Introduction

This special issue of the European Journal of Social Theory addresses the theme of a crisis in European integration, in particular in the context of the crisis of the Eurozone since 2009. The contributions to this issue offer assessments on the nature of this crisis, its extent and implications. It is now generally felt that the current crisis is particularly significant and marks a turning point in the history of European integration as it addresses new divisions, but also as it faces new opportunities in redefining the relationship between state, economy and society.

The post-Second World War project of European integration had never been entirely crisis-free, but the present crisis appears to be different from earlier ones. Earlier crises – opposition to the eastern enlargement in 2002, the failed attempt to create a Constitution, the French and Dutch no votes in 2005, growing opposition to the so-called democratic deficit, etc. – did not imperil transnational governance, which always had the poles of deepening and widening to negotiate. There was never a preordained path to what can no longer be called ‘a project’. Indeed, the current situation is characterized by the plurality of possible paths. In the past, the critical issues were largely concerned with the problem of democratic legitimacy while today other issues have come to the fore. The formative period of European integration until the mid-1980s was largely an inter-state attempt to achieve market integration through the removal of obstacles to the mobility of capital, labour, services and goods. Normative goals were secondary since the legacy of the Second World War and the aim to bring about lasting peace in the war-torn continent provided the requisite legitimation for a regime that apparently required otherwise only legality. In the early decades, European integration was largely a project of the transnationalization of the nation-state until the point that an optimal degree of economic integration could be achieved. The problem was that no one knew what this was and still less when it might be reached.

It was possible to characterize the first phase of the European endeavour as a state-orchestrated project, and one in which elites were in charge of a project of their own devising. It was driven by national interests and was a functionalized and systemic process – it was a project in every sense of the term in that it was a product of state planning in an era when the capitalistic planned economy was embraced by the right and the left, though initially the left was more suspicious of European integration as contrary to interests of labour. However, the drive towards integration cannot be described as ‘Hayekian’ in the foundational period of European integration. There is little evidence to suggest that the controversial ideas of Friedrich von Hayek had any impact on European integration in this period. The Road to Serfdom (1944) had to wait almost three decades to have any impact on macro-economic thinking. Visions of strong federalism were more likely to carry weight than the Hayekian vision of political liberty resting upon economic liberalism. But, as Christoph Deutschmann argues in this issue, by the time of the Single European Act (1986) and the Maastricht Treaty (1992), neo-liberalism had become a pervasive influence, even if it was not recognized as such. It is a further question as to how pervasive these influences were and whether they led to the crisis that has apparently fallen on Europe. Where in all of this are the normative claims of European integration to achieve through co-operation greater peace and prosperity? How much legitimacy can be traded for legality?

The story of European integration told in the conventional political science narrative denies the salience of normative elements, and even more so the relevance of cultural models of Europe that go beyond the efficacy of functional systems or a framework of legality. Habermas’ argument of the unrealized normative potential of European integration was one of the few critical interpretations of the post-national polity that sought to mediate between national and the transnational levels of governance where a compatible form of democratization might be created (Habermas, 2001, 2006). The orthodox position is that legitimacy is firmly a national matter with transnational legitimacy derivative of national legitimacy. Theorists such as Majone and Morasvcik have given some very strong arguments for a minimal model of European integration and have defended it against the charge of being undemocratic. But the demand for legitimation has not gone away, leaving Europe in the hands of unelected elites. That technocratic model of European integration has slowly given way to a more contested field of visions of Europe, including anti-European currents (see Schrag, 2013). Since European integration became entangled in social and cultural questions, it was inevitable that new demands would arise. Indeed, the reflexive logic of Europeanization made such contestation all the more likely (see Trenz and Eder, 2004; Wilde and Trenz, 2013). Once the movement towards co-operation becomes a matter of integration, with everything that this implies, there are spill-over effects that can produce results that can never be anticipated. The transformation of the systemic logic into what has been increasingly seen as a process of constitutionalization gave an additional impetus to greater rather than lesser contestation. Thus what had been seen as a conflict of widening versus deepening, in the superficial language of EU analysis, might be better seen as a conflict that derives from, on the one side, the pluralization that comes from the geopolitical enlargement of the EU and, on the other, the multiple voices that emerged from the nascent constitutionalization that came with the process of deepening. One outcome of this was that democratization and Euro-federalism had to be traded for constitutionalization, but the need for democratic legitimacy could never be entirely silenced, despite innovative achievements in constitutional thinking and institutional design. Andreas Follesdal and Simon Hix (2005) have given a persuasive rejoinder to the position of Majone and Moravscik, showing how in fact the dimension of democratic contestation cannot be excluded from democracy. Since the institutional structures of the EU foreclose democratic contestation, it is not too surprising that it takes place outside the avenues of the EU and often takes an anti-European direction.

The wider context of the global economy and international order is also is much more to the fore in shaping European integration in an age that can be characterized as what I have previously termed, ‘post-western’ (Delanty, 2003, 2013). Europe is not reducible to the category of the West and, since the enlargement of the EU, the central and eastern civilizational traditions have come to the fore, so that the Europe can no longer be defined exclusively in terms of the historical experience of the founding western European nations. It is now more multi-centred. In this sense, Europe has become more ‘European’, though arguably it has yet to fully rediscover its own diversity. Moreover, the wider context is no longer dominated by the West, which, like Europe itself, has become decentred. The major sites of economic and political power are now beyond the western world, which is only one centre of global power. The post-war boom that fuelled the early project has long run its course and Europe has entered a period of crisis in its economic and in its political structures. The implications for Europe are at best uncertain and revanchist trends are much in evidence. The current crisis has occurred at time when the intensively interconnected nature of Europe was becoming apparent at precisely the same time that Europe overall was becoming entangled in global processes. But one of the problems in all of this is that Europe is rediscovering its plurality at the same time it also has embarked on a project of political and economic unification. The result has been a certain contradiction between cultural diversity and political unity. Cultural policy-making has been a virtue out of this, but so far the Realpolitik of European political economy has been rather different.

The systemic dimension of European integration has been the dominant logic until now. It has driven market integration, shaped the building of the edifice of EU institutions and has been the main driver of what has increasingly been recognized as constitutionalization (Fossum and Menendez, 2011). While this process – whether described as regulatory, inter-governmental or constitutionalizing – has enhanced the momentum towards societal convergence, it is apparent that this is not so straightforward. Europeanization produces differentiation alongside convergence. This is evident, for example, in very great differences in the interpretation of EU directives, especially in the domain of soft law. But above all it is now apparent that European integration is caught up in the vortex of globalization and cannot therefore entirely determine its own course. This is one of the major differences from earlier periods of European integration when it was largely a movement aimed at transnational governance within a relatively circumscribed geopolitical order. This differentiating logic is reflected in major divisions between countries as well as within countries. The vision of a common Europe that was much promoted since the late 1980s is now all but dead. Europe is divided not just between East and West, but also between North and South. The new divisions are ones forged by the 2008 crisis of western capitalism and are between debt and creditor states (see Castells et al., 2012; Delanty, 2014).

Yet, there is no denying that alongside these often contrary processes of systemic integration and differentiation is another and equally contradictory trend towards social integration. For instance, it has been argued (see Caporaso and Tarrow, 2009) that European Court of Justice legislation in the area of labour mobility has brought about an embedding of markets. This argument, however, may give too much weight to the ECJ and neglects the trend towards market liberalization. The objective reality is simply that European transnational governance has had a relatively weak impact on social arrangements and while it may have had indirect democratizing effects, it has not itself led in any significant sense to a new order of democracy. The complex ramifications of this are explored in this issue in the contributions by Daniel Innerarity and William Outhwaite. The gains have not been trivial, as Adrian Favell argues, especially in the area of rights of mobility, which has been one of the most significant aspects of European integration. Although this was originally conceived as the mobilization of labour, it has now come to be one of the chief dimensions in the formation of European society, since not everyone who travels is a worker; many are students, tourists, retirees living abroad, etc. But this works as much to undermine European integration as it does to reinforce societal convergence, for the social impetus is now more likely to be found in the assertion of demands for social protection against market forces. The social dimension, which has mostly been the responsibility of the democratic welfare state, is thus in tension with the systemic-driven forces of market liberalization and thus in conflict with what for many people is the new face of the European Union. This issue, fuelled by the alleged democratic deficit, has added to anti-European sentiments. Undoubtedly the EU is being blamed for many things not of its own making and paradoxically its successes not only are unappreciated, but provide the channels for anti-European politics. These currents are gaining force, but too are other developments arising from increased societal integration. European integration has become a site of increased contestation. It can be a catalyst for nation-building as much as for the making of a post-national polity, as reflected in Catalan and Scottish bids for independence. It should of course be noted that these examples of nationalist movements are themselves highly Europeanized in that they seek national autonomy within the framework of the EU, thus illustrating one way in which nationalism and European integration can be mutually reinforcing. They also demonstrate the uncertainty as to what both – the nation and Europe – actually represent.

There is little doubt that one of the strongest anti-systemic currents consists of new demands for social protectionism. Social cohesion based on social security and solidarity was the basis of the European nation-state in the era of industrial society when a compromise was achieved between labour and capital (definitions of this vary from those of T. H. Marshall and Karl Polanyi). With austerity policies in place in many countries, and the declining purchasing power of the middle class, social discontent has fuelled a new wave of anti-European politics, which can be either right- or left-wing. Paul Blokker draws attention to an emerging political critique of capitalism, which he sees as an emerging alternative to the social critique and the artistic critique, to use the terms of analysis of Boltanski and Chiapello (2006) in The New Spirit of Capitalism. His argument is that this new political anti-systemic current goes in the direction of greater critical capacity, especially in the context of an ever more unbalanced relationship between the rulers and the ruled. Whether this sentiment translates into progressive democratic contestation is not so straightforward. One expression of the frustrated appeal to democracy is in the turn to referenda as supposedly a way to give voice to the demos, as recently illustrated by the referendum in Switzerland in 2014 when a narrow majority voted to restrict migration, and earlier in 2005 in France and the Netherlands. The proposed referendum in the UK on British membership of the EU is another example of populist democratic contestation that ultimately devalues the quality of democracy by placing it in the hands of simple majorities. Referenda, which can be settled only by an affirmative or a negative decision, are ill-equipped for the complexity of problems facing modern democracies and a poor substitute for a public sphere based on reasoned deliberation. Referenda too often become a vehicle and catalysis for xenophobic anti-migrant politics, as in the case of the Switzerland, where almost a quarter of the population are immigrants. The demand for social protection thus ultimately undermines the chances of European integration developing social cohesion, leaving only systemic processes of integration to run their course.

The current situation can thus be summed up as one in which three processes collide: the process of integration continues in a systemic and quasi-constitutionalizing direction. A contrary process of differentiation has occurred as a result partly of systemic problems emanating from the first process, but also as a result of the impact of globalization and the unintended consequences of a logic of integration that produces differences. This can be understood in Luhmann’s terms as a difference creating process, since integration necessarily is accompanied by a rising awareness of mutual differences, but the outcome can also be described as one of fragmentation (see also Jessop, 2008). This is evidenced in divisions within Europe and in the emphasis on diversity over unity in European cultural policy (Sassatelli, 2009). Both processes have in turn generated an additional one of increased contestation due to demands for democratization and for social protection. Democracy has now entered the picture, which is no longer one of the transnationalization of the nation-state. Such contestation is not only right-wing, but also left-wing. These are systemic and anti-systemic processes and all are constitutive of the making of European society. European society, in a very specific sense, is emerging from these conflicting processes.

European integration cannot be easily summed up, since there is no master narrative, nor is there a dominant discourse. National appropriations of Europeanization also vary greatly. Few today would claim that Europe is taking on the normative character of a post-national constitutional polity, even if that remains an ideal to be actualized. This is now more likely to be a source of a critique of a political order that can be more accurately described in Hayekian terms as neo-liberal, as argued, for example by Wolfgang Streeck (2011, 2013) and others who claim that European economic integration has entered a new neo-liberal phase in which it clashes with national varieties of capitalism (see, for example, Höpner and Schäfer, 2010). However, if taken too far, this would be a false characterization, as both Christoph Deutschmann and Adrian Favell convincingly argue in their respective contributions to this issue. Most countries and the EU itself are not predominantly neo-liberal, which is a component of a more diverse range of forms of capitalism, as in the theory of ‘varieties of capitalism’ (Hall and Soskice, 2001). The diversity of forms of capitalism should be seen less in national variants than in ideal types, for most countries exhibit degrees of, on the one side, co-ordinated economies and, on the other, liberal market economies. The claim that there is a retrenchment of the welfare state in Europe remains controversial since it a question of what is measured and exactly what is in decline in a given period. Equally problematical is the over-generalized conception of neo-liberalism that ultimately becomes so all-encompassing that everything is an affirmation of the claim.

Yet, there is no denying that neo-liberalism has become a more pervasive aspect of both the national policies and of Europeanization in recent times, as is the case in many parts of the world (see Mirowski and Plehwe, 2009; Peck, 2010). According to Baldwin (2011), Europe and the United States are becoming alike, challenging arguments of the specificity of a European model of social capitalism. But we must not forget that neo-liberalism, like European integration, is not simply one thing that has remained constant but forms a constantly change ensemble of ideas, discourses and practices. So-called austerity policies are only one expression of this, and, as discussed by Noëlle Burgi in this issue, they have anomic consequences by which economic and political crisis leads to a social crisis. Whether or not there has been a retrenchment of the welfare state, there has certainly been a shift in the direction of neo-liberal governance (Rose, 1999) and, although this does not necessarily imply retrenchment, it does point clearly in the direction of the individualization of risk and responsibility. As Yasemin Soysal as argued, what has changed is the tie between redistribution and solidarity bringing about a normalization of the market economy into cultural, political and social sites (Soysal, 2012). This perspective on neo-liberalism is reflected in Noëlle Burgi’s article. However, it is also plausible to argue that the Hayekian order – conceived narrowly as economic policy – has at least in part collapsed as a hegemonic project, as Christoph Deutschmann argues (see also Crouch, 2011). Whether or not neo-liberalism is the right term to describe the convulsions of current trends, the problem of low-growth, post-industrial economies still remains as does the internal systemic crisis of capitalism.

It should also be considered that today there are social and political expectations that were not present in the earlier decades. Important in this regard are new demands for democracy and probably too expectations for personal and collective wealth that, if realized, would be unsustainable fiscally and environmentally. The EU was not founded to make democracy possible, but it has become embroiled in democratization, as discussed by Daniel Innerarity and William Outhwaite in their respective contributions to this issue. Democracy was very far from the vision of European integration in its formative phase. This was an era of state planning that saw a higher purpose beyond democracy, which in the political imagination of this period was very limited and nationally circumscribed, aside from the Euro-federal alternative. Historically it has been the case that increased expectations in times of decline fuel discontent, which has been at the root of many revolutions. The post-Second World War decades were a time when capitalism, coupled with the centrally planned state, seemed to offer the best way forward. The radical critique of democratic capitalism was a later development of the 1970s and only today has come to target the EU, though it lacks a transformative capacity (see Castells, 2012). This too was the background for the neo-liberal critique which apparently gained the upper hand by the 1980s. It may then be the case today that the very success of European integration in increasing prosperity and in advancing the threshold of democratic legitimation has now come to experience a level of critique which it had not previously had to contend with. As identified by Paul Blokker in this issue, the most salient aspect of this is the search for forms of commonality beyond those of the fragmentation resulting from neo-liberal capitalism. However, it does appear to be the case that the neo-liberal critique, which gained ascendancy in the 1980s, has lost its political supremacy today, thus opening the ground for a new political imaginary.

It is undeniable that there is now a crisis quite different from earlier ones and from the older critiques of late capitalism. It has been widely recognized in recent literature that there is a pervasive crisis in the institutional design of the EU with monetary union without a sufficiently strong level of political union and no safeguards against debt default. Due to the weakness of the EU’s political capacity, the problem of debt is effectively nationalized. In this issue, Rubén Lo Voulo explores some of the similarities with Latin American economies in the past and notes the failure to learn a number of important lessons as regards finance-led growth. Capitalism is not only a system of production, but also depends on a complex system of debts and credits. The very conception of money itself was never thought through in the creation of a common currency that has now become one of the most divisive forces in modern Europe. It is undoubtedly a tragic milestone in the history of modern Europe that the first common medium became the chief source of division. However, this is not necessarily due to the common currency in itself as to the previously discussed contradictions between integration and differentiation. After all, despite the problems of the Euro, there is little desire for those countries, such as Greece and Ireland, the worst affected, to leave the Eurozone. One of the main problems that the systemic contradiction of monetary union without political union produces is a counter-movement that cannot be so easily characterized in Polanyian terms as a demand for social protection to counteract the corrosive forces of market liberalization. The naïve faith in democratic socialism that inspired Polanyi’s critique of the market presupposed the national state. But with the complex apparatus of national and supranational orders of governance within the EU, it is much more complicated and the national state in the Eurozone does not control its own currency, thus weakening the capacity of the national state as a provider of social protection. For the EU to create greater social justice, it would need to do something that would be profoundly anti-democratic, namely the creation of a European supra-state to equalize debt burden. But this would not be politically possible, nor would it be democratic, however much it may be rational. Indeed, in this instance, calls for greater democracy run counter to demands for greater social protectionism. This lack of confluence between democracy and social protection makes all the more difficult the articulation of a new European political imaginary.

The themes of crisis and critique are central to the analysis of the current situation, as Patrick O’Mahony argues in this issue. Against the inclination of the conservative critique of modernity to attribute to critique ‘pathogenesis’, another tradition would see the relation as inverted, in that critique follows from the onset of a crisis and with normative potential for the learning capacity of society. As Habermas argued in 1973 in Legitimation Crisis, the onset of a crisis is connected with a transformation in the subject. Critique arises with recognition of an objective crisis that the subject seeks to overcome. The current situation is a very different one from the 1970s, but one of the key challenges remains, namely the task of reconciling democracy and capitalism. The context of the nation-state, which Habermas still took for granted in 1972, is no longer the container for either democracy or capitalism. The challenge today is greater in democratizing a political order that has escaped all hitherto existing conceptions of democracy and, paradoxically, further efforts to democratize the EU may produce the opposite result, especially when there is the application of democratic institutions of the nation-state to the level of transnational governance. The task of democratizing the EU, especially the key institutions such as the European Central Bank, remains but it is also a problem of establishing agreement on which elements of democracy pertain to transnational governance and which are pertinent to the national and regional levels. Yet, one should not conclude that the EU is going to collapse. Instead, from a social theoretical perspective, one should see the current crisis in terms of the ‘positive’ – or ‘disclosing’ – as opposed to ‘negative’ operations of critique, as both Patrick O’Mahony and Paul Blokker argue. Thus, what began as a crisis in the financial system becomes through its effects a crisis in the social and political order, transforming our very understanding of territory, jurisdiction, democracy, citizenship and governance, giving rise to new cultural models of European society leading in turn to the widening of the moral and political horizons.

For this reason, it is important that social theory does not lose sight of the possibility of a theory of society. The idea of society today can no longer be conceived as a functional system underpinned by a foundational national ethos or demos; it must instead be seen – as both Klaus Eder and Patrick O’ Mahony recognize – in terms of particular kinds of self-understanding and normative claim-making in the context of democratically constituted frameworks (see also Kantner, 2006). Critique is central to this conception of the social as a reflexive and transformation process of self-creation. It is only in this sense that the notion of peoplehood can be a meaningful term.

The concepts of crisis and critique do not mean that European integration has failed. It has been one of the political success stories of the last century. A war within Europe is now more or less impossible. One complication is of course that Russia is now lurching towards war with Ukraine over its pro-EU stance. There the costs of democratization are high. But we must not lose sight of the fact that more than five decades of European integration have delivered peace and prosperity to much of Europe. The Euro-crisis and financial crisis of 2008–2010 are a major setback, as analysed by Christoph Deutschmann in this issue. There are, however, no indications of a systemic collapse, despite the spectre of a Greek or Spanish default. In many ways crisis is the normal condition of capitalism, as Marx and Schumpeter recognized. What we are experiencing might thus be seen as the normal condition of crisis-ridden capitalism. The formative period of European integration was certainly exceptional. This was based on industrial growth economies, full employment and Fordist capitalism, on the one hand, and, on the other, expanding welfare states producing what has been termed democratic capitalism (see Bowles and Gintis, 1986). Today in many respects it is less a crisis of capitalism than a crisis of democracy. However, this would be to underestimate the seriousness of the current crisis as a crisis of capitalism, for instance, the downward spiral of interest rates of 0.5% is clearly something historically unprecedented as is, despite some signs of recovery, declining growth.

European integration today needs to be built on new foundations. Where it has failed was in building a viable social order, as opposed to one of market integration. Certainly great strides forward have been made in the area of mobility rights, but there is not much more, other than in civil liberties (anti-discrimination, for instance) and in environmental policies. While it is incorrect to argue that there is a decline in rights, even if there is not an expansion, and that this might be explained by neo-liberalism, it is nonetheless the case that a rights-based regime is too slim a basis for solidarity and, moreover, mobility is also not a sufficient basis for a European society to emerge out of its regional and national components.

It is not clear what the way forward is. The question of a social model of capitalism is one of the key questions facing European society, which is in danger of being shaped in the image of either the market or the state and in which neo-liberalism is, if not in theory but in practice, the dominant element (see Offe, 2003). However, the notion of social capitalism may be too much influenced by the idea of democratic capitalism. There is no going back to the post-Second World War era that came to an end in the 1970s. The European imagination needs to move onwards and to find alternatives to neo-liberal thinking that dominated the last decades of the twentieth century. A genuinely critical social theory of Europe will also need to be more than a critique of neo-liberalism, since the charge of market liberalization neither explains the present predicament nor offers a way out. As Adrian Favell has also argued in this issue, not all aspects of European integration can be accounted for in terms of neo-liberalism, which as argued above, is one dimension of a more mixed and volatile situation.

It is also no longer self-evident that the simple appeal to a democratic self-constitution will produce the answer. This Habermasian normative vision is forced to presuppose what it needs to create, namely, a European people. The absence of a substantive notion of a European people is a major problem for any normative vision of Europe. This does not mean that nation-states can rely unproblematically on such substantive or foundational notions of a people, but the comfortable illusion of the national state is still a powerful force. From a sociological perspective, as explored by Klaus Eder in this issue, it is possible to see the elements of a European society in the making. To speak of a European society is not without difficulty. However, as noted above, it has a certain reality if we bear in mind the sociological approach from Durkheim onwards that sees the social as an emergent reality. It is not reducible to one element, in this case, to either the market or the state – these being the two main currents of Europeanization. It can also be stated that to speak of a national society is also not without difficulty – as is vividly reflected in the Scottish and Catalonian separatist movements that seriously challenge the idea of a unitary British or Spanish society. But these are only the more dramatic examples of a more general trend towards the pluralization of the social. The crisis of European integration is most visible as a crisis of national societies, since the major divisions are now within countries than between countries or between a given country and the EU.

The field of European integration is now coming increasingly to be shaped around tensions relating to capitalism and democracy. The normative stakes could be characterized as between a Hayekian Europe of market liberalism versus one of social protectionism. But this would be too simple. The place and role of democracy force a different perspective, which can be characterized as a choice between a minimal model of European integration and a more pervasive one in which collective learning will emerge from the debris of the current crisis. This is indeed closer to Habermas’ idea of postnational democracy than either the idea of a minimal or maximal model of Europe, despite the increasingly questioning attitude in his recent work (2009, 2012). Notwithstanding the paradox of presupposing what is to be created, it is evident that no solutions can be found without democratic legitimacy; nor can democracy be created by undemocratic means. This leads to the dilemma of seeking to return to national models of democracy or advancing the existing structures of the EU. To claim that neither the national state nor the EU offer democracy as a basis for advancement would not be a helpful solution and an alternative does not appear to be available. As Klaus Eder argues, until national political communities see themselves as just one interest group in a larger configuration, the view will persist that Europe is nothing more than the sum of national demoi. The severity of the current crisis may force that recognition. It is also very likely to be exacerbated by the changing global context in which the post-industrial low-growth economies of Europe are becoming increasingly sidelined. A backward glance of the course of European integration over the past five decades or so reveals that there is nothing constant in it and, on that assumption of the absence of path dependency, it is open to new definitions. This may be a moment of opportunity but also of weakness.

One conclusion can be drawn from the current crisis; all European countries are intractably interconnected politically and economically. The weakening of transnational governance and the abandonment of the path to its democratization will not help Europe face the problems that integration brings. These problems inevitably bring with them problems of differentiation and therefore increased contestation is the result. The contributors to this issue are agreed that the moment of crisis offers a space of reflection on the problems such interconnectedness has created and the opportunity for the exploration of alternatives. It remains to be seen what will emerge from this time of crisis.