THE EUROPEAN INTEGRATION PROJECT, YOUNG PEOPLE AND THE

EURO CRISIS:

Material conditions, ideology and disintegrative tendencies

Johan Ekman

Helsingin Yliopisto

Valtiotieteellinen Tiedekunta

Talous- ja sosiaalihistoria

Pro gradu tutkielma

Maaliskuu 2020

ii

Tiedekunta – Fakultet – Faculty

Valtiotieteellinen tiedekunta

Koulutusohjelma – Utbildingsprogram – Degree Programme

Yhteiskunnallisen muutoksen maisteriohjelma

Tekijä – Författare – Author

Johan Gabriel Ekman

Työn nimi – Arbetets titel – Title

The European Integration Project, Young People and the Euro Crisis: Material Conditions, Ideology and Disintegrative Tendencies

Oppiaine/Opintosuunta – Läroämne/Studieinriktning – Subject/Study track

Talous- ja sosiaalihistoria

Työn laji – Arbetets art – Level

Pro gradu tutkielma

Aika – Datum – Month and year

Sivumäärä – Sidoantal – Number of pages

Tiivistelmä – Referat – Abstract

This thesis addresses the question of disintegrative tendencies that the European integration project has faced

after the Euro Crisis of 2008-09, with reference to EU youth policy. It analyses the effectiveness of EU youth

policy in relation to how well aspirations for high employment rates and better social conditions were met in the

context of the Euro Crisis. It engages with theoretical approaches on the origins of the integration project, and

argues for the benefits of a critical political economy approach for better understanding how young people have

been affected by its developments after the adoption of the Maastricht Treaty. It argues that disintegrative

tendencies increased because of rigid, austerity emphasizing policies adapted during the crisis in the southern

eurozone, and that these policies derived from how the integration project had been configured to fit an epoch of

capitalism conditioned by neoliberal ideology. The thesis shows how youth policies in the EU became part and

parcel of the Lisbon Agenda that had as its supreme objective to structurally reform the economies of member

states to become more competitive through flexible labour markets and leaner welfare states, which weakened

social citizenship norms. In the context of the Euro Crisis, a significant restructuring of the political economy of the

crisis countries took place, and this had serious effects on young people’s lives. The reforms that were conditional

to the bailouts of Southern eurozone crisis countries aimed at calming markets and guaranteeing price stability,

as well as to further entrench marketization in accordance with the objectives of the integration project as spelled

out in the Maastricht Treaty and the Lisbon Strategy. A discrepancy between targets set and objectives of EU-

youth policy is revealed, as unemployment rose. The thesis also analyses how these policies were debated in the

European Parliament 2009-2012, showing that young people rarely figure in the debates in 2009-10, after which

the topic gains prominence in the debate. However, policy makers across the board continue to argue for a policy

of structural reforms and a more flexible labour market.

Avainsanat – Nyckelord – Keywords

Euro Crisis, European Union, European Integration, Young People, Critical Political Economy

Ohjaaja tai ohjaajat – Handledare – Supervisor or supervisors

Jari Eloranta

Säilytyspaikka – Förvaringställe – Where deposited

Muita tietoja – Övriga uppgifter – Additional information

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“Pessimismo dell’intelligenza, ottimismo della volontà”

“Pessimism of the intellect, optimism of the mind”

- Antonio Gramsci

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Contents

1. Introduction 1

1.2. Scope and Structure 3

2. Theoretical Premises, Methods and Data 5

2.1. Critical Theory 5

2.2. Qualitative Methods 8

2.3. Application of Content-, Discourse- and Policy Analysis to the Study 10

3. European Integration: History, Theory and Concepts 17

3.1. From Neo-Functionalism to Liberal Intergovernmentalism 17

3.2. Critical Political Economy: An Alternative to Traditional Theories 21

3.2.1. Hegemony and Crisis: the Essential Gramscian Dimension 21

3.2.2. Socio-Economic Epochs: Fordism to post-Fordism 24

3.3.3. Financialization and Neoliberalism 25

3.3.4. The Second Integration Project and German Led Ordoliberalism 27

3.4. Conclusions 31

4. EU Youth Policy in Context 32

4.1. Introduction 32

4.2. Towards an EU Youth Policy 33

4.3. Moving Up the Agenda: European Youth Pact & Europe 2020 36

4.4. Conclusions 41

5. Young People, Youth Policy And Crisis: A Testing Time 42

5.1. The Eurozone Crisis 42

5.2. EU Youth Policy, the South of the Eurozone and the Crisis 46

5.3. Conclusions 56

6. The Crisis and Young People in European Parliamentary Debate 2009-2012 57

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6.1. Introduction 57

6.2. The Debate on the Tenth Anniversary of the Euro 58

6.3. The Years 2009-2010 62

6.3.1 The Global Financial Crisis and the European Recovery Plan 62

6.3.3. Elections to the EP: “Everything Has Changed But I am Staying” 67

6.4. The Years 2011-2012 74

6.4.1. The Crisis Deepens 74

6.4. Young People on the Agenda: “A need to make sacrifices” 78

6.3. Conclusions 82

7. Conclusions and Suggestions for Further Research 83

7.1. Youth Policy and Post-Fordism 83

7.2. Young People and the Euro crisis 84

7.3. Young people and Ideological Discourse Formation in the European Parliament 2009-2012 86

7.4. The EU’s Organic Crisis 88

7.5. Suggestions for Further Research 89

Sources 91

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List of Abbreviations

ALDE (Alliance of Liberals and Democrats)

Commission (European Commission)

Council (European Council)

ECR (European Conservatives and Reformists)

EP (European Parliament)

EPP (European Peoples Party)

EU (European Union)

GUE/NGL (Confederal Group of the European United Left/Nordic Green Left)

IPE (International Political Economy)

MoU (Memorandum of Understanding)

NEET (Young Person Not in Education, Employment or Training)

OMC (Open Method of Coordination)

PES (Party of European Socialists)

S&D (Socialists and Democrats)

SEA (Single European Act)

YFJ (European Youth Forum)

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Figures and Tables

Table 1: Analytical framework 16 Figure 1: A tweet by Donald Tusk 42 Table 2: Summary of economic reforms in the Southern periphery of the eurozone 50 Figure 2: Unemployment levels in Greece, Italy, Portugal, Spain, Euro-area and EU28 52 Figure 3. Youth unemployment levels in Greece, Italy, Portugal, Spain, the EU28 and the Euro-area 54 Figure 4: Percentage of 18-30 year olds who felt

marginalized due to the crisis 55

Figure 5. Percentage of young people who have

heard of the Youth Guarantee 84

1

1. INTRODUCTION

This thesis addresses the question of disintegrative tendencies that the European

integration project has faced after the Euro Crisis of 2008-09, with particular

reference to EU youth policy. It analyses the effectiveness of EU youth policy in

relation to how well aspirations for high employment rates and social conditions

were met, particularly in the context of the Euro Crisis. The premise is that EU-

youth policies provide a case from which broader lessons regarding the future of

the European integration projects durability can be drawn.

I was actively involved in the shaping of youth policy before and after the

crisis. Those years were crucial for the integration project as they were an important

moment for a continuous effort to reshape the political economy of the EU in a time

when the crisis shed light on numerous contradictions inherent in the integration

project. During these years, in a world where globalization – which I here use as a

reference to a deregulation of capital movements and the fast spread of new

technologies - and stiff competition with non-western economies was a fact nobody

in serious policy making could escape, youth also seemed to at least become part of

the policy equation on how to “relaunch” Europe.

This meant that youth policies were developed as a part of the “Lisbon

Agenda”, launched in the beginning of the millennia. However, despite it’s

expressed aspirations, I will show that youth policies that addressed employment

and social welfare did not achieve their goals and that the principal reasons for this

did not lay in any inherent economic determinism: instead, this was due to political

choices, and by altering these choices a different outcome would have been

possible to achieve. This was painfully evident when the crisis hit in 2008-09,

especially in the south of the eurozone, where the social conditions of young people

significantly worsened due to these choices. This has prompted me to critically

assess both how youth policies were shaped by understanding them in a critical

international political economy (IPE) context, and how these policies were

ideologically justified, as my underlying hypothesis is that the answer to why these

policies were implemented lie in how the EU has created economic structures that

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to a high degree primarily serve interests of transnational financial capital. To my

knowledge, this has not been systematically done previously.

Youth policies had become, like all other social policy, subordinated to the

imperatives of these economic structures. This meant that while the essential

Lisbon Strategy for Growth and Jobs increased the importance of youth policies at

the top level of EU decision-making, the social targets of these policies were not

effectively realized. More specifically, the assumption is that as European youth

policy had become an integral part of the Lisbon Agenda, it restricted the de facto

policy choices available, and subordinated them to the imperatives of an economic

agenda set by capitalist pressures and power political interest led by Germany.

This is visible in that the policies which are designated to empower young

people through employment, increased social well-being and opportunities of self-

development, are not materialized at the national level when their economies

needed to be bailed out after the Euro Crisis as cross border solidarity was not

invoked through income transfers from one state to another, which would have

allowed for more expansionist and socially just policies. This is especially apparent

in the southern states of the eurozone that were subjected to harsh austerity as a

condition for bailouts when they faced the crisis. Instead, the crisis was used to

further deepen the integration of young people into the realities of “Lisbon Europe”

which emphasized the need for flexible labour markets, tougher competition and

the consequent withering of the welfare states.

Whilst policy makers often claimed an inherent “necessity” in pursuing

reforms, this was in fact an ideological justification for policies that deepened the

predominance of high finance ahead of commitments to quality jobs and social

welfare. This follows from a necessity to ideologically be able to smooth the

contradictions arising from the situation faced. These contradictions I conclude,

increased the same “disintegrative tendencies” in the EU (Patomäki, 2017) that

were later dramatically exemplified in the Brexit vote in the UK and the increasing

popularity of nationalist right-wing parties, because the ideological cement gluing

together the project was not any more sufficient to conceal discrepancies in what

was promised and what was realized. This also applied to the young generation that

had experienced deeper integration as part of their life experience and were

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generally supportive of it, thus exposing the integration project to alternative

political projects questioning its foundations.

These hypotheses serve as postulates for the interpretative qualitative research

framework that is applied in the study. The questions that guide the research are

designed to test the hypotheses in a critical political economy framework that

departs from the notion that the mode of regulation of the economy forms the

structure within which political action and ideological justification take place.

These questions are how do EU youth policy relate to the mode of regulation in the

EU? How well are these goals met in the context of the Euro Crisis 2009-2012 in

the southern eurozone? How do policy makers in key debates in the European

Parliament justify crisis policies in relation to young people in the southern

eurozone?

1.2. Scope and Structure

What I seek to do is to first place EU youth policy in a wider context of European

integration through connecting the main youth policy instruments to the finance

driven regulation regime that frames the integration project. While this on the one

hand provides an opportunity to shed light on the effectiveness of the social- and

employment targets EU youth policy has set itself, it also provides an opportunity

to discuss a wider problematique. This is that as EU youth policy is a field that has

not to my knowledge been researched in relation to testing critical IPE theory, it

poses interesting questions for the understanding of hegemonic orders and the

reproduction of power relations in a specific crisis context. The youth policy

perspective is in this regard important to explore further because it concerns a

generation that has grown up in a world where the integration project in its current

form had been the prevailing norm until the crisis, and this has potentially

significant consequences for the future of the integration project as such.

Chapter two explains the theoretical premises and methodology of the

study. It discusses why a qualitative, interpretative approach has been used and why

content, policy and discourse analysis have been found suitable to answer the

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research questions at hand. The chapter also explains what system of coding and

which categories are used to operationalize the research and make it replicable.

In the third chapter, the case for a critical IPE-perspective to be applied for

understanding the organic crisis of the EU is made. This is done through contrasting

mainstream theories of integration with a critical IPE perspective, arguing for a

Gramscian- and Regulation theory approach to be applied. This chapter also

discusses main concepts such as hegemony, crisis, Fordism and post-Fordism,

ordoliberalism and neoliberalism, which are utilized in the study.

After this, the thesis proceeds in chapter 4 to analyse the development of EU

youth policy in a post-Fordist context from the White Paper on Youth via the Youth

Pact to the Europe 2020 Agenda and the Youth Strategy. It describes how youth

policy was developed to fit the framework of the Lisbon Strategy, and how youth

policy became more prominent on the policy agenda of the EU as part of acting

upon the recommendations of the influential Sapir Report on the European

economy.

In chapter 5 we move to the Euro Crisis in order to illustrate how targets of

youth policy fared when measured against events in the crisis countries of the

Southern eurozone. This is done through a mapping out of the situation in the crisis

countries in this acute moment of crisis, illustrating the economic reality playing

out, with particular attention given to the measures that were undertaken in Greece,

Portugal, Italy and Spain and outlined in documents agreed with creditors as

conditions for bailouts. This is done with a particular focus on young people. The

case of southern Europe is chosen as the situation there serves well to illustrate

structural power relations in the EU, and how these are manifest in a crisis context.

In chapter 6, the discourse formation at political level in the European Parliament

(EP) 2009-2012 is analysed to understand how discourse changes in the Parliament

over time, and how politicians justify their policies. There is a particular focus on

young people, but this is considered in relation to the broader policy deliberations

on the crisis.

Chapter 7 then forms the conclusions of the study, reflects on the challenges

met, and makes suggestions for further research.

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Finally, a few qualifications are necessary: I do not seek to give a complete

analysis of all the complex causes of the global financial crisis or the Euro Crisis

and the link between American and European finance is not dealt with in depth.

This is because the transatlantic link, which undoubtedly is significant for a deeper

understanding of the European predicament, needs more space to be adequately

dealt with.

Further I do not account for the internal developments and problems relating to

for example corruption – economic, social or political – of the southern crisis

countries, which is an important aspect but needs to be confined to a different

study. The historical development of institutions, a study on organized crime

(especially in the case of Italy) and dynamics of party-political contestations would

be too superficially treated in this work due to limitations of space. Further, this is

not a comparative study between states, but a study of European Union economic

structures and their ideological justifications.

Also, the methodology chosen poses its own restrictions as no causal outcome

claims can be made on the basis of the research. A chapter including a quantitative

analysis could further strengthen the work to allow for more numerical evidence in

tracking the occurrence of youth related topics in the debates. Alas, the limited

space here means this dimension needs to be confined to another, expanded study.

However, with these limitations in mind, what I hope to do is to shed

comprehensive light on the power structures inherent in the configuration of the

European integration project in its current form, and the limitations of the finance

led growth model applied in the EU. Further, the empirical evidence shows that the

consequences of these choices are very real in terms of how they have limited the

life opportunities of a generation of young Europeans. This I hope will contribute to

deepen our knowledge of complex and still fiercely debated events as a means to

overcome these challenges and thus create a more socially sustainable Europe.

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2. THEORETICAL PREMISES, METHODS AND DATA

2.1.Critical Theory

History is not treated here as a succession of events smoothly following one

another, but rather, in accordance with Fernand Braudel (1958), as structural

wholes within which practices and events are repeated in more or less a stable

mode: these structures are characterized by contradictions as well as stable internal

logics. These practices can, however also break down in moments of crisis and give

rise to new historical structures. This leads to the essential Gramscian moment of

critical theory, which highlights the role of “organic intellectuals” (Gramsci, 1975:

Q4 §49) in upholding the ideological justifications of a hegemonic order. This

hegemony is articulated through a “vision” that can is formulated in a way as to

neutralize antagonisms that can rise to challenge it (Laclau, 1977: p.161). Ideology

here is seen as a phenomenon that is multi-levelled and that contains a number of

discursive forms that forms what Gramsci has called the “common sense”, designed

to modify and mould opinion in a certain direction (Gramsci: Q1 §65). When the

“organic intellectuals” are no longer capable of convincingly leading society in the

desired political direction, the order is questioned, leading to a moment of crisis.

Critical IPE differs from a positivist approach to social sciences, attempting

to reach beyond the traditional conventions of Liberalism, Realism and

deterministic forms of Marxism (Gill, 2008: pp.11-12). A Gramscian critical IPE

approach is concerned with analysing social reality holistically and dialectically in

a specific historical context: it believes social scientific explanations need not to be

restricted to the positivist view that reality has to correspond to our sensory

experiences, but instead should be explained through understanding real but

invisible structures that can change due to human agency (Gill 2008: p.12). This

was also the point that Karl Marx made when he observed that men make their own

history, but that they do not choose the conditions under which they make it (Marx,

1852). I have selected this approach as it allows for the inclusion of ideology,

7

hegemony and the power of capital in my analysis of youth policy “under

conditions that are shaped by the structures, institutions and processes of neo-liberal

capitalism” (Gill 2008: p.12).

Robert W. Cox applied the Gramscian concept of hegemony to the international

sphere, arguing that for a hegemonic international system to be held intact “ideas

and material conditions are always bound together, mutually influencing one

another, and not reducible one to the other” (Cox, 1983: p.169). Otherwise, the

legitimacy of those that rule is questioned. This, in turn, feeds “Caesarian”

moments, when the old forces struggle and new political alternatives are

challenging for power (Gramsci, Q4 §6)). I argue that this tendency has been

accentuated since 2008 when, following the subprime market crisis in the United

States and the subsequent Euro Crisis, the questioning of the European integration

project started gaining pace also among younger people, and that EU youth policies

were not able to address the problems young poeple were facing. Those who grew

into adulthood in the period of deeper integration that followed the signing of the

Maastricht treaty, also referred to as “millennials”, born between 1982 and 2000

(Howe & Strauss, 2000) were exposed to contradictions emerging between material

reality and ideological justifications of the integration project.

These millennials had since childhood lived in a Europe picking up speed by

the “second phase” of EU-integration that has been characterized by a geographical

widening and the deepening of economic ties in the EU: thus, their life experience

was marked by the implications of a reality first leading up to and then punctuated

by the crisis of 2008.

Empirical observations indicate that young people that fell within the scope of

youth policy indeed generally seem to have a more positive attitude towards the EU

than their elders, but there were after the crisis signs that the crisis had an adverse

effect to these attitudes (Gomez, 2014). A sign of this is perhaps that the powerful

European Round Table of Industrialists (ERTI, 2019) felt the need to launch an

initiative to promote European integration among young people, eagerly stressing

that the EU has “benefitted its citizens economically socially, regardless of the

challenges” (ibid.). However, with for example youth unemployment rates

staggeringly high in the eurozone, key social citizenship norms, as summarized by

8

Walter Korpi (1989), based on the right to employment and welfare state provisions

as guaranteed through political intervention designed to limit market power, were

being undermined, contributing to the erosion of the material base that is essential

for hegemonic leadership to function effectively.

Simultaneously, the hovering question above the continent during the past

decade of this crisis management has been what the mid- and long-term

consequences are, as the integration project is undergoing an “organic crisis”, a

concept used by Gramsci to describe a situation in which the social consensus

comes under strain (Gramsci Q4, §49).

Gramsci often stated that there is a need for “pessimism of the intellect,

optimism of the mind”. The purpose here is, following that maxim, not to exclude

any possibility of agency that can lead to change. However, recognizing the

difficulty in the mobilization of transnational agency capable of addressing “design

flaws” in the European Monetary Union (EMU) in order to solve the current

problems of an economic structure generating speculative bubbles, asymmetric

shocks, a “doom-loop” between tendencies towards financial and public fiscal

crisis, inadequate demand, inequality, and social and ecological unsustainability

(Krugman, 2012; de Grauwe, 2013; Stockhammer, 2004) is important in order to

find solutions for attaining more sustainable policies.

2.2.Qualitative Methods

The research of the thesis is conducted using qualitative research methods as they

provide suitable tools for understanding whether – and how – youth policy aims in

practice contradict with the overall neoliberal policy framework that defines the

integration project in a post-Fordist epoch. Thus, the aim is not to show causal

relationships between policies and their impact on young people. Rather, the

objective is to place youth policy in a wider context through interpreting it in

relation to power structures inherent in the integration project.

Qualitative research can broadly be defined as being “a naturalistic,

interpretative approach concerned with understanding the meanings which people

9

attach to phenomena (actions, decisions, beliefs, values etc.) within their social

worlds” (Snape & Spencer, 2003: p.3.) Further, the qualitative approach has been

associated with a viewing of social life being comprehended in terms of processes

instead of static terms and as a method that provides a holistic perspective on the

questions of study within explained contexts, while the researcher uses personal

insights while taking non- judgemental stances (ibid.: p.4). In accordance with the

aim of the study – that is to understand events unfolding in a historical context –

qualitative methods are useful as “They are particularly well suited to exploring

issues that hold some complexity and to studying processes that occur over time”

(ibid.).

Another debate that needs to briefly be considered is that of epistemology, that

is, understanding “how” it is possible to understand and know about the world. In

this study, an inductive approach is used which means that a conclusion is reached

through stitching together a picture of patterns and associations that arise from

observation (ibid.: p.14). This is in contrast to a deductive approach where the

conclusions are arrived at after gathering evidence that proves the presented

conclusion (ibid.).

The thesis is also based on an interpretivist stance. This interpretivism follows a

Weberian school of thought that holds that interpretation and observation are both

fundamental for understanding the social world (Ibid.: p.7). Characteristics of this

approach are that the researcher and the social world impact on each other; facts

and values are not distinct, which also means that findings are influenced by the

researchers values – this means that purely objective findings do not exist; the

social world is not functioning according to law like regularities but is mediated

through human agency (ibid: pp.13-14).

This approach has at least two potential pitfalls. The first relates to the question

of scientific objectivity. It is not enough to state that it is “impossible” to achieve it:

the findings need to have scientific validity despite being filtered through the

researcher’s subjective values. To do this, it is important not to conceal the

interpretative framework which guides the research, which in my case means that I

hold it to be possible to make through political choices that favour those with less

10

economic resources. This, I believe, stands per definition contrary to a view where

events just “unfold” teleologically without the determination of human agency.

The second potential problem is the question of replicability of results. To

achieve the possibility to replicate the research, I have utilized a system of coding

and categorizing the data analysed. Coding and categorizing are essential for

organizing the work and for it to be replicable, which is particularly important as

qualitative analysis always faces the risk of becoming led in such a way as to

produce answers confirming the research questions posed.

2.3. Application of Content-, Discourse- and Policy Analysis to the Study

The thesis utilises three approaches of qualitative analysis: content-, discourse and

policy analysis. Content analysis is, as is discourse analysis, a method in which

texts such as they are formed are analysed, and in which similarities and differences

are sought to form a picture of events (Tuomi & Sarajärvi, 2018: p: 105). Critical

discourse analysis (CDA) is also utilized, as this allows for “elucidating how

discourse is related to other social elements (power, ideologies, institutions, etc.)

and offering a critique of discourse as a way into wider critique of social reality”

through a method of dialectical reasoning (Fairclough, 2014: p.35). Policy analysis

is used to provide answers as to how effective policies are in relation to their set

targets and how the policies relate to the context in which they have been designed

and implemented (Tuomi & Sarajärvi: p.201).

The analysis of the questions at hand departs from the historical materialist

assumption that material reality and ideology exist in a relationship in which the

latter arises from the former and interact dialectically (Gill, 2008: p18). Thus, the

analysis seeks to map out, with reference to the Euro Crisis, how pronounced

policies fared in that context, and how these policies were justified.

Chapter 2 prepares the ground for the subsequent chapters and situates the

Lisbon Agenda within the integration project that was constructed in a post-Fordist

framework of regulation. There, I argue for why a critical political economy

framework can elucidate those blind spots that traditional integration theories

11

struggle to wholly explain the nature of the Euro Crisis and which concepts are

central for understanding it. That chapter is a literature review, where theories are

contrasted with each other, and where the central concepts of the thesis are

introduced and explained. This chapter argues that disintegrative tendencies in the

EU can be understood in the light of a shift to a post-Fordist mode of regulation,

which in itself is not the result of inevitable historical progress, but of political

struggles. A difficult aspect of this approach is to not allow for the theory to guide

the research in such a way as to provide ready-made answers, but to rather be a

toolbox of useful concepts applicable to understanding the problem at hand.

In chapter 3, European youth policy is analysed using the methods of

content and policy analysis. This is done through relating documented EU youth

policy to the Lisbon Strategy (European Council, 2000) and the Sapir Report

(2003) that formed the intellectual basis for the relaunch of the strategy and the

subsequent Europe 2020 agenda. Here, the contradictory nature of the integration

project becomes visible, as it is argued that the stated aims of youth policy in terms

of social citizenship norms such as employment and social welfare is hard to

combine with the post-Fordist economic policy regime that lays as the foundation

of the economic-and employment strategy of the EU. To do this, I have coded the

main youth policy documents such as the White Paper on Youth, the European

Youth Pact and the European Youth Strategy and categorized them thematically as

follows: Labour Market policies; Competition enhancing policy; and Social Policy.

I have compared the targets falling under those headlines to the same categories in

the Lisbon Strategy, Sapir Report as well as policy documents such as the Broad

Economic Guidelines that operationalize the conclusions of the Lisbon Strategy.

From this I have been able to show how youth policies follow the logic of the

“Lisbon approach” to economic- and social policy. This also shows the

contradictory nature of the youth policy goals that emphasize social rights and

employment and the broader economic and social policy of the Lisbon Agenda.

In chapter 4 I have then evaluated how the aims of youth policies fared in

the context of the Euro Crisis in Greece, Portugal, Spain and Italy. The policies and

their implementation were documented in Financial Assistance Programmes and

Memorandums of Understanding (MoU), signed between Portugal, Greece and

Spain and the creditors (the EU, the IMF, the World Bank) as a condition of bail

12

outs. In the case of Italy, the main document is the European Central Bank letter

(Draghi & Trichet, 2011) to the Italian Government, which outlines measures to be

implemented to reassure investors. The reason why the southern countries of the

eurozone are chosen as a geographical focal point is that the adjustments of the

economies as part of the bailout packages illustrate how the economic structures

condition the crisis policies. This combination of harsh structural adjustments

following the ordoliberal blueprint inherent in the eurozone is at odds with how the

crisis is rationalized both in the targets expressed in the Financial Assitance

Programs and MoU:s with the crisis countries, and in youth policy documents.

I have categorized the policies that were implemented according to the

assistance programs as following: policies targeting youth specifically; labour

market policies; and competition enhancing policies. From this, I have been able to

summarize what the policy targets have been generally, and how they relate to the

Lisbon Agenda and EU economic policy. I have then compared these policies to

explicit EU youth policy targets. Further, to understand the effects of these policies,

I have utilized OECD and Eurostat-data on employment, unemployment and nature

of employment of young people. I have also used academic secondary literature,

reliable media resources (the BBC, The Financial Times, the Guardian, the New

York Times) in this chapter do illustrate how the crisis was unfolding.

This chapter shows how targets of youth policy are missed, as austerity

measures and structural reforms override other policy targets. Here, the main

challenge was that mapping out the social reality comprehensively in that many

countries is almost an impossible undertaking with the space and time at hand. I

solved this by restricting the research to a few, relevant macroeconomic indicators

such as general unemployment rates, youth unemployment rates and short term

work that serve to illustrate key aspects of the crisis. Another problem was that

there are undoubtedly nationally specific circumstances that determine how the

crisis hit. However, the fact that in all states a similar change in terms of the

acceleration of precariousness of young people occurred, makes the comparison fit

for the purpose of this study.

Chapter 4 empirically underscores the argument made in chapters two and

three, but it still does not fully explain the discrepancy, as ideological justifications

13

by policy makers also matter. In chapter 5 I have thus moved to an analysis of

Parliamentary debate in the European Parliament (EP) in the years 2009-2012. This

is to understand the role of political agency in terms of ideological justifications of

policy. The purpose is to trace patterns and seek clues as to why a certain

ideological stance is made by different political party families. This is illustrated by

representative quotations that help to stitch a picture of how reality was conceived

and represented by the main political actors in the EP.

According to the European Parliament itself, its plenary debates are “the

high point of the European Parliament’s political activity” and they “represent the

culmination of the legislative work done in committee and in political groups” (EP,

2020) Thus, that forum was an adequate setting for understanding how policy was

rationalized in political debate.

It is self-evident that in an assembly consisting of 751 members, debates

need to be highly structured affairs, and the political groups play an important part

in this, as do the committees. The speakers of the groups and the committees

express the position of a political group, and the committee representatives the

majority opinion of the committee on the topic at hand. Naturally, this does not

mean that diverging opinions do not exist – but the opinion expressed is mandated

by the group/committee. Further, Parliament as a chamber of debate also allows for

views of the Commission and Council to be heard, as much of the legislative work

of the EP is done in connection with those bodies. The European Parliament is,

consequently, an important arena for the ideological framing of policy.

One challenge of this was the vast amount of material available, and

determining which debates were relevant to consider and between which years to

analyse the debates. The time span was then determined so as to allow the material

to be manageable in a one-person research Project, but also as to form a period that

is meaningful and long enough to draw conclusions. The parliamentary debates

held once or twice a month (excluding the month of August) are recorded, and form

thousands of pages of texts. A selection of what to analyse is therefore essential.

This problem was solved by selecting debates directly concerned with the

architecture of the eurozone, the crisis response of the EU, and sessions dedicated

to the southern European crisis countries. Two plenary debates on youth related

14

issues that took place in this period are considered in the analysis, but while they

might express proposals of specific policies, the main focus here is on the debates

that define the overall policies to overcome the crisis. This also allows for an

understanding for when questions specifically important for the young have made it

to the top of the debated policy agenda.

I have limited the analysis to speeches representing a collective will of a

parliamentary group, the Commission or the Council, as these form a synthesis of

political will that represent the collegial and parliamentary practices established and

can thus be said to be representative of a certain actor.

After 2012, parliamentary debates are no longer translated into ad verbatim

reports in English, which makes it impossible to comprehend the transcripts in all

different EU-languages. However, having listened to a sample of debates in audio

format with translation, it seemed motivated to limit the analysis here to the period

2009-2012, as this is when the crisis policy is actively shaped, and when its

ideological justification is forged. The material was then narrowed down to this

time period, after which a representative amount of debates was identified. This

amounted to a total of 38 debates.

I have categorized the interventions according to the actors taking part in the

debate according as to how the they articulate the following: a)What are the

proposed instruments to solve the crisis? b) Are the proposals criticizing the

structures or are they accommodated to fit the structures? c) How are young people

taken into account in the debate?

The chapter shows first how youth questions are largely marginalized in the

period 2009-2010, after which they gain prominence as a subject of debate.

However, the justifications of the policy course taken seems often to run contrary to

what the real material effects of the policies are on the ground. The most critical

voices come from the far right and occasionally from the far left party, while the

centre-left- and right as well as the liberal group are largely in agreement on the

broad lines of policy. Overall, this chapter was the most challenging part of the

study because of the reasons accounted for above. Whilst I believe I have

succeeded in answering the research questions, I have also concluded that a more

15

comprehensive analysis could be made by using quantitative research methods to

manage the vast amount of data.

After chapters 4 and 5, I have moved to the last stage of the research, where I

have been able to reconnect with the original research questions and provide

answers to them. This then forms the basis of my concluding discussion and

suggestions for further research. The research indicates generally that there exists a

discrepancy with the “reality on the ground” and the ideological justifications by

political actors: this discrepancy is most evident in the reluctance to confront the

structural limitations posed by the eurozone, thus confirming that Gramscian

notions of hegemony as an explanatory variable are valid for making sense of

policy choices. Further, in relation to the young people, surprisingly little attention

is paid to this group in the debates analysed, despite the catastrophic levels of

unemployment that are bound to have a severe impact on social cohesion before

2012 and despite young people having been identified as a key group in the

implementation of the follow up to the Lisbon Strategy. It is in these discrepancies

that the seeds of stronger disintegrative tendencies lay.

The analytical framework that was developed for the research and is described in

this chapter is illustrated in table 1.

16

Theory & Methods

Regulation theory, Critical IPE, content analysis, critical discourse analysis, policy analysis, coding, categorizing.

Context European integration in the Lisbon era; Euro Crisis

Data & Texts OECD and Eurostat economic indicators, the Sapir Report, The Lisbon Strategy, Europe 2020, The White Paper on Youth Memorandums of Understanding with crisis countries, Debates in European Parliament

Actors European Commission, European Council, Parliamentarians representing groups in Parliament.

Subjects categorized

Youth Policy; EMU; Crisis response; Crisis countries of southern Europe

Table 1: Analytical framework

17

3. EUROPEAN INTEGRATION: HISTORY, THEORY AND CONCEPTS

The theoretical and historical writings on EU-integration are often overlapping and

the explanations of events are threading on controversial ground (Anderson, 2009:

p.3). But to understand the current predicament of the European integration project

and its discontents, and how this might answer questions on why and how current

crisis tendencies have come about and are affecting EU policy making – such as

youth policy – a theoretical footing is necessary. This chapter will engage with

alternative theoretical approaches on the origins of the integration project, and

argues for the benefits of a critical political economy approach, while placing the

theories in a context of European integration history.

3.1. Neo-functionalism to Liberal Intergovernmentalism

The world that dawned after the devastating war of 1939 - 1945 saw an immediate

change in international power relations, with the US being now the undoubted

superpower, competing about ideological and economic supremacy with the Soviet

Union. In this new global context, European states found themselves in a new

predicament. The US had decisively become the dominant economic power after

the war (Hobsbawm, 1995: p.258) and thus became the state with the means to

intervene in the post war reconstruction efforts of the continent. A key to this

reconstruction, and to the reconciliation of Europe, was, as accounted for by Barry

Eichengreen, to restore German productive capacity through the restoring of

industrial capacity (Eichengreen 2008: pp. 54-59).

This lay in the American interest as its vast economic expansion after the

war was in need of expanding consumer markets, while the ideological rivalry of

the Soviet Union also needed to be countered. Politically, the line that held that

there was a national interest in securing a liberal international economic order

encompassing the whole of Europe had prevailed over more protectionist policies.

18

This had become evident already in 1944, when, at the Bretton Woods conference,

Secretary of State Henry Morgenthau, announced that “non of us has found any

incompatibility between devotion to our own countries and joint action. Indeed, we

have found on the contrary that the only genuine safeguard for our national interest

lies in international cooperation” (Morgenthau, 1944). In his address, he continued

by asserting that “no people – and therefore no government of the people – will

again tolerate prolonged and widespread unemployment” (ibid.). The Marshall

plan, which provided the required money for European reconstruction, was also

conditional on the instalment of a market economy in the receiving countries

(Eichengreen: p.66). Moreover, the Marshall Plan gave strong encouragement to

European integration, as it also required a coordinated European strategy for the use

of these funds, which meant reconciling Germany and France through the

promotion of common institutions, which had the effect of avoiding any French

efforts to cap German production levels (ibid.: p. 69).

These developments encouraged theoretical explanations of the unification

of Europe, and American scholars developed the first of them. The Liberal

evolutionary model of Neofunctionalism became mainly associated with Ernst

Haas, who engaged in developing a pluralist theory of integration (Bache, 2015: pp.

10-11). Neofunctionalists held that a qualitative evolution would lead toward a

unified Europe, in which economic integration drove the process of political

integration in the form of development of the supranational institutions of the

European community (ibid.: p. 11). The claim of Haas was to understand

integration as an “instance of voluntary ‘integration’” where

“the decomposition of old nations can be systemically analyzed within the framework of the evolution of a larger polity – a polity destined, perhaps, to develop into a nation of its own” (Haas, 1958: preface p. 32).

Theoretically, this “evolutionary approach” thus presupposed a logic of the

withering away of the very necessity of the state in the development of a European

capitalist polity. This optimistic prediction was already dealt a severe blow in 1965.

That was when the “empty chair crisis” occurred, when president Charles De

Gaulle of France seemed to manifest with no uncertainty that if a large member

19

state such as France did not wish to advance integration, the process would be

halted (Ryner & Cafruny, 2017: p. 16).

The empty chair crisis gave impetus to Neo-Realist scholarship that saw the

birth of the European Economic Community (ECC) as mainly a solution to

reconcile the rivalry between Germany and France which had led to wars of

devastating effect for not merely Europe but the world as a whole (ibid.: p. 27).

Seen in this light, the peace that ensued World War 2 allowed for a new

geopolitical reality, which enabled the conditions for a supranational arrangement

that would bind the interests of France and Germany together. Alan Milward, a

prominent scholar in the field, has in the important and sophisticated interpretation

The Rescue of the European Nation State (1992), argued that what in fact occurred

after World War 2 was a reconstructing of renewed polities in the countries ravaged

by war, whose stability was further guaranteed through the increase in economic

prosperity that strides toward unification would mean. Thus, by sharing elements of

sovereignty, these western European states that had risked perishing altogether,

were in fact strengthened through supranational cooperation.

These theories seemed, however, to run into difficulties in wholly

explaining particularities of the European case. One reason that makes this

“unidentified political object”, as Jaques Delors called it, difficult to wholly explain

and grasp, is that its institutions are not merely a framework for interstate

cooperation – in fact they contain a strong element of federalism that originates in

ideas developed by Jean Monnet and likeminded cosmopolitan technocrats. The

common agricultural policy, to note a significant policy created in the 1960s, is an

example of that. In the light of present day Europe and its architecture, this streak

of functionalist federalism can thus help to explain also the positioning of the

European Commission that tries, in the words of Commission President Jean-

Claude Juncker in what has, in an echo of US federalism been dubbed the State of

the Union Address, take a role in rendering “this imperfect Union a little more

perfect with each passing day” (Juncker, 2018: p.2). There is, thus, both an element

of federalism and interstate cooperation that need to be taken into account in

seeking to identify the object that Delors struggled to describe. Also, the

development of youth policy, as we will see in the subsequent chapter, has elements

of both supra national and national level decision-making.

20

Notwithstanding the federalist aspirations of the EU, Realism had, however,

correctly brought back the centrality of state power relations to the analysis of the

EU (Ryner & Cafruny 2017: p. 17). This insight has helped to refine the Liberal

Intergovernmentalism developed by Andrew Moravcsik (ibid.). Here, in accordance

with the Liberal tradition in social sciences, economics and politics are put in

strictly separate compartments (Ibid: p. 18), but while the economy is seen as

naturally tilting towards harmony, the power of the state is not discounted for. In

one influential work on integration theory Moravcsik proposed that EU integration

was a reflection of

“a distinctively modern form of power politics, peacefully pursued by democratic states for largely economic reasons through the expansion of asymmetrical interdependence and the manipulation of institutional commitments” (Moravcsisk, 1998: p. 5)

States thus engage in interstate bargaining, driven by their particular interests,

eventually leading to a compromise that reflects their power capabilities. This

approach has also been dominant in mainstream explanations of the Euro Crisis in

which Germany, despite its reluctance to bail outs, agreed to a compromise as a

result of disciplinary austerity measures being inflicted on the debtor states in the

periphery (Schimmelfennig, 2015: p. 183). This, however, assumes that the process

indeed is based on rational calculations that will “solve” problems that are

occurring. However, the EU is experiencing a crisis in which promises of positive

outcomes – as in the case of how outspoken targets of youth policy– are not wholly

matching with the reality experienced. To address these shortcomings, a more

heterodox, critical economy approach, by the “Amsterdam school” (Anderson,

2009: p.131), presents an alternative. This is because it can provide tools to explain

how a certain policy is pursued despite its contradictory results, as it takes into

account not merely naked power calculations, but also ideology as a variable that

explains the hegemonic status of a political practice. That, in turn, can reveal

structural power relations in society that operate transnationally.

21

3.2. Critical Political Economy: An alternative to Traditional Theories

3.2.1. Hegemony and Crisis: the Essential Gramscian Dimension

The problem of both the Liberal and Realist perspectives, and indeed the influential

Liberal Intergovernmentalist one, lie, according to the critical IPE theory

subscribed to here, in that they fail to recognize the “power relations that are

constitutive of capitalist market structures” (Apeldoorn et. al., 2003: p. 29). Thus,

as theoretical frameworks they are

“inherently incapable of grasping fundamentally the structuration of power relations on a social terrain, where market forces have come to constitute the dominant principle of social organization to which all other principles and media of social organization have become subordinated” (ibid.)

These shortcomings follow from the assumption that the forces of the market are

derivative from human nature, and it is this that limits the capability of mainstream

scholarship to explain the legitimacy problems that face the integration project

(ibid.). We must instead look at the interplay between ideology and the economic

structures to explain why European policy makers pursued a certain policy that

seemed to deepen divisions within Europe and indeed expose a gap between what is

stated in policies and what the de facto policies become in a crisis situation, and

with what consequences for, in this case, young people’s lives. To help explain

these discrepancies Gramscian concepts of organic crisis and hegemony are helpful.

For Gramsci, hegemony is understood in terms of how a dominant class

formation exercises power in society. This implies that it needs not merely to

dominate through material capability to do so, but also to engage in “intellectual

leadership” (Gramsci, Q1 §44). Thus, hegemony is established and maintained

through both making sure that material conditions are adequate, and that rule is

perceived as legitimate by the ruled so as to become “common sense” (Gramsci,

1975: Q1 §65).

22

The concept of crisis is connected to that of hegemony, as crisis is the result

of a situation in which the class in power loses its ability to justify its rule and ‘the

particular men who constitute, represent and lead’ are “no longer recognized by

their class” (Gramsci, 2015: p. 579). The crisis of authority of this class leads to the

possibility of change that is violent, or from the point of view of the ruling strata, a

situation that is “delicate and dangerous” (ibid.). An acute crisis of legitimacy is

thus a failure of hegemonic leadership, and it is expressed, as is described in the

famous lines of the Prison Notebooks as following: “The crisis consists precisely in

the fact that the old is dying and the new cannot be born; in this interregnum a

variety of morbid symptoms can appear” (ibid.: p. 704). It is also worth

emphasizing that “crisis” is not to be viewed as a single event: of course, a precise

moment, such as the financial crisis of 2007-08 is pivotal as an acute catalyst of

events, but that must be viewed above all in light of a dialectical historical process

as well as a result stemming from the inherent contradictions of capitalism

(Keucheyan & Durand, 2015: p. 29). It is this that makes a crisis an organic one of

longue durée (ibid.). In this context the acute crisis moment, in this case the

financial- and Euro Zone crisis, becomes a key battleground on which to fight for

political power, and it is this battle that will destine the re-establishment of

hegemonic rule or transformation to a new type of rule.

Translated to the European context, and in which the current crisis of the

integration project is located, critical theories of hegemony of international

relations are of help. These theories of hegemony focus attention on how world

orders come into being, how they are maintained and also, how these orders change

(Cafruny & Ryner, 2003: p18). They thus question the empiricist and positivist

outlook of mainstream theories of social science, including Liberal- and Realist

based theories of European Integration (ibid.) that build on axiomatic a priori

assumptions that escape verification, as their starting point is that markets express

an inner rationality of human nature, while questions of power are limited to

political units - such as states - engaging with each other (ibid.). What critical IPE

does, in contrast, is to breach this gap, avoiding the resulting blind spots.

In this pursuit, the concept of hegemony is essential. While Realist theory

understands hegemony, as in the case of the sophisticated theorizing of Robert

Gilpin (1984; 1988), to be a cause of interstate power play in which ultimately

23

military power is the defining variable, Gramscian theory seeks a more

comprehensive understanding of the concept. Here, hegemony is the interplay of

“configuration of material power, the prevalent collective image of world order

(including norms) and a set of institutions which administer the order” (Cox, 1981:

p. 139). Thus, essential for power is the presumed “common sense” that rests on

certain material conditions being fulfilled; while coercive force is underpinning

power, a true hegemon is able to maintain consent ideally without retorting to the

use of that force (Cox, 1983: p. 164). Otherwise, crisis will occur. The claim here is

that Europe is precisely experiencing such a crisis of the hegemonic order, and this

has been evident in the inability both on national and European level of the Social

Democratic centre-left and the centre-right Christian Democratic alternatives to

justify their leadership. While having been the presiding parties of welfare state

expansion in the post World War 2 era (Ryner & Cafruny 2017: pp. 118-121), they

now, as legislative election results in many EU-states, as well as results in

European elections demonstrate, face serious challenges, as the electoral picture in

Europe has become more fragmented and volatile.

This represents the political terrain on which alternatives to the status quo

are born. But essentially, the inability of the post-war forces of European politics,

as well as the technocratic class of EU-bureaucrats to legitimate rule, is also the

product of the current structures of the EU and the Euro Zone that have been cast to

fit the changes that occurred with the moving away from Fordism to post-Fordism.

It is also in this post-Fordist world that we need to understand the policy outcomes,

also when moving to concrete youth policy.

24

3.2.2. Socio-Economic Epochs: Fordism to post-Fordism

In The European Union and Global Capitalism (2017), Magnus Ryner and Alan

Cafruny use the metaphor of an ordoliberal iron cage to describe how “the

Eurozone endures despite its mounting social costs and conflicts” (ibid: p. 10). In

the long term, as they point out, this, however, has implications for the survival of

the EU (ibid.). It is the structure of this cage that can shed light on both the crisis

and why European policy makers continue to implement policies that seem to be

damaging to the task of upholding a certain type of integration project. The

construction of this cage, which is both ideological and practical, must also be

understood in terms of a shift in socio-economic epochs, more specifically, in the

shift from Fordism to post-Fordism.

In the aftermath of World War 2, Europe was conditioned by what Giovanni

Arrighi has called “military and social Keynesianism” (Arrighi, 2008: p. 152) led

by the US, that had as its aim to neutralize antagonisms inherent to capitalism and

make sure Western Europe remained solid against the Soviet threat. This

Keynesianism, which encompassed capital controls abhorred by strong capitalist

interests, was from a US perspective with all probability a temporary measure that

would serve the end of consolidating a global capitalism conditioned by the US

(Panitch & Gindin 2012: pp. 72-80).

With significant help from the US, the immediate post World War 2 period

witnessed vast welfare state expansion in Western Europe that was based on a

Fordist mode of production, a concept that describes how mass consumption was

integrated with mass industrial production (Ryner & Cafruny, 2017: p. 34). In this

model, named after the automobile manufacturer, economic growth is achieved

through investments in production of consumer goods on an industrial scale, which

in turn are consumed by waged workers. This Fordist world also crucially included

a compromise between labour and capital. The post-war expansion provided ample

opportunities of pursuing growth, as reconstruction laid the ground for massive,

labour intensive investments (Eichengreen: p.2). Politically, this also worked as a

foundation for the class compromise reached, as the veterans arriving home from

the war demanded change toward a more economically equal society. Now the US

25

provided the motor for this to become reality in Europe through the Marshall Plan,

which also required the receivers to “commit to putting in place the prerequisites

for a functioning market economy” (Eichengreen: p.66).

However, in the decades following the war, investment opportunities

became more limited, and growth needed to be spurred through more specialized

methods that required high skills from the work force; meanwhile, labour costs

were rising as social relations had become more equal as wages grew creating

inflationary pressures (Eichengreen: pp. 223-224). Politically, the reaction to this

development and the problems of inflation and unemployment eventually ran into

as investment opportunities dried up, was to seek growth through a new economic

model, that of financialization: this neoliberal turn saw subordination to financial

capital become the overriding norm of economic policy (Harvey, 2007a: pp. 9-19).

This shift towards a post-Fordist mode of regulation had immense consequences for

the development also for the European integration project, as it impacted on the

productive base of society, as instability increased, and the fruits of economic

growth were not reinvested in the economy in a way to boost demand similarly as

in the post-war period.

3.3.3. Financialization and Neoliberalism

The concept of financialization here refers to a process where growth is

increasingly relying on the predominance of the development of financial

derivatives as an engine of growth, and it is central in understanding the shift from

Fordism to post-Fordism. The crisis that hit Europe in 2008 derived from this

financialization and was connected to the epochal shift in the global economy,

where Keynesianism was replaced by a post-Fordist global economic architecture.

This process is characterized by different aspects, such as “the liberalization of

finance; the internationalization and increased sophistication of financial markets;

the growth of indebtedness among firms, households and states; the tendency

toward the privatisation of social security systems and of nature; the fragmentation

of the workers’ movement; the proliferation of financial crises” (Durand, 2017:

p.25).

26

The crisis, viewed from a post-Keynesian and regulation-theoretical

approach, can be said to be located in a “Minsky moment”, derived from the

theorizing of John Maynard Keynes who identified the crisis of financial capitalism

in the instability caused by the fact that financial markets did not have the capacity

to allocate resources efficiently.

Keynes argument was later expanded by Hyman Minsky, who argued that it

was central to, in contrast to the neoclassical synthesis, view instability as inherent

in capitalism, and to realize that the role of finance capital is necessary in

understanding this instability (Minsky, 1986). A financialized growth regime

creates strong short-term expectations of profit that breeds uncertainty in contrast to

capitalist models where long-term developments of capital are favoured, which in

turn creates an inherent instability in the economic system. This also explains

moments where lengthy upturns generate manic moments, when credit becomes

available on enterprises largely based on expectations on rising assets. When

economic slowdown occurs, lenders get into trouble as they will have difficulties

paying interests or principal. This in turn triggers selling off of assets, as the net

worth of the units drop. That generates a crisis moment, as panic can spread further

augmenting a downward spiral of prices. When liquid and credit are withdrawn, the

economy is hit by lower consumption and investment and a real threat of a deflation

occurs. The debris of that spiral consists of more defaults, creating a serious threat

to the market economy’s functioning. This seems to be consistent with Minsky’s

financial instability hypothesis, which has also been tested for example in the

context of the Asian Financial Crisis of 1997-98 (Holloway & Eloranta, 2014).

The ideological justification and political implementation of this practice is

what is referred to as neoliberalism. Neoliberalism is conceptually defined as “a

theory of political economic practices that proposes that human well-being can best

be advanced by liberating individual entrepreneurial freedoms and skills within an

institutional framework characterized by strong private property rights, free

markets, and free trade (Harvey, 2007a: p.2). The role of the state becomes one of

further advancing these practices (ibid.), which then has the paradoxical

consequence of, also in Europe, to undermine the functioning of the capitalist state

as “almost all social-scientific research into the nature of advanced capitalist states

underlines that the welfare state is one of its essential components”(Ryner &

27

Cafruny 2017: p. 113). This neoliberalism has since the epochal turn away from

embedded liberalism spread effectively around the world “like a vast tidal wave of

institutional reform and discursive adjustment” (Harvey, 2007b, p.

23). Consequently, when neoliberal practice became the framework of global

capitalism (Abdebal, 2006), it had implications for welfare capitalism of Europe as

well. The inherent instability of a system dependent on a financialized economy

was in due time to be evident. And its imperatives overshadow other areas of

policy, such as paradoxically those developed for counteracting the effects it in

itself is causing, such as EU youth policy.

3.3.4. The Second Integration Project and German-led Ordoliberalism

When the shift to the second post-war epoch took place, beginning in earnest in the

1970´s, there was a fundamental change in the political and economic landscape of

European integration (Bieling et.al., 2016: p. 59), as the finance led growth regime

depended on de-regulation of markets and opening up of capital flows. An

essentially neoliberal world that demanded “the subordination of society to market

discipline” (Ryner, 2014: p. 6) took form. From the Single European Act (SEA)

forward, we have witnessed how the institutional set up has reflected this

imperative: it is here we trace the beginning of a “second phase” of integration. The

Maastricht Treaty of 1992 that followed the SEA, was set up with the objective to

arrive to a single currency that was, as stated in Article B, to ensure “economic and

social progress which is sustainable, in particular through an area without internal

frontiers” (European Council and European Commission, 1992). This lack of

frontiers famously included the free movement of capital, goods, people and

services which consequently had a profound effect on the very capacity of the state

to act as a mediator on the national level, while at the EU-level this was not

followed by a move towards greater federalism in the sense of a stronger social

protection regime.

The path from this on was clearly set with monetary union as the desired

target, and it was consequently achieved, linking those countries that did not opt out

in an embrace of a mutual currency in 1999. Now monetary policy was handed over

28

to the European Central Bank – or the European System of Central Banks - witch’s

technocratic independence of politics is ensured through article 130 of the Treaty

(Eurlex, 2007, Treaty of Lisbon), but that also has what could be deemed as the

very political “primary objective ...”to maintain price stability” (Ibid: Art. 282).

These developments sowed the seeds of legitimacy problems for the whole

integration project: when the finance based regime faced a crisis, triggered by the

failure of this finance led growth regime in the US and then followed by the

sovereign debt crisis resulting from of the bailouts needed to save the Euro (Bieling

et.al: pp. 62-63), matters had almost come to head.

A political dilemma, which is expressed in the increasing difficulties that

the dominant forces of post-war politics, along with EU-technocrats face across

Europe, is that the integration project that had, since the shift to a neoliberal post-

Fordism structurally depended on American led finance, found itself devoid of

answers to how to reassert its legitimacy (Cafruny & Ryner, 2007: pp. 16-38). This

is due to the configuration of the integration project, guided by German led

ordoliberalism which is the ideological expression of a European variant off

neoliberalism that justifies a shielding of changes of macroeconomic policy from

democratic political intervention through a set of arrangements also dubbed as new

constitutionalism (Gill, 1991). The doctrine is informed by the belief that free

markets need strong government to be implemented, and that key to monetary

policy is to keep inflation low, even at the cost of high unemployment and cuts in

public expenditure (Bonefeld, 2012). It has been mobilized to provide the ideology

for the “intellectual and moral leadership” of EU-economic policy, with the

consequence that the problem is not formulated in terms of a financialized

economic system that causes instability, but instead as a problem of public finances

and competitiveness (Ryner & Cafruny: p.222).

As such, ordoliberalism reflects the European reaction to globalization,

which was to respond to it by, as the leading theorist of the French regulation

school Michel Aglietta has put it “moving towards economic and financial

integration (the Single Market Project) then to proceed to monetary integration (the

EMU project) ”(Aglietta 2000: p. 426). This led to a European monetary standard

to replace the Fordist labour standard, which in itself was a result of that the nation-

29

based regulation that ensured prosperity in the post war period was replaced by

financial integration that was void of adequate regulatory mediatory mechanisms

(ibid). The result has been an integration project characterized by competitive

austerity, stagnant productivity, high unemployment and uneven geographical

development, all which contrasts with the hopes of the designers of the EMU

(Cafruny & Ryner 2007: p. 71). This in turn has gnawed on the credibility of the

actors most associated with the integration project, in particular after the Euro

Crisis.

The reasons for this are linked to the position of Germany and its role as a

“reluctant hegemon” within Europe (Bulmer & Paterson, 2013) as this sheds light

on the dominance of ordoliberal practice in the EU. From the beginning, the

ascendancy of West-Germany to a dominant position in Europe was a result of the

strategy its capitalist classes adopted after the war: a strategy which was dependent

on “close and unconditional co-operation with the American military government”

(Graf, 1992: p. 12). In West-Germany, thus, the economic liberalism of the US, in

combination with a belief in a stronger role for the state were adopted (Ibid: p. 13).

This ordoliberalism is an economic practice and ideology which, born in Weimar

Germany, was created as an alternative to Keynesianism, Communism and Social

Democracy (Bonefeld, 2012: pp. 634-35). It assumes a strong role for the state in

enforcing functioning markets while making sure to counteract pitfalls of laissez-

faire liberalism (Ibid.). In a description of post war sentiment, it was noted that

“while the rest of Europe is reading Keynes, many in West Germany are reading

Friedrich von Hayek” (Panitch & Gindin, 2012: p. 97).

Thus, while European integration is fundamentally driven by a “Franco-German

motor” locked in common institutional development from the beginning, this motor

is more fuelled by austere ordoliberalism than the French tradition of dirigisme,

where the state has a bigger role to play as a social mediator, and the relationship

between France and Germany has been, as a result of the strong industrial

development of the latter, translated into a relationship of structural dominance over

the former (Deubner et. al.,1992: p. 142). This relative weakness of France vis a vis

Germany, has allowed for Germany to project its form of disciplinary neoliberalism

onto Europe in order to serve its own domestic priorities (Ryner, 2003: p. 203).

30

The nature of the integration project has accordingly ever since the SEA and the

Maastricht Treaty, followed by the EMU, been an essentially neoliberal one. With

this is meant that the very essence of EU integration has been one in which the

main driving principle has been that of asserting price stability ahead of high

employment and robust public services, all anchored in the ordoliberal principle of

“sound money” (Cafruny & Ryner, 2017: p. 60). Further, and crucially for

understanding the developments of youth policy, the Lisbon Strategy, which aimed

at making the EU the most competitive, knowledge-based economy by 2010, built

on assumptions that this was to be achieved through increased flexibility in

employment relations and more relaxed financial regulation (Amable et. al., 2009:

pp. 35-36). It thus projected a vision of growth based on a “peculiar mixture of

economic liberalism, social democratic aspirations and neo-Schumpeterian

technological determinism” (ibid., p. 34). In this strategy, the “speeding up of

liberalizations”, promotion of “active employment measures” and a call for “more

intensive cooperation by EU financial market regulators” and financial companies,

are essential, to name a few examples from the strategy itself (Lisbon Strategy,

2000)

While this development fits badly with the dirigisme of the French political

tradition (Clift, 2003: p. 179) it has, never the less, become the order of the day and

paradoxically the French themselves have been key in inscribing neoliberalism in

the rules of the EU, not the least by the efforts of French Social Democrat Jaques

Delors in his role as Commission President (Abdelal, 2006: p. 9). Since the 1983 U-

Turn of France´s President Mitterrand, who after a massive speculation against the

Franc retreated from his socialist Keynesianism and accepted market liberalization

and deregulation as the way forward (Clift: 182), the alternative proposals to

neoliberalism have been few and far between. This has made a mark on policy

development at EU-level generally, as new areas of policy development are fit in

that context. This also goes for EU-youth policies, as we will see in the next

chapter.

31

4. Conclusions

This chapter has argued that classical integration theories have struggled to deliver

wholly adequate answers to why disintegrative tendencies are currently unfolding

in Europe. Of the theories discussed, Neo-functionalism has, despite efforts to

claim that deeper integration has been achieved, difficulties in accommodating

itself with empirical facts, while intergovernmentalism idealizes the EU to such an

extent that it struggles to count for disintegrative elements in the first place. Instead

in this chapter a heterodox, critical political economy perspective has shed light on

the contradictions through focusing on socio-economic contradictions and crisis-

tendencies, the balance of class forces and social alliances, their ideological cement,

and how these operate across the domestic and international levels. EU youth

policies are accordingly to be understood in the light of the current configuration of

the Eurozone. These structures are held to feed disintegrative tendencies in the EU.

In the chapters that follow, will examine how this relates to the topic of youth

policy.

32

4. EU YOUTH POLICY IN CONTEXT

4.1. Introduction

Having been a somewhat marginal issue, embedded as one policy area in the

directorate general at the Commission that encompass culture and sport as well,

youth policy became more prominent as it became a component of the Lisbon

Agenda which was to make the EU the most competitive, knowledge-based

economy in the world. This meant that youth policy was explicitly linked to the

most ambitious policy targets of decision makers in the EU. This was a

development welcomed to European youth civil society. A Policy Paper adopted in

2005 by the Council of Members of the representative platform of European youth

organizations, The European Youth Forum (YFJ, 2005) stated that the YFJ is “glad

to see the final adoption of such a European Youth Pact by the European Council

and its inclusion in the Lisbon Strategy” (YFJ, 2005). The fact that they were

“glad” reflected that youth now was “relevant” in the Brussels debate.

Co-opting the main youth organizations of Europe was in fact preferable for

decision makers to keep them out in the cold, from where they would perhaps be

criticizing decision makers. As things stood at that point however, it is worth

recalling that when heads of state started taking an interest, youth had not yet

become such a hot topic in the political debate, as we will discover in chapter 6.

The question of youth policy was still seen as something that, in the EU context,

mainly was to be included under headlines such as “mobility” and “active

citizenship”. This of course helps understand that youth NGO representatives were

glad that youth was more integrated to the economic strategies of the EU: the

implementation of the Lisbon Strategy proved to be a door through which youth

policy entered the level of heads of state. But this also meant that youth policy

became an integrated part of a political and economic project that would in fact

make it harder to implement the targets concerning strengthening of social

citizenship norms of young people.

33

This chapter outlines the main features of the youth policy of the EU

leading up to the Euro Crisis. The purpose is to show how these policies developed

as part and parcel of an integration project embedded in a process in fact weakening

social citizenship norms for young people. The argument is not that individual EU

youth policies or policy recommendations for member states would necessarily be

negative, but that they fall within a general economic policy framework that is

deeply problematic for how to increase employment, employability and equality

between young people across the EU.

4.2. Towards an EU policy

Today, the legal basis for youth policies at EU level is found in articles 165 and 166

of the Lisbon Treaty (Eurlex 2007). The paragraphs focus mainly on education and

mobility, but there is also a mention that Union action shall be aiming at

“encouraging the participation of young people in democratic life in Europe”

(§165). This can seem vague, but it gives a legal reference point for arguing that the

EU has a responsibility to be proactive in youth policy matters. No age range is

mentioned here as of what constitutes a “young” person, and as a Commission

working paper notes, the age scope varies depending on circumstances, generally

not exceeding 29 years of age (EC, 2011) However, youth policies are defined to

belong to the ordinary legislative procedure which explicitly excludes

harmonization of youth policies between member states (Treaty of Lisbon, §165)

Thus, youth policy is adopted by the Council on recommendation of the

Commission, as well as through “incentive measures” that are adopted by the

European Parliament and Council after consultation with the Economic and Social

Committee. Legal harmonization is of course not the only way to advance policy,

and in the case of the demographic of young people this is evident, as youth policy

was being developed to some extent before the Lisbon Treaty. What is significant

now is that this “legal mandate” is coupled with the youth field converging with

policy in the broader economic and social field.

Before the Lisbon Treaty was adopted there was more ambiguity on the

point of competences what regards youth policy, and the formalization process that

34

gradually deepened formal integration in the field took some time. Already in the

beginning of the Millennia, it can easily be pictured how excluding youth from

formal EU-decision making did not really correspond with facts as policies relating

to for example employment, higher education and competitiveness had direct

consequences on young people. Thus, during the 2000’s it became clear that youth

policy had a distinctly European dimension. In addition, the youth lobby was

generally strongly in favour of deeper integration of youth policy within the wider

economic integration of the EU (YFJ, 2005).

The starting point of an explicit youth policy within the European Union in

its second, post-Maastricht integration phase can be traced to the Commission

White Paper A new impetus for European youth (EC, 2001). This White Paper was

adopted in 2001 after an impressive process of consultations in the EU-member

states involving researchers, policy makers and young people (EC, 2001). The

process culminated in a meeting in Paris, where the results of the national

consultations were synthesized into four main areas: “Active citizenship for young

people” which focused on how to include young people in decision making;

“Expanding and recognizing areas of experimentation” that held that formative

experiences must not be confined to traditional forms of formal learning but must

include support and recognition of volunteering and mobility; “Developing the

autonomy of young people”, underlining the necessity of sufficient material

conditions for leading independent lives; and fourth “the European Union as the

Champion of Values” where young people emphasized the need to strengthen

fundamental rights and increase the protection of vulnerable minorities (EC, 2001:

p.12).

These four main areas were then distilled by the Commission to two

recommendations on what to build the basis of a future youth policy of the EU.

Noting that a formal basis was lacking in the treaties for legally binding proposals,

the conclusions were that the Open Method of Coordination (OMC) was to be

applied to the youth field and that significantly, young people should better be

taken into account in other policy areas. The conclusions of the White Paper were

formally adopted as a resolution by the European Council in 2002 (European

Council, 2002), thus establishing the framework of European cooperation in the

youth field. This “framework” was at that point to focus on participation,

35

information, voluntary activities among young people, greater understanding and

knowledge of youth.

In implementing these targets, the OMC was designed as the main tool. The

OMC in itself is a process that allows member states to, following guidelines rather

than rules, to advance certain policies in the social policy field that normally do not

fall under the competence of members states (European Parliament, 2014). In the

youth field, its main characteristic was to promote exchange of good practices

between member states, but also to establish a mechanism for advancing at national

level the four themes agreed at the Council.

It is important to note that the overall plan, as stated in the Commissions White

Paper, is “to invest in youth is…one of the keys in achieving the political objective

laid down by the Lisbon European Council: making Europe ‘the most competitive

and dynamic knowledge-based economy in the world’“ (EC, 2001: p.

9).

What is clear, based on the conclusions of the White Paper process, is that those

involved in the process, addressed many of the pivotal questions of the Lisbon era

what regards the conditions of living affecting a generation that was growing up in

a Europe characterized by the finance led growth: The need to address insecure

labour markets, and to achieve reconciliation of family and work, for example. The

proposed remedy for these problems that existed already before the big crisis was to

integrate the solutions in the broader Lisbon agenda. Thus, while the White Paper

process undoubtedly put some of the fundamental questions facing young people

firmly on the EU-agenda, they were simultaneously enshrined in a policy that in

fact paradoxically contribute to disintegrative tendencies within the EU stemming

from the more insecure social conditions that resulted from the logic running

through the Lisbon strategy that operationalized the shift to the post-Fordist

economy.

36

4.3. Moving Up the Agenda: European Youth Pact & Europe 2020

To grasp how youth policy is situated in the overall post-Maastricht

integration project, it needs to be understood in the context of the Lisbon

agenda. To do that, the Sapir Report (2003), commissioned by EC president

Romano Prodi, provides a good point of reference for the analysis. This report

had the task of analyzing the strategic goals set out in the Lisbon agenda – that

is to be the most competitive and dynamic economy globally – and based on

that to “review the entire system of EU economic policies and to propose a

strategy for delivering faster growth together with stability and cohesion in an

enlarged European Union” (Sapir et. al. 2003: p. i).

In doing so, they were in the brief invited to take inspiration of the Padoa-

Schioppa Report that in turn set out the blueprint of the second integration

project leading up to the SEA, Maastricht and the common currency. As for

implementation, The Sapir Report notes that “EU-priorities can translate into

policy actions by Member States or economic and social actors only if they

develop a sense of shared ownership” (Sapir et. al.: p.5, my emphasize).

Hence a need to involve relevant stakeholders, including young people and

their interest groups, in the process. Anchoring the strategy in key reference

groups is hoped to strengthen the commitment to deliver and to minimize

eventual criticisms.

The Sapir Report argues that unfavourable demographic trends,

globalization and fast technological change, combined with external

competition, leave no other choice than to embark on a quest of a more

“dynamic” economy. That development had been characterized by, as

discussed in chapter three, by an economic model of financialization, entitling

liberalizations and welfare retrenchment, that were outlined in the Lisbon

Strategy for Growth and Jobs.

This translated into policies that promote macro-economic stability,

innovation, a regulatory environment that is more adequate for the needs of

venture capital, even stating with reference to Europe that “corporate tax

structures with low tax rates and broad tax bases are more appropriate” (Ibid:

37

pp.39). Further, labour market flexibility is held to have many benefits in the

quest, as “part of EU:s growth deficit has been attributed to lack of labour

market flexibility” (Ibid: p.40). The report also notes that the high

unemployment levels of young people and the demographic changes mean

that the foundations for economic growth and welfare are weakening.

As a reference point for the recommendations, the report holds the

American economy, which is demonstrated to have been more successful in

its productivity and output than the European economy as a result of better

allocation of financial and labour markets, as an example to follow (Ibid: pp.

43-55). However, American growth was based on a financial growth regime

that, as was discussed in chapter three, depended on an expansion financed by

debt ultimately contributing to the financial crisis in the US. In Europe, the

accumulation regime was in fact tied to the American one due to the

seigniorage of the dollar and the dominant role of the US financial industry in

two ways: first through an export-based growth in the North of Europe where

wage growth was held below productivity growth (Cafruny & Ryner 2017:

p.102). As the American economy was indeed expanding due to

financialization, it generated the effect of demand in EU exports (ibid).

Secondly, there were investments from the North West of Europe into

undervalued and non - productive assets in the southern eurozone, where

consumption and growth were financed through access to cheap loans up till

the crisis (Becker et. Al., 2012)

Thus, the Sapir Report goes on to reinforce the same logic as that of Lisbon

Strategy, and this becomes the intellectual backdrop to the Europe 2020-

agenda. Its aim is to repair the problems of low economic growth rates and

high unemployment of the post-Fordist era through a policy of “more of the

same”, and this logically also include the young. It excludes the alternative of

a more long-term growth model based on increasing effective demand as the

engine of growth that would have a more predictable pattern of growth that

includes more stable labour conditions for working people and the potential of

on the one hand tax revenues that could be reinvested in the economy, or the

incentive for long term private investment. As financial markets are

liberalized and in a context of divergent economies within a borderless

38

Europe, the Sapir report could also have argued for Europe wide solutions

involving the participants in the labour market in wage bargaining and it could

have envisaged Europe-wide collective investment projects. The decision to

exclude that alternative has the function of determining the limits of the

politically possible through a teleological assumption of imperatives built in a

globalized economy.

Youth policy was now also to be tied to the continuation of this economic

development. This development had become evident already in the adoption

of the White Paper and the common European objectives of European youth

policy that was followed by the adoption of the European Youth Pact by the

Spring European Council in 2005. The objective of the Pact was to, as

outlined in the Commission Communication on the implementation of it to

recognize that “integrating young people in society and working life, and

making better use of their potential, are essential for ensuring a return to

sustained and sustainable growth in Europe” (EC, 2005a: p.2). The initiative

was politically first supported and then proposed by French President Jaques

Chirac, German Chancellor Gerhard Schröeder, Swedish Prime Minister

Göran Persson and Spanish Prime Minister Jose Luis Zapatero in a letter to

the President of the European Council as part of the process to revise the

Lisbon Strategy (Euractive, 2005), in the efforts to revitalize it in the spirit of

the Sapir Report.

A reason for a revision of the agenda was, the Council agreed, that progress

after the original Lisbon Strategy had been “mixed” (EC 2005a, p.3), which

was indeed the red thread that ran through the Sapir Report. The Council

expressed its dissatisfaction with the slow pace of which reforms to increase

competitiveness had taken, noting how the years after the adoption of the

Lisbon strategy had indeed proved to be a disappointment (Ibid: p.15).

Growth had remained low, while unemployment figures were high. This was

no way to make the EU the most competitive and knowledge-based economy

in the era of globalization.

The reason for the sluggish growth and stubborn unemployment figures

were at this point stated as an overall unsatisfactory approach to the Lisbon

39

strategy. The critical assessment was however not to be found in the basic

premises which lay the foundation of the Strategy, but in the fact that this

model was not pushed through quickly enough. The Council resolution states

that the new strategy must put a renewed effort into increasing flexibility on

the labour market and “modernization” of welfare systems, while making

economies more investment friendly for business (ibid: p.9). Also, research

and innovation are to be supported as means to strengthen “human

capital”(ibid.). At this point of the trajectory of the second phase of the

integration project, young people formally entered the picture in core areas of

policy, as the Council Resolution included the European Youth Pact in its

conclusions. In these conclusions, objectives for member states now included

specific targets of increasing employment and to develop policies for

integrating young people in the labour market. Further, priority is to be given

to “improve the situation of the most vulnerable young people” (EC, 2005a:

p.12).

No doubt this marks a change in the status of youth policies in the

European Union – no more are youth questions confined to the realms of

active citizenship, mobility programmes of young people or support for

volunteering activities. This naturally does not change the competences of

member states, and the OMC is still the only European level mechanism to

officially support the integration of youth policies. However, as youth

questions are “mainstreamed” into other areas of policy on which a political

commitment of members states exists at the highest level, it must be seen as a

game changer, while the objectives of specific policy measures will suffer the

same difficulties as other objectives of the Lisbon strategy that are bound by

the economic structures that affect employment and social policies at a

national level. This is manifest by the fact that the Youth Pact is at this point

incorporated to the Broad Economic Guidelines 2005-2008 of the EU (EC,

2005b), which are indeed key in understanding the European Youth Pact.

The Integrated guidelines offer a rather honest assessment of the

underwhelming economic performance of the EU, and notes that there is a

“continuing under-performance of the Union economy” and that this is

explained by low productivity and the fact that “labour input remains

40

comparatively low” (ibid: p.4) as employment rates have only increased from

61,9% in 1999 to 62.9% in 2003 (ibid.). The analysis notes that “there is a

considerable scope for further improvement, notably among young and older

workers” (ibid.). The low employment rates and few working hours are an

indication that the EU has “a reservoir of unused labour” (ibid.). Overall the

policy document outlines that Member states need to adhere to price stability,

only “nominal” wage increases, structural reforms and increasing flexibility

on the labour market as well as investments in innovation and education. The

guidelines also underline the importance of investing in young people and a

specific guideline ensures a commitment to reduce unemployment and help

young people find pathways to employment.

The guidelines thus provide a blueprint for the economic and

employment policies of the EU in its renewed effort to boost the Lisbon

agenda. If previously, young people were not often seen as a specific group in

the economic and social policies to be implemented, they certainly were now.

And it would be rather surprising if this would not be the case, as the

guidelines also note the demographic challenges Europe is facing, with the

obvious negative implications for welfare services that a slimmer tax base will

have. While the self-criticism is evident for lack of underwhelming

performances, and the important recognition of youth unemployment as a

problem, there are at least two noticeable facts to be highlighted here, as they

will resurface in the context of the crisis.

The first is that the lack of deeper questioning of the rationale of the

policies proposed: instead, the emphasize lies on more of the same, but more

intensively so. There is no mentioning of the fact that large amounts of capital

is being hoarded in a context of increasingly lax regulation without

comparable investments of this capital into generating growth and industrial

innovation: true, investment instruments like the structural funds and the

social fund exist, but these are small in relation to huge profits generated by

the financial industry. Also, strict inflation targets and the commitment to

sound money principles advocated principally by – and in – the most powerful

European state Germany, in effect prevent pro-active policies that are not

about increasing competitiveness through de facto generating more

41

precariousness among the young. Might it not be that finance led growth

models are a cause to the low growth rates and high unemployment figures?

The second obvious question is the discrepancy between policy intentions

and the fact that while the economic and especially monetary principles are

European level questions (and the monetary policies remain ostensibly “non-

political”), employment and social policy remain national affairs so as to limit

pan European financial commitments. This will be notable when the crisis

hits, as a guiding principle of crisis management is restructuration of crisis

states’ economies in line with ordoliberal principles, while especially young

people pay the price. While it might be true that respective economies are in

need of reform, the commitments to “help young people” are hollow if no

money are tied to them.

4.4. Conclusions

This chapter has described how youth policy has developed since the White Paper

process to converge with the policy targets set out in the Lisbon Strategy and

successive policy developments. While youth policy became a topic now discussed

at the level of heads of state and thus more politically more relevant, it meant that

while the goals of youth policy were ambitious in terms of strengthening social

citizenship, they were subjected to the very logic of the Lisbon agenda that

paradoxically make it hard to realize those goals in practice. Thus, while addressing

pivotal questions for young people such as insecure working conditions and

unemployment, the problems relating to chasing growth through attempts at

increasing marketization, the problems they propose to tackle were not properly

addressed. On the contrary, it might be asked whether youth policy became an

accomplice in a project that had averse effects on the situation of many young

people in the EU.

42

5. YOUNG PEOPLE, YOUTH POLICY AND CRISIS: A TESTING

TIME

5.1. The Eurozone Crisis

When Pierre Moscovici, European commissioner for economic affairs, declared in

August 2018 that “Greece can now turn a page”, and that a “line has been drawn

under the crisis” (Guardian, 2018a), he was joining in celebration with the Greek

government. Earlier in the summer Greece’s finance minister of the left wing

SYRIZA-party Euclid Tsanakopoulos had insisted that “the Greek people can smile

again” while Prime Minister Alexis Tsipras on his part rejoiced that “Greece is

once again becoming a normal country” (Guardian, 2018b); This was the same

Tsipras who, before agreeing to massive austerity measures in exchange for a

bailout, had been humiliated in the European Parliament by a self declaredly

“angry” liberal, Guy Verhofstadt, who had, among other things lectured Tsipras on

failing to deliver “structural reforms” including opening markets and cutting public

sector expenditure (Verhofstadt, 2015). Dubbed the “Baby Thatcher” of Belgian

politics (The Times, 2017), Verhofstadt perhaps anticipated that Greece would

finally, just as all the other crisis countries of the south, bow to the neoliberal policy

of “no alternative” (Watson & Hay 2003). And in 2018, they indeed had, as council

President Donald Tusk put it in a tweet (Figure 1), “done it” - with “European

solidarity” (Twitter, 2018).

Figure 1: A tweet by Donald Tusk (source: Twitter, 19.8.2018)

43

This phase of the EU’s history was a dramatic one, threatening to split perhaps not

only the Euro, but the EU itself. The triggering of the European crisis was

extraordinary: if one could be excused of holding the view that European Union

politics seemed generally bureaucratic and even boring, the unfolding of the crisis

was anything but.

In December 2009, Greek Prime Minister Papandreou had insisted that it

was “out of the question” for the country to apply for an IMF loan, despite it being

revealed that the country’s debt stood at 300bn euros, which was 113 per cent of its

GDP, while government bonds were sliding alarmingly (BBC, 2009a) Two days

before, the credit agency Standard & Poors had downgraded the outlook for the

Spanish economy to negative, further adding question marks on the Eurozone

economy (BBC, 2009b). Also, Portugal’s precarious situation became known to

markets and the public, as it’s Finance Minister admitted that the country was

facing "an extraordinary and exceptional situation, due to a major financial and

economic crisis without precedent in our recent history", but insisted it “will not”

leave the euro (BBC, 2010a).

In March, the credibility of the Eurozone took a further blow as Dublin

announced that a recapitalization the size of its tax revenues for 2010 was to be

budgeted for one single bank: the Anglo-Irish Bank was in need of 34 billion euros

to avoid going bust (Tooze, 2018: p. 337). In addition to this, the state of Italy was

being scrutinized, as lax discipline of Silvio Berlusconi’s centre-right government

was a cause for worry among markets and EU-leaders due to its lax financial

discipline (Spiegel, 2011).

Less than six months after Papandreou’s denials, the eurozone members

and the IMF had agreed on a 110BN conditional bailout package for Greece (BBC,

2010b), raising questions of how many bail outs would be needed and at what

political cost. But the dramatic fashion of how the crisis unfolded should not

disguise the fact that the problems were perhaps not as unthinkable as many

professionals within media and politics seemed to believe. But what the Eurozone

crisis did was cast a stark light on problems that derived from how the integration

project had been constructed since the adoption the SEA and the Maastricht Treaty.

44

This “spectacularly ambitious undertaking” (Tooze: p.93) tied together

vastly different economies on the continent while lacking a common fiscal and

economic policy apart from fiscal rules that limited deficits and. And it had a

Central Bank that had only the mandate to keep inflation in check, not, like the

Federal Reserve, to have a responsibility in terms of employment, while fiscal

transfers were prohibited, reflecting that its “operational DNA came from the

Bundesbank” (Tooze: p.99) which was opposed to adding any European dimension

to risk sharing.

In the relative good times of the beginning of the project, the package held

together: the fact that the Bundesbank bunds were anchoring the eurozone economy

made risky borrowing for the southern eurozone economies plausible, while the

export sector of Germany had become competitive through social democratic

chancellor Gerhard Schröeder’s wage restraints, benefit cuts (known as the Haartz

program) and increase in precarious working conditions while growth was spurred

through exports. In the eurozone, the Lisbon program was in fact following a logic

of pushing for structural reforms that would follow the German example as a model

for increasing competitiveness in the face of global competition. But when the

eurozone was exposed to the hit deriving from the global financial crisis, things

started to look worrying.

The crux of the matter was that when it became clear that the economies of

the south were faltering, Germany and France, with their large economies, became

liable as guarantors of the whole eurozone whether they liked it or not, while given

the structure of the eurozone, there was no federal mechanism to deal with the

problem. This was explicit in the “no bailout” clause of article 103 of the Lisbon

Treaty while they could not escape the fact that they had to act if they wanted to

save the eurozone.

It was perhaps not surprising that other northern states of the eurozone were

worried: if they were not bailing out the south, would it not leave them more

exposed in a situation of the crisis spreading? In all of this, the power of finance

was evident: as has been showed by Cedric Durand, the alternative not act in order

to save the financial system that in the first place had triggered the crisis was not an

option in the circumstances (Durand, 2017: pp. 308-09). If cash flows had dried up,

45

it would have halted much of the world economy and triggered, most probably, an

economic meltdown similar to that witnessed in before the Second World War.

Thus, “The hegemony of finance...is only maintained through the public

authorities’ unconditional support” (Durand, 2017: p.305).

Accordingly, the financial institutions were bailed out while people living in

the states worst hit by the crisis, not the least young people, paid the heaviest price.

Because, as put by Durand:

“financial stability comes to depend on…Dispossession [that] takes the particular form of the political profits associated with the benefits of state interventions. In the case of aid to the financial sector, these are direct benefits: the public guarantees made to banks as well as unconventional monetary policies coming along in support of equity values. Their social content is opaque: this is, on the one hand, a real or latent charge on public finances, and, on the other, an enlargement of the monetary power attributed to the financial sector. The indirect benefits are immediately grasped. The austerity measures running down pubic services and impinging upon social rights seek to guarantee continuity in the interest payments that administrations pay out. Meanwhile, structural reforms have the goal of supporting firms’ profitability – and thus their capacity to pay dividends and interests and genretae gains on the stock markets – by reducing the price of labour…Governments’ responses to the crisis precisely expressed the logic of dispossession” (Durand, 2017: pp. 303-304).

As this “dispossession” became a reality, also disintegrative tendencies deepened as

social divisions increased as a result, also among young people. This was not

inevitable, as a restructuring of debt and an investment in young people through a

concentrated European effort would have been possible as a part of the package

also to restructure the economies. But instead, a political choice was made,

reflecting the hegemonic power of finance.

The process played out concretely in the form of bail out packages that had

been agreed by EU institutions, the IMF and the Eurozone (known as the troika) to

“save” the faltering economies of the southern eurozone. These packages managed

to reassure financial markets and keep the euro together. In the cases of Portugal,

Spain and in the most extreme of them, in Greece, the solution to support the crisis

countries became that of massive loans in exchange for measures to restructure the

economy through austerity, as the only real alternative to this approach would have

been a fiscal transfer union controlled by eurozone institutions of a federalist

46

nature, which ran contrary to the political will of creditor states like Germany as

there were huge misgivings to the reliability of public finances in the southern

eurozone countries (Roberts 2012: p.144). This also revealed the contradictory

nature of stated aims of EU youth policy and the reality faced as a consequence of

policies implemented in the operation to save the eurozone. Here, the power of the

structures, determined by the necessary power of transnational financial capital

essential for growth and the power relations inherent in the integration project

become evident.

5.2. EU Youth Policy, the South of the Eurozone and the Crisis

As the European Youth Pact expired in 2008, a Renewed framework for the

European Youth Field 2010-2018, also known as the European Youth

Strategy (European Council, 2009) was prepared, and subsequently adopted in

November 2009 in a context of an accelerating financial crisis. The strategy

was explained to be part of the “new beginning” that Commission President

Barroso announced in the preface of the Europe 2020 strategy that was

adopted in 2010, replacing the original Lisbon Strategy (EC, 2010a). The

Youth Strategy’s starting point was to be located in “the context of the post-

2010 Lisbon Strategy” (European Council, 2009: p.4). It recognized, referring

to the 2009 EU youth report, that while

”…a majority of today’s young Europeans enjoy good living conditions, there are still challenges to be met such as youth unemployment, young people not participating in education or training, poverty among youth, low levels of participation and representation of young people in the democratic process and various health problems. Economic downturns, such as the one which began in 2008, tend to have a significant negative impact on young people and the effects risk being long term” (European Council, 2009. p.9)”

At this point, what became widely known as a crisis, is referred to as an

economic downturn, and it is hard to sense a strong sense of urgency in the

text. However, there is a recognition that there are a number of negative social

effects that affect young people more severely than the population at large.

47

Following this, the targets as announced in the Europe 2020 Strategy

were to promote youth employment, education and social inclusion. In order

to operationalize the macro level targets, the strategy was then anchored in the

Integrated guidelines for the economic and employment policies of the

Member States (EC, 2010b). These guidelines provided the framework

which’s progress was continuously evaluated by the Council. And it was here,

once again, that the youth strategy converged with the broader policy aims,

which remained true to the Maastricht arrangement.

The guidelines noted that “The Lisbon Strategy for growth and jobs

helped forge consensus around the broad direction of EU’s economic and

employment policies” (EC, 2010a: paragraph 5), underlining how the strategy

is a continuity of policy. A recognition of the disruptive nature of the crisis

was also noted, however: “the financial and economic crisis that started in

2008 resulted in a significant loss in jobs and potential output and has led to a

dramatic deterioration of public finances” (ibid: paragraph 5). And it

continues noting “coordinated fiscal stimulus” and the European Economic

Recovery Plan” and the euro currency as evidence that “the crisis therefore

showed that coordination of Union’s policies can deliver significant results if

it is strengthened” (ibid: paragraph 6). Also, “barriers” to the employment of

young people should be removed (ibid: paragraph. 11). Further, in the

guidelines, young people are mentioned several times, for example in the

context of fighting low wage-jobs and supporting the creation of “quality

jobs”, while ensuring “adequate social security” (ibid: p.21). Another category

that is paid attention to are young people not in employment, education or

training – the so called NEET’s (ibid: pp.22-23).

The main ”fields of action” in this period were: Education and

training, Employment and entrepreneurship, Health and wellbeing,

Participation, Voluntary activities, Social inclusion, Youth and the world and

Creativity and culture. The objective was to, on the basis of evidence,

implement these policies on member state level in order to “reap the positive

spill-over effects of coordinated structural reforms, particularly within the

48

euro area” (ibid: p.3). While being commendable targets, the question

remained how they were to be implemented and to what effect.

We will now move to scrutinize how well these political targets fared

in the context of the Euro Crisis, when facing the political realities that

became evident especially in the southern eurozone countries. The policies

that reshaped societies in the south of Europe, and which had a significant

impact on young people’s lives, were, as noticed above, ironed out in MoU:s

that detailed how the subjected countries through commodification of public

services, cuts in social welfare and loosening regulation on the labour market

could escape insolvency (Roberts: pp. 144-146). In the case of Italy, the third

largest economy of the eurozone, no bailout was needed, but measures were

implemented in line with demands set out by creditors in a letter penned by

ECB chiefs Jean- Claude Trichet and Mario Draghi (Trichet & Draghi: 2011).

These included the following demands:

A comprehensive, far-reaching and credible reform strategy, including the full liberalisation of local public services and of professional services is needed. This should apply particularly to the provision of local services through large scale privatizations…A need to further reform the collective wage bargaining system allowing firm-level agreements to tailor wages and working conditions to firms' specific needs and increasing their relevance with respect to other layers of negotiations…A thorough review of the rules regulating the hiring and dismissal of employees should be adopted in conjunction with the establishment of an unemployment insurance system and a set of active labour market policies capable of easing the reallocation of resources towards the more competitive firms and sectors.

Further, the ECB was calling for decree-laws to be passed as well as a

constitutional reform to tighten the fiscal rules. The demands are very much in

line with the rules set out in the bailout agreements and demonstrate the

willingness of creditors to make highly political demands. These instruments

indeed followed the “form and substance of European economic policy”

(Nousios et. al. 2012: p.7) as set out in the EU Lisbon Strategy for Growth and

Jobs through a strategy which has, while succeeding in keeping the euro alive,

ensured that the heaviest price of the crisis has been paid not by capital but by

49

labour, while the economic effects in terms of growth can mildly be said to be

weak” (ibid.).

The purpose of the MoU:s was to, through imposed agreement

between the governments in question and the creditors represented by the

troika, implement structural reforms and to cut public expenditure. The

measures were set against specific targets supposed to materialize as a result

of reforms. The progress was then measured regularly through the fulfillment

of the conditionalities spelled out. In the case of Italy, no formal adjustment

package ever existed, but explicit targets were set by the ECB, and reforms

were implemented according to a schedule implemented by a technocratic

government that was installed.

A survey of the MoU:s shows that as a drastic remodeling of the

political economy in southern Europe took place and young people had to, in

contradiction to the stated aims of youth policies, paid a heavy price. The

MoU:s are quite explicit with their aims: to restore market confidence and

financial stability, to ensure investor confidence, promote economic growth,

balance the budgets and to create jobs. It is clear that the overriding objective,

however, is to restore market confidence, stability and to send a positive

signal to investors. It is, however, more to the actions of the European Central

Bank which, stretching its mandate, managed to do this finally when

absolutely no alternative seemed to remain. The ECB chief Mario Draghi’s

assurance later to, in contradiction to the most ardent ordoliberals, to “do

whatever it takes”, and start a programme of unprecedented bond buying with

the aim of keeping interest rates low, became a key to solving the crisis. But

this was only in 2012. Before that, it was the economic adjustment programs,

summarized in table 3, that dictated the policy of liberalizations, wage cuts,

more flexibility on the labour market and deep cuts in public expenditure, that

dictated policy.

50

Countries Objectives Measures

Greece, Italy, Portugal, Spain

Restoring market confidence and financial stability

Ensure investor confidence Ensure economic growth

Achieve balanced budgets Creation of jobs

Wage cuts Significant public expenditure cuts

Privatizations Liberalizations

More labour market flexibility

Table 2: Summary of economic reforms in the Southern periphery of the eurozone

(Sources: European Commission: Economic Adjustment programmes for Greece, Portugal and Spain; Draghi and Trichet letter to the Italian Government)

It is useful to look at how young people fared during the crisis in terms of

employment, as it forms a basis for many of the other youth policy targets in terms

of individual well-being, but it also has big consequences for both economic

development and welfare services. Measuring on the level of three indicators of

employment, idleness and quality of contracts, the situation got worse for the

young, with consequences naturally for the overall economic situation in terms of

growth and sustainability of welfare services. This was particularly true in the south

of the eurozone, and the measures are linked to the conditionalities deemed

necessary for the bailouts. Meanwhile, trust in governing parties but also in the EU

began to erode as left wing parties such as SYRIZA in Greece, Podemos in Spain

and Cinque Stelle in Italy grew (Mudde & Kaltwasser 2017: 99-105).

In terms of unemployment, figures rose spectacularly in this period,

especially for young people. As recognized in the EU-youth strategy, young people

51

are more vulnerable as they have often recently – or not at all – entered the labour

market, and thus when there are less jobs on offer, they will be the ones remaining

more easily excluded. Dismissal of young people is in addition, in the words of

OECD research director Stefano Scarpetta: “tend to be less costly” (Financial

Times, 2019). Also, unemployment benefits are in many European countries often

not available to those who have not yet had a job contract thus making their social

situation more precarious (OECD, 2010). An OECD-research report on the

unemployment situation for young people in Europe concludes that

“Beyond the negative effects on future wages and employability, long spells of unemployment while young often create permanent scars through the harmful effects on a number of other outcomes, including happiness, job satisfaction and health, many years later” (OECD 2010: p.4)

Looking at the big increase in general unemployment in southern Europe between

2010 and 2015, we can conclude that the combination of relying on a costly,

hegemonic model of a financialized economy and the consequent crisis policies

have had the effect of worsening the situation of young people. In the most extreme

case, that of Greece, unemployment goes from 12,7 per cent to a peak of 27,47 per

cent in 2013. In Spain, the numbers are also extremely high, increasing from 19,9

per cent to almost 27 per cent in the worst year of 2013. In Italy, where the situation

is not as strikingly as bad, we still observe an increase from 8,3 per cent to 12,5 per

cent as its worst, while Portugal goes up from almost 11per cent in 2010 to 16,8 per

cent in 2013 (Figure 2).

52

Figure 2. Unemployment levels in Greece, Italy, Portugal, Spain, Euro-area

and EU28. (Source OECD Unemployment statistics)

This illustration serves to compare with youth unemployment levels, which reach

extremely high levels: in Italy this is especially striking, with numbers going up to

46 per cent at their peak. In Greece peak levels reached 58 per cent in 2018, while

the corresponding numbers were 38 per cent in Portugal and 55 per cent in Spain

(Figure. 3). It is clear that while the general working population is worse off, young

people were also affected substantially.

On another measure, that of young people not in education, employment or

training (NEET), the picture is that since the crisis, the percentage has increased.

The explanation to this can plausibly be that the reform measures undertaken cut

budgets in all crisis countries on employment services and education, while the

amount of public sector jobs were reduced and job creation in the private sector was

weak. This formed a basis on which it was extremely difficult to maintain, let alone

decrease, levels of youth in risk of marginalization. In terms of numbers we can

note that the level of NEETs is high throughout, but again the peak crisis years

witness increases (Eurostat, 2020). In Greece, the increase goes from 17,5 per cent

in 2009 to 30 per cent in 2013; in Spain is consistently over 20 per cent but reaches

0

5

10

15

20

25

30

2010 2011 2012 2013 2014 2015

Greece

Italy

Portugal

Spain

Euro-area(19)

EU28

53

a crisis years peak of 24 per cent, while Portugal goes from 13 per cent up to 17 per

cent and decreases back to the 2009 level after that. In Italy, the situation is similar,

with an increase from around 20 per cent up to 27 per cent.

One reason why the numbers are perhaps not as high as they could be in the

countries going through bail outs, is that some moderate measures to soften the

blow were made, as Troika officials conceded on some points, as popular anger

rose. In Greece, this was witnessed by a shift in popularity to the left-wing Syriza

Party, and in Spain Podemos, a far-left upstart, was gaining ground. Concrete

concessions made in Greece are that NEETS are given partial access to work

scheme programs, and in 2013 a youth internship scheme for 45 000 young people

was implemented (EC 2010b: p.39). In Portugal, in the summer of 2012, minor

expansive measures were introduced to attempt to ease some of the effects of the

high levels of unemployment while furthering the restructuring of the economy in a

fashion that increases flexibility and precariousness. The Impulso Jovem initiative,

which seeks to target young people especially vulnerable to social exclusion

through internships, education and supported employment, was introduced. Young

people were also offered the chance of a “double diploma” equivalent to a lower

secondary degree (EC 2014: p.28). It must however be emphasized, that the overall

cuts are huge, as public investments are cut back on an unprecedented scale in all

countries and layoffs are massive.

54

Figure 3. Youth unemployment levels in Greece, Italy, Portugal, Spain, the EU28

and the Euro-area (Source: OECD Unemployment Statistics)

Another effect in all southern countries is the increase of short-term contracts

that combined with the overall increase in precariousness. One of the measures

passed by the Greek government is a labour market reform that aimed at decreasing

fixed term contracts is approved by parliament, whilst a new “wage grid” for public

sector workers was being finalized and social benefits were cut, as were health care

services (EC 2010b pp. 23-24.). Also, student tax-credits are eliminated, as are

mortgage rate reductions for first time buyers (ibid.) In Portugal, The Parliament

approved a variety of measures in a new labour code in 2011-2012, including

lowering of severance pay, redefining what constituted a fair dismissal, increasing

flexibility of working time, facilitating collective agreements and reducing social

benefits in order to get rid of “unemployment traps” (EC, 2014b p.16). In the

summer of 2012, Spain on its part, agreed to conditionalities set out by the troika

that followed the same blueprint as other economic adjustment programs aiming at

privatizations, commodification and increased flexibility on the labour market as

well as stricter conditions for receiving social benefits (EC, Spain, First review:

0

10

20

30

40

50

60

70

2010 2011 2012 2013 2014 2015

Greece Italy Portugal Spain EU28 EURO19

55

p.36). In Italy, the 54BN program of cuts was accompanied by a law that facilitated

dismissals (New York Times, 2011).

Since the crisis, short-term contracts have also increased entrenched, especially

in the south (Financial Times, 2019). In Spain, short-term contracts have increased

from 59 per cent in 2008 to 69 per cent, while the increase in Portugal was from 53

to 63 per cent. In Italy, the number grew from 43 to 56 per cent, while Greece in

this respect had the lower increase, from 28 per cent to 29 per cent.

Figure 4:Percentage of 18-30 year olds who felt marginalized due to the crisis

(Source European Parliament, Special Eurobarometer On Youth, 2014)

What is clear, following a survey of what measures were imposed on crisis

countries of the Southern Eurozone, is that these measures did not match with the

aims to fight precarious jobs, open up employment possibilities and reduce

unemployment. Rather, public anger and distrust seem to have risen, as the

economic conditions of young people worsened, as there are numerous reports of

social upheaval in the crisis countries, with headlines such as “Spain Steps Up

Austerity Among Protests” (Financial Times, 2012), “Portuguese March Against

0

10

20

30

40

50

60

70

80

90

100

Greece Spain Portugal Italy Germany EU28

56

Austerity – Want Government Out” (Reuters 2013) and “Greece protests Against

Austerity Package Turns Violent” (BBC 2011) become common.

In the same time, the measures implemented as conditionalities of the bail

outs both appeased markets and advanced the objectives of advancing structural

reforms. What regards young people, a special Eurobarometer of the European

Parliament revealed that the sense of marginalization was indeed very high

especially in the south of the Eurozone (Figure 4). In Greece and Spain, the feeling

of marginalization had reached staggering levels above 80 per cent of young people

in the age group 18-29. In Portugal it was 75 per cent and in Italy 70 per cent. As a

point of comparison, the number is 58 per cent in Germany. What seems thus to

have taken place in the years of the crisis, is that while the reforms accompanying

the bail-outs seem not to have had the effect of delivering on employment- and

social objectives, and while the policies set out in the Youth strategy are not even

remotely met, the sense of marginalization has increased. How this was

ideologically justified is the subject of the next chapter.

5.3 Conclusions

This chapter has shown that a significant restructuring of the political economy of

the crisis countries took place following the crisis, and this had serious effects on

young people’s lives. The reforms that were conditional to the bailouts, aimed at

calming markets and guaranteeing price stability, as well as to further entrench

marketization of the integration project in accordance with the objectives of the

second integration project as spelled out in the Maastricht treaty and the Lisbon

Strategy. A discrepancy between the targets set and objectives of EU-youth policy

is revealed, as unemployment rose, while precariousness and idleness increased.

These effects have been lasting after the crisis, as the current tool box of policies

continue to be inadequate as the structural imperatives will not allow for sufficient

coordinated European level policies that would entitle a true European wide

response to the situation young people are facing.

57

6. THE CRISIS AND YOUNG PEOPLE IN EUROPEAN

PARLIAMENTARY DEBATE 2009-2012

6.1. Introduction

In the previous chapter we have surveyed how the crisis played out in southern

eurozone states and how EU youth policy targets related to the economic

adjustment policies of the EU. The conclusion of that chapter was that there was a

discrepancy between stated youth policy aims and the policies demanded by the

troika as conditions of bailouts. The contradiction between stated intentions and

action derives from youth policy being overruled by the imperative to stabilize

markets through saving the financial system through attaching the conditionality of

austerity policies to the bailouts. As youth policies sit in the frame of the Lisbon

Agenda and its successor strategy Europe 2020, upholding the pre-crisis status quo

of a financialized economic model is the main target of policy, despite its

detrimental effects on social citizenship norms for young people.

The objective of this chapter is to describe how the crisis and the situation

of young people is debated in the EP in 2009-2012. I will show that the

Commission, Council, and the three largest groups in the EP - the EPP, the S&D,

PES and the ALDE - are mostly in agreement with reform packages leading to

austerity despite their negative impact on the social situation of young people. The

Greens and the GUE are more critical of the policies, but it is the nationalists on the

far right that most consequently challenge the EU-response. Young people are

almost invisible in the debates in the years 2009-2010, after which they start to

emerge in the debates in 2011 and particularly in 2012, but no fundamental change

in economic policy is formed, instead youth policy is included in the discourse of

justifying crisis policy.

58

6.2. The Debate on the Tenth Anniversary of the Euro

On the 13th of January 2009, the European Parliament convened for a so-called

Formal Sitting and debate: the topic was the 10th anniversary of the euro (EP,

2009a). The ensemble of speakers lined up consisted of dignitaries representing the

EP, the European Central Bank and the Commission, as well as the president of the

Eurogroup, Luxembourg's Prime Minister Jean-Claude Juncker. In addition,

members of the European Parliament contributed to the debate.

While the mood was festive in the plenary hall of the Parliament, an

unprecedented crisis was unfolding in the eurozone. The president of the Parliament

Hans Pöttering optimistically declared that the euro was to be “hopefully an

irreversible step towards deeper political and economic integration” (ibid.). It

would be “a symbol of a common, peaceful European future, particularly for young

people” (ibid.). The positions taken by other high-ranking politicians mirrored his

optimism. The ECB director Jean-Claude Trichet, stated that the Euro has been

“One of Europe’s main achievements” and that “One day, the creation of the euro

will be seen as a decisive stage in the long march to ever closer union for the

peoples of Europe”. He also mapped out some main political aims of the euro-

system:

“Since the introduction of the euro, our fellow citizens have known a level of price stability that few in the euro area had achieved before. This price stability is an advantage for all European citizens. It protects income and savings, helps to reduce the cost of financing, and encourages investment, job-creation and medium and long-term prosperity. The single currency is a factor for dynamism in the European economy. It has increased price transparency, strengthened trade and promoted economic and financial integration”(ibid.: p.9)

Only slightly more sober in his assessment, the chairman of the Eurogroup – an

informal body that is to gain increasing significance as the inter-state crisis

management structures start taking prominence – Jean-Claude Juncker stated that

the euro “is a measure of stability”, as he simultaneously and correctly warns of a

difficult year ahead. Juncker also states that

59

“The euro area economies are better protected against negative economic developments because being part of the euro area is a mark of quality certifying that its members have a real capacity for implementing prudent macroeconomic policies and policies based on sustained growth and prosperity for its citizens.” (ibid.: p.11)

The next speaker, Joaquin Almunia, representing the European Commission, took

the floor and continued on the same path of rhetoric. After establishing that the euro

is an “undeniable success”, he also stresses that the reason for this is that “The euro

has given us low inflation and low interest rates, thanks to a macroeconomic

framework directed at stability.” (ibid.: p.12). The Commissioner continued by

telling the audience that

“Within the short period of a decade, the euro has earned a well-deserved reputation for strength and stability. The euro is the second of the world’s currencies and, thanks to its role in the international economy, is already comparable in some respects to the dollar as an instrument of commerce and means of payment in international finance.”

The Commissioner, after having admitted that “the economic situation is not as we

had hoped”, proposed that the path forward was “Increased budgetary vigilance, its

extension to other macroeconomic aspects, the link between macroeconomic

policies and structural reform” (ibid.). As will become evident when the crisis

proceeds, these form the logical pillars of the crisis policy to come.

In two symbolically significant speeches from the representatives of the EP,

the chairman of the committees of Economic Affairs Pervenche Beres and the

member of the same committee Werner Lange spoke. As politicians they were

representative of the integration project both through their political affiliations and

nationality: the two post-war “motors” of integration France and Germany on the

one hand, and Socialism and Christian Democracy on the other. These are the two

sides of the same European coin outlining their understanding of the common

currency, now facing turbulent times.

60

Beres, in a clear echo of French dirigisme, pointed out that “the euro is the

successful outcome of a vision and political will, and not the product of the market.

It demonstrates the best that Europe can achieve when everyone joins forces” (Ibid:

p.14) Also, Beres salutes the success of the euro, which was supposedly evident in

that non-member states were now “knocking on the door”, and in the fact the

number of euro countries had risen from 10 to 16. She also hoped that an

“economic” union will develop along-side the monetary one” (Ibid.).

Lange, who represented the Christian Democrat family CDU in European

politics, continued on the track of asserting the “success” of the Euro, and also

established the priority as one of pushing down inflation and relying on the

Stability and Growth Pact and calling for “stronger coordination of budgetary and

finance policy” whilst stating an “appeal to Member States of the euro area, but the

also the whole European Union, to take this discipline, this coordinated

cooperation, more seriously than has been the case in the past”. The problems of

“varying development of interest rates for government bonds”, were also on

Lange’s horizon. Essentially, the course to take was to continue with more of the

same, with a little more discipline added. The financialized model of the eurozone

economy was endorsed:

“We have experienced the euro as a lever for creating a European financial market. The political conclusion from these common successes is that states with a common currency and a common internal market have achieved a unique level of integration that will secure peace and prosperity.” (ibid.)

The debate in January 2009 is instructive as it reveals many of the main

components of understanding the contrast between what is playing out in the

economy and the society, and how this reality is being debated in the Parliament.

Nowhere was to be seen a critical assessment of growth figures that have

stubbornly remained low, or the unemployment figures that even before the crisis

were high. Also, the volatility built in the financialized economy was not mentioned

as a risk factor that had become an ever present risk in the transition to the era of

post Fordism. From this debate, we can also start tracing shifts in the positions of

how the various actors formulated their responses to the crisis during the following

years.

61

What regards specifically the young generation, it was noticeable how they

were kept at the very margin of the debates until 2011, when the staggering youth

employment figures were impossible to ignore as they started to be translated into

political action in crisis countries questioning the status quo. But at the anniversary

debate of the euro, the only one specifically talking about the young, apart from

Pöttering, was the nationalist Nigel Farage, who refers to young people in the south

of Europe:

“Spain is in economic trouble. Italy, as German economists at the time said, should never have joined the euro, but the situation in Greece is, I think where we should focus our attention. Thousands of young people out on the streets demonstrating, demanding their government does something, demanding their government cuts rates, demanding their government devalues. But the Greek government is stuck inside the euro straitjacket” (ibid.: p.20).

This shows the sensitivity of the far right to the problem at hand, exploiting the

opportunity that arises when the discourse formulating the ideological vision of the

hegemonic project is weakening. As the establishment was concerned with

formulations that intend to smooth things over, their vision become vulnerable

when material conditions were visibly weakening.

The coming years would prove that far from being stabilizing factor, the

euro, because of it being a currency without a linked federal social and economic

policy, became a liability for all countries participating in the project. As for the

integration project, it had become evident that the very structure of the eurozone

was a main explanatory variable for the limited political choices available to solve

the crisis, as the policy of a strong currency and prohibition of it injecting funds

into the European economy to keep investor confidence up was still the preferred

policy objective.

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6.3. The Years 2009-2010

6.3.1 The Global Financial Crisis and the European Recovery Plan

Away from the festivities, the EP was also engaged in concrete policy making and

debating on how to solve the crisis. The main policy pursued was known as The

European recovery plan which proposed member states to “lessen the human cost

of the economic downturn” and to “help Europe to prepare to take advantage when

growth returns so that the European economy is in tune with the competitiveness

and the needs of the future, as outlined in the Lisbon Strategy for Growth and Jobs”

(EC, 2008: p.5).

In March 2009, the EP debated the forthcoming EU council with a

particular focus on the topics of this recovery plan (EP, 2009b: pp.2-31). The

rotating EU presidency was represented by Deputy Prime Minister Alexandr

Vondra of the Check Republic who announced that “As this Parliament certainly

knows, a wide range of measures have been taken by the Union and the Member

States in the face of the financial crisis. We have avoided a meltdown of the

financial system.” (ibid: p.3) The rescue of the financial system was now under

way, he declared, and “Our top priority now is the restoration of credit flows to the

economy. We have to deal, in particular, with the ‘impaired assets’ held by banks,

since these discourage them from resuming lending” (Ibid.). Further, the wake-up

call, following decades of deregulation of the financial markets globally, seems to

have been that “We also need to do more to improve the regulation and supervision

of financial institutions. This is a clear lesson from the crisis, and prevention is no

less important. Cross-border banks hold up to 80% of Europe’s banking assets.”

(ibid.)

Also, governments were to “commit to sound public finances” (ibid.).

Further, foreseeing the policies to come, the Council presidency stated that

“structural reforms are more urgent than ever if we are to promote growth and jobs”

(ibid). These remarks are echoed by the Commission President, who also adds that

the focus must be “on the social impact of the crisis, namely the problem of

63

unemployment” (ibid: p.7). This concern was also extended by social democrat Jan

Andersson of the PES, who was one of the rapporteurs of the plan, to young people:

“I would also like to say something about young people. Young people are currently becoming unemployed straight from education. We must create opportunities for young people to find employment or further education or whatever it may be. Otherwise, we are storing up problems for the future. In conclusion, we must act. We must act in a coordinated way with solidarity, we must act now and not wait, and our action must be sufficient” (ibid. p.8)

This was one of the rare occasions when young people were mentioned in the

debates surveyed that year– but again, the commendable goals of that statement are

not being implemented in the states facing the crisis. Thus the paragraphs quoted

above visualize the discrepancy between what is said and what in effect will be

done. As such, the debate on the European Recovery Plan touched on what is to be

a severe contradiction during the crisis years which is that the post-Mastricht

integration project with its ingrained belief in a logic of post-fordist neoliberal

regulation regime is compatible with maintaining norms of social citizenship. The

neutralization of this antagonism instead will become more and more difficult, as

the crisis deepened.

The European crisis strategy was confirmed at the G20-meeting in in

Pittsburgh a month later, underlining how the regulation regime indeed had a global

dimension. The following passage from Commission President Barroso underscores

this:

“In the current period of uncertainty it was also vitally important that the G20 participants confirmed some of the fundamental economic paradigms: the core or the heart of our global recovery plan must be the jobs, needs and interests of people who are not afraid to work, and this applies across the whole world, not only in the rich countries but also in the poor countries. At the heart of our global recovery plan must be the needs and interests not only of people alive today but also of future generations. Recovery must not be at the expense of our children and grandchildren. The only reliable basis for sustainable globalisation and growing prosperity is an open world economy build on market principles, effective regulation and strong global institutions.” (EP 2009c: p.64)

64

The European role in the creation of the regulatory regime that was now struggling

with facing the crisis had been considerable, as European states and particularly

France had played the protagonist in building the institutional framework that

characterized global neoliberalism (Abdebal, 2006). This architecture had in fact

been favourably disposed to a US-led global order where finance capitalism with its

crisis proneness, has become the trusted source for growth (ibid.).

The passage quoted above is revealing as it uses the concept of “future

generations” to justify the policies agreed, and links this with “needs and interests

of people who are not afraid to work”. The signal in the statement is that there is a

global commitment to cement the recovery that is depending on structural reforms

that depend on stylized neoclassical models of labour allocation. Apart from the

rhetoric, the immediate discrepancy that comes to the fore is that it has certainly

been no secret that the current structures are precarious, while warning bells had

been sounded also by many economists before the crisis (Ryner & Cafruny 2017:

pp. 101-104). While Barroso might reassure capital markets that the institutional

structure will continue to serve their interests in the name of “sustainable

globalization”, it on the other hand promises more of the same to the “future

generations” who are supposed “not to be afraid to work” despite them actually

starting to pay the price for policies that are not of their making, instead finding

themselves excluded from the labour market or more often pushed into precarious

short term contracts.

Commissioner Olli Rehn's statement that followed Barroso’s, supported the

approach of the G20, but in his account, the blame was shoved squarely over the

Atlantic as the crisis was said to have originated in the “greed” found “especially on

Wall Street” (EP 2009c: p.68). There was no mention of the role played by the

financial centre of the City of London, or how this same model of growth based on

“greed” was consciously adopted by the EU as a central component of the post-

Maastricht “relaunch” of the EU. That would, of course, have been an effective

admission that the economic policy leading up to the crisis was to blame for events,

and that would in turn have implied that there would be a need for a fundamental

reassessment of policy, which member states, especially Germany, were not keen to

do.

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It is however important to recall that the Single Market, as designed by the

British Lord Cockfield, was in fact specifically constructed to maximize the interest

of the City and financial institutions, and this arrangement gave, through so called

passporting rights, access to transatlantic capital to the European market playing its

part in making the regulatory regimes on both sides of the Atlantic more compatible

and powerful (Ryner and Cafruny: p. 60). This, in turn, was to have profound

consequences to the central European model of coordinated ‘Rhienland

Capitalism’, which was in the post war years well designed to ensure the

functioning of welfare states, as they were more prone to long term investment

rather than the deregulated growth model of a financialized economy (ibid: pp.106-

108). Thus, when Rehn put the blame on the “greed of financial markets” and

called for a “returning to the basic values of the European model, which requires

combining entrepreneurial initiatives, respect for productive work and striving for

solidarity” (EP 2009c: p.64), the question arises as to what the model was supposed

to generate before the fall. There was more of a hint of contradiction in Rehn’s

words: “In other words, our common challenge now is to save the European social

market economy from the systemic errors of financial capitalism” (ibid.: p.68)

as the traditional model of European welfare capitalism seemed to have be

adversely affected by the financialized growth model due to its volatility and

increasing demands for loosening of social citizenship norms.

The creation of jobs was also signaled as a main priority as unemployment

was rising. This was predictably by the European Council and the Commission to

be found in a more flexible labour market and “structural changes”. These

commitments were also articulated on the 5th of May, when the EP gathered for a

debate on employment (EP 2009d). The Council presidency, in the wake of the

alarming situation that was arising in the south of Europe, announced that “creating

a favourable environment for investments and job creation” was a priority that was

to be realized through “flexicurity” (ibid: p.68). Flexicurity is modeled on the

Danish labour market, which allows for a relatively relaxed approach to dismissing

people, with the aim of this creating a labour market in which labour is to shift

according to needs arising on the market, but still ensuring a social safety net

(Madsen, 2004). There is, as we have seen in previous chapters, nothing new in this

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as it corresponds to the Lisbon logic. But now the crisis becomes an argument to

speed up the flexibilization of the labour market.

The Council’s approach was also illustrative in emphasizing that social

security should not be a “passive safety net”, as there was a “need for incentives to

actively seek employment”, and the young should get better “communication

skills” to find jobs (EP, 2009d: p.68). This approach that the responsibility to find a

job increasingly was with young people themselves, while welfare states were to be

designed to pressure on young people to find a job, was of course, to put it mildly,

very difficult in economies where there are not enough jobs available and where

jobs were being lost due to austerity measures.

This, however, reduced the capacity of the state to mediate social relations,

and as the crisis made the social situation worse, it also increased the everyday

pressures on individuals. The problem in terms of welfare regimes was undoubtedly

arising, as welfare states are designed as to be dependent on a high employment

rate: in the Nordic countries it was especially the banking crisis of the early nineties

that shifted responsibility on individuals in order to cope with the withering of the

social dimension that was emerging in a more open global economy, where the

social fabric of a state was challenged by the increasing power of transnational

capital in a deregulated economy (Andersson, 1993). What happened now in the

crisis context, was a continuation of this path but in the context of the southern

periphery of the Eurozone that in the 1990’s had been characterized by high levels

of growth resulting from an increase in lending from especially German banks that

financed debt in southern countries competing with a competitive Germany

(Lapavitsas: pp. 1-5). Now in the debate in parliament, the crisis was

instrumentalized both as an explanation to why the crisis occurred, and as a

justification of further moving in the direction of deregulation.

In the analysis of the Commission, however, the crisis lied in a “rigid”

labour market and burdensome welfare states, and that these must be restructured as

“Profound changes are going to be needed to face stiff competition in a globalised economy and to safeguard long-term employment in the EU. However, in many instances, these changes are actually about continuing initiatives or even accelerating the overdue reforms which have been pursued for

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many years in the context of the European employment strategy” (EP: 2009d: p. 68)

This strategy of remodelling societies – which had not in fact hitherto generated

high growth rates or high rates of decent employment – was consequently pursued.

6.3.3. Elections to the European Parliament: “Everything Has Changed

But I am staying”

In this unprecedented context of crisis, elections to the EP took place in June 2009.

The electoral campaigns and the results naturally impacted on how the crisis was

debated. The winner of the election was the European People’s Party Grouping

(EPP), a coalition of centre-right parties (Lightfoot, 2009: p. 31). Of the three

political “spiritual families” the Socialist PES group fared rather badly and came

second, a position they had held since having been relegated to it in 1999, while the

Liberal ALDE group also lost seats (ibid.).

An interesting feature of the elections concerned the endorsement of the

Commission president. The former premier of Portugal, Jose-Manuel Barroso, had

already well before the elections been endorsed as the EPP candidate (Ibid.). The

position as president was significant, but the Socialists were incapable of

nominating their own candidate to oppose the centre-right Barroso who was

running for re-appointment: in fact, socialist or social democratic- led governments

in Britain, Portugal and Spain openly supported Barroso’s candidature, effectively

torpedoing any attempts to nominate a centre-left candidate, and thus the only

candidate finally accepted by the European Council was Barroso (Garcia and

Priestly, 2015: p.64). After the elections, the PES also rushed to form a coalition

with the centrist Margherita party from Italy, which further highlighted their

centrist positioning and which gave the group more votes to cast in Parliament

(Lightfoot: p.37). The group also changed its name from the Party of European

Socialists (PES) to Socialists and Democrats (S&D). In practice, the S&D also

continued a policy of supporting the EPP on implementing a shared policy agenda

(Ibid: p.38). The EPP and PES together also agreed to share the position of the

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President of the EP, with the position first going to EPP:s Jersy Buzek for two and a

half years and Martin Schulz of PES for the latter half of the legislative period

(ibid.). These

facts are relevant to mention not merely for providing a context, but also to

underscore the consensus prevailing in European politics between the main party-

political players; the electoral campaign had showed that despite differences in

emphasize, a broad consensus, as was noted in a comprehensive election study,

prevailed: “to a large extent, policy alternatives were relatively limited and the

main cleavage was between pro-and anti-integration parties, especially as all four

main parties supported the Lisbon Treaty” (Lightfoot: p. 34).

After the EP-elections, the first parliamentary debate of substance

considered indeed the appointment of Barroso as Commission President, an event

preceded by a debate on his nomination and political program. In the debate,

Barroso laid out his plans in front of the legislators. Barroso, who had already

presided over the Commission for five years before his reappointment, asserted that

“now is not the time for status quo, routine. We must have an agenda for change”

(2009e: p.46). The detailed substance of this change was very limited in his speech,

but he promised that while the crisis had to be solved, “we must keep an eye on the

future”. This was to be done through “overhauling the Lisbon Strategy after 2010”,

as there was a need for “a much more integrated approach to the economic, social

and environmental strands of the different strategies” (Ibid.) As we have seen in

previous chapters, the direction that this overhaul was in fact to continue to pursue

the aims of the Lisbon Agenda. This was not missed by the leader of the Greens

Daniel Cohn Bendit, who ironically quipped in his speech that “we are told:

‘everything has changed so I am staying’” (ibid: p.52).

Barroso’s analysis on the financial system was vague but politically

significant: “regulation and supervision have not kept pace with the integration and

innovation of financial markets – not in Europe, not at a global level” (ibid: p.46).

This statement does not acknowledge that it in fact had been a political choice to

deregulate the financial markets and meet their needs in the first place. Instead, the

focus lied on what has not been done and not on the active political participation by

decision makers in the deregulation efforts. This shows an important element of the

EU’s response to the crisis in the years 2009-10. Those efforts were not

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characterized by moving away from the financialization of the economy. Instead,

the EU’s foremost decision makers were keen on first saving the status quo, and in

those cases were deepening of integration was on the agenda, to do it through

intensifying the goals of the Lisbon Agenda.

It was also clear at this point that young people, while being considered an

important group to integrate in that agenda, were not yet seen as relevant to

mention at this level of debate. While Barroso refers once abstractly to “future

generations” (ibid.) when talking about the need to strengthen innovations, young

people were absent from his speech, as they were for the other political groups as

well.

There was still some time however, before the near insolvency of the

southern eurozone states makes the debate more urgent in tone, and the main

concern in the debates in the EP continued between 2009-2010 to be on the shifting

large sums of money to financial institutions, and to maintain monetary stability

and liquidity. Thus, Commissioner Almunia announced in September, reporting to

the EP from the G20 Summit that

“We can now confirm that these stimulus plans, together with the very significant monetary stimuli adopted by the central banks, plus the mobilisation of public resources in support of financial institutions, particularly the banks, have managed to halt the economy’s freefall.” (EP, 2009f: p.3)

With this was meant that an agreement to save financial institutions was reached,

paving way for a shift towards a debate on debt levels. It is noticeable that any

substantiated policies to encounter the unemployment and risky debt situation was

before this rarely tackled in the deliberation of policies. The market had to be

saved, and the opportunity was taken to reshape economies to better fit the need of

a globalized financial capitalism. This will increase the rifts in the social fabric, as

the “social” component of the “social market economy” was becoming more

absent.

In October, when the program of the Swedish EU-presidency was debated

in the EP – and when the crisis was certainly an undeniable reality – there was

merely a recognition from the Council Presidency that ”the situation on the labour

markets is expected to get worse yet and we will still need stimulus and support

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measures” (EP 2009g: p.3), without any specification on what these measures are to

be.

The party-political groupings’ response on what ought to be done, equally

followed generally a similar pattern of scarcity of specific remedies. The

conservative EPP stressed the need to make sure that the “social market economy”,

a concept much used, was preserved, through “saving of jobs, on maintaining or

restoring confidence” (ibid: p.5). For the EPP, increasing competitiveness through

“painful measures” (EP 2010e) in order to “restore calm to the financial markets” is

a priority (Ibid.). Also, a pattern of stressing the need to supervise the financial

markets was emerging, but there is not much concrete in terms of how. The

question of a financial transaction tax also briefly surfaced, as in in April 2009 (EP

2009d: pp.64-65), and later in the year there was a call to “cap bonuses” (EP 2009f:

p.5) in the financial sector as well to invest in research.

Overall, the EPP was consequent in advocating austerity: in a debate

foreshadowing the massive assistance programs mobilized with regards the

southern eurozone countries, the EPP expressed that “social protection is of course

important” but ads that “The European Union does not make funds available

without conditions” (EP 2009e: p.83). These conditions turn out to be causing

austerity measures that limit public spending significantly, while reducing the

number of jobs and lowers wages. Also, the crux of the matter is that when the EPP

consequently in debates support the Eurogroup and the troika, it did not matter

much if it simultaneously declared intentions of a less harsh nature. Noticeable was

that at this stage that the situation of young people did not figure at all in the

speeches of the PPE.

A central aspect of the EPP:s position was justifying the policy of austerity

as a condition of the “social market economy”, a phrase also preferred by by

Commission President Barroso, for example when he was explaining that the crisis

response policy now was about “secure financial stability, first through the Greece

Programme and then through mechanisms for the euro area as a whole” and with a

“programme for growth and jobs through structural reforms” (2010e: p.99).

The S&D articulated a sense of urgency, as “The crisis is deepening and

jobs are being lost” (2009b: p11). Also, the S&D took a position in which it

questioned the IMF and states that the most vulnerable “should not have to pay for

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the adjustment policies” (EP 2009e: p.84). Also, they shoed concern for the

situation of young people, a rare thing in the debates, by worrying that “young

people should get a foot hold on the labour market” (2009d: p.68). But while a

financial transaction tax started to figure as a priority in 2010, there was no real

questioning of the structures that in the end governed the economy of the EU,

which sums the difficulties of the S&D group: the integration project seemed hard

to accommodate with social democratic commitments to more social equality.

There was also a slight shift in the rhetoric of the S&D group evolving :

whilst still critical of employment not being taken into account “enough”, and the

talk of workers paying too high a price of policies in the crisis countries, there was

now a recognition that “it is not just a question of austerity” (2010i: 15.12. p.175,

my emphasis). This “just” signals that indeed austerity is needed, but other

measures, such as more expansive strategies, should be adopted as well. In the same

time, the party accepted the policies that were being implemented in the crisis

countries, leaving open the question as to what in practice was the alternative policy

suggested. There was concern for the young, but this was, in 2010, only expressed

once in the debates directly concerning the general crisis policy. The socialists

were, on the level of rhetoric, deploring the social situation, but the structural

realities, which the party was not going to challenge head on, remain there. Thus, in

the debate, the attempt is to show concern, whilst not challenging the fundamentals

of policy. Indeed, the party was sure that the Greek finance minister

Papakonstantinou “will do an excellent job” (2012b: p54) in a debate where

measures of austerity and restructuration are on the agenda.

Of the smaller political groups, the line of ALDE takes shape in the form of

openly promoting more flexicurity, and pushing for the implementation of the

Lisbon Strategy, for example claiming that “it is the Member States which ignored

it that are suffering the deepest and the longest” (2009c: p.12). The criticism that

not enough is being done in terms of implementing the Lisbon Strategy in fact can

be taken at this stage as perhaps the toughest position as to consequences for the

welfare states of the south. This was underscored by Liberal Democrat leader

Graham Watsons claim that the IMF must be financed despite it “being rough

justice that responsible Member States must mitigate against default by those that

lived it up” (2009c: p.12). ALDE, by 2010 had assumed a its federalist positioning

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in the public debates through calls for stricter implementation of both structural

reforms, and eurobonds that would mutualize debt (EP2010j: p 9). Also, a stricter

implementation of the Lisbon strategy was called for. The message to the crisis

countries was generally that there was a need to act more strongly to force them to

change the structures of their economies to become more competitive. In effect, as

in the case of the PES, structural constraints and ideological commitments to

finance led growth models caused a situation where the “structural change” and

austerity was indeed being implemented – within which all the other policies, also

what regards youth policies must fit – while the other side of the coin, that is the

federalist proposals of a more social character, were not to become reality.

The Greens, in the year 2009, were both critical of the finance sector and

supported “Green energy”, as it would provide “far more jobs-rich than investment

in business as usual” (EP2009c, p.70). For the Greens, the problem arose in that the

party articulated pro-integrationist Keynesian policies, but did not propose concrete

ways of challenging the prevailing structures. Though there was clearly a strong

support for more federalist European solutions, and calls to put “Keynes in

Brussels” surfaced (2009e: p19), but in the same time the Greens also supported a

line of “harsh, immediate action” for stricter budget discipline (2010j: p 176). What

regards young people, the group profiles itself through MP Emilie Turunen’s Own

Initiative Report on access to the labour market for young people (EP, 2010e) with

proposals including the Youth Guarantee that is to surface in Commission and

Member State plans. Nevertheless, the debate was not identifying the link between

the Maastricht treaty, the Lisbon Strategy and the policy of the strong euro with the

consequences playing out in the crisis countries.

On the far left there is a constant criticism of financial globalization in the

debates, and the GUE also pointed out in a debate, which was to serve as a

foreshadowing of what is to follow when crisis policies are applied to the Southern

countries, that

“the problem facing us this evening is indeed the nature of the conditions that you attach to the granting of European assistance or International Monetary Fund assistance to the populations. This assistance “can no longer be conditional on the application of structural adjustment plans reducing social

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expenditure, training expenditure, and privatising public sectors, including social services of general interest” (EP 2009e: p. 84)

This made the GUE group unique at this stage in bringing up problems of

conditionalities. But even for the left, a picture started emerging of difficulties in

proposing alternatives to the status quo. The analysis which forms the basis of the

critique of the policies at hand are obviously hard to enact upon in practice without

taking a nationalist turn or supporting a Europe wide transfer union.

On the fringe at this stage, is the nationalist right that flavor their rhetoric

with firebrand statements for example detecting “a new conservative revolution”

spreading from the USA (2009e: p.7). The policies of the hard-right groups are

consistent in advocating an all-out break with the euro, which will be key in their

electoral platforms across the continent as unemployment increases.

The overall direction was that the Council and Commission pushed forward

with a more coherent strategy where the message of higher employment stood in

contradiction to the social effects caused by the crisis. Leaving aside a struggle

between Commission and Council as to whether there will be stronger “community

approach” or an interstate one, what emerged was a picture of strengthening

supervision of the national economies as the Commission “now see a willingness

on the part of governments to accept stronger monitoring, backed up by incentives

for compliance and earlier sanctions” (2010g: p.7).

Whilst discussions of “economic union” was still emerging in the debates, it

seemed already clear that in terms of crisis management and of indeed the measures

to supervise budgets, the direction was that of a continuation of the pre-crisis

situation in terms of common economic and monetary policy but with increased

surveillance measures. This reflected the power relations of the union, but as the

bail outs were causing political upheavals also in the creditor countries, the matters

moved in a direction where the southern crisis countries were pushed to deep

structural reforms as a condition of bail outs that in effect keep them in the euro-

area.

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6.4. The Years 2011-2012

6.4.1 The Crisis Deepens

In 2011 the crisis was deepening and the bailouts of Greece and Ireland were

implemented with attached conditionalities while criticism in the creditor states

against financial commitments grew and the social crisis in the south deepened.

One example of the unease in the countries providing the loans for the

bailouts was witnessed when the ALDE group highlighted the situation in Finland,

where the nationalist True Finns party was gathering support, as resentment

towards the loan-packages among the electorate had grown. The ALDE speaker,

Carl Haglund, highlighted the need to speed up reforms to save the euro area,

(2011e: p.229) pointing out that this should be done in a more “ambitious strategy”

(ibid.) in order to avoid the partial decisions that are keeping the question on the

agenda of national parliaments.

This was in response to the European Commission that was now, along with

the Council and the Eurogroup, driving wage cuts and structural reforms in the

southern periphery. “Competitiveness” was a word frequently used in the debates,

and so was the concept of structural reforms. Words were also matched with

actions, and the assistance program for Greece had set the blueprint for what was to

come also for other countries. The debate on the crisis on the 11th of May in 2011

centred on concrete measures of policy taken in the crisis countries, and was

instructive as it showed how the political actors positioned themselves in relation to

concrete policies. After the debate, there was no uncertainty as to how difficult any

alternative to the drastic cuts was, as leading politicians in the debates explained

why they were necessary. The Council president in office, Andres Karman, noted

that

”The Portuguese Parliament had previously rejected the new fiscal conciliation package proposed by the government. Negotiations between the Troika and the Portuguese authorities have now been finalised and the memorandum of understanding on the policy conditions attached to the financial assistance is being agreed.” (ibid: p. 224)

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Portugal had thus shown an example of how national opposition was brushed aside.

If a state was to avoid insolvency, and perhaps even being kicked out of the euro,

the strict conditionalities were to be met, notwithstanding opposition or indeed

social costs. EU Commissioner Olli Rehn confirmed this approach by explaining

that

“it is a demanding but fair and necessary programme of adjustment. It will require

major efforts on the part of the Portuguese people. Great attention has been paid in

its preparation to social fairness and protecting the vulnerable. Europe stands by

Portugal for the sake of the country and for the sake of economic stability in

Europe.” (ibid: p.226)

Yet, the deep cuts in social welfare had, as the survey in chapter 5 confirms,

adverse effects on social citizenship. The “social fairness” Rehn is referring to was

evidently not the priority: what was at stake here was primarily achieving the goal

of keeping the euro area intact in its current configuration, while enforcing

structural changes accommodating to investors’ needs.

Rather more accurate was the statement that ”At the present juncture,

financial stability is being safeguarded by the EU-IMF stability mechanisms and

especially by the actions that the Member States – especially the vulnerable

Member States – are themselves taking” (ibid.). These “actions” were the ones

agreed to in the memoranda with crisis countries, and they were specifically

designed to significantly scale down public sector expenditure. In another debate on

Greece, Rehn stated that

“we want Greece to remain part of the European family and of the euro. After living beyond its means for too long, the journey Greece is now undertaking is difficult…but it is a journey we are taking together in a pact of solidarity”(EP 2012e)

If the supreme objective was to safeguard the structure of the EMU, which

also meant retaining a system that did not have means for a European wide social

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policy as creditors were not prepared to go for income transfers, the path taken

seemed to be the only viable one. However, what this illustrates are the socio-

economic power relations of the integration project. Any youth policy goals that

had the objective of safeguarding social citizenship norms could not, in this setting,

override the primary objectives of policy. As young people were already in a

vulnerable position on a labour market where their foothold was often not stable,

the effects of the crisis are exceptionally harshly felt. And there was not much

support coming from the largest European political parties either.

As a response to the austerity, the left of centre S&D had previously in

March 2011, in a more general policy debate, through its president Martin Schulz,

strongly questioned that crisis countries were not allowed “interventionist measures

by the state”, while he also pointed out that proposed cuts in budgets would prevent

further investments (EP 2011b: p.228). However, a bit later in the year, Shultz

voiced his support for a harder approach from the part of the socialist and democrat

party family: ”we are in favour of budgetary discipline, because there is absolutely

no alternative to this. However, it must be fair.” (EP 2011g, p.9). It seems that

while “fairness policies” such as caps on bonuses, are added to the rhetorical

toolbox, the very concrete policies of adjustments are accepted in the end.

Perhaps unsurprisingly, in the debate on the crisis packages in May 2011,

the left group GUE profiled itself as a critic of the economic structure of the

eurozone, and it was also critical of the adjustment packages. The left condemned

the “irrational criteria of the Stability and Growth Pact”, and expressed its “deep

indignation” (2011e, p.230) of the adjustment policies. However, a revealing

exchange on what makes action difficult ensues after the speech, when Peter Van

Daelen from the right wing nationalist ECR group poses the following question:

“if what your country has agreed is as bad as all that, and if it is so bad to find yourselves under a real regime whereby you even have to restructure your whole economy, why not leave the euro area? The euro is a strong currency and there have to be prerequisites for that. If that troubles you, you should just leave!” (ibid: p.231)

The answer from the GUE speaker is telling:

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“[it] is unacceptable…that a question like this can be asked when Europe’s leaders were unable to admit in time that their policies were responsible for exacerbating the situation of Portugal, which, as is well-known, had a fragile economy and had to be subjected to the policy of the strong euro, which serves the interests of Germany, France and others, but does not serve the interests of Portugal or of other countries with weaker economies" (ibid.)

This shows the difficulty in both remaining a member of the club but to effectively

question the adjustment policies. This will also be apparent when the left gains

government power in Greece, as the consequences of being forced to leave the

EMU seem too risky, and German led ordoliberal austerity policy is finally

accepted. The situation is contradictory for a left that after all does not challenge

the structural setting of the integration project. Instead, the nationalist right is given

the possibility to portrait itself as the one challenging the hegemony, here in the

words of Marine Le Pen of the Front National:

”There are two possible solutions: Greek debt restructuring accompanied by the restructuring of the public debt of failing States leading, ultimately, to the collapse of our banking system, or a concerted, rational and pragmatic exit from the euro area enabling Greece to catch its breath.” (ibid., p. 232)

During the crisis years, there was a continuity in the rhetoric of the far-right that

posed an alternative to the status quo: while the ruling block, consisting of the

“traditional” forces of European politics are struggling to solve the crisis, the far

right pitches itself as an alternative. This alternative, as well as the far-left, was

becoming more attractive to voters, as the situation gets worse during 2011.

While 2011 saw a shift to a more urgent debate on the crisis, during which

the policies were cemented with the justification of increasing competitiveness and

growth, also young people, a key group for the future of the integration project,

finally started to emerge in the high-level policy debates. However, no real

alternative on part of dominant policymakers was offered to ease the situation of

young people. In 2012 a more pessimistic outlook on life in the crisis countries

parallels unemployment levels of young people and increasing precariousness.

According to the May Eurobarometer that year (Eurobarometer, spring 2012), 98

percent of Greek people, 88 percent of Portugese and Spanish and 87 percent of

Italians think that life for young people in their countries are worse than elsewhere

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in Europe. By contrast, the same figure for Germany is 21 per cent, for Austria 14

per cent and for the Netherlands 20 per cent. Polarization is strong within the

Union.

In this atmosphere, disintegrative tendencies were getting stronger, as

Eurosceptic parties were gaining support on the left, but particularly on the far

right. In Italy, many young people had opted to vote for the Cinque Stelle

Movement that was openly challenging the eurozone orthodoxy and European

integration; in Spain Podemos with its critical attitude to eurozone austerity was

rising. At the same time, the far right was gaining ground as French FN led by

Marine Le Pen, and The Lega Nord with Matteo Salvini in charge were rising. In

Greece, eurozone austerity was blowing wind into the sails of far left Syriza. There

was no doubt that also the situation of young people had to climb higher on the

agenda.

6.4.2. Young people on the agenda: “A Need to Make Sacrifices”

The way young people seriously entered the crisis debate in the EP was not through

proposals to change essentials of policy. When the social democratic prime minister

of Denmark, Helle Thoring Schmidt, in the capacity of President on Office of the

Council, announced, among many congratulatory remarks especially by the centre-

right, the priorities of the Danish presidency of the EU 2012, it was the first time

that young people were put at the top of discourse on the crisis. In her address to the

European Parliament, she announced that

"What our youth demand of us is only fair: access to the same education and job opportunities that previous generations have enjoyed. A chance to contribute to their societies and to build a secure future”. This “pact between generations” was envisioned in the terms of a “social market economy” where "Restraint in spending is not a departure from solidarity – in present conditions, it is a precondition for dependable solidarity. I am certain that a great majority of people understand that, and are prepared to be part of it, if it is fairly applied. People are ready to make sacrifices, but they will not be sacrificed. People will accept austerity with justice, but they will resist austerity that is manifestly unequal and unfair. As leaders of Europe, we must work in that knowledge and respond to that reality." (18.2012: p.2)

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The Danish PM thus, in effect proposed more cuts and austerity, justifying this with

a “need to make sacrifices”. Concerning young people in the crisis countries, it

must be asked if this does not sound hard to accept: if the European integration

project was to promise more sacrifice in a situation where unemployment rates

were already sky high, while welfare was cut back, this surely was deepening

dissatisfaction. While the approach was designed to reassure markets and investors,

the ideological explanations offered to young people were sounding hollow, as

material conditions were getting worse.

The European institutions were keen to endorse the Danish presidency

approach. European Commission President José Barroso, in response to Thoring-

Shmidt, told he was “convinced”, after having “listened to [you], and your inspired

remarks, about your sincere commitment to European values” (ibid: p.8). What had

by now become the familiar remedy of “stability”, “structural reforms' “ and stricter

“economic governance” was going to be implemented (ibid.).

There is now, however some criticism against policies, and some

recognition of the structural nature of the problems – for example, in a debate on

the Annual Growth Survey, the rapporteur notes that the parliament’s “main

message” is that there is “need far more coherence between fiscal and budgetary

policies…and social and employment policies” (EP 2012b, p.30). The Greens also

make a point, in relation to the debate on the Danish presidency, that it is a

“huge problem that we believe that we can have a common currency and that we can defend it without having a truly jointly functioning European Central Bank or without authorizing the European Financial Stability Facility”

(EP 2012a: p.15) This is not translated into concrete policies, however, and in fact

at this stage the adjustment programs are already up and running.

The mechanism that was now to be offered to young people in 2012 was

called the the Youth Guarantee, which was adopted in 2013. The objective was to

provide young people with a public “guarantee” of either education or employment

to avoid prolonged period of idleness. This Youth Guarantee was to be financed

and implemented almost fully by EU member states themselves, only providing the

instrument of voluntary reporting by national authorities as a way to perhaps put

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some pressure on governments. Thus, it was an ineffectual way of dealing with the

problem in the worst hit countries. Its visibility in most countries also was

extremely high limited, as 79 per cent of young people had never heard of it (figure

7), meaning that much political credit was not to be gained. One big weakness of

the Guarantee was that while giving “a chance to our young people” (EP, 2012h:

p5), it has not so much of practical meaning in crisis countries as that would require

transnational shifting of funds in order to be able to implement it in the first place

as they were pressed to do extensive cuts.

Figure 5: Have you ever heard of the Youth Guarantee? 18-30 olds (Source:

European Parliament, Special Eurobarometer on Youth, 2014)

However, in 2012, three years after the effects of the crisis were seriously felt,

young people at least are in the focal point of the debate. Even the centre-right EPP

recognized that “particularly the young” needed jobs (EP, 2012c p.8). In Parliament

in March 2012 Hannes Swoboda, on behalf of S&D, asks “what are we to say to

young people that do not find work?” and continues with the pertinent question that

up until that point had perhaps been taken as granted, “how can we win them over

to the case of Europe” as “we have responded so late to the problem of youth

yes,butdon'tknowthedetails Yes,knowsthedetails No

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employment” (ibid p.9). Now, there was suddenly worry for what has become

known as the “generazione mille euro”, a reference to the Italian young people

who earn a thousand euros or less a month. Also the S&D now recognized that

austerity measures in Greece and Spain were ineffective. The remedy for young

people was proposed to be the Youth Guarantee, but no concrete proposals were

made as to question the structures of the Eurozone, thus not helping that

discrepancies between what the policies enacted upon have been and the rhetoric at

the European level were becoming visible.

The justification for austerity policies as a means for a better future for

children and young people is also an argument when the future of Europe is debated

on Europe Day on the ninth of May. Martin Schulz, now President of the EP, calls

for “budgetary discipline” in order to avoid that his “children and children’s

children will have to foot the bill” (EP 2012d: p.5). That continues as a basic line of

argument that year. A further example of this being when Swoboda stressed that the

S&D did not want “war between the generations”, while reminding that “our group

– and we have repeatedly made clear – is not opposed to budgetary consolidation”

(ibid.). The Green group on the other hand proposed the “reopening of the

Memorandum” in Greece, while their leader Daniel Cohn Bendit, simultaneously

hoped the Greek to “be capable of keeping up with the reforms” (EP, 2012d: p. 12).

On the far right, Nigel Farage of NI, used the Europe Day session to celebrate a

“democratic rebellion” that he claims has begun in Europe (ibid: p12).

The discrepancy between youth policy targets and the de facto European

policies was also evident in the “youth initiatives debate” on May 23rd (EP 2012f)

There, proposals to invest money in training were discussed (a debate from which

right-wing political groups were absent), but also in that case, a link between

overall economic governance and monetary policy which were reflected in the

adjustment programs, was not made with the social and employment problems

young people are facing. While there was a recognition that more public

investments were needed, there was not any questioning of the policies that have

been implemented on the ground through the adjustment programs, marking the

overall difficulties in remaining committed to integration while demanding a more

socially just Europe.

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6.5. Conclusions

This chapter mapped out how the debate on the Euro Crisis played out in the

European parliament in the immediate years after the crisis. What emerged was a

picture in which most parties agree on a crisis response that involves austerity,

structural reforms and labour market flexibility. Further, it is not before the summer

of 2011 that the subject of young people start to appear regularly in the debate, but

also then, there was not many attempts to advocate for a change in policies that are

evidently causing youth unemployment rates to rise and marginalization to

increase. As there was a general acceptance of the economic structures of the

integration project, the scope for advocating real change in the deteriorating

situation was narrow.

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7. CONCLUSIONS AND SUGGESTIONS FOR FURTHER

RESEARCH

1.1 Youth Policy and Post-Fordism

Prussia’s iron chancellor Otto von Bismarck famously asserted that “politics is the

art of the possible”. In this thesis, I have been interested in understanding what

determines the framework that constitutes this “possible”. In terms of youth policy

in the EU, I have concluded that this “framework of the possible” was constructed

within the context of a post-Fordist economic structure, and that this in turn was a

political and ideological choice that was made by policy makers. The consequences

of that, in the context of the Euro Crisis, was that the disintegrative tendencies of

the EU deepened as unemployment rates rose and social conditions were aversely

affected as a result of crisis policy.

Meanwhile, the Lisbon Strategy of Growth and Jobs was an overarching

frame for the increasingly neoliberal policies to be promoted in a eurozone. This

heyday of an economic model with roots in the epochal shift from embedded

liberalism to neoliberalism that stemmed from the late 1960s, also seemed to reach

a limit with the subprime crisis in the US in 2007 and the subsequent Euro

Crisis. This helps explain why the political choices that followed the crisis of 2008-

09 seemed to run contrary to most manifested targets of youth policy in large parts

of Europe, as these polcies were imprisoned by a rigid political structure

conditioned by German led ordoliberalism. As a consequence particularly the

southern countries of the eurozone were hit with devastating effect, promoting cries

of “a lost generation” to describe in essence what was my generation. Even without

entering a debate on the politics of the crisis, nobody could deny that young people

faced huge difficulties as joblessness rates skyrocketed while rough austerity

measures were imposed on states as conditions of bailouts.

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To the first research question, as to how EU-youth policy relate to the broader

economic regulatory framework of the EU as operationalized by the Lisbon

Agenda, we can conclude that youth policies were co-opted to fit its frame in order

to deepen the neoliberalization project of a post Maastricht Europe. By placing the

main youth policy instruments in the context of a post-Fordist regulatory

framework that characterizes the Second phase of the integration project that relies

on a finance led capitalism, as was done in chapters three and four, motivations of

an increasing willingness from the Council and the Commission to push for deeper

integration also in terms of youth policy can be explained.

This demonstrates how youth policy was aligned – or “mainstreamed” –with

the broader economic and social targets of the Lisbon Agenda. The EU

Commission’s White Paper process made the Open Method of Coordination

applicable on youth policy, which in turn made youth policy linked also at national

level to the economic and social policy goals of the EU. This foreshadowed the

inclusion of youth specifically into the Lisbon Treaty, which gave a stronger legal

mandate for supra-national policy making in the youth field. These changes meant

that young people were further integrated into a policy framework that put pressure

on states to deepen marketization but without the funds or policy tools necessary

for an economically expansive strategy for strengthening social citizenship, as the

argument for the policy changes was that there was an inevitability in the Lisbon

reforms to enact policies that aimed for thinner social safety nets and more insecure

labour markets.

7.2. Young People and the Euro Crisis

The second research questions asked how stated youth policy targets compared

with actual outcomes in the Euro Crisis context. As showed in chapter five with

reference to the southern economies of the eurozone, social and political goals

relating to young people were overruled by the creditor states’ demands, as decided

in Memorandums of Understanding sealed with the crisis countries as conditions of

85

bail outs. In the case of Italy, the ECB letter to the Italian government makes

explicit demands on Italy to go as far as altering its national constitution to meet

investors’ demands of implementing austerity measures.

The goals of EU youth policies are expressed in the language of

empowering young people through quality jobs, reconciliation of family life and

work and wide-ranging social services. However, when the proposals in the

strategies are linked to the crisis policies, the effect is that an even more young

people are plunged into a precarious social existence. This is demonstrable in that

unemployment levels rose in a spectacular manner. Also, part time work increased

while the amount of young people not in employment, education or training also

increased.

However, to the question as to how well the youth-policy targets are met in

the crisis countries the answer is not as simple as “they were not”. Instead, as part

of a broader neoliberal post-Fordist agenda, as expressed in terms of privatizations

and flexibilizations, many efforts to restructure the economies of the crisis countries

took place. But, if the question would be if EU-youth policy succeeds in realizing a

better economic and social future for young people, the answer is emphatically that

EU youth policies were not capable of doing that. Instead, as we have discovered,

the effect was to weaken the mediatory function of the state with the consequence

of increasing protests in the crisis countries through massive demonstrations and a

radicalization of politics. The response of the eurozone creditors and the ECB was

to drive further marketization of the crisis countries, threatening for example with

cutting off the Greek banks.

This meant that the authority of the states was in fact, with support of the

EU, also mobilized to restructure the economy with the effect of weakening social

citizenship norms which hit young many young people and led, quoting Tooze, to

“half a generation had their launch out of education to working life aborted”

(Tooze: p. 374).

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7.3. Young people and ideological discourse formation in the European

Parliament 2009-2012

The fourth question addressed the ideological dimension of how the policies were

justified, namely how did policy makers in the European Parliament debate crisis

policies in relation to young people. The justifications of policy are relying on

arguments of “increasing competitiveness” and “structural reforms”, but the

structural constraints that in the first-place limit policy choices, deriving from the

architecture of the post-Maastricht integration project, are rarely questioned, and in

those cases only by parties on the extreme right and sometimes the extreme left.

But even the latter have difficulties in proposing changes to the policies. Overall,

the policy response from the Council and the Commission, and with slight

variations among the political groupings, is that of stricter surveillance of national

budgets, structural changes in the labour market and austerity measures are the

solutions favoured.

This, I argue, was due to the difficulty to penetrate the ordoliberal

ideological fog with alternatives to neolibearlization. This underlines the argument

that there was a discrepancy with the promises of the integration project and the

practical consequences of it, and that this discrepancy weakened the legitimacy of

the integration project, also in terms of how young people perceive it.

A further finding is that initially, when the crisis response policies took

shape 2009-2010, young people were barely mentioned in deliberations in the

European Parliament’s main debates on the overall crisis policy. In that period,

young people were mentioned twice each year in the debates surveyed. When

youth, in the beginning of 2012 got a more prominent place in that debate, the

response from the main stakeholders such as the Council and the Commission, as

well as the main party groupings in the EP, was to fit in the policies specifically

targeted at young people within the ordoliberal framework characteristic of the

Lisbon era. In the year 2012 by contrast, young people were mentioned 62 times.

An explanation to this is that as the crisis proceed, parties critical to

economic policies inherent in the integration project, such as Five Stars in Italy,

Podemos in Spain and Syriza in Greece, attracted support from young people in

87

large numbers, the politicians in the EP-debates start by 2012 to publicly articulate

their views regarding young people. It was not possible to try to pretend, by

ignoring it, that the problem was not acute. Even a remedy in the form of a “Youth

Guarantee” was presented at this stage but this policy, for which member states

themselves were still expected to take financial responsibility.

When youth questions came to occupy the agenda, as they did by the time

of the Danish EU-Presidency of 2012, the rhetoric of the mainstream parties was

deeply embedded in the Lisbon- and post-Lisbon jargon. Throughout the crisis,

especially the EPP, S&D and ALDE groups argued that it was through structural

reforms and better implementation of the Lisbon targets that the eurozone economy

could recover, while the crisis countries needed to agree to the MoU conditions.

While the S&D had a softer approach, they nevertheless supported the broad lines

of policy. By 2012, also young people were directly mentioned as potential

beneficiaries of such reforms, despite clear evidence of the contrary.

The consequences of the policies are documented in the financial assistance

programs between the crisis countries and the troika, and in the letter of creditors to

the Italian government and the implementation of those demands. These were, in all

cases, a vast battery of austerity and liberalization measures, including wage cuts,

lay-offs and cuts in welfare. A small amount of fiscally expansive measures were

also allowed for, such as limited youth internship schemes, but the huge increase in

unemployment rates that can be argued to be a logical consequence of the policies,

also vastly seem to have dwarfed these measures. In any case, the decisions

implemented also saw a shift in emphasizing the responsibility of the individual in

becoming more “employable” in a labour market that was to become more dynamic

as a result of the restructuring. However, the result of this was a vast feeling of

marginalization among the young, as the mediating function of the welfare regimes

in their countries were weakened. The consequences of this might be profound for

the European integration project, as a functioning capitalist polity is dependent on

the mediation mechanism provided by a welfare state. Ideological justifications of a

political project such as the EU, of which young people had been saturated, is in the

long run not enough as a bulwark against disintegration if material reality goes not

match them.

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7.4. The EU’s Organic Crisis

The findings of this thesis thus indicate that the EU:s "organic crisis" deepened due

to structural limitations of the European integration project, codified in the treaties

of the second integration project that formed the European response to the epochal

shift from Fordism to post-Fordism. This left limited options to policies alternative

to those advocated by the ordoliberal mainstream. For young people that had grown

up in an era of eurohubris, this had profound consequences, as their sense of

marginalization increased as a result of the crisis policies imposed on them. In order

to be successful, policies concerning young people would have needed to challenge

the configuration of the European integration project.

Successful youth policy and a European integration project that is perceived

as legitimate are not in themselves incompatible with each other. I would suggest,

however, that meeting the employment- and social targets of European youth policy

is not possible in a European Union where economic and social policy continue to

be prisoners of a post-Fordist regulation framework. That gnaws on the legitimacy

of the project to the point where those who seek to undermine it have an almost

open goal to aim for.

7.5. Suggestions for Further Research and Limitations of the Research

Project

This study indicates that there is promising ground for further research connected to

the problematique at hand. My proposal would be to continue with a case study

focusing on the actors forming European youth policy to get a more comprehensive

understanding of how policy is shaped in the complex structures of the European

Union that interlink nation states, civil society, political parties and the EU civil

service.

It is also through a deeper analysis that some of the limitations of that this

89

project faced can be addressed. For example, it would allow to theoretically further

explore alternatives to the neoliberal form of the integration project, which would

also include an analysis of the transatlantic dimension which could further explain

motives of EU decision makers; to plunge into a deeper exploration of motives of

decision makers which would further explain the ideological choices taken; and to

be able to trace these processes during a longer time period. However, the thesis

gives a good basis for more comprehensive studies.

Decisions on policy are often made in circumstances that are characterized

by a variety of contradicting pressures for those involved. In policy processes, it

might easily occur that those policies are rationalized so as to best fit the narrative

of the accountable decision maker, be it an elected youth civil society

representative, a civil servant or politician. In those circumstances, a certain

intellectual framework, such as a White Paper on Youth, a Sapir Report, ta Lisbon

Strategy, or a Europe2020 Strategy can become easy to follow, implement and

rationalise. Thus, one path that could be pursued in order to better explain decisions

taken, would be to focus on civil society actors, civil servants and politicians

directly concerned with youth policy and understand how the organizational

structures they operate within interact with the institutional framework of the

European Union. Through in-depth interviews with key actors it would be possible

to better understand the rationale of action in the shaping of youth policy, thus

providing further material for verifying or rejecting the hypotheses that in this study

are limited to analysing policy documents and transcripts of debates.

The second added dimension for further research would be to include an

analysis of discourse formation in the media, as this also influences actors pursuing

policies within a certain organizational or institutional framework. Powerful media

outlets can frame a debate in a certain direction, affirming preconceived opinions or

providing a leadership function in actively shaping the world views of their

consumers, no matter how critically they are disposed. The interests behind these

media outlets – interest group- or class based for instance – can provide clues as to

why certain policies are pursued and others are not. A systematic analysis of media

opinion and news reporting of the media outlets that the policy actors above

mention to prefer, would also add to understanding of how hegemonic leadership

functions and how it adapts to changing circumstances.

90

Thirdly, a quantitative dimension could be added to the research: this would

allow for a study in how the question of young people and youth policy has shifted

over time, before and after the crisis, to become more or less important in discourse

formation on integration policy both in media and in terms of political deliberation.

As my thesis indicates, such a shift has indeed happened, but this could be further

traced through a longer time-period of the post-Maastricht integration project. This

would provide for further material for studying the case of policy actors in the

field.

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