The EU has achieved a great union of the private economy, but little union of the public sector. The paradox is that European public finances are so scant that the EU has to intervene, control, and eventually bail out the public finances of its member states, a process that many regard as undemocratic. The EU is too interventionist because it is too weak. The alternative is for the Union to bolster public resources for large-scale initiatives, stop controlling and interfering in domestic policy-making, and return more fiscal autonomy to the member states.

We need to discontinue the idea of a “fiscal union” between member states and, instead, provide the European Commission with more fiscal resources. The fiscal autonomy of each of the levels of government, both the member states and the Union, as well as the local and regional governments, is the best formula for efficient public management and democratic accountability.

Comparing Europe and America

Some inspiration can be taken from the process of building the first modern union of states in a great continental area and inspired by democratic principles: the United States of America. The lengthy process of building the American Union, which was gradual, conflictive, and asymmetric, might be reminiscent of the process currently under way in the EU. It took close to 125 years from the initial undertaking to form the Union, the ratification of the US Constitution toward the end of the eighteenth century, to the point that the United States achieved solid federal institutions. From this standpoint, the EU, which has lasted to date around half this time, has made greater progress in many fields than the United States had halfway through its construction process. However, the EU's principal hurdle lies in its public finance sector.

At the very start of its existence, the US federal government was extremely weak, as weak as the EU is now in terms of financial resources. The majority of its expenditure, including that on the wars against the British, came from the individual states, which had proclaimed their sovereignty before accepting the US Constitution.

The world is a European invention, and Europe's task in the twenty-first century is to take responsibility for it. It is true that every large cultural unit, now or in the historical past, can be said to have a “world” of its own. It is perhaps even true that every human individual has his or her own “world”, in the sense of a particular way of organizing the data of experience. But the world, the familiar globular entity, both physical and intellectual, which ever-increasing numbers of people, over the past six or seven centuries, have been persuaded to accept as a universal human environment, was invented (although we still say “discovered”) by European explorers, experimenters, and thinkers.

A principal characteristic of this world is that it is not organized, that it always turns out to be more than we thought it was, more than we can fit under the dominion of God or Fate in any form, that it always turns out, paradoxically, to be different from itself. Indeed, the inventors of this world, and we in their wake, set a positive value on its infinite elusiveness. We insist on respecting hard facts, which always means new facts, since old facts by definition are soft, corrupted by the devices we have applied in understanding them. We insist on the uncharted, the unknown, even the unimaginable, as a field for our activity. In other words, this new world – which we thus follow those European pioneers in recreating – is designed to be out of control. Its whole character – as world, as “reality”, as fact, as a field for activity – is always to be at least one step beyond all our abilities to control it.

Out of control

If you want a world of infinite possibility, therefore presumably of infinite promise, you have to accept a world out of control. It took until the twentieth century for the second half of this bargain to become fully clear to us. The world has been out of control ever since its invention; but only recently have the most disastrous consequences of this condition forced themselves on our awareness.

Most people studying Europe in 1970, when the CES was founded, would be amazed at the progress of European integration since then. Of course, the Schuman Declaration was 20 years old in 1970, and the ECSC had been supplemented by the European Atomic Energy Community (Euratom) and the much broader EEC. But these Communities included only the original six member states (France, West Germany, Italy, and the Benelux), with the first enlargement still three years in the future, and Community institutions were generally quite hesitant to take any actions not supported by the member states. True, the European Court of Justice had promulgated the principles of the supremacy of Community law, and of its direct effect. Even so, the number and importance of instances where member states were obliged to change their policies remained quite restricted.

Federal aspirations

Perhaps the quality of the change at work was more important than the quantity. Former Commission president Walter Hallstein observed in 1969 that individual Europeans were being affected by the Community's legal system “more strongly and more directly with every day that passes”. He went on to point out that Europeans were “subject in varying degrees to two legal systems – as a citizen of one of the Community's member-states to [the] national legal system, and as a member of the Community to the Community's legal system”. This was a new experience for many Europeans, but it was “not a new experience for citizens of countries with federal constitutions” (Maas 2007: 21).

Raising the idea of federalism suggests that some people might be less surprised at the progress of European integration. Federalists like Altiero Spinelli and Ursula Hirschmann had proposed as early as 1943 a European “continental” citizenship alongside national citizenship. In the aftermath of World War II most European political leaders supported creating a common European legal status for individual citizens. Thus Winston Churchill in 1948 called for “a European group which could give a sense of enlarged patriotism and common citizenship” and hoped “to see a Europe where men of every country will think as much of being a European as of belonging to their native land” (Maas 2017).

At the heart of the challenges facing modern governments are the intertwined tasks of devising policies to deliver economic prosperity and of mobilizing popular consent for them. The importance of economic policy was noted in the nineteenth century by William Gladstone, the British prime minister renowned for his fiscal acumen, who observed that “budgets are not merely matters of arithmetic, but in a thousand ways go to the root of prosperity of individuals, and relations of classes, and the strength of Kingdoms”. The importance of mobilization is manifest in democracies, where economic policy-making is always also coalition building.

Few can doubt the magnitude of those challenges in Europe today. Many countries that could once reliably command 3 per cent rates of annual economic growth now struggle to secure 1 per cent. More than 15 per cent of young people in the EU are unemployed, and the vast majority who do find work are being forced into temporary jobs lasting only months if not weeks. Moreover, the adjustment of most European countries to a technological revolution marked by the advance of digital technologies lags well behind parallel movements in the US and even China. To cope with the technological revolution of the twenty-first century, the nations of Europe need new modernization strategies.

Political will

Part of the challenge, of course, is to identify such strategies. Finding an effective strategy is not a simple task because every country starts with a different set of institutional endowments. Thus, approaches that might work in one will not necessarily succeed in others. There are no magic bullets here. However, the process of implementing new economic strategies has also been complicated by the disintegration of longstanding electoral alignments and the fragmentation of European party systems. There is some truth to the old saying that “where there is a will there is a way”, but in democracies the relevant “will” emerges out of party politics and it is uncertain whether partisan competition in Europe today is capable of generating the will to implement policies that will promote prosperity in the coming years. Why not?

If we ask a political economist, “what is the biggest issue confronting Europe today?” the likely answer we will get is: “where should I start!?” Indeed, there is no shortage of candidates: the macroeconomic divergence of the EU's member states, the conflicts about EMU, the powder keg of immigration policy, the growing concentration of wealth and political power, the wave of populist mobilization after the Great Recession, and, on the horizon, technological changes with unforeseeable implications for the structure of European economies. One could add the (real or self-imposed) limitations in fiscal capacities of many welfare states to deal with future challenges (an ability that I would nominate, without expecting much disagreement, as a “significant achievement from Europe's past”).

Many of these problems can be linked to the question of what happens to Europe's middle classes – as workers, consumers, and citizens. This does not mean that we should stop being interested in, concerned about, and solidaristic with Europe's “precariat” or “outsiders”. But in terms of sheer numbers, it should be clear that Europe's societies will look very different if they fail at the political integration of its middle classes. Much research suggests that this political integration is inextricably tied to labor market experiences and consumption opportunities. In the light of growing economic inequalities and their social repercussions, it is this link that begins to appear precarious to many contemporary observers.

Admittedly, the fate of the middle class has not only to do with economic facts and measurable insecurities but also with psychology. To appreciate the problem, we have to move from an individualistic to a relational perspective. Economists still sometimes pretend that people care about money per se. Empirically and theoretically, it is more plausible to assume that people are primarily motivated to feel included in groups and to get as high a status in

these group as possible (Marx 2019a, 2019b). In capitalist societies, money is an important material and symbolic resource to acquire status. A wealth of evidence in psychology, sociology, and biology shows that humans are incredibly sensitive to even subtle social cues signaling inclusion or exclusion.

John Bruton once said, “the European Union is the world's most successful invention for advancing peace”, and some may argue a great symbol for effective globalization and collaboration. While Europe is vast beyond the EU, rarely do we view the continent without considering the EU. Nevertheless, with many looming issues and concerns, one wonders: How successful is it really? Will it grow to encompass the rest of Europe? Is it really the savior for all of Europe? And if there are pressing issues, what are the steps to be taken, in order to keep the EU alive throughout the next decades? The number of EU skeptics continue to increase, while the EU supporters decrease. In the light of Brexit, many increasingly wonder if the EU will exist by 2050.

There is no doubt that Europe will continue to transform and flourish over the next decades, and that would be due in large part to the EU's reach and influence. We are pro-EU optimists who want to see Europe and the EU to flourish in the next decades and believe the EU will remain in existence by 2050, but we predict that it will go through, and needs to go through, serious changes and reforms with regards to gender equality, union size, member state sovereignty, and domestic policies, as well as the way member states work together.

More women, fewer new member states

In the wake of a gender awareness era, we predict that the EU will promote women in key decision-making positions, in politics and the economy, to appeal to the masses. With the current EU gender pay gap of 16 per cent (European Commission 2019), this promotion of women is a much needed rebranding that will significantly advance the performance and quality of work in the EU region. Women also outnumber men in all of Europe (Smirnova & Cai 2015). This raises the question of how the EU hopes to appeal more to the people and current member states’ citizens, if not providing equal treatment to men and women. Amending the current discrepancy would be a great strategic move that inspires young generations to support the EU even amid difficult times.

Since the 1940s pro-European elites have embedded concrete steps towards European integration within a narrative that the member states were on the road to an ever closer union. The unification process was posited to be unidirectional and irreversible, resting on the twin motors of ever progressing deepening and enlargement. Nevertheless, Algeria managed to leave in 1962, as did Greenland in 1985. Long before Brexit, the narrative of the ‘ever closer union’ has also been called into question by other events and processes. For example, the Luxembourg compromise of 1966 ditched an integration step laid out in the treaty. A plethora of small and tiny changes also accumulated to disintegrate existing achievements or make them dysfunctional. The European Coal and Steel Community, for example, was largely non-functioning only a few years after its establishment. Overall, this chapter argues that disintegration and dysfunctionality are part of the political normality of the integration process. They are produced by the treatment of complex problems and knock-on effects of the integration process itself. The trend has strengthened further since Maastricht, and since the 1990s it has been shaping the debate over the European Union more strongly than ever before.

What was the contribution of European integration to the economic history of Western Europe? Also on this issue, the EU often claims to have been both important and successful while, in fact, there is surprisingly little research on its economic effects. This chapter argues that the EC did indeed contribute to growing material prosperity in the member states during the Cold War. However, this contribution remained rather modest, at well below half of 1 per cent additional GDP growth per annum. The European Community had greater weight in relative terms during the 1970s and 1980s than during the 1950s and 1960s, even this has been generally overlooked to date. It thus played a greater role once the post-war boom was over, and, without it, the slump would have been even worse. Those aspects aside, the location of the economic within the integration process remained curiously vague during the Cold War. Economic integration was on the one hand an end in itself to promote prosperity; on the other it was always just a means to achieve overarching political objectives.

The European Union is sometimes described as a ‘community of values’. Is this adequate? Legally anchored civil and human rights and democratic guarantees were not the foundation upon which institutional cooperation was built. Instead they sneaked in by the back door. Especially in the early days the centrality of values was by no means obvious, and certainly contested. The search for a specific institutional ethos only became significant in the course of the 1970s. Today’s EU was not born as a community of values; instead it grew into one in a fascinating, decades-long process characterised by ambivalence and contradiction. That does not mean that values and norms played no role in earlier stages of the integration process. At the beginning of the 1950s these questions were already hotly debated, and the value-orientation is clearly reflected in the way European integration was very much understood as a contribution to securing peace. To that extent, the European project is actually inconceivable without the values that grounded and legitimised it; values and norms shaped the EC’s institutions and informal practices at very fundamental levels. But without a legally binding framework they initially remained fragile and vulnerable.

The EU often claims to play a central role for peace in Europe. To date astonishingly little research has systematically addressed this issue; the dominant narrative is essentially that cast by the protagonists of the integration process themselves. This chapter argues that the European integration process was initially much more a beneficiary of the European peace settlement, than shaping it in any significant sense. At the same time it is important to distinguish between three concepts of peace: reconciliation between the member states and especially between the ‘arch-enemies’ France and Germany; the EC’s contribution to peace in a world largely defined by the Cold War; and finally social peace within the member states. The chapter examines these three dimensions and argues that the EC was particularly important with regard to the third of these categories. Later and in different forms than we normally assume – this is how the EU really contributed to peace over the past decades.

These days ‘Europe’ is assumed to mean the European Union and Brussels. The majority of European states are part of the EU, and its various policies have a profound impact on its member states and the international system. It is therefore easy to equate Europe with the European Union, or at least with international cooperation in Europe. This chapter argues that such an approach is problematic, particularly from a historical perspective. It underestimates two aspects: firstly, the European Community as the EU’s predecessor was a fragile latecomer in a densely populated field of international organisations. Seventy years ago (and more recently too) it appeared rather unlikely that this particular organisation would one day come to be identified with Europe as a whole. And secondly, the integration process was not only shaped by the histories of the participating states and the general historical context, but also influenced by a veritable web of relationships with other Western European organisations and transnational forums. Europe was never just the EU, and the EU never all of Europe. So we need to understand how that equivalence became so strong and how the EC was able to morph from humble origins into Europe’s pre-eminent international entity.

At crucial junctures European citizens spoke up to express support for or dissatisfaction with the EC, or addressed European affairs in other forums. Yet the process from which the EC and EU eventually emerged was always characterised by a degree of remoteness, and by a tension between civil society participation and elite-centric politics. Overall, the chapter argues that attitudes towards the integration process – even before the Maastricht Treaty – were much less robust than had long been believed. During the post-war decades the EC remained no bearer of great passions. The reasons for this include the Community’s economic focus, its technocratic aspect and its remoteness from everyday life. At the same time many people preferred to become involved in other things than the affairs of the EC, for example in youth exchange programmes, town twinning or Interrailing around the continent and other forms of transnational tourism. For important questions that the public had in relation to Europe, the EC at the time offered no answers and no platform for civil society engagement. Hence, European cooperation EC style was based more on toleration than on genuine approval.

Brussels has often been criticised as a bureaucratic monster, a supranational juggernaut, a new empire. While the terms leave much room for interpretation, they all present the EC as a threat to the political order of its member states. In reality, member states have been central to the integration process throughout its history. That is not to suggest that Brussels simply represented an extension of their interests. It is true to an extent, yet in the course of time the integration process also fundamentally transformed the member states. But there was no need for a gigantic Brussels bureaucracy to subjugate or substitute the member states. The mechanisms involved, as this chapter shows, were much more subtle. While great change occurred at the political, administrative and legal levels, it appeared to make little difference to the everyday lives of ordinary people – who in turn showed little interest in these processes. And by the time the effects finally became more obvious the basic foundations had already been laid, making it difficult to ‘turn the clock back’.