Introduction

This chapter examines the origins, sustenance, and puncturing of the growth dynamic enjoyed by the United Kingdom and Ireland since the early 1990s. Often classified as ‘liberal market economies’, these two economies are particularly well matched for purposes of comparative analysis. They share not only a common legacy but also key structural similarities, such as their high levels of trade openness, their dependence on foreign direct investment, their membership in the EU (both since 1973), their flexible labour-market regimes (at least by European standards), their shared ‘liberal’ welfare tradition, and – of course – their common language. Yet, there are also notable differences between the two countries – not only in terms of their economic size and relative influence on the international stage but also their rather different and distinctive political traditions. For example, from 1987 onwards, Irish macroeconomic policy has been guided by ‘social-partnership’ agreements between the government and key social and economic interests, which have stood in stark contrast to the British system of free-collective bargaining. Given these differences and the path-dependent nature of political discourse, there might be strong reasons for anticipating divergent ideational and institutional responses even to common pressures and imperatives. Yet, as discussed in this chapter, there are striking similarities between the two countries in the development of political discourse and public policy in response to the crisis in recent years.

Introduction

Central and Eastern European countries were global leaders in the adoption of neo-liberal ideas and policies during the 1990s and 2000s. After being ruled for decades by communist political regimes that rejected free-market economics, Central and Eastern European countries were among the least liberal societies in the world in 1989. The following two decades witnessed a dramatic catch-up with and popularization of Western liberal norms. Estonia, for instance, which was part of the Soviet Union for almost fifty years, transformed into one of the most liberal economies in the world and a Eurozone member in the twenty years between 1991 and 2011. Its economic liberalism now exceeds that of most Western European countries. Other countries moved at their own pace, in their own way, and with greater or lesser trouble, but nearly all Central and Eastern European countries adopted neo-liberal ideas and policies at a dramatic rate for the better part of two decades.

This volume begins with a puzzle: Why has neo-liberalism proven so resilient in Europe, despite multiple internal difficulties and external challenges? Chapter 1 sets out a definition of ‘neo-liberalism’ and its ideational resilience. It notes that the term is broad and can be used in different ways and that resilience can vary. It specifies the resilience of neo-liberal ideas as characterized by their continuity, dominance, and survival. The first chapter offers five lines of investigation to explain such resilience in political and policy debates: (1) neo-liberalism's generality, diversity, and mutability enables it to adapt to and hence resist challenges; (2) neo-liberal ideas have predominated because they have remained at the level of rhetoric; (3) neo-liberal ideas have been stronger than competitors in policy debates and political discourse; (4) neo-liberalism remains dominant because of support by powerful interests who gain from it; and (5) institutionalization of neo-liberalism has given it a superior and protected position relative to possible alternatives.

This concluding chapter draws on the preceding chapters to pursue the five lines of analysis set out in the Chapter 1. We begin by following through the five lines of analysis, demonstrating how they relate to the empirical cases. Then we examine possible pathways out of the ideational dominance of neo-liberalism. Our aim is not to provide a simple mystery-writer ‘whodunit’ response to the initial puzzle – the chapters in the book have already shown the complexity of the answers – but rather to trace the diverse forms of the resilience of neo-liberalism and the factors responsible for it.

Neo-liberalism has had one central message for the state: scale back, cut back, cut out, transform. This brings to mind Winston Churchill's reply to an opponent who asked, ‘How much is enough?’ to Churchill's repeated push to spend increasingly more on defence in the 1930s. Churchill's rejoinder came in the form of a story about a Brazilian banker with whom he had just had lunch. The banker had received a cable informing him of the death of his mother-in-law and asking for instructions. He cabled back: ‘embalm, cremate, bury at sea; leave nothing to chance’.

This take on neo-liberalism – as burying the state – is certainly exaggerated because neo-liberalism comes in many different forms with many different policy applications. Only the recommendations of the most radical strands come close to the Brazilian banker's response to his mother-in-law's death. Yet the story as a metaphor for neo-liberal views of the state nonetheless somehow rings true. This is largely because neo-liberals have been more anti-state in their rhetoric than in their actions.

The state has been neo-liberalism’s bête noire, as its main focus of attack, because neo-liberals – whatever their differences – have viewed the state as consistently doing too much in the wrong ways with the worst consequences not only for the markets but also for democracy, by endangering individual freedom through its interventions. As a provider of public goods, the state had to be scaled back to leave room for the market, which would assure more efficiency. However, the state has also been neo-liberalism’s greatest conquest, as its main locus of action, because it has been primarily through the state that neo-liberals have been able to realize their vision(s).

The present period is one of economic turbulence but ideological stability. Despite the scale of the 2008 financial crash, there has not been, so far, much sign of the type of shift in the ideas governing economic policy that followed the economic upheaval of the 1930s and the smaller upheaval of the 1970s. The 1930s saw the emergence of Keynesianism and Social Democracy and the 1970s saw the emergence of to monetarism and neo-liberalism. Although challenged by recent events, for the moment neo-liberalism appears to be retaining its ascendancy. How should we understand this resilience? How should we understand neo-liberalism? These are the questions with which this chapter is concerned, and it makes three main claims. First, neo-liberalism is more than simply a contingent reaction to Keynesianism and Social Democracy. Part of its resilience as a set of ideas is that it draws on perennial themes of classical liberal political economy, particularly concerning the nature of commercial society and the role of the state in a market economy. Second, neo-liberalism is not a unified doctrine but rather has several distinct strands, which can be contradictory. Third, one of the most striking contradictions is in regard to neo-liberal attitudes to fiscal conservatism. In terms of the typology developed in Chapter 1, I argue that the resilience of neo-liberalism can best be explained by the first three explanations: (1) the ideological malleability of its core principles, (2) the gap between rhetoric and reality, and (3) the ways in which neo-liberal ideas achieve discourse hegemony by being translated into a form of populist economic common sense. These features make neo-liberalism difficult to discredit and help to account for its resilience.

Analysis of EU regulation of markets leads into ‘the seventh circle’ (of hell, purgatory, or paradise, depending on individual taste) of European neo-liberalism. The EU's core function is regulation and it is the leading exponent of neo-liberal regulation in Europe. Since the 1980s, it has developed a dominant set of ideas centred on competition to achieve a ‘single European market’ that is sufficiently integrated and coherent to be called a ‘model’.

Although the neo-liberal content of the regulatory model is often taken for granted in public and academic debates about the EU, this chapter argues that it was not legally or ideationally inevitable. Indeed, between the 1960s and 1980s, attractive alternatives were available and neo-liberalism appeared to be an unlikely candidate for ideational dominance. However, a powerful coalition of the European Commission, European Court of Justice (ECJ), national governments, and large firms has formed to support the EU's neo-liberal regulatory model. The coalition is heterogeneous, and it has widened and deepened over time as key actors have altered their position.

Thus, the development of a powerful coalition that favours neo-liberal ideas requires analysis rather than simply being presumed on the basis of the EU’s legal and institutional framework. Equally, changes over time must be accounted for. In response, the analysis shows how and why the key features of neo-liberalism – its breadth and ambiguities, the combination of competition and a strong state, and its apparent political neutrality through reliance on rules and ‘markets’ –make it attractive at the EU level.

The EU steps on the international podium

In January 2003, the EU embarked on its first crisis management mission abroad. The EU Police Mission in Bosnia and Herzegovina (EUPM) would last seven years and had a staff capacity of 540 at its peak. The EUPM aimed to establish and train a multiethnic police service and to assist local authorities in conducting large-scale crime investigations. By building and strengthening key institutions in the criminal justice sector, the mission sought to facilitate a return to normalcy in a war-torn region (Merlingen 2009).

In the summer of 2003, an EU military mission landed in the Congo. Militias had killed hundreds of civilians. Thousands sought protection from the UN mission (then dubbed “MONUC”). When the UN battalion could not protect the terrified population, the UN called on the EU to send forces. The EU mission (ARTEMIS) of approximately 2000 soldiers drove the militias out within weeks and handed control back to the United Nations.

Introduction: the prospect of transboundary crises

The previous chapters described how the EU has been building capacity to coordinate a joint response to overwhelmed member states and other disaster-stricken areas; moreover, they demonstrated a growing capacity to send civil–military missions to worldwide hot spots. This chapter focuses on a different type of crisis, one that affects multiple member states and, when left unaddressed, can threaten the political fabric of the European Union. This chapter documents the EU's efforts to deal with transboundary crises (Boin and Rhinard 2008).

These crises find their origin in the very essence of what the EU seeks to achieve. Since 1957, the European Union has prioritized the “four freedoms”: the free movement of goods, services, capital, and labor across borders (Art. 12 EU Treaty). Physical and technical barriers were lowered, regulations were harmonized or made compatible, and critical infrastructures were tied together. In the 1980s, member states agreed to create a single economic market in Europe. The integration of Europe has made EU member states increasingly vulnerable to what could once be considered “foreign” or “local” problems in distant places (OECD 2003, 2011; Missiroli 2005; Sundelius 2005).

The surprising emergence of the EU as crisis manager

There are few reasons to expect the European Union (EU) to play a role in the management of crises and disasters. The response to such events has traditionally been the remit of national governments. What could the EU – often depicted as a bureaucratic talk shop – possibly add to the efforts of national and local governments?

Quite a bit, as this book reveals. The member states have invested the EU with a significant amount of what we refer to as “crisis management capacity.” While often reluctant to transfer more authority to Brussels, member states have shown a sustained willingness to enhance the EU's crisis management capacities. After a large-scale crisis or disaster, member states routinely call for additional EU capacities to coordinate, link, or integrate their response capacities. Few European Council meetings conclude without some call for more crisis cooperation.

The EU has indeed become more visible as a crisis manager in recent years. Consider the following examples:

• In January 2010, a massive earthquake struck Haiti. The EU coordinated the humanitarian response of its member states, sent a police force of 200 Europeans, and created a relief fund for the devastated island.

• In the early months of 2011, popular revolts broke out across northern Africa and the Middle East. The EU sent its High Representative, Catherine Ashton, to newly liberated countries to assess how the EU could help their democratic development. The EU imposed an arms embargo on Libya and discussed the imposition of a no-flight zone. Meanwhile, the southern member states appealed to the EU for a coordinated response to the feared exodus of young Arabs seeking a better future on the European continent.

• In the spring of 2011, a vicious E. coli (EHEC) epidemic in Germany caused the deaths of over 40 people. After Germany informed the European Commission through the EU’s Early Warning and Response System, the Commission’s DG Sanco (Directorate General for Health & Consumers) took the lead in coordinating an EU-wide investigation and control measures.

• […]

Introduction: the gradual ascendance of the Civil Protection Mechanism

The earliest efforts to create joint crisis management capacity in the EU arguably date back to the 1970s. A set of now mostly forgotten disasters – who remembers Seveso and Amoco Cadiz? – prompted Commission officials to build what today is known as the Civil Protection Mechanism. This oddly titled organizational capacity helps member states deliver on the promise, captured in the Solidarity Clause of the Lisbon Treaty (cited above), of swift cooperation among national civil protection services in responding to natural or human-made disasters.

Since the first cautious steps were taken in the late 1970s, civil protection has emerged as a European policy domain – a “new European political space” (Stone Sweet, Fligstein, and Sandholtz 2001). The EU has in place a set of procedures and instruments that allow member states to coordinate and pool their resources in the face of disaster. Today, civil protection is explicitly mentioned in the Lisbon Treaty, it is a recognized EU policy area, and its products, as we will see, are increasingly “consumed” across the world.