How Miliband could help Hollande drive Europe forward

http://www.guardian.co.uk/commentisfree/2012/jul/23/miliband-hollande-europe

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Ed Miliband, Douglas Alexander and other Labour officials go to see François Hollande on Tuesday. Hollande, a typical party politician, has a good network of friends in European left parties at the moment. Sadly, none are in government. Hollande looks out on conservative prime ministers in Spain, Italy, Germany and, of course, Britain. The only exception is Belgium, but there the French-speaking socialist prime minister, Elio di Rupo, is barely <em>primus inter pares </em>in the carefully equilibrated federal system of Belgian government.

Hollande made an early point of receiving German Social Democratic party leaders in Paris, though on current opinion polls the chance of a clear social democratic victory in the German elections in September 2013 look slim. As Olaf Cramme of centre-left thinktank the Policy Network has noted, opinion polls in Germany have not varied in 18 months. In the past, Germans have given Christian Democratic Union leaders like Konrad Adenauer and Helmut Kohl very long periods in office; Angela Merkel, who has been chancellor for just seven years, may benefit from the same longevity.

So the focus is on the European centre-left to shape a new politics for the 21st century. The industrial blue-collar trade-unionised working class which was the bedrock of social democracy between circa 1930 and 1990 has shrunk to the point of disappearance. In the 1920s the Commons held an inquiry into the shortage of domestic servants in Britain. Then, as now, MPs looked backwards, not to the future. They did not notice that the rise of a consuming Fordist working class was altering all social and political relations. Now the workers have gone and the nannies are back.

Hollande is facing a major early crisis over the shut-down of a giant Peugeot factory at Aulnay; 8,000 jobs are at risk as Peugeot is still family-owned and has not invested in new models or new production sites outside France. England's Asian-owned car factories are going great guns but cars, like other high-worth industrial products, are made by robots, not workers.

So Miliband and Hollande are right to focus on youth unemployment, which is a major problem in both countries. France and Britain are awash with graduates without jobs, or eking out a miserable existence as interns. Can the French left in power and the British left hoping to return to power find an answer to their disfunctioning labour markets, especially for young school and university leavers?

Another problem is Europe. The French media are giving more and more space to the growing view across the Channel that Britain may be edging towards the exit door of the European Union. Hollande's advisers in the Elysee follow Tory politics closely. They are alarmed at Cameron's R&R – repatriation and referendum – policy on Europe. Cameron put into play the idea of referendum in mid-July in both newspaper interviews and in the Commons. This was followed by William Hague launching a Foreign Office-led 18-month project inviting everyone to write in with all the things they do not like about Europe, and to list the powers or competences that Britain would like to see repatriated. Cameron and Hague are frightened of the rise of Ukip. Peter Kellner of YouGov told the Fabian summer conference that Ukip could well emerge as the single biggest party in the June 2014 elections. With 20-plus MEPS on big salaries, mammoth expenses and allowances and Europe-financed aides, Ukip could field candidates in every Tory seat in 2015 and steal enough votes to prevent a Conservative majority even if the Liberal Democrats fade.

But the R&R talk – especially about a referendum in Britain – worries Paris. The French and other Europeans may find small concessions to make to Cameron, but as Hollande's key European adviser told me in the Elysee recently, while they may be up for a Europe at various speeds they cannot concede a two-rulebook European Union with one rulebook for British firms and banks and one for all the other countries in the single market.

Labour has its own problems over Europe, not the least its core vote hostility to those arriving from new EU member states competing for fewer and fewer low-pay jobs, social housing and school places. The response should be to create more firms to offer jobs, build social housing again after a 20-year moratorium and invest in childcare and early-age schooling.

But Labour will not make friends in Paris or elsewhere in Europe by adopting its own light version of Cameron's R&R policy. Repatriation is an ugly Tory metaphor dating back to Powellite years or the Monday Club in the 1980s with its repatriation committee supported by young rightwing Tories who are now MPs in the Commons. A referendum that could lead to Britain leaving the EU would dry up investment and global status for Britain overnight.

Labour should fashion its own R&R policy – reform of the EU institutions and rebalancing of European economics in favour of growth, jobs and a focus on salaries and wages, not rentier income. Right now all the focus is on the eurozone crisis and the need for less austerity and more growth. But the EU institutions – a 27-strong commission that is far too big, a European parliament disconnected from national parliaments, and three EU presidents (commission, council and parliament) and a high representative – need substantial slimming down and refocusing to make them fit for purpose.

A centre-left R&R (reform and rebalancing) project for Europe should be developed to counter Cameron's dangerous and isolationist repatriation and referendum politics. Winning Hollande's engagement for a serious examination of reforming the EU, together with rebalancing Euronomics, would show Miliband setting the agenda on this important policy area.