr
International Initiative for Promoting Political Economy
7th Annual Conference in Political Economy
‘Political Economy: International Trends and National Differences’
School of Economics & Management, University of Lisbon, Portugal
September 7-9, 2016

2. Main arguments & structure
Main arguments:
 European integration is an imperialist project
 Exploitation of weaker economies through a
mechanism of value transfers that operates, in a
differentiated manner, both within and outside the
EU
 Thus, EU is basically divided in two groups of
countries: a dominant euro-centre and a dominated
euro-periphery
 The Left should struggle to dismantle this imperialist
project instead of trying futilely to reform it.

3. Structure:
 A Survey of the Mainstream and Radical analyses of
the European integration process
 A periodisation of the european integration’s
evolution
 Conclusions: A Marxist value-theoretic analysis of
the European integration process and a Left strategy
for dismantling EU altogether (LEXITs)

4. I. Mainstream & Radical analyses of
the european integration process
 The current EU crisis (increasing econ. disequilibria, internal
conflicts, authoritarianism, popular abhorrence etc.)
revealed the failure of both Mainstream and Radical theories
to grasp the essence of the European integration process
 From the end of the 1980s European studies are dominated
by explicitly or implicitly pro-EU analyses, either Mainstream
or Radical. Neither of them can grasp and/or express
particularly the growing popular abhorrence for the EU
 Several phases of their development: from the initial
enthusiasm to the europessimism of the beginning of the
1980s to the new triumphalism from the mid-1980s till the
eruption of the EU crisis (2010).

5. Mainstream theories
 Τhe origins of European integration theory can be traced back to
American International Relations literature. It subsequently evolved as a
distinct area.
 Two dominant European Studies approaches (stemming from broader
theories of integration):
1) Institutionalism (also as neofunctionalism and
intergovernmentalism): integration s the result of a structural
necessity (once an institution has been formed, its effects spill over to
other areas of integration; Newer versions abandon the automatism
implied in the spill over effect and recognise the possibility of set
backs. (e.g. Haas (1958); Sandholtz & Zysman (1989), Sandholtz &
Stone Sweet (1998)
2) Intergovermentalism (coming from the neorealist school): the
interests of the different participating states dictate the course of the
integration (e.g. Moravcsik, 1991, 1998).
 American analyses are theory-oriented American , European ones more
case study-oriented (Verdun 2005: 11). Explanation: imperialist conflicts
between the US and the EU. US emphasis on theory conceals critiques of
European integration. EU emphasis on case studies has behind it the
attempt – usually funded by the EU – to hide or rectify critical problems.

6. A critique of the Mainstream theories
 Mainstream approaches take existing class and economic
structures as given and unquestionable.
 European integration as a ‘political project’: schemes,
policies, important people (e.g. Schuman) drive this project.
 No structural elements particularly at the level of the mode
of production.
 Concomitantly, class analysis is absent and economic analysis
is restricted to policies and aims of the main systemic agents
of the project.
 Their economic emphasis on:
(a) the benefits to growth from liberalisation and integration (a
well contested hypothesis)
(b) whether the Eurozone is an OCA [optimal currency area]
(with most US analyses alignining behind the positive answer
and most EU analyses trying to either negate it or rectify it

7. Radical theories
 Till the mid-1980s Radical analyses of the EU were:
dominated by Marxism (e.g. Mandel (1970), Cocks (1980))
value-theoretic and class perspective
mainly against the European integration characterizing it as an
imperialist project (e.g. British Left)
 From the mid-1980s (beginning of EU triumphalism, collapse
of the Eastern bloc, neoliberal hegemony etc.) there was a
marked change by discarding almost all the previous
features. The new main points are:
emphasis on political projects and ideologies (rather than deep
systemic structural factors (e.g. EU neoliberal policies)
questioning who is benefiting from the concrete course of the
European integration and attempting to transform it
Marxism per se is sidelined by other perspectives
The issue of imperialism has been dropped

8.  Α characteristic precursor of this retreat is the position
of the NLR in the beginning of the 1980s (beginning
with Nairn’s (1972) ‘The Left against Europe?’ [still
dressed in Marxist jargon] and culminating in
Anderson’s (2009) admiration for Mainstream
neofunctionalism)
 Today Radical analyses of the European integration
appear as ‘Critical Approaches’ and can be classified as
follows:
Social constructivism (coming from the Frankfurt
school tradition) – e.g. Diez (1997), Marcussen (2000)
Post-modernist analyses – e.g. Jorgensen (1997),
Walker (1989)
The neo-Gramscian or Historical Materialist
perspective – e.g. Cox (1985)
The so-called Critical Political Economy (CPE)
current

9.  Social constructivism (coming from the Frankfurt school
tradition) and bifurcated to (a) a more traditional, more
critical to the EU and with more emphasis on systemic
features current and (b) Habermas’ more ideology-theoretic
and pro-EU perspective. This current questions the social
foundations of the European integration and argues for
alternative policies. However, even its more radical versions
do not question the European integration per se.
 Post-modernist analyses are nowadays completely ‘lost in the
translation’ without any serious critical content
 The neo-Gramscian or Historical Materialist perspective
focuses on issues of ideology and politics. relations. They
question the hegemonic nature of the European integration
project (Bieler & Morton (2001), Van Apeldoorn et al. (2003).
They call for strengthening EU’s democratic processes. They
represent a deformation of A.Gramsci’s thought from that of
a communist leader to that of a perplexed reformist. Total
lack of any significant economic analysis.

10.  Three CPE sub-currents: (1) classical Regulation Approach,
(2) York school of global political economy, (3) Amsterdam
school of international political economy. All of them stem
from the newer non-orthodox middle-range theories
(Mavroudeas (1999, 2011)) – of which Regulation was the
prime representative – and they share almost all the
methodological and analytical problems of their precursors
(lack of general theory, empiricism, indeterminacy and post-
structuralism etc.). They offer a rather weak economic
analysis emphasising economic policies (neoliberalism etc.)
and neglecting deeper class and economic structures. They
do not question the European integration per se but simply
preach its social and democratic transformation.

11. A critique of the Radical theories
 The Radical approaches to European integration do not
question the economic and class basis of this process –
despite setting this as one of their tasks.
 They usually clamour about the derailment of the initial
Keynesian and corporatist European integration scheme
(that supposedly left space for some pro-working class
reforms) and the increasing Anglo-Saxon neoliberal
dominance (as distinguished from other more continental
European perspectives [e.g. German ordo-liberalism]).
 They aspire to a return to some form of social liberalism since
they also accept that a return to traditional Keynesianism is
unfeasible.
 The notion of imperialism is completely absent from their
analyses. Concomitantly they do not question the European
integration as such but only its contemporary dominant
neoliberal versions.

12. II. A periodisation of the European
integration
 European integration began after the 2nd WW as an attempt to
reconstruct and stabilise capitalism in Western Europe under the
US auspices and against the threat from the Eastern block (1950s –
1974):
 The Marshall Plan and the Bretton Woods system provided the framework
of its launching.
 US multinationals played a crucial role.
 The initial integration project was shaped by the corporatist institutions and
Keynesian policies characteristic of the post-war period.
 Another crucial aspect was the containment of the traditional Franco-
German antagonism under the vigilant eyes of the UK (as the faithful ally of
the US). West Europe was reconstituted as a regional imperialist pole
exploiting less developed economies.
 Its initial core was comprised of developed capitalist economies.
 The basic economic structures, after several deliberations, were the common
market (trade liberalisation) plus the common agricultural policy [CAP]
(administrative system).
 Some initial forms of political co-ordination along national lines

13.  The 1974 global capitalist crisis and the subsequent dismantling of
the Bretton Woods system affected radically the initial conditions
and ushered a period of uncertainty, euro-pessimism and failed
attempts towards monetary integration (1974-1985):
 The 1974 profitability crisis marked the end of the post-war period of
strong growth. Beginning of a series of inconclusive waves of
capitalist restructuring (conservative Keynesianism, Neoliberalism of
the closed economy [Monetarism])
 It also aggravated intra-imperialist rivalries: US unilateralism became
even more pronounced (as evidenced by US’ ‘forcible’ imposition of
flexible exchange rates).
 The major European capitalisms attempted to alleviate some of the
US pressure by moving towards monetary integration (as a support
for the common market). Several failed attempts each one followed
by an even bolder move ((snake in the channel, EMS etc.).
 The first enlargement batch with less developed economies (Greece,
Spain, Portugal) for both economic and geopolitical reasons and the
introduction of a limited fiscal transfer mechanism (aid
programmes).
 However, pessimism and augmented internal differences along
national lines prevailed.

14.  The end of the 1980s and the advent of neoliberalism, the
collapse of the Eastern block and the resurgence of
integration and of aims to surpass US hegemony (1985-2008):
 Capitalist restructuring culminates in neoliberalism of the open
economy (‘globalisation’) as a means to restore profitability and
solve the structural problems. Particular emphasis on strengthening
international trade and capital liberalisation as a counteracting force
to low profitability and as a lever for structural reforms.
 As a result, renewed efforts for increased European integration
reinforced by the process of collapse of the Eastern block (1989 and
the so-called European anno mirabilis) ) which ‘liberated’ further
European capitals from US patronage and augmented their initial shy
aspirations to challenging US global supremacy.
 New batches of enlargement
 Deepening of political integration (revision of initial treaties,
expansion of EU’s jurisdiction to many new areas)
 More aggressive monetary integration (EMU) supplemented with
broader economic rules (Maastricht Treaty provisions) affecting –
mainly indirectly - fiscal policy.

15. Overall, in the 1980s-2008 period the dominant capitalisms of the EU
(the developed core around Germany in an uneasy alliance with
France) augmented European integration (through, among others,
transnational structures which however expressed the dominance of
particular national economies) and strived to challenge US global
supremacy.
The EMU and the creation of the euro as an alternative international
reserve currency plays a crucial role in this drive.
However, the expansion and the deepening of the European
integration aggravated the existing problems of uneven development
and placed a time bomb at the foundations of European integration.
In particular, the initiated by the common market division between
euro-core and euro-periphery was enhanced.
The attempt to contain the frictions caused by uneven development
by imposing wider economic restrictions (Maastricht treaty
provisions) was partially affordable in periods of even low growth but
proved to be disastrous in periods of crisis.
The US-EU rivalries were fomented further.

16.  The 2007-8 global capitalist crisis and the concomitant EU
crisis:
 The eruption of the 2007-8 global crisis – a profitability cum
structural crisis (i.e an a-la-Marx and not an a-la-financialisation
crisis) changed abruptly the whole framework.
 Initial hopes for ‘de-coupling’ (i.e. that the crisis concerns only the
US) were quickly rebutted and the crisis erupted in EU as well.
 EU’s failed ‘slay of hands’: As all major capitalisms abandoned
hastily neoliberal policies in favour of conservative Keynesian policies
(anti-cyclical lax monetary and fiscal policies), the EU followed at a
slower pace and to a more limited extent and reversed earlier.
Underlying belief: as the US and the Emerging Economies (EE) were
creating ‘bubbles’ of overaccumulation the EU would put its house in
order while at the same time profiting from these ‘bubbles’. When the
latter would inevitably burst, then the EU would be in a good
position to claim for global supremacy. A supplement to this plan was
the transformation of the euro-periphery into some kind of ‘special
economic zone’ (cheap wages and assets, increased exploitation rates
etc.). Its antagonists sabotaged this plan which had also serious
problems of its own (a very fast and austere adjustment causing huge
popular resistance [passive or energetic]).

17.  As a result of EU’s inferior position in the international
imperialist system and the barbaric restructuring required to
sustain its global imperial aspirations the EU has become the
‘big sick man’ of the aftermath of the 2007-8 global crisis.
 The choice of (a) limited anti-cyclical policies followed with a
fast reversal and (b) deep anti-popular restructuring (with
austerity policies) and © transforming the euro-periphery to
a ‘special economic zone’ is a one-way course for the euro-
core in order to conserve its global imperial ambitions.
 However, at the same time it foments internal tensions in the
form of both increased popular abhorrence towards the EU
and grievances by several of euro-periphery’s capitalisms
under demotion.
 The recent resurgence of anti-EU movements (e.g. Brexit) is
indicative.

18. By way of Conclusions
 The necessity of a Marxist and Left opposition to
the European integration – express the growing
popular abhorrence towards the European
integration and not leaving it to the mercy of the
resurging extreme Right.
 This requires the relaunching of a Marxist value-
theoretic analysis of the European integration
process that should guide a Left strategy for
dismantling EU altogether (LEXITs)

19.  A Marxist value-theoretic analysis of the European integration
process (e.g. Carchedi in several works) should be based on:
 A deeper understanding of capitalism’s oscillation between
periods of augmented internationalisation and periods of return
to its national roots. That is a negation of the fallacy of
‘globalisation’.
 A refined analysis of the economic mechanism of imperialist
exploitation (contra to both theories of the end of imperialism
and of the ‘new imperialism’ extractivist fallacy). International
transfers of value on the basis of ‘broad unequal exchange’
(based on different organic compositions of capital) and trade and
iternational investment on the basis of absolute advantage. The
notion of the imperialist system as a complex pyramid involving
several instances and the existence of sub-imperialisms (i.e.
capitalisms exploited by stronger ones and exploiting weaker
ones0.
 Such a framework can explain both the ebbs and flows of
European integration and its essentially reactionary and
exploitative nature.

20.  A Left strategy for dismantling EU altogether (LEXITs):
Should break from the ‘social Europe’ fallacy (that is
the futile expectation that the inherently reactionary
project of the European integration can be gradually
transformed).
Should also break from (the following from the
previous one) belated shy euro-scepticism of
dismantling – temporarily or permanently – the EMU.
The basic exploitative mechanism of the EU is the
common market structure, of which EMU is a
supplement.
 ‘From the standpoint of the economic conditions of
imperialism … a United States of Europe, under capitalism, is
either impossible or reactionary’ (Lenin (1915)).

21. References
 Anderson, Perry 2009, The New Old World, London: Verso.
 Bieler & Morton (2001)
 Carchedi, Bruno and Carchedi, Guglielmo ( 1999) 'Contradictions of European Integration', Capital
and Class, special issue, No. 67
 Carchedi, Guglielmo (1997) The EMU, .’Monetary Crises and the Single European Currency', Capital
and Class, 63
 Carchedi G. (2001), For Another Europe: A Class Analysis of European Economic Integration,
London: Verso
 Cocks, Peter (1980) 'Towards a Marxist Theory of European Integration', Intemational Organization,
34
 Cox (1985)
 Diez (1997) Jones E. & Verdun A. (2005), The Political Economy of European Integration: Theory and
analysis, London: Routledge
 Haas (1958)
 Mandel, Ernest (1970) Europe versus America? Contradictions of Imperialism, London: New Left
Books
 Marcussen (2000)
 Mavroudeas S. (1999), ‘Regulation Theory: The Road from Creative Marxism to Post-Modern
Disintegration’, Science & Society vol.63 no.3.
 Mavroudeas S. (2011), The Limits of Regulation: A Critical Analysis of Capitalist Development,
Cheltenham: Edward Elgar.
 Moravcsik (1991)
 Moravcsik (1998)
 Nairn, Tom (1972), ‘The Left against Europe?’, New Left Review, I, 75
 Sandholtz & Zysman (1989)
 Sandholtz & Stone Sweet (1998)
 Van Apeldoorn et al. (2003).