Skip to content
Department of History

The European Union – a neoliberal history?

As the 2024 European Parliament elections unfold, we asked EUI History Researcher Jonas Elvander to tell us about his recent book rethinking the history of the European Union in the framework of the history of neoliberalism, and what it tells us about the current challenges facing European democracies.

07 June 2024 | Research

HEC Research Highlight

In your recent book, Disciplinerad Demokrati (Disciplined Democracy), you look at the development of the European Union as a chapter in the history of neoliberalism. What would you identify as the key elements of this history?

The story of the EU’s neoliberalism is usually told as a “turn” that happened in the mid-1980s and early 90s, culminating in the Maastricht Treaty. This is only partly true. The foundations for the EU were laid at the same time as neoliberalism emerged, in the 1940s and 50s, and some key elements in the Rome Treaty were formulated by “ordoliberals” (the German variant of neoliberalism which put more emphasis on antitrust policies), such as the “four freedoms” of the Common Market. The reason the EC is never described as neoliberal in this period is that the free movement of people, capital, goods, and services was not fully realised until the 80s and 90s, when the wider neoliberal shift in the world made it politically possible. What Jacques Delors and his colleagues did in the 80s was actually little more than to implement the Rome Treaty, 30 years after its adoption, which some neoliberals also acknowledged. The neoliberal principles that had been there since the 50s thus became “operational” only in the 80s.

Paradoxically, however, the neoliberals, who apart from some German ordoliberals had mostly been eurosceptics, were not happy. Because the Maastricht Treaty included an expansion of the EC into a political union, as well as plans for a social charter which Delors hoped would constitute a sort of European welfare state, most neoliberals came to reject the union. At the same moment as the EU came to conform to some of the most cherished neoliberal principles, notably in terms of monetary policy and strict fiscal criteria, the neoliberal movement intensified its scepticism toward the EU. This reaction was perhaps best illustrated by Margaret Thatcher. In the space of a few years at the turn of the 90s, she went from urging Delors to complete the Common Market to advocating for British secession. The neoliberal critique was only radicalised after that, culminating during the euro crisis with the foundation of Alternative für Deutschland in Germany and Brexit in Britain.

How does Sweden fit into this narrative? How did Swedish society register, but also contribute to these developments?

Sweden is an interesting case that well illustrates the intimate relationship between the EU and neoliberalism, since both phenomena were introduced there at the same time in the early and mid-90s. In the early 90s a financial crisis erupted as a result of the deregulation the financial markets in the mid-80s. This was handled with austerity programs, first by a social democratic government which had already started to turn toward a more market-based policy, and then by a rare conservative one. At the same time, capital had begun to trickle out of the country as a result of the abolished capital controls, leading to worries that Sweden would lose jobs to the recently integrated continental market. This convinced a majority within the Social Democrats to drop their traditional resistance to the EU, which in their eyes had famously stood for “Capitalism, Catholicism, Conservatism, Colonialism”. The Swedish right had other motives to apply for membership; they knew it would make it impossible to reestablish the social democratic model that had governed Swedish society since the 40s and built the world’s most generous welfare state. In this sense, the EU was a way to “lock in” the reforms that had been implemented during the crisis and make sure that Sweden would henceforth be based on a neoliberal model. From this perspective, it is obvious that the EU makes social democracy impossible, at least the kind practiced in Scandinavia during the postwar period.

This has not received enough attention in Sweden, where support for the EU is high and still growing among most parties. One reason for this is probably that in parallel with the EU accession, Sweden adopted a set of even harder fiscal rules than those in the Stability and Growth Pact, making Sweden one of the most neoliberal countries in the world in terms of political room for manoeuvre. These rules have only begun to be challenged in the last few years, albeit still cautiously. Today, Sweden belongs to the “frugal” group of northern European countries which resist all attempts to overcome the neoliberal impasse of the EU; there is cross-party support for remaining in the union, but there is also cross-party agreement on the need to block all further transfer of power to the EU level. This was recently illustrated in the attempts to water down the Next Generation EU package, which was adopted in 2020 to assist the countries that had been hit hardest by the Covid pandemic.

You mention a lack of critical discussion about the development of the European Union while euroscepticism is becoming increasingly vocal and features in the political platforms of populist or extreme-right movements and parties across Europe. How do you think these two aspects go together? What do you think is missing in the public debate on the future of the European Union?

The EU is often seen as a cosmopolitan and tolerant antithesis of reactionary ethno-nationalism, for example in the writings of Jürgen Habermas. This is a potentially dangerous state of affairs since Europe can also be understood as a common “civilisation” and therefore easily become the basis for chauvinistic politics itself. This has certainly been the case in the past; fascism, Nazism and their postwar descendants have all had European ambitions. So far, the far right have mostly been sceptical of the EU, but there are no guarantees it will remain so. The alliance between Giorgia Meloni and Ursula von der Leyen in the past year is an example of how easily far-right parties can become integrated in the governance of the union. The road had already been paved by the Commission’s adoption of a hardline approach to migration and the new Commission portfolio tasked with guarding the “European way of life”. If people of the left and centre left are serious about fighting the ascendant far right, they need to engage in a sober discussion about the problems that the EU presents to its member states economically and democratically, and not idealise it as an inherently good bulwark against ethno-nationalism. Since many far-right parties have emerged out of the neoliberal movement, while others are increasingly ready to adopt neoliberal policies in a bargain for power with the centre right, there is little that stops the EU from becoming a vehicle for far-right policies. In many ways we are already seeing the beginnings of such a development today.

Last update: 07 June 2024

Go back to top of the page