Kantian Europe or Neoliberal Europe?

Surat Horachaikul1
Jittipat Poonkham2
I. Introduction
There has been a highlighted increase in the number of scholars who believe that the current
international relations state which has been predominantly marked by American supremacy is
now being increasingly and continuously challenged by the most widened and deepened
regional bloc, the European Union (EU). The rift between EU (mainly France and Germany)
and America concerning the invasion of Iraq, and the failure of the American coalition in Iraq
have prompted some to propound that the EU and America are fundamentally different and
that the EU is a superpower. Importantly, it is also argued that the EU moves itself in a rather
different manner than that of a traditional power. The move in the opposite direction of the
US has gone to the extent that the EU now acts to counter the American primacy. As the then
French President Jacques Chirac said: “The Security Council and the European Union are
becoming counterweights to the United States in the post-Cold War, post-September 11
world–and in each of those bodies, France has a say greater than its size or military
capability.”3
What is also widely argued is that while America is in decline due to its focus on the so-called
limited and/or invalid military power, Europe is becoming an alternative superpower because
it provides the alternative by principally focusing on the pursuit of non-military means,
remarkably differentiating itself from the sort of power America stands for.4 Among scholars
who see the EU as highly capable of becoming a superpower in the future, John McCormick,
for example, stands out from others in that he believes the day has already arrived. Arguing
that in the changing nature of an international system which has invalidated American
military supremacy since Iraq, the EU is now an alternative superpower. Instead of
emphasizing traditional military means, which is not only counterproductive but also costly,
Europe has turned out to be skillful at employing “the use of diplomacy, the provision of
economic opportunity and political incentive, and the exercise of soft power.”5
McCormick’s thesis is indeed not without good cause particularly if we take Europe’s
economic and, to some extent, military strength into account. In Chapter 4 of his book, “The
European Economic Colossus,” McCormick vigorously argues that whereas there is always a

* The terms Europe and European Union are used interchangeably through out the paper.
1
Surat Horachaikul is Assistant Professor of Department of International Relations, Faculty of Political
Science of Chulalongkorn University, Bangkok, Thailand. Currently, he is also Deputy Director of
Master of Arts in European Studies at Chulalongkorn University.
2
Jittipat Poonkham works as Research Assistant in Department of International Relations, Faculty of
Political Science of Chulalongkorn University, Bangkok. He is also Editorial Assistant of the Faculty’s
journal, Warasarn Sangkhomsart (Journal of Social Science).
3
Quoted in T.V. Paul, “Soft Balancing in the Age of US Primacy”, in International Security, 30:1,
Summer 2005, p. 68.
4
On the arguments that the EU proclaims itself in a rather different way than that of conventional great
powers, see, for example, Reinhard Rummel, The Evolution of an International Actor: Western
Europe’s New Assertiveness (Boulder, CO: Westview, 1990); Ronald Steel, “The Rise of the European
Superpower”, in The New Republic, 2 July 1990, pp. 23-5; Andrew Moravcsik, “The Quiet
Superpower”, in Newsweek, 17 June 2002, p. 27; Charles A. Kupchan, The End of the American Era:
US Foreign Policy and the Geopolitics of the Twenty-First Century (New York: Vintage, 2002); T.R.
Reid, The United States of Europe: The New Superpower and the End of American Supremacy (New
York: Penguin, 2004); Stephen Haseler, Super-State: The New Europe and its Challenge to America
(London: I B Taurus, 2004); Mark Leonard, Why Europe Will Run the 21st Century (London: Fourth
Estate, 2005); and Rockwell A. Schnabel, The Next Superpower? The Rise of Europe and its Challenge
to the United States (Lanham, MD: Rowman and Littlefield, 2005).
5
John McCormick, The European Superpower (Hampshire: Palgrave Macmillan, 2007), p. 7.
question mark over Europe’s military credence, there are a few remaining suspicions about
European economic power. He candidly states:
…It [EU] is the world’s biggest capitalist marketplace, the world’s biggest trading power,
and the world’s biggest magnet for — and source of — foreign direct investment. It is one
of the world’s biggest markets for mergers and acquisitions, and 12 of its members now
have the euro, which threatens to depose the US dollar as the world’s leading reserve
currency. And if quantity alone is not a mark of power, then the EU also enjoys a qualitative
advantage – it drives a hard bargain in trade negotiations, European corporations compete
aggressively with their American and Japanese counterparts, every multinational worth its
salt wants access to the European market, and their new wealth is helping Europeans live
longer and healthier lives.6

To support his thesis further, McCormick compares the EU’s economic strength with that of
the US.
…While the value of global and EU exports grew by 96 per cent between 1993 and 2003,
the value of US exports grew by only 60 per cent. While the US share of exports fell from
13 per cent to 11 per cent in the same period, the EU share held steady at 40 per cent. By
the late 1990s the EU was matching the United States on most trade fronts, and was flexing
its muscles in the hallways of the new World Trade Organization. And corporate Europe
was on the rise as well: in 2002, just 36 of the 100 biggest corporations in the world — and
only two of the ten biggest — were European. By 2005, 48 of those corporations were from
the EU, and the top ten included BP, Royal Dutch/Shell, DaimlerChrysler, and Total.

With the 2004 enlargement into Eastern Europe, the EU overtook the US to become the
biggest and richest capitalist marketplace in the world, accounting for nearly one-third of
the world’s gross domestic product and nearly half the industrialized world’s consumer
population. It is today by far the world’s biggest trading power, accounting for about 42 per
cent of the trade in merchandise and about half of all trade in commercial services. And the
wealthiest EU members have a single currency that is now used (officially) by more
consumers than the US dollar: 310 million versus 291 million.7

Apart from trade, it is also evident that the EU actively contributes to world peace as it has
operated at least 15 civil and military operations under the auspices of European Security and
Defence Policy (ESDP) since 2003. These include
(1) 4 military operations in the Former Yugoslav Republic of Macedonia (FYROM),
Congo, Bosnia, and a second military mission to Congo to monitor and support
elections
(2) 4 police operations in Bosnia, FYROM, Congo and Palestine;
(3) 2 border control missions in Rafah (between Gaza and Egypt) and Moldova/Ukraine
Border;
(4) 2 ‘rule of law’ missions in Georgia and Iraq;
(5) 1 security sector reform mission in Congo;
(6) 1 monitoring peace agreements in Aceh (Indonesia); and
(7) 1 peacekeeping mission in Darfur (Sudan)

The EU’s contribution to world peace in term of aid is also remarkable and perhaps
unprecedented. Indeed, it is now “the biggest provider of development aid in the world” as its
official website claims.8 Unquestionably, glancing at the economic and military muscles of
the EU which visibly signal the rise of the EU, many scholars seem to have enough solid
evidence to propound that the EU is a superpower, that the EU prospers economically despite
becoming a superpower, and that the EU is fundamentally different from the US.

6
McCormick, The European Superpower, p. 84.
7
McCormick, The European Superpower, p. 88-89.
8
http://ec.europa.eu/europeaid/index_en.htm, 2 July 2008

2
It is the last proposition that bothers us, the authors of this paper, the most. Not that we
disagree with the notion that the EU and America are different, but rather the extent of the
difference that has been argued by some scholars is what we disagree with. We find that the
extent of these differences is largely exaggerated, and thereby misleading. But because of the
abundance of supporting details in each of the work in question, categorizing and/or
deconstructing them all is beyond the scope of this paper. As a result, we decided to review
Of Paradise and Power: America and Europe in the New World Order by the
neoconservative Robert Kagan. The main reason behind our choice is that the book represents
the extreme of the exaggeration spectrum. Additionally, though the book was published in
2003, it is still popular among scholars and students of international relations, especially Thai
scholars and students. While it may not serve all Kagan’s purposes, many seem to be
convinced that Europe is different from America in that the former behaves in a Kantian
manner, while the latter in a Hobbesian manner. The Kantian label for Europe is now very
common when it comes to any discussion about world politics. The labeling of Kantian
Europe and Hobbesian America may make the theme of the book sound polemical and
thereby easy to remember, yet the labeling is largely an exaggeration. And the exaggeration is
quite disturbing because Kagan’s crude understanding of the differences and similarities
between the two worldly political philosophers, Thomas Hobbes and Immanuel Kant,
misleads readers. This is crucial because if students of international relations follow Kagan’s
thesis hastily without careful analysis, then their understanding of the core of international
relations discipline could be a fallacy. Last but not least, the book ignores the neo-liberal
similarities between Europe and America.
To elaborate Kagan’s thesis, Europe and America no longer have the same perception about
the world. While Europe enters the Kantian world of “perpetual peace,” America still operates
in an anarchic Hobbesian world. The nature of the divide between Europe and America not
only covers temporal national interests (in every important aspect) but also is an enduring one.
Kagan confidently asserts:
It is time to stop pretending that Europeans and Americans share a common view of the
world, or even that they occupy the same world. On the all-important question of power–the
efficacy of power, the morality of power, the desirability of power—American and
European perspectives are diverging. Europe is turning away from power, or to put it a little
differently, it is moving beyond power into a self-contained world of laws and rules and
transnational negotiation and cooperation. It is entering a post-historical paradise of peace
and relative prosperity, the realization of Immanuel Kant’s “perpetual peace.” Meanwhile,
the United States remains mired in history, exercising power in an anarchic Hobbesian
world where international laws and rules are unreliable, and where true security and the
defense and promotion of a liberal order still depend on the possession and use of military
might. This is why on major strategic and international questions today, Americans are from
Mars and Europeans are from Venus: They agree on little and understand one another less
and less. And this state of affairs is not transitory—the product of one American election or
one catastrophic event. The reasons for the transatlantic divide are deep, long in
development, and likely to endure. When it comes to setting national priorities, determining
threats, defining challenges, and fashioning and implementing foreign and defense policies,
the United States and Europe have parted away.9

9
Robert Kagan, Of Paradise and Power: America and Europe in the New World Order (New York:
Alfred A. Knopf, 2003), p. 4-5. For similar arguments, see also Thomas S. Mowle, Allies at Odds?:
The United States and the European Union (New York: Palgrave MacMillan, 2004); Werner
Weidenfeld, America and Europe: Is the Break Inevitable? (Gutersloh: Bertelsmann Foundation
Publishers, 1966); Thomas Risse, “Beyond Iraq: The Crisis of the Transatlantic Security Community”,
in David Held and Mathias Koenig-Archibugi (eds), American Power in the Twenty-First Century
(Cambridge: Polity Press, 2004), pp. 214-40; and Timothy Garton Ash, Free World: America, Europe,
and the Surprising Future of the West (New York: Random House, 2004).

3
To deconstruct the exaggerated differences between Europe and America as proposed by
Kagan, this paper is structured into three parts. The first part is the normative assessment of
the ideas proposed by the two worldly political philosophers, Thomas Hobbes and Immanuel
Kant. Here we argue that even though there are differences between them, there are certain
foundations of ideas between the two that resemble one another. The second part deals with
empirical Europe. Here it is argued that Europe is not different from America when it comes
to the dimension of political economy. In other words, today’s Europe is increasingly
neoliberal in its political economic conduct. In contrast to what Kagan claims antagonistically
between Kantian Europe and Hobbesian America, the last part argues that Europe and
America have collusively shared “a large piece of cake” of global capitalism. That is, the
demise of the transatlantic relationship between Europe and the US has been greatly
exaggerated. The European integration in general is “part and parcel of the global political
economy,” or, to put it differently, the wider discourse of disciplinary neoliberalism. 10
II. Where Kant Meets Hobbes
In Kagan’s popular thesis, Europe and the America seem to live in different worlds. The
former is “entering a post-historical paradise of peace” foreseen by the liberal idealist
Immanuel Kant, where conflicts are solved with diplomacy through the framework of
international institutions. The US, in contrast, continues to inhabit an anarchic Hobbesian
world, where security still depends on the possession and use of military power. However, the
theoretical distinction between the two philosophers is not as distinguishable as the common
notion claims. As a matter of fact, they share many similarities, which we discuss below.
Although Kant argued that a state of peace among men living together (contra of Hobbes’
state of nature) must be formally instituted so as to perpetuate peace11, he described the state
of nature in the most accurately Hobbesian terms. In The Metaphysics of Morals, Kant
explained: “…before a public lawful condition is established, individual men, peoples, and
states can never be secure against violence from one another, since each has its own right to
do what seems right and good to it and be dependent upon another’s opinion about this.”12
Like Hobbes, Kant himself accepted that the state of nature is an indispensable general
society of mankind. Again in the same publication, Kant stressed:
(1) States, considered in external relation to one another, are…by nature in a nonrightful
condition. (2) This nonrightful condition is a condition of war (of the rights of the stronger),
even if it is not a condition of actual war and actual attacks being constantly made
(hostilities). Although no state is wronged by another in this condition …, this condition is
in itself wrong in the highest degree, and states neighboring upon one another are under
obligation to leave it.13

That is, a state of nature is a state of war in which everyone must be perpetually armed against
everyone, just as Hobbes argued that it is the war of all against all. 14 Nevertheless, the
important difference between Hobbes and Kant is that the latter ideally proposed to leave the
Leviathan world and enter civil society. According to Kant, the best form of constitution is a
republican state with a separation of powers, which could prevent the Leviathan despotism.

10
Stephen Gill, “Constitutionalising Capital: EMU and Disciplinary Neo-Liberalism”, in Andreas
Bieler and Adam D. Morton (eds), Social Forces in the Making of the New Europe: The Restructuring
of European Social Relations in the Global Political Economy (New York: Palgrave MacMillan, 2001),
p. 53.
11
Immanuel Kant, “Perpetual Peace: A Philosophical Sketch”, translated by H.B. Nisbet, in H. Reiss
(ed.) Kant’s Political Writings (Cambridge: Cambridge University Press, 1991), p. 98. Original
Enphasis.
12
Quoted in Richard Tuck, The Rights of War and Peace: Political Thought and the International
Order from Grotius to Kant (Oxford: Oxford University Press, 2001), p. 208. Original Emphasis.
13
Quoted in Tuck, The Rights of War and Peace, p. 209. Original Emphasis.
14
Thomas Hobbes, “From Leviathan,” in Chris Brown, Terry Nardin and Nicholas Rengger (eds)
International Relations in Political Thoughts (Cambridge: Cambridge University Press, 2002), p. 337.

4
But Kant’s republicanism of the construction of a sovereign is very close to Hobbes. As
Richard Tuck argues, for Kant, “the legislative sovereign was the entire body of the people
agreeing unanimously on its measures,” and consequently it could pass the representative
power to the supreme legislators, which can be a monarch.15 Tuck explains:
…Kant did not make any distinction between a legislative and an executive power, and
even when he did do so (notably in The Metaphysics of Morals) the distinction was far from
being like a Montesquieuian or Madisonian separation of powers. As “The Doctrine of
Right” section 51 makes clear, it was a conceptual distinction, with a single-person
legislator being quite possible and even desirable on the grounds of simplicity.16

Kant follows Hobbes by stating that “the smaller the number of ruling persons in a state and
the greater their powers of representation, the more the constitution will approximate to its
republican potentiality.”17 He argues further that despotism is “relatively bearable under the
rule of a single individual.”18
In the section entitled “Against Hobbes” in On the Common Saying: ‘This May be True in
Theory but it does not Apply in Practice’, rather than a refutation of Hobbesian
presuppositions as widely believed, Kant’s first part of that section “is in fact a fairly faithful
reconstruction of Hobbes’s theory of sovereignty: Kant’s ‘republic’ account of the
construction of a sovereign is much closer to Hobbes than Rousseau’s had been...” The
similarity within the same section is also found where Kant “proposed the same test to which
Hobbes had suggested (in effect) for the legitimacy of the sovereign, that he should be
thought of as the outcome of general will, should be used also for testing legitimacy of the
sovereign’s particular enactments”19 On Kantian and Hobbesian meaningful explanation of a
law as unjust, the difference was also minor. As Tuck explains, if the sovereign tried to curb
the freedom of religious expression, “in all cases…where the supreme legislation did
nevertheless adopt such measures, it would be permissible to pass general and public
judgments upon them, but never to offer any verbal or active resistance.”20
Thus Kantian Republics and Hobbesian Commonwealths are equally inclined to an advocacy
for monarchy. In international relations, Kant’s ideas have also the same connection with
Hobbes’s ideas. Kant envisaged a system of individual sovereign states as an anarchic state of
nature, in which states have the right to commit preemptive strikes against one another. In
Perpetual Peace, he insisted that
While natural right allows us to say of men living in a lawless condition that they ought to
abandon it, the right of nations does not allow us to say the same of states. For as states,
they already have a lawful internal constitution, and have thus outgrown the coercive right
of others to subject them to a wider legal constitution in accordance with their conception of
right.21

In the absence of any central authority, international relations would have to be conducted on
Kant’s Hobbesian international system. For instance, if one state is, or seems to be, threatened
and violated, Kant said that the state has the right of prevention, or even the menacing
increase in a state’s power (by its acquisition of territory): “This is a wrong to the lesser
power merely by the condition of the superior power, before any deed on its part, and in the
state of nature an attack by the lesser power is indeed legitimate. Accordingly, this is also the

15
Tuck, The Rights of War and Peace, p. 211. Original Emphasis.
16
Tuck, The Rights of War and Peace, p. 211. Original Emphasis.
17
Kant, “Perpetual Peace”, p. 101.
18
Kant, “Perpetual Peace”, p. 102.
19
Tuck, The Rights of War and Peace, p. 211. Original Emphasis.
20
Kant Quoted in Tuck, The Rights of War and Peace, p. 212.
21
Kant, “Perpetual Peace”, p. 104.

5
basis of the right to a balance of power among all states that are contiguous and could act on
one another.” 22
According to Kant, “…war is therefore an indispensable means of advancing it [war] further;
and only when culture has reached its full development—and only God knows when that will
be—will perpetual peace become possible and of benefit to us.”23 To put it differently, war or
military antagonism itself could bring the states to form cooperatively what Kant called a
“pacific federation” in order to end all wars. Kant said that this antagonism becomes in the
long run the cause of a law-governed social order. A federation of free states is finally created
by the influential forces of free civil institutions within each country, which would force
governments to recognize the risk of war towards their interests, especially commercial ones.
Even though the states embrace desirably a regime of international and cosmopolitan right,
there are no rules or norms which guarantee the states’ security; Kant put it that their
“philosophically or diplomatically formulated codes do not and cannot have the slightest legal
force, since states as such are not subject to a common external constraint.”24 Needless to say,
while Kant’s means to perpetual peace is very ambiguous, his positions on Hobbesian logic
are quite obvious.
To sum up, Hobbes’s and Kant’s theories are not clear-cut distinctions as general literatures
would have us understood, but rather they share on many similarities. As Tuck concludes, it is
usually supposed that Kant marked a major break with the international jurisprudence of
previous generations, but if critically read, it can be seen that his thinking in many ways is
similar to the ideas of Hobbes. 25 We have seen how Kagan misses the basic similarity
between Europe and America in normative context; the next section further deconstructs
Kagan’s thesis by revealing how close Europe is to America when it comes to their neoliberal
political economy practices. In a way, it can be said that Europe and America help strengthen
the neoliberal hegemony.
III. Neoliberalization of Europe
After considering the normative perspective of the European Union, in this section we
illustrate historiographical and political economic dimensions of Europe so as to make an
empirical sense of the construction of neoliberal Europe under the tutelage of the American
empire. Here we focus on the way that the ruling social, economic, and political forces in
Europe have challenged the European economic integration, ensuring and reproducing the
hegemony of neoliberal policies and ideas within the EU. This section provides an overview
of the most influential corporate players in Brussels, the policy roles and implementation of
the Commissions within the union and through international forums, such as World Trade
Organization (WTO), and the union treaties and constitution among the EU states aiming at
legitimizing neoliberalism as the means for European unification par excellence.
In the “postmodern” Europe with “a moral consciousness” in international affairs, many claim
that the European economic colossus could challenge the world hegemony of the United
States. Thus, the EU becomes a “global actor” as the world’s largest economy, the most
powerful trading power and the largest provider globally of development and humanitarian
aid.26 And the remarkable achievement of the single market after the Maastricht treaty came
into force and the creation of single currency, the euro, have directly influenced the global
currency of the dollar. As John McCormick observes:

22
Quoted in Tuck, The Rights of War and Peace, p. 215. Original Emphasis.
23
Quoted in Tuck, The Rights of War and Peace, p. 218.
24
Quoted in Tuck, The Rights of War and Peace, p. 220. Original Emphasis.
25
Quoted in Tuck, The Rights of War and Peace, p. 224.
26
Charlotte Bretherton and John Vogler, The European Union as a Global Actor (London and New
York: Routledge, 2006).

6
 …by the end of 2003, governments and corporations were increasingly borrowing in euros,
nearly 40 per cent of foreign exchange transactions are today carried out in euros, central
banks are holding more of their reserves in euros, and euros are increasingly used by
consumers outside the euro zone…27

In the words of Romano Prodi, the then President of the European Commission, the idea of
Europe means “a great power that can play a relevant role on the world’s chessboard…The
euro zone is a good starting point to stand up to the United States, which are, and will
continue to be, the greatest competitors on the international markets.” 28 These claims are
accepted by Berkeley economist and former Clinton advisor Jeffrey Frankel that the euro
“could surpass the US dollar as the leading reserve currency if the euro zone economy
becomes bigger than that of the US and if confidence in the dollar continues to be undermined
by US economic policy.” 29 Moreover, the statistics also show the rise of the European
corporate world. “In 1969, the Fortune list of the world’s biggest 400 corporations showed
that 238 (nearly 60 percent) were American while 108 (27 percent) were European. By
contrast, the Fortune Global 500 list of the world’s 500 biggest corporations in 2005 showed
that 176 (35 percent) were American and 158 (32 percent) were from the EU.” 30
Consequently, this Kantian “postmodern superpower” of the EU, as McCormick claims, will
finally substitute the Hobbsian realist world of the United States. In economic terms, at least,
the “unipolar illusion / moment” has been replaced with “the bipolar system.” 31
To us, this absolute dichotomy between European paradise and American power seems to be
overstated; in fact they share fundamentally many ideas and practices within the larger
context of global political economy. We argue here that the EU and the United States are both
neoliberal global actors, which use both economic and non-economic means to maximize
their profits and promote competitiveness in international affairs.
To begin with, we can see the European Roundtable of Industrialists (ERT) as the key
political and economic force aiming at the promotion of neoliberal policies and ideas within
Europe. The ERT, founded in 1983 by Umberto Agnelli of Fiat, Wisse Dekker of Philips and
Pehr Gyllenhammer of Volvo, consists of some 45 ‘captains of industry,’ that is, the Chief
Executive Officers of the most influential European multinational corporations. The aim of
the organization was “to revitalise European industry and make it competitive again, and to
speed up the process of unification of the European market.”32 Or, as the Corporate Europe
Observatory (1997) puts it, “more than just another lobby organization trying to benefit from
the European integration process, the ERT was formed with the expressed intention of
reviving European integration and shaping it to the preference of European transnational
corporations.”33 Since the early 1980s, the ERT has been a driving force behind all the major
reforms at the EU level, pushing for deregulation, liberalization, and other measures to
increase the international competitiveness of European industry, and more generally behind
the institutionalization of neoliberal policies and ideas within the EU. It does not only seek to
set the political agenda but also shape the discourse in which European decision making is
embedded.34 In so doing, the ERT has worked closely with the Commission.

27
McCormick, The European Superpower, p. 91.
28
Quoted in James Petras and Henry Veltmeyer, Empire with Imperialism: The Globalizing Dynamics
of Neo-liberal Capitalism (London and New York: Zed Books, 2005), p. 136.
29
McCormick, The European Superpower, p. 91.
30
McCormick, The European Superpower, pp. 103-4.
31
McCormick, The European Superpower, p. 33.
32
Bastiaan van Apeldoorn, “Transnational Class Agency and European Governance: The Case of the
European Round Table of Industrialists,” New Political Economy, Vol. 5: No. 2 (2000), p. 161.
33
Quoted in Guglielmo Carchedi, For Another Europe: A Class Analysis of European Economic
Integration (London and New York: Verso, 2001), p. 31.
34
van Appeldoorn, “Transnational Class Agency and European Governance,” p. 165.

7
In January 1985, ERT chairman Wisse Dekker launched a proposal for a five-year plan in
Europe 1990: An Agenda for Action to eliminate trade barriers, harmonize regulations and
abolish fiscal frontiers. Three days later, the newly appointed president of the European
Commission, Jacques Delors, delivered a speech in the European Parliament, which closely
paralleled Dekker’s ‘agenda for action.’ Then, Industry Commissioner Lord Cockfield
published his White Paper, which became the basis of the 1986 Single European Act, the
legal framework of the Single Market.35 A neoliberal Europe was ‘relaunched’ by the ERT’s
“continuing pressure,” which Delors recognized as “one of the main driving forces behind the
Single Market.” 36
The next important step for neoliberalization of Europe was the Maastricht Treaty and the
European Monetary Union (EMU). As early as 1985, the ERT had argued that the Internal
Market must be completed with a single currency accompanying “low inflation and interest
rates, exchange rate stability, and above all, public deficits and government debt no higher
than 3 percent and 60 percent of gross domestic product respectively.”37 The sources for the
adjustment in Europe was due to the global economic crises, including fiscal crisis, currency
instability, and economic stagnation as well as fears of a loss of the EU’s competitive edge
relative to East Asia and North America. As Bastiaan van Apeldoorn argues, the EMU must
be seen in the context of “the rising dominance of neoliberal ideology within the European
political economy and the appeal of neoliberalism gained as an alternative strategy after the
political failure of the neomercantilist project.” 38 Thus it is important to place EMU and other
EU measures in the context of global political economy, or strictly speaking, neoliberal
governance.
The EMU continued to be a leading ERT demand in its 1991 report Reshaping Europe which
favored “tight monetary and financial discipline in a rules-based economic constitution as a
means to deliver low inflation and to protect savings.” This institutional framework involves
the separation of the economic and the political in ways that lessen the possibility for
democratic accountability in economic and social policy-making. 39 This correlates to the
mythical demise of the states; however, in the neoliberal governance it necessitates rather
strong states to “institutionalize market forces, support economic liberalization, and promote
public-private partnerships not only in service provision, but also in the enforcement of
contracts and the prevention of corruption.” 40 States are relevant but not the democratic
masses. Hence, in the EMU, monetary policy is conducted by an independent central banking
system—the European Central Bank, which restricts and controls European states’ fiscal
policy. This ECB policy indicates the most disturbing example of how the single currency, in
combination with economic deregulation, limits the scope for democratic decision making. It
could be argued that the democratic deficits of the EU, on the one hand, and the increasing
dominance of social forces bound up with neoliberal agendas, on the other, are two sides of
the same coin in as much as the former can be seen as reflecting a wider phenomenon that
Stephen Gill calls the “new constitutionalism”, that is, “the politico-legal dimension of the
wider discourse of disciplinary neoliberalism [seeking] to separate economic policies from
broad political accountability in order to make governments more responsive to the discipline

35
Belen Balanya, et al., Europe Inc.: Regional and Global Restructuring and the Rise of Corporate
Power, (London: Pluto Press, 2003), p. 21.
36
Belen Balanya, et al., Europe Inc., p. 22.
37
John Milios, “European Integration as a Vehicle of Neoliberal Hegemony,” in Alfredo Saad-Filho
and Deborah Johnston (eds), Neoliberalism: A Critical Reader (London: Pluto Press, 2005), p. 210.
38
van Appeldoorn, “Transnational Class Agency and European Governance,” p. 169.
39
Gill, “Constitutionalising Capital,” p. 50.
40
The World Bank, World Development Report: The States in a Changing World, 1997. Quoted in Gill,
“Constitutionalising Capital,” p. 52.

8
of market forces and correspondingly less responsive to popular-democratic forces and
processes.”41
Thus, the democratic deficit of the EU cannot be explained within the institutional perspective;
rather, it needs the framework of a neoliberal Europe to understand why its deficit cannot be
easily eliminated.
We should also point out that the main work preparing the ground for the EMU was not done
by the ERT, but rather by the Association for the Monetary Union of Europe (AMUE).
Among its core membership are the ERT members, and AMUE has the same privileged
access to the Commission. The Commission not only provides financial support to the AMUE
but also frequently consults it on monetary questions. AMUE energetically presented a
detailed blueprint for a monetary union in April 1988 and then in the following years
published annual surveys indicating wide business support across Europe. Although the
Maastricht Treaty had put Economic and Monetary Union firmly on the official political
agenda of the EU, its practical implementation took place at the 1995 Madrid EU summit,
where a speedy introduction of the euro was launched. In June 1998 the new European
Central Bank became responsible for monetary policy in the euro zone, and on 1 January
1999 the twelve participating states turned their currencies into one, the euro. 42 The
corporations envisioned the single market and single currency as an opportunity for European
competitiveness make the euro a viable global currency (economies of scale and the trend of
relocations to the most competitive areas). In this sense, the countries, facing global
competition as they try to attract foreign investments, will eventually lower corporate tax
rates and get rid of its regulations. As a Morgan Stanley economist put it: “If you remove
currency as a safety valve, governments will be forced to focus on real changes to become
more competitive: lower taxes, labor market flexibility, and a more favorable regulatory
backdrop for business.” 43 So, this more favorable investment climate, which was
institutionalized through the EU treaties by the close cooperation between the corporate
lobbies and the Commissions, has shifted towards disciplinary neoliberalism as the EU-level
austerity programs meet the convergence criteria that further job losses and reduce welfare
and progressive social policies. The EU integration into the global financial world facilitates
both European and American transnational corporations (TNCs) to exploit the countries in the
region which have low-wage, low-tax and are engaged in structural adjustment programs.
We argue further that the social policy within the EU is only lip service, which nevertheless
plays a key role in reshaping labor markets to fit the needs of economic competitiveness, so
that, as Cochrane, Clarke, and Gewirtz argue, social policy becomes a form of infrastructure
underpinning that competitiveness. 44 To put it differently, it is a welfare oriented towards
servicing the needs of market-led neoliberal change and restructuring. Robin Blackburn
maintains that the European Union today has no social programs. The best it has are structural
regional funds, the Common Agricultural Policy (CAP), and schemes targeted at the new
members. 45 Here, it could be argued that the European Monetary Union has been
accompanied by deregulation of financial markets, privatization of public assets and the
cutting of social provisions.
Not only that, the EU has integrated into a global free trade regime under the new World
Trade Organization (WTO), and an economic rationale for the EU converges with the US in

41
Stephen Gill, “European Governance and New Constitutionalism: Economic and Monetary Union
and Alternatives to Disciplinary Neoliberalism in Europe,” in New Political Economy, 3:1, 1998, p. 5.
42
Balanya, et al. Europe Inc., pp. 51-2.
43
Balanya, et al. Europe Inc., p. 56.
44
Allan Cochrane, John Clarke, and Sharon Gewirtz, “Looking for a European Welfare State,” in Allan
Cochrane, Comparing Welfare States (London: SAGE Publications, 2001), pp. 261-290.
45
Robin Blackburn, “Capital and Social Europe,” in New Left Review, 34, July-August 2005, pp. 87-
112.

9
bigger picture of neoliberal ideas and practices. We argue that rather than a social policy, the
CAP is used as a means of competitiveness which undermines exploitative agricultural
products in developing countries.
The Common Agricultural Policy is a system of European Union agricultural subsidies and
programs to European farmers, which has helped turn the EU from a major food importer into
a net exporter. It is noteworthy that the EU’s budget for the CAP has risen substantially. In
1980, Europe spent 11 billion euros on the CAP. In 1990, the figure climbed to 26 billion, and
in 2000 the budget reached 41 billion euros, totaling 44 percent of the union’s budget.46 The
increase is indisputably due to the unique and distinctive nature of its agricultural sector, and
the political factor of strong and powerful domestic lobbies. However, while for most
economic sectors in Europe, integration occurred in parallel with liberalization, in the
agricultural sector, integration was accompanied by increasing protection. Christina Davis
puts it well: “In essence, the protection of agriculture helped to induce European states to
accept other aspects of integration, including trade liberalization and infringement on national
policy autonomy.” 47 In other words, the CAP was seen as a legitimization for European
economic integration. The pressures to liberalize this sector largely derived from its rising
budget costs, a demand from European corporations, and a demand from the US through
international negotiation. The budget pressures arising from the considerable expense of
maintaining the CAP led to ideas of European agricultural reform. Some of these ideas came
from business lobbies, led by Union of Industrial and Employers’ Confederations of Europe
(UNICE). One concern is that agricultural protection will prevent wider trade agreements for
liberalization and lead to trade wars that could close off markets. Similarly, the United States
has launched trade sanctions against Europe for its agricultural policies beginning with the
chicken war of the 1960s and continuing to the banana and beef wars of the 1990s. Here we
see agricultural liberalization of the EU within international negotiations of GATT trade
rounds and then the WTO.
In the Tokyo Round (1973-1979) agricultural liberalization, especially the EU’s CAP, was the
prime objective for the United States because European import barriers shut off access to the
large European markets, and subsidized export of European commodities brought Europe into
direct competition with US exports in third-country markets. But the EC at that time,
especially France, wanted to keep agriculture separate from the rest of the talks, while the US
was opposed to this. This weakening of the linkage between agricultural negotiations and the
rest of the negotiations directly caused the difficulties encountered in the Tokyo Round.
However, the final outcome was that tariffs on industrial products were reduced by 35 percent,
while it did not go well on agricultural liberalization. “The Tokyo Round was a disaster for
US agriculture,” said a US negotiator.48
Conversely, the Uruguay Round (1986-1994) represented a more balanced outcome with
some agricultural reforms along with the gains in liberalization of industrial goods and
services. The approach of a “single package” of the Uruguay Round helped pressure and force
the EC to consider the trade off between agricultural protection and industrial liberalization.
In so doing, Christina Davis observes that “business lobbying and a broadened policy process
led the EC to accept a moderate amount of CAP reform as part of the package for the
liberalization of agricultural, industrial, and service markets.”49 However, at the beginning of
the Round, the EC position continued to be defensive on agriculture, while many developing
countries formed the Cairns Group calling for agricultural trade liberalization and threatened

46
William I. Hitchcock, The Struggle for Europe: The Turbulent History of a Divided Continent, 1945
to the Present (New York: Anchor Books, 2004), p. 449.
47
Christina L. Davis, Food Fights over Free Trade: How International Institutions Promote
Agricultural Trade Liberalization (Princeton and Oxford: Princeton University Press, 2003), p. 250.
48
Official of USTR office quoted in Davis, Food Fights over Free Trade, p. 268.
49
Davis, Food Fights over Free Trade, p. 255.

10
to walk out of the negotiations if this goal was not met. They also resisted the inclusion of
service liberalization fearing that this would increase the imbalance of world trade. 50
After the breakdown of negotiations over agricultural issues, GATT director-General Arthur
Dunkel brought together a draft agreement that forced governments to consider and choose
between accepting major agricultural reform or losing the gains of the Uruguay Round as a
package. Many business groups continued to urge agricultural reform for the sake of the
overall gains. This time Germany sided with Britain to favor reform and France was left
isolated. 51 In Brussels, EC Commissioner for Agriculture Ray MacSharry introduced a draft
paper suggesting major reforms of the CAP to restrain chronic overproduction that was the
source of the worst budget and trade problems. It could be argued that the MacSharry reforms
in 1992 were largely motivated by the needs to make changes so that the EC could reach an
agreement in the GATT negotiations. 52 For us, these changes in agricultural liberalization can
be explained as corporate Europe finding this “window of opportunity” of liberalization in
other major sectors more profitable than the indebted CAP which must be inevitably
transformed. Nor did the EU transformation fundamentally hurt its economy; rather it has still
been able to exploit other developing countries. As Davis puts it,
Agricultural protection remains a priority for governments, but it is now subject to free
trade principles, as evidenced by the shift away from protecting farmers with price supports
and production subsidies and toward supporting farmers with tariffs and direct payments.53

Statistically, in 2000, the annual dairy subsidy paid by the EU was $913 per cow. This was
nearly double the average annual income of someone living in sub-Saharan Africa. In aid, the
EU gave $8 per head to sub-Saharan Africa. 54 So the claims that Europeans are morally
superior to Americans in their concern for the “Third World” are hypocritical. Timothy
Garton Ash points out that when it comes to giving aid, they generally are, but not in
openness for trade: “Trade, Not Aid.” 55 It seems to us that now Kantian Europe can also be a
Hobbesian Europe, which is no different than the United States. Thus, both superpowers have
shared the common characteristic of neoliberal capitalism, which is now a global regime of
restructuring and exploiting other economies. In his review of Michael Moore’s A World
without Walls: Freedom, Development, Free Trade and Global Governance, Robert Wade
notes critically that while the WTO talks are turning out to be a neoliberal way, Europe, the
US and Japan have shown no signs of discarding the subsidies to their farmers that allow
them to dump grain, sugar, cotton and other commodities onto world markets at a fraction of
the cost of production.56 That is to say, WTO rules now prevent developing countries from

50
Davis, Food Fights over Free Trade, pp. 276-7.
51
Before that, Germany sided strongly with France in opposition to agricultural liberalization. But after
German election and increasing industry pressure, Chancellor Helmut Kohl shifted to push CAP’s
reforms instead. He justified this politically controversial position by saying that the reforms “created
the conditions for a successful conclusion of the GATT negotiation.” Gizelle Hendriks quoted in Davis,
Food Fights over Free Trade, p. 297.
52
The McSherry reforms were created to limit rising production, while at the same time adjusting to
the trend toward a more free agricultural market. There was a reduction of support by 29 percent for
cereals and 15 percent for beef. Lower prices were to be compensated by direct income payments.
They also created set-aside payments to withdraw land from production, payments to limit stocking
levels, and introduced measures to encourage retirement and forestation. For further account of the
CAP in this context, see Eve Fouilleux, “The Common Agricultural Policy,” in Michelle Cini (ed.),
European Union Politics (Oxford: Oxford University Press, 2003), pp. 253-255.
53
Davis, Food Fights over Free Trade, p. 313. Our Emphasis.
54
Timothy Garton Ash, Free World: America, Europe, and the Surprising Future of the West (New
York: Random House, 2004), p. 155.
55
Ash, Free World, p. 155.
56
Robert Wade, “Reviews: The Ringmaster of Doha,” New Left Review, 25, January-February 2004, p.
151.

11
protecting themselves and their farmers; the developed countries, like the EU and the US,
have taken highly profitable advantages from their rule-based organization.
The observation concerning the reform of the CAP has suggested that the reform was along
the line of liberalization consistent with Uruguay Round’s paving the path for EU’s TNCs to
access Southern country markets. Looking another way around, the reform helped developed
countries and corporations to achieve further liberalization in sectors where they had an
advantage, such as services, and introduced intellectual property rights and other protections
for TNCs activities. As Josh Karliner observes in The Corporate Planet: “To a large degree,
the triad of Japan, EU and US can be seen as three large corporate states, at times cooperating,
at times competing with one another to promote the interests of their rival transnationals
across the globe.”57
With the conclusion of the Uruguay Round of the GATT negotiations, the subsequent
creation of the WTO was a great victory for transnational corporations, which had both
lobbied their governments and cooperated with them in removing barriers to trade in goods
and services. Moreover, discussions behind closed doors between the most powerful countries,
and most importantly, very strong pressure from the US and the EU, often forced Southern
countries into accepting undemocratic and exploitative WTO policies. As Aileen Kwa points
out clearly, “Power politics in the WTO, far from being ‘ruled-based’, it is the organization’s
very lack of formalized internal structures that helps to serve the interests of the powerful.” 58
In the process, the EU and the US prepared their common positions bilaterally within the
Transatlantic Economic Partnership (TEP). 59 Despite the fact that there are some economic
disputes between them, 60 the EU and the US share a nearly identical vision, not only “to
dismantle trade barriers, both bilateral and multilateral,” but also “to maintain open markets,
resist protectionism and sustain the momentum of liberalisation.”61 As neoliberal-sponsored
EU Trade Commissioner Lord Leon Brittan states in the Transnational Business Dialogue’s
conference in Chicago:
We and the American government had asked businessmen from both sides of the Atlantic to
get together and see if they could reach agreement on what needed to be done next. If they
could, governments would be hard put to explain why it couldn’t be done. The result was
dramatic. European and American business leaders united in demanding more and faster
trade liberalization. And that had an immediate impact…62

This realization of a true transatlantic relationship should be seen as rather global partners,
which pursue their neoliberal objectives broadly together in terms of bilateral and multilateral
dimensions. In so doing, the EU has followed a two-tier strategy to attain global rules on trade
and investment by working with the Organization for Economic Cooperation and
Development (OECD), and simultaneously pushing for negotiations on a treaty in the WTO.
The OECD—notably the US, Canada, Japan and the EU—negotiated the Multilateral
Agreement on Investment (MAI), aiming to ensure a good business climate in the South for
corporate investment. In short, the MAI requires countries to open all sectors of their
economies, and modify national protective investment laws, mostly in the direction of greater
liberalization and deregulation. 63 Not only that, in 1996 the Northern countries still had
pushed for the MIA within the WTO. They also pushed to bring services under the WTO
coverage, which will help preserve their leading corporate positions. The so-called the
General Agreement on Trade in Services (GATS), the Agreement on Trade-Related

57
Quoted in Balanya, et al. Europe Inc., p. 91.
58
Quoted in Wade, “Reviews: The Ringmaster of Doha,” p. 149.
59
Balanya, et al. Europe Inc., p. 124.
60
See details of economic conflicts between EU and US in McCormick, The European Superpower, pp.
97-100.
61
Balanya, et al. Europe Inc., pp. 98-9.
62
Quoted in Balanya, et al. Europe Inc., p. 104. Our Emphasis.
63
See details of the MAI in Balanya, et al. Europe Inc., pp. 113-5.

12
Intellectual Property Rights (TRIPs), and the Agreement on Trade-Related Investment
Measures (TRIMs) are mainly on the agenda of the Millennium Round in order to reinforce
legal and other sanctions in support of a deepening of economic liberalization. Nevertheless,
Southern governments revolted against the MAI from the beginning due to fearing that it
would impact national governments’ abilities to control FDI flows so as to support national
development objectives and priorities.64 Besides, public awareness about the trade agreements
is growing and social movements are mobilizing against the neoliberal free trade agendas.
Martin Khor, Director of the Third World Network, has pointed out that “the EU’s motive for
a WTO agreement on competition policy is not to limit corporate concentration on a global
scale. On the contrary, it hopes to dismantle barriers faced by Northern TNCs in ‘emerging
markets’, such as various laws or policies that favour local firms.”65
Despite the spectacular rise of the “antiglobalization movement,” governments in both North
and South remain deeply committed to neoliberal trade and investment policies. As the
Corporate Europe Observatory (CEO) notes, since the failure of the 1999 WTO summit at
Seattle, the EU and the US intensified their neoliberal campaign to restore momentum for
accelerating trade and investment liberalization in a new round.66 Within the EU, the new EU
Trade Commissioner Pascal Lamy has continued in Sir Leon Brittan’s neoliberal footsteps
and maintained even stronger ties with large corporations. An example of their close
relationship is the European Business Summit, which comprised a thousand business leaders
and most of the European Commissioners together in both May 2000 and June 2002. The
summit proposed for “improving European competitiveness.”67
Competitiveness is increasingly being defined discursively, and socially constructed in
neoliberal terms within both the corporations and the Commission’s policy discourse. 68 The
ERT was very active in propagating and articulating this competitiveness discourse in its
report, Beating the Crisis, in accordance with Delor’s influential White Paper on “Growth,
Competitiveness and Employment,” which steadfastly claimed that the Single European Act
could help “to restore the balance in the development of the single market by way of joining
flanking policies as part of economic and social cohesion.” However, in practice, Simon Lee
argues that
By endorsing further deregulation, liberalization and the transfer of the tax burden from the
company and entrepreneur to the individual, the ‘flanking policies’ incorporated within the
competitiveness agenda were threatening to undermine the drive for greater social cohesion
by attacking the solidaristic principles of European welfare states in order to provide a more
advantageous environment for businesses to operate. 69

Then the EU Commission under Jacques Santer set up a Competitiveness Advisory Group
(CAG) in February 1995 so as to produce a biannual report on the state of the Union’s
competitiveness and to advise on economic policy priorities and guidelines with the aim of
stimulating competitiveness and reaping its benefits. 70 As a result, the competitiveness
discourse has become the primary “benchmark” for neoliberal restructuring of the EU.

64
Quoted in Balanya, et al. Europe Inc., p. 133.
65
Quoted in Balanya, et al. Europe Inc., p. 133.
66
Balanya, et al. Europe Inc., p. xvii.
67
Balanya, et al. Europe Inc., p. xx.
68
van Apeldoorn, “Transnational Class Agency and European Governance”; and Ben Rosamond,
“Imagining the European Economy: ‘Competitiveness’ and the Social Construction of ‘Europe’ as an
Economic Space,” New Political Economy, 7:2, 2002, pp. 157-77.
69
Simon Lee, “Discovering the Frontiers of Regionalism: Fostering Entrepreneurship, Innovation and
Competitiveness in the European Union,” in Shaun Breslin et al. (eds) New Regionalisms in the Global
Political Economy (London and New York: Routledge, 2002), p. 169.
70
Balanya, et al. Europe Inc., p. 33.

13
Strengthening European industrial competitiveness within the global economy has always
been the corporate main objective, and it lobbies for the neoliberal promotion through the
development of the Single Market into a steadily more integrated economic system. This was
institutionalized in the 1997 Amsterdam Treaty, which the ERT demanded completion of the
Single Market was written into the Single Market Action Plan, and is now being implemented
by the EU member states: The plan has led “to further liberalization of the
telecommunications, transport and energy markets, the patenting of life, the granting of
monopolies to biotech companies for products developed with biotechnological techniques,
and movement towards the harmonisation of corporate taxation in Europe.”71
One of the major goals in the Amsterdam Treaty was a thorough revision of voting
procedures and national representation in EU institutions in order to prepare for the
anticipated accession of Central and Eastern European countries (CEECs). Both the ERT and
UNICE lobbied vigorously for the speedy enlargement of the EU towards the East. European
corporations regarded CEECs as enormous markets with plentiful resources and providers of
cheap labors. For the ERT, “enlargement is fundamental: It will bring great economic benefits.
These countries will bring new people, a lot of skills, technology, education, know-how. They
will bring material resources including land and energy, and they will bring markets for our
products.”72 However, these countries necessitate stringent neoliberal “structural adjustment”
prior to accession. Thus the rationale for EU enlargement should be envisaged through the
neoliberal European perspective, that is, the European corporations could move easily to the
lower-income, labor intensive, and resource rich areas of the East.
To boost the EU’s competitiveness, another road towards the neoliberal restructuring of the
EU is the so-called Lisbon Agenda in 2000. The summit set an action plan to transform
Europe into “the most competitive and dynamic knowledge-based economy in the world by
2010.” The plan was to “promote liberalization reforms, increase R&D spending, and
encourage the deregulation of labor and product markets across the continent. Similarly, the
euro’s proponents hoped that the single currency would not only increase cross-border trade
but also, by imposing tougher price and wage discipline on its members, speed up structural
reforms in all European economies.” 73 The Corporate Europe Observatory argues that the
result will be a sweeping neoliberal restructuring of European societies. ERT member Baron
Daniel Janssen describes this as part of a “double revolution,” which consists of “reducing the
power of the state and of the public sector in general through privatization and deregulation,”
and “transferring many of the nation-states’ powers to a more modern and internationally
minded structure at European level.”74 Consequently, the disciplinary neoliberalism has been
continuously institutionalized within the European Union, while the major decision making is
transferred into the hands of supranational actors and institutions regulating and facilitating
businesses.
Constitutionally, the EU in many ways is largely of neo-liberal category. The case becomes
even bolder if one sees the relationship between the constitution and EU’s enlargement. To be
accepted in EU, the applicant states have to follow the restrictive policies linked with the
Maastricht criteria and Stability and Growth Pact. In this sense, John Milios argues that “the
“Constitution” actually aims at making neo-liberal “irreversible” in the enlarged EU” because
“the Constitution aims at “finalizing” the institutional framework of the EU for decades to
come, so that the “deepening” of the process of European (economic, political, and social)
unification may be facilitated.”75 Milios further explains:

71
Balanya, et al. Europe Inc., p. 27.
72
Quoted in Balanya, et al. Europe Inc., p. 65.
73
The Economist, “A Special Report on the European Union” (7 March 2007), p. 5.
74
Quoted in Balanya, et al. Europe Inc., p. xx.
75
Milios, “European Integration as a Vehicle of Neoliberal Hegemony,” p. 211.

14
 The “Constitution” ascribes the character of “constitutional order” to two major pillars of
neo-liberalism. First, deregulated markets. Article I-3 says that “The Union’s objectives: a
single market where competition is free and undistorted.” Second, the priority of state
security and “military capacity” over human and social rights. …More specifically with
regard to economic and social policies, after some “progressive” formulations concerning
the economic and social “objectives” of the EU in part I of the constitution,…disinflation,
the main motto behind all neo-liberal policies, is acclaimed as a major “constitutional” end.
“The primary objective of the European System of Central Banks shall be to maintain price
stability” (Article I-29).76

Last but not least, we argue that the EU does not militarily step out of the Hobbesian world
into the Kantian paradise of perpetual peace, as Kagan claims. 77 Similarly, Thomas Risse
argues that while the EU matches the US in economic power, it lacks the willingness to match
the US in military power. 78 Due to its power gaps, Europe has depended on the presence of
American military forces, which played the critical role in bringing Europe into the Kantian
paradise. As McCormick argues further, unlike the Hobbesian US, the EU has in fact rejected
realist interpretations of the international system, and has emerged as a “post-modern”
civilian superpower. 79 And the Iraq war may have seen as the transatlantic rift, which makes
the Western allies increasingly at odds with one another. The Iraq showdown undeniably
divided the partnership into a deep crisis; however, the EU and the US have endured its
“inevitable alliance.” 80 To illustrate, since then they have cooperated closely in dealing with
many international issues, such as the Iran and Korean peninsular crises. And as we discussed
above, the economic interdependence between the two superpowers is strongly collusive. The
transatlantic relationship might have been going through a stormy period, but this was no
reason to despair, as a high-level report released by the Council of Foreign Relations pointed
out.81
Moreover, the idea of “post-modern civilian Europe” could be traced back to the early 1970s
so as to understand the debate well. It was explored in more depth by Francois Duchene
arguing that “the lack of military power was not the handicap that it once was, and that
Western Europe might become the world’s first civilian centre of power, the first major area
of the Old World where the age-old process of war and indirect violence could be translated
into something more in tune with the twentieth-century citizen’s notion of civilized politics.”
As a civilian power that was “long on economic power and relatively short on military force,”
Duchene argues, “Western Europe would be free of a load of military power which could give
it great influence in the world.”82 For Andrew Moravcsik, the EU is a “quiet superpower” that
does not rely on guns and bombs but is focused instead on the promotion of peace and
democracy through economic opportunity, trade, peacekeeping, and foreign aid. To
Moravcsik, the attraction of European social welfare model of Europe outdoes the neoliberal
political economy of the US. He bluntly sums up:
European nations cannot match US military might but in trade, aid, votes in international
organizations, legitimacy, and global appeal of their social and political model, they surpass

76
Milios, “European Integration as a Vehicle of Neoliberal Hegemony,” pp. 211-2.
77
Kagan, Of Paradise and Power, p. 57.
78
Thomas Risse, “US Power in a Liberal Security Community,” in G. John Ikenberry (ed.) American
Unrivaled: The Future of the Balance of Power (Ithaca: Cornell University Press, 2002).
79
McCormick, The European Superpower.
80
Michael Cox, “Beyond the West: Terrors in Transatlantia,” in European Journal of International
Relations, 11:2, 2005, p. 207.
81
Henry Kissinger and Lawrence Summers (eds), Renewing the Atlantic Partnership (New York:
Council of Foreign Relations, 2004). Quoted in Cox, “Beyond the West,” p. 207.
82
Quoted in McCormick, The European Superpower, pp. 27-8.

15
 the United States. The EU has become the ‘quiet superpower,’ quietly challenging the neo-
conservative boast of US “unipolarity”.83

For us, Moravcsik has dismissed the fact that, firstly, the evidence discussed above indicates
that the EU and the US are fundamentally world-wide neoliberals, and they have strongly
promoted the neoliberal agenda on developing countries. Second, the EU has developed a
common army and become an increasingly global actor with the tasks of humanitarian, rescue,
peacekeeping, and other crisis management operations, including peacemaking. Guglielmo
Carchedi puts it well that “in order to impose its trade and (under)development policies, the
EU needs for a military arm has been expressed in more official terminology time and
again.”84 For example, after a December 1998 meeting in St Malo, France, Tony Blair and
Jacques Chirac declared that the EU should have the capacity for autonomous military action,
is idea which German Chancellor Gerhard Schroeder later endorsed. At the 1999 Cologne
summit to launch the European Security and Defense Policy (ESDP), it was declared that:
…the Union must have the capacity for autonomous action, backed up by credible military
forces, the means to decide to use them, and a readiness to do so, in order to respond to
international crises without prejudice to actions by NATO. 85

We argue that the belief that “Europe could not be Europe without its own army”86 is due to
the increasingly Europe’s global interests. In the ERT’s 1991 publication Reshaping Europe,
it showed that since the 1991 Gulf War, the ERT has increased its campaign to strengthen the
EU’s foreign policy powers and for the creation of joint EU military forces. It argued that the
Union should be able to defend the global interests of European business. Accordingly,
former Secretary-General Keith Richardson was disappointed by the “little progress towards a
unified foreign policy to protect Europe’s overseas interest, and none at all towards the
integrated defence which we need if we are to preserve competitive defence industries.” 87
Thus, the notion that the EU has become a civilian superpower that emphasizes on “soft
security” and decreasingly relies on the implications of “hard security” or even hard
diplomacy in international relations is an illusion. That is far from implying that Europe has
transcended power politics into Kantian Europe. As Niell Nugent puts it well, “Classic ‘power
politics’ have not of course disappeared, but they are not as dominant or as prominent as they
were.”88 Hence Jacques Chirac suggested in October 2003 that “there cannot be a Europe
without its own defence system.”89
IV. Conclusion
This paper has argued that, contrary to Kagan’s thesis of Hobbesian America and Kantian
Europe, these two philosophers in fact share fundamental ideas and agree on terminology.
Their similarities bring about a convergence, not a divergence of European and American
views, that is, Kant has met Hobbes in both Europe and the US. Though Europe and America
do not see eye to eye on every issue, the US-European relationship continues to have a strong
common interest under the neoliberal consensus. For over a decade the leaders and
corporations of Europe have pushed for ever more explicit and implicit liberalization of trade
and service, deregulation of financial and labor markets, privatization of the public sector, and
cutting the social programs. From the Maastricht Treaty of 1992 to the Lisbon Summit in

83
Andrew Moravcsik, “EU Got that Thing”, The American Prospect, 16: 1, January 2005, pp. 38-39,
http://www.prospect.org/cs/articles?article=eu_got_that_thing.
84
Carchedi, For Another Europe, p. 191.
85
Quoted in Niell Nugent, The Government and Politics of the European Union, 5th Edition (Durham:
Duke University Press, 2003), p. 419.
86
Jolyon Howorth, “National Defense and European Security Integration,” in Jolyon Howorth and
Anand Menon (eds), The European Union and National Defense Policy, (London: Routledge, 1997), p.
12. Quoted in Carchedi, For Another Europe, p. 192.
87
Quoted in Balanya, et al. Europe Inc., p. 67.
88
Nugent, The Government and Politics of the European Union, p. 7.
89
Quoted in McCormick, The European Superpower, p. 78.

16
2000, from the Nice Treaty of 2001 to the unratified constitutional Treaty of 2004, all have
urged European states to institutionalize a disciplinary neoliberalism. Accordingly, the notion
that the EU could emerge as a civilian superpower, offering a “force for good” and more
humanitarian, social democratic alternatives to the US, is an illusory myth. Instead, like the
US, the EU is a neoliberal Europe. In addition, the EU has developed its military power, even
though not up to American capability to defend its economic interests abroad. And although
EU-US economic disputes receive a great deal of publicity, they do not undermine their
“inevitable alliance.” On the contrary, strong EU-US neoliberal ties remain one of the pillars
of the fundamentally cooperative transatlantic relationship, to jointly exploit global
economies. In the world of neoliberal capitalism, the dominant fact is “not the war against
terrorism, but the remorseless growth of poverty and inequality.”90

90
Alex Callinicos, The New Mandarins of American Power (Polity Press, 2003), p. 128.

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