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“The European Union - Towards a Discourse of Reconnection, Renewal and Hope” Speech at The 11th Annual Emile Noël Lecture

New York University School of Law, 28th September 2015

Ladies and gentlemen, may I begin by thanking Dr. Gráinne de Burca, Director of the Jean Monnet Center for Regional and International Economic Law and Justice here at your university for her invitation to give the Annual Emile Nöel Lecture.  It is an honour to deliver the lecture in honour of a great European, and as part of a sequence of lectures that have acquired a prestigious reputation. 

The title I have given to my lecture is a response to what I feel is a great democratic challenge, one of a regional kind insofar as its focus is the European Union.  However, I am convinced that the challenges of connecting citizens, of creating a space for vision and innovation in theory and policy, of offering hope at a time of great change on a planet scarred by a growing inequality, are also global in nature.   

The discourse that prevails in relation to European issues at the present time, including the contributions of distinguished, but at times lonely, academic voices, refers to a crisis of legitimacy in an institutional sense.  The roots of this discourse on the legitimacy gap are as old as the Union but have acquired an increasing urgency due to the fiscal crisis of member states, the response of different governments and its effect on citizens.

If we are to respond to this issue of legitimacy, we must look to the social sciences, remembering that all policy at some point bases itself, or at least seeks to justify itself, in terms of theoretical assumptions.  In doing so, we need to test the transparency, the adequacy, and the power of such assumptions. I suggest that the discourse I seek in the title of my lecture assumes a pluralism of scholarship which has been in decline for some time.  

As a consequence we are, as flies in a jar of honey, trapped in a single paradigm of thought from which we are finding it difficult to escape.  We perceive the need for new thinking that will source new policies that address the human challenges of social inclusion, poverty elimination, gender equality, public health, and security in its widest sense; we perceive this need, but we seem unable to act.

That single paradigm of thought has a historical location.  It comes from a moment of hubris that suggested that literally all aspects of life could be fitted within an explanatory frame of extreme market theory.  Citizens came to be replaced by consumers who were assumed to rationally calculate how to maximise their satisfactions.  

That this model is now in crisis is surely evident in the social statistics that we gather from developed, developing and so-called undeveloped societies.  That we need a new model is acknowledged in the World Development Report 2015 – Mind, Society and Behaviour – published by the World Bank Group.  

That report references Milton Friedman’s famous essay On the Methodology of Positive Economics, 1953:  

“The individual actor could be understood as if he behaved like a dispassionate, rational and purely self-interested agent since individuals who did not behave that way would be driven out of the market by those who did.  The assumptions of perfect calculation and fixed and wholly self-regarding preferences imbedded in standard economic models became taken for granted beliefs in many circles.”

The World Development Report goes on to suggest that:

“Economics has come full circle.  After a respite of about 40 years, an economics based on a more realistic understanding of human beings is being reinvented.  ...  [T]his Report shows that a more interdisciplinary perspective on human behaviour can improve the predictive power of economics and provide new tools for development policy.”

Such a statement acknowledges the inadequacy of the prevailing model and paradigm of economic theory, one that is usually associated with the Chicago school; but paradigms of thought do change.  

Modernisation Theory in Sociology is a good example.  It is almost 50 years since I passed through New York for the first time on my way to study at Indiana University at Bloomington, Indiana. I was in my early twenties and one of the first Irish graduates to be offered an opportunity of postgraduate study in the social sciences in the United States. Sociology was enjoying its renewed spring and was perhaps even moving into a moment of hubris in that autumn of 1966.  

Many like me were about to be introduced also to Modernisation Theory, as contained in the great canonical assertions of the Princeton Studies of Gabriel Almond, Lucian Pye, Samuel P. Huntington and others, with its evolutionary concepts of civilisation, progress, development and its perception of traditional society hindering progress.

In time, such narrow frameworks did come to be questioned and were deconstructed by intellectually emancipated scholars such as Orlando Fals Borda, and particularly so in the fields of political science and anthropology.  

As to method, there was great excitement at the new possibilities of large scale surveys based on sampling, and the capacity for analysis of a newly-introduced large computing facility.   In turn, the social sciences increasingly focused on individual ‘opinion’ and ‘preferences’ rather than the ‘discourses’ and ‘politics’ that shaped those preferences. Preferences, it was assumed, preceded discourse, and could be directly modelled in ‘rational utility terms’.  

Missing from the narrative of the times was any analysis of the form or the location of power. At the edge of the discourse, C. Wright Mills’ ‘The Sociological Imagination’ stood as an accusing text to the self-satisfied times.  

It was at Illinois that I read, for the first time, Alvin Gouldner’s ‘The Coming Crisis of Western Sociology’, and I have had that work ringing in my head through all the years, in particular the emphasis Gouldner placed on the need for good scholarship to adhere to the discipline of declaring what he called one’s “domain assumptions”.  The framework one took for granted as the given, the normal, had to be declared, presented as a paradigm.  Fundamental change required one to be open, to allow that taken for granted reality that preceded the research to be open to question. 

I look back, not infrequently, to that time when the possibility of paradigm articulation, shift, and change seemed to offer a set of possibilities that would make pluralist scholarship the norm and enable its hypotheses to make their way to generating a diversity of policy options.  So many academic institutions have resiled from a commitment to that pluralist scholarship.

This stands as background, as a global background in intellectual terms, to the issues we must face in the European Union.  There are particular issues that arise within the Union, urgent issues as to whether it will be possible to have an institutional integration, which most commentators agree is necessary, and also a parallel social integration that would receive the support of the citizens of the Union.  However, the assumptions of theory as it informs discourse are perhaps even more important because they define what is possible and what can be imagined.  The assumptions determine the basis on which power can be exercised or regulated and they determine the basis on which issues such as integration are approached. Unchallenged theoretical frameworks and doctrines can disguise reality, and contribute to the separation of citizens from their political institutions.  

If the current crises within Europe, as I have suggested, have an intellectual as well as political and economic dimension, we must recognise too that the European Union has within it the capacity to bring into being a new discourse that achieves a fairer, more inclusive Union.  

I believe that the political will which would enable a new vision for the future to prevail is now being evidenced at citizen level.  The public response, for example, to the position of refugees arriving in Europe in recent times has, for the most part, demonstrated a deeply humanitarian instinct.  If, as we all hope, 2015 is to be marked by achievements of agreements on Climate Change and on a new approach to Sustainable Development, a change of consciousness at a global level also seems possible.  Is it not also possible then to aspire to a response, at a European and a global level, to the threat to democracy that is posed by increasing global inequality and a financialised global economy? 

Let us consider for a moment the context in which the positive view of Europe, developed and advanced by Emile Noël and others, was conceived. The memory of war and the near extinction of European culture were ever-present in the minds of the pioneers of the Union in its early manifestations.  Their vision was one of peace and prosperity based on core values of reconciliation and solidarity.  

In that vision, the role of the state, and of the inter-state institutions which were being constructed, was understood as important and as mediating in nature: balancing, as they did, the historical tensions between the interests of capital and labour, or as Wolfgang Streeck has defined it in more recent times, balancing the objectives of social justice and market justice.

That balance defined the post-war boom, and had also been the context for significant social progress in the United States, spurred on by such work as that of Michael Harrington’s The Other America – Poverty in the United States.   However, it would be irrevocably broken in the period beginning in the 1970s, as growth slowed and the view took hold that prosperity and the balancing of interests could only be sustained by a weakening of the State.

In a relatively short period the widely disseminated views associated with Friedrich Von Hayek and Milton Friedman took a powerful grip on intellectual life.   That hegemony was achieved in a conscious exercise of institutional power.   It released a very concrete set of political principles, and it set the terms for the position Europe and other regions find themselves in today.  Over time, policy became ensnared within a single hegemonic model built on the assumption of the human actor as a utility maximising rational being. These intellectual assumptions were the source of an economic policy that was the very antithesis to the Keynesianism of the post-war decades.  Within the Academy dissent and heterodoxy would be silenced or marginalised.

Far beyond Europe, from the impact of the fall of the Berlin Wall, one can trace an ideological drift that, inter alia, defined language in a new way.   For example, ‘freedom’ in the public discourse becomes ‘freedom’ from State regulation.  Support for the concept of public goods and public services, for the public world, for the enrichment of the public space, for the definition of culture, of broadcasting, as a shared public activity was put under pressure from a populism based on radical individualism; all of it of course predicated on an assumption of infinite economic growth.

The State as an institution, which after World War II had been used as an instrument to set about the rebuilding of Europe, offering health care, decent housing and social protection to its veterans, their families and their successors came, in the decades from the Eighties to the present, to be regarded as an institutional obstacle to growth and prosperity. 

Aspects of State regulation did survive for a while but the financialisation of the global economy was now well underway.  In the process, the profoundly ideological notion that State regulation is an obstacle to freedom came to achieve a tacit acceptance.  Be it in the United States or the European Union, the stripping away of regulation can be shown to have shifted power to the beneficiaries of a growing inequality. Over the period since 1980, and in accelerated form in more recent years, gaps in income and wealth have widened generally and regionally in the European Union, and in the United States.
 
Our present circumstances in Europe are dominated by different forms of crises: the crisis of debt, the crisis of unemployment and economic stagnation, and institutional crises at several levels including some that challenge the integrity of the Union itself. However as a source of, and foundation for, economic policy, the evolution of this theoretical model of neo-liberal capitalism with minimal regulation now provokes a challenge to the democratic institutions in which citizens had placed their trust.  Recognising this reality, and taking it into account in our response is central to any understanding of the contemporary position of the European Union and the resolution of its difficulties.

The centrality of debt to the European economic crisis and to the wider questions of integration has been neatly summarised inter alia by Claus Offe.  Giving the title ‘Europe Entrapped’ to his recent article in Eurozine, Offe’s response to the present crisis is critical of European Union strategies to date.

“A central problem for the euro rescue scheme is that the banking crisis became a state budgetary crisis, which then became the crisis of European integration we have today.  This in turn is a crisis of renationalising our sense of solidarity, a crisis in which the rich countries of Europe impose saving packages upon their poorer neighbours which are supposed to win back the confidence of the finance industries.”

If we take perhaps the most troubling of the contemporary problems – that of scandalously high and unaccountable levels of youth unemployment – we see writ large the profound consequences that economic policies and deregulation of finance have had on social cohesion and indeed, as research has shown, productivity at a personal and social level.  

For the EU 28, the most recent Eurostat figures disclose youth unemployment running at 20.4%, compared to 10.9% of the general population (it is currently 4% in the United States).  In some of the worst affected members, the picture is of course much bleaker. Spain has an unemployment rate of 22%, but a youth unemployment rate of 48.6%.  Greece has a rate of unemployment of 25%, but its youth unemployment rate is currently running at 51.8%, and Croatia and Italy also have youth unemployment rates of over 40%. 

By any measure, these are stark figures and demonstrate the ongoing impact of the banking and financial collapse of 2007-2008, and the linked issue of unsustainable public debt in many states.  In Ireland, unemployment is falling and currently stands at 9.5% but further progress will be contingent on a wider European recovery which remains fragile.

At those times when growth, however adequately defined, produced surpluses, an unaccountable system could drift on.  Citizens could be encouraged to compete with each other in terms of consumption in a highly individualised sense.  Now, however, inflation may be near zero, but the demand side of the national economy continues to contract as unemployment creeps up.  As economies moved from a period of growth, and governments were forced to cut services and suspend infrastructural investment, fear and tension are the consequences. 

These consequences fall most heavily on the poor and within society hope is eroded among the young whose expectations, after all, were formed in a debt expanded financialised economy rather than in any version of the real economy that emphasised the possession of skills and creativity.

Recognising this intellectual and public policy context is important for coming to terms with the disconnect between the citizens of the European Union and their representative institutions. 

Democratic participation is now at historically low levels across the continent. In times of economic contraction and reduced State expenditure on services, elected representatives take the hit of a public anger as they are perceived to be the most proximate and available sources of authority, while at the same time they are perceived as powerless to act. Politics itself and the status of governments and parliaments have been eroded, as crucial decisions that affect people’s lives are increasingly taken outside such an institutional accountability.    This is the legitimacy crisis emerging at various levels.

Indeed this grounding question of legitimacy is a primary focus for thinkers such as Habermas, Streeck, and Offe, who all share a broad consensus view that the emasculation of politics we are witnessing in Europe has been fundamentally affected by the political changes that came about in the Eighties and Nineties.  

In Europe, a growing gap has opened between, on one hand, the advocates of Social Europe who simply wish to protect aspects of social protection, parts of which, such as the British National Health Service or Scandinavian social protection, are iconic political achievements of the past; and, on the other hand, those who under the mask of labour market flexibility seek the surrender of hard-won rights in the workplace and the society. 

The outcomes of this conflict see our shared vulnerable planet scarred by a growing inequality, an inequality that has implications for health, housing, work, participation, life itself.  That is what constitutes the concern for those in the European Street.  

What might have been the political presentation of this confrontation in electoral terms, has been dampened by the moving of electoral competition to what is regarded as the political centre, a centre of course that, in recent times, is under the shadow of some dangerous populisms.  In some States such a choice of the centre has come to be defined as the fullness of political choice.  

There is nothing uniquely European about our position, although it may be that in the multi-level structure of the EU the tension between democracy and global markets is particularly pronounced.  We are living through what many scholars acknowledge is a new form of capitalism with a global reach, which existing democratic institutional arrangements are failing to render accountable. 

Where previously forms of connection between economy and society could be contested in the political discourse, and discussion of redistribution, of poverty proofing, of reducing inequality, was possible, now these issues are presented as very much secondary to the management of the newly socialised public debt.  

As parliaments lose capacity, as the realm of the social state shrinks, the feeling on the street is that more and more the people are being asked to adjust themselves and their lives to ‘fiscal’ policies, which it is suggested are beyond the ken of ordinary folk.  The adjustment of the citizenry to debt costs and forecasts may be called austerity, but what is masked by such a term is perceived by many as a submission to forces that are not under any democratic control, and at the same time a transfer of wealth to private creditors.  Wolfgang Streeck has described in great detail the fear being felt in the European Street that, at a global level, a capitalism without democracy is under way.  

The scale of the debt problem and the ongoing economic difficulties facing Europe are enormous, and as governments struggle with these great questions, diverse proposals are being brought forward by scholars and political scientists. Jürgen Habermas makes a case for a new institutional ‘transnationalism’, while acknowledging the scale of the democratic challenge this would present. Wolfgang Streeck seeks, as an alternative, an exit from a dysfunctional version of monetary union, badly introduced. Claus Offe takes a pessimistic view and highlights the gap between what he sees as fiscally necessary in terms of debt-sharing, and the political obstacles to the necessary changes across the Eurozone.  Offe suggests the only possible solutions may lie in the area of social policy.  

Teasing out the various policy options at this difficult moment is the very onerous work of national governments, rather than for me as a Head of State. I would suggest, however, that their efforts in bringing forward economic and institutional reforms will not, if taken in isolation, address the deeper existential issues of legitimacy facing Europe unless we recognise the dominant influences of the contemporary forms of capitalism and need to revisit the relationship between economic and social policy in a fundamental way.

This is not to say that there are not grounds for hope.  The crisis at an economic and at a political level is deep, but crises can provide an opportunity for a new strategic direction, for renewal. 

As a beginning, however, we need to break free intellectually so as to give ourselves the possibilities that our sustainable future demands, but paradigm departure can be difficult, even painful.  In a passage, near the end of Gilbert Rist’s ‘The History of Development’  published at the end of the Nineties, he wrote of the difficulty of getting to a new paradigm in intellectual work and policy:

“Only a new paradigm can alter, not the way things are, but our way of conceiving them.  That is, it can make it possible for us to think what is today unthinkable.  History shows us a series of turnarounds that have changed the face of the world.  What value today have the certainties of Galileo’s adversaries, of the Inquisitors hunting down witches, of the colonisers so full of their sacred trust of civilisation?”  

We are not living in circumstances that cannot be changed.  Inequality at global, regional or national level is not some form of natural law.  Many are now recognising that distributional issues are a necessary part of the discourse that is necessary if we are to restore the possibility of the legitimacy that is needed for systemic integration.  The need for revision of institutional architecture has to be primarily directed at the needs of the Union and its citizens and, only within that, can the systemic institutional change needed in relation to currency and economic stability be pursued.

As to how we can act in the short term, there are proposals available to us in such works as that of Professor Anthony B. Atkinson.  In his recent book Inequality, he explores the specific historical and political contexts and causes of contemporary forms of inequality and makes the following observation:-

 “Crucially, I do not accept that rising inequality is inevitable: it is not solely the product of forces outside our control.  There are steps that can be taken by governments, acting individually or collectively, by firms, by trade unions and consumer organisations, and by us as individuals to reduce the present levels of inequality.”

Professor Atkinson goes on to make some proposals for policy; which I believe could be implemented within the present constitutional parameters of the European Union.  The proposals would build a social floor for the European Union but would also have a global reach in addressing inequality.  These are Professor Atkinson’s proposals, not mine, but their central feature is that addressing inequality, arresting its deepening, breaking the cycle of exclusion and alienation is achievable.  

In this regard, I have previously pointed to the existing treaty obligations under the Charter of Fundamental Rights and Freedoms, and the obligations under the Revised Social Charter of the Council of Europe and providing an existing rights framework for such a social floor.

Such proposals could serve as a beginning for the rebuilding of a Social Europe, and do so within existing constitutional arrangements.  I find such a contribution attractive and valuable.  I ask myself, however, could this ever make its way into the current discourse in the European Union at institutional or political level?

We should remember, too, the great achievements that have been made possible in the past. At its periods of greatest achievement and progress, the European Union has inspired the loyalty of its citizens because of the hope it represented of a better society for all. If it is to survive and to flourish, Europe must regain the power to inspire and to offer hope. The Union has much to be proud of and to celebrate and European Union membership has given impetus to so many inclusive decisions in member states.  Michael Longo and Philomena Murray in their introduction to another recent work Europe’s Legitimacy Crisis: From Causes to Solutions, make the point succinctly: 

“The European Union’s future no longer seems to be informed by the vision of the past”

In the Irish case, membership of the Union has been a powerful impetus towards gender equality, for example.  Its influence on environmental responsibility has been immense, and it has been used as both source and shelter for Government decisions on sustainability.

The principle of free movement of peoples was once seen as a core value to be celebrated rather than merely as a labour market instrument or a legal rule to be circumvented. It was a cornerstone of the idea of Europe that enabled cultural and social interaction on an unprecedented scale. 

In the area of education, the ERASMUS scheme allowed young European people to study and work in other member states, exposing them to a different linguistic and cultural environment at a formative period in their lives. Since 1987, three million Europeans have taken part in ERASMUS, with 40% going on to settle abroad and one third marrying a citizen from another state.  The Commission has estimated that there have been one million babies born of ERASMUS –in what Umberto has described as a “sexual revolution” sweeping Europe, which he has argued should be extended beyond students to workers also. Travel is the nourishment for integration. Policies of fiscal consolidation or a Council reform are unlikely to produce such a romantic or demographic dividend!

In fostering political will for reform, the importance of symbolism should not be underestimated. When intergovernmental meetings are called to discuss where the European Union must go, they usually conclude with a joint statement.   On the street very often what citizens believe they are hearing is not any invitation to an understanding of economic or political circumstance, not to speak of change.  Thus when the conditions of life itself cannot be reconciled with the image of authority and care on offer, one is pushed to ask the question: have things spun out of control?  Has not a fissure between public and power emerged?

In responding to our current crisis and its institutional sources some public intellectuals speak of what they see as an irreformable reality, of the need for a new moment of confrontation and total change when existing institutions can be swept away.  This may be heady stuff but there are those who see the human costs of such an outcome; who see how old badges of difference, ethnicity, belief and bankrupt certainties of the past, so often, and dangerously, claimed to be absolute, could quickly fill the vacuum that would be created, how easily our publics could drift in a resile to old hatreds, based on distortions.

I remain committed to the European vision and to the potential for the founding principles of Europe to provide the foundations for a renewed and strengthened Union.  Yet to provide hope, a positive vision at this crucial moment, I believe we must rediscover the enabling and inspiring principle of solidarity: solidarity within the Union and solidarity in the wider world.  

When Europe was in ruins after the war the destruction was unavoidably in one’s gaze.  When European growth rates were achieved within a social model it may not have seemed necessary to have a widespread economic literacy.   Many could drift from participation.  Adjustments in living conditions could be the stuff of political competition as to the disposal of the fruits of growth.  We should remember too that period of the European Union’s history when solidarity mattered, when Combat Poverty, for example, was born.  

It is well within the capacity of the European publics to craft a new policy and institutional order that combines social cohesion with competitiveness. The danger at the moment is that the discourse has stalled under the pressure of an insufficient paradigm of connection between economy and society. The further danger is that without the political support of its people, the necessary institutional and policy changes will become ever less possible. 

Rebuilding a social Europe may require greatly increased tax and spend capacities on the part of the EU institutions.  At present, the political will for such policies and for the necessary ceding of sovereignty from the national level does not exist.

Political will and reviving an active European citizenship requires comprehension and participation by citizens, facilitated by an economic literacy. May I suggest that if literacy was an essential tool in securing the right to vote and be heard in a previous century, an economic literacy that can demystify banking, fiscal and real economy crises seems surely necessary now for an inclusive discourse, one that can address the widely reported alienation of citizens.  

In the contemporary period, as I have said, mediating institutions are becoming sidelined or neglected and publics are reflecting their alienation in non-participation.  The vacuum that has emerged becomes available to populist extremes, old and dangerous fundamentalisms.  Old and bogus certainties are resurrected to justify exclusions, create fears, and revive hate.

If this is to be reversed - and I believe it can -  recognising the consequences of a limiting paradigm in our intellectual work is a necessary beginning.  We can, I believe, save the European vision, and we, in doing so, are saving a model in which peoples of other continents have placed their hopes. At general level, the perception of our 
inter-dependency which lies at the heart of Emile Noël’s Europe can be the basis for possibilities of joint action on issues such as climate change, the elimination of global poverty, the ending of gender violence and a restructuring of global debt. 

Reviving solidarity holds the best prospect of re-engaging electorates also.  Reflect, for example, on what would be the response among its publics to the European Union’s agreeing to implement a social agenda derived from the economic, social and cultural rights and the supporting protocols, of the Council of Europe?  Imagine the value of a meaningful guarantee of rights to food, shelter, education and health.

A reconstituted discourse for the European Union must be part of a new global discourse that can build on commitments in relation to global challenges such as sustainable development and climate change.  Europe can embrace these and other challenges in conscious recognition, but rejection, of an old legacy that many of its members share, one of imperialism, of economic exploitation, political manipulation and cultural exclusion, which it must face and transact as part of its past, if it is to enable its present to be democratic and if it is to protect its future for its best possibilities.

Recent developments and global challenges can be turned in a new direction for the European Union, building a Union that will be an exemplar for other regions, presenting new global and regional choices as to the appropriate connections between society and economy, ethics and ecological sustainability.  

The European Union can, in its response to the present migrant and refugee flows from the neighbourhood of the Union, create a model for appropriate response to such issues.  If it were not to do so, the evidence is that such an issue can confound the best of European values with new xenophobic parties being the beneficiaries in a sea of populist tendencies.  When we see the overwhelming popular support for compassionate and generous policies at this time, we should be left in no doubt that solidarity both within the Union and with our neighbouring regions can be a powerful unifying value.

Within the economic sphere, redefining work itself as a human activity in a contemporary interdependent global economy, the European Union can also make a significant contribution in confronting the creation of the ‘precariat’ that is emerging at a global level. At times, this growing phenomenon of insecure work sails under a flag of convenience called ‘labour market flexibility’, but it is really about deregulation and the erosion of rights, security, and benefits painfully gained over generations.  This is a universal issue, one not confined to the European Union, but one where, given the political will, and its strong legal framework and tradition, the Union could be exemplary.

The glaring inequalities of our globe must be recognised as the threat they constitute to democracy everywhere.  If what is called ‘democracy within capitalism’ continues to change its form into’ capitalism without democracy’, and, I repeat, if politics in its practice becomes hollow, if economic literacy is not to be provided for as a necessary tool in the most public discourse, the argument on legitimacy will not simply be an economic one.  It will be about democracy itself.

Conducting an analysis that might suggest a suite of regulatory responses to global financial flows could, as the contribution of a region, help bring into reality the new sustainable development goals that we are agreeing this weekend, thus crafting into them the human rights principles upon which so many scholars have contributed.

We are at a defining moment.  The scale and complexity of the challenges we face are daunting, but we have great resources with which to face them: the rich and profoundly ethical intellectual heritage of Europe and of the founding visionaries of European cooperation such as Emile Noël.  

The tasks we must undertake are political and institutional, but they are also intellectual and moral in nature.

We have together, at global level and in the European Union, an opportunity to play to the potential of our possibilities, to define our inter-dependency in terms of human vulnerability.  We should take our opportunity and that is to be very European indeed.