Money, Money Everywhere Why Does the EU Get Such a Bad Rap?

Maurice Weiss / DER SPIEGEL

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Part 2: Ignoring Europe's Presence


Explaining this phenomenon is relatively simple in Birmingham. At the end of last year, Roger Stedman, medical director of the Midland Metropolitan Hospital, and Toby Lewis, the hospital's CEO, were sitting together in a mobile office unit with a view of the imposing construction site. Over instant coffee, the two Englishmen wondered why anyone would come to see them to talk about Europe.

The new facility will be one of Europe's biggest trauma centers, with 670 beds and 15 operating rooms -- at a total cost of £340 million (€392 million). Of that total, £107 million is a loan from the European Investment Bank (EIB), the EU's bank. In Brussels, the hospital deal is seen as part of the Juncker Plan and the "Investment Offensive." But that's not how they see it in Birmingham. "It's a loan at market prices," says hospital director Stedman. "We could have financed it differently. It's a business deal, not a gift from the EU."

That's quite a harsh response. One might expect that the hospital officials in Birmingham would at least find a few friendly words for their biggest creditor, that they might show some gratitude to the EU for assuming such a large risk. It would be logical, and certainly polite, for them to praise the cooperation with Europe, and it would hardly be surprising if they were to repeat their praise at every press conference and in every local newspaper. They could say that Europe is making a large contribution to this hospital and that, in fact, German, Italian, Polish, Portuguese, Czech and Belgian taxpayers are vouching for a loan so that a nice hospital can be built in England. But these English builders aren't doing that.

In fact, Europe's presence is virtually ignored in Birmingham when it comes to the construction of the Midland Metropolitan Hospital. The EU's role as a loan provider is kept silent, even by those who have good reason to say something nice. Even more surprising is the fact that, in the course of our conversation, Dr. Stedman and CEO Lewis reveal themselves to be pro-EU and anti-Brexit. They don't say so explicitly, but their words suggest that they would much rather have seen Britain remain in the EU, if only for fear of personnel shortages. Tens of thousands of EU citizens work in the British healthcare sector, says Lewis. Without them, he adds, the entire industry faces collapse. But praise for the EU? Forget it.

The EU story in Crete is different, even if the result is largely the same. High above the beautiful expansive beaches of Rethymno is the Creta Farms sausage factory, and the people who run it can hardly be beat when it comes to enthusiasm for Europe. The company has developed chemical and technical processes to extract fat from pork and replace it with olive oil. After the procedure, the sausage is easier to digest, and yet it still tastes good, at least better and stronger than many a competing product.

Last Chance Loan

For about a year, the Greeks have been supplying the Australian market with products under the brand name "Oliving," a play on the words olive and living, and they have already captured a 3 percent market share in the low-fat segment. They have to expand quickly to satisfy demand, which is where the EU came into play, in the form of the Juncker Plan.

Creta Farms became part of the European Investment Offensive when it was granted a 15 million euro loan. Without the money, says company president Manos Domazakis, a slim, melancholy man, the company would have run into difficulties and would not have been able to fill its orders -- and roughly 700 jobs would have been in jeopardy. And in Rethymno, Crete, 700 jobs is a huge number.

Experts from Brussels and Luxembourg flew to Crete, inspected all the books and had company officials explain the business down to the last detail, including the process of putting olive oil in the sausage, the marketing and the sales potential. They visited the pig production facility, the largest in Greece, with 45,000 animals processed annually, and they toured the sausage factory, passing commercial kitchens, fermenters and packing stations. They also looked to see whether the company had any other potential sources of financing. But there were none.

That's because Crete is still part of Greece, where banks are tip-toeing along the precipice of a financial and government crisis and have no interest whatsoever in granting new loans. The Greek stock market is also as good as dead and private investors prefer to look for projects in calmer waters outside of Greece. For Creta Farms, says President Domazakis, Europe was the one last chance to secure fresh funding.

The visitors from the north were sober, competent and professional, says Domazakis, who runs the family business together with his brother. They are truly grateful to the EU and its investment bank. In fact, the Domazakis brothers would be the perfect examples of the benefits offered by European Union membership, and not just in Crete. But during a drive along the coast, Domazakis lowers his voice and says that not everyone is pleased about the Juncker loan.

Envious competitors have badmouthed Creta Farms as "traitors" for allegedly receiving special treatment. Domestic banks were also upset over the foreign money from Brussels and Luxembourg, and about the symbolic message it sends when a Greek company is unable to secure financing in Greece. In other words, the fans of Europe from Rethymno, the employees of Creta Farms, all of them grateful beneficiaries who would certainly like to tell their story, now prefer to remain silent. Saying good things about the EU only creates bad blood. It's almost as if the EU were cursed.

Interference?

No matter where you look, the various agencies of the European Union can do what they want, but they won't get any recognition. Instead, people merely seek out and find the old prejudices, including the claim, disguised as economics, that the EU, with all its programs, ultimately only interferes with European markets.

The people at the European Investment Bank ought to have a response to that. A visit to the EIB in the cold European district of Luxembourg reveals sober, competent, professional men and women who could all have been part of the group to visit Creta Farms. And they explain, quite plausibly, that the EIB does everything it can to help as effectively as possible, but without interfering and getting in anyone's way.

No one wants an uber-state, one which, in addition to the nation-state apparatus, bursts into domestic markets as an unwanted actor. That is why Europe tries to identify investment gaps, determine "additionality," recognize structural problems and understand market failures -- prior to granting loans and providing assistance. And if a member state doesn't want any help, because it believes the help is misguided, no help is provided.

In contrast, the national governments like to take what they can get without asking permission and go back for seconds if they can -- before turning around to badmouth the European Union. Many national governments are not ashamed to actively block compromises at meetings in Brussels, only to return home and deride the EU for its inability to compromise. The same story has been going on for 10 or 15 years: The same governments that play a key role in shaping Europe's fate as members of the European Council in Brussels talk about the EU as a foreign power over which they have no influence when speaking to a domestic audience. It is an untenable situation.

This mendacity on the part of governments destroys all the minor successes, of which there are so many. The meetings where experts from 40 cities discuss ways to fight corruption in the awarding of public contracts. Or how best to handle difficult adolescents. Or how to bring the disabled into the working world. The European Union spends a lot of time exploring how to create jobs, how to train people properly, how not to leave the unemployed behind and how to give young people hope.

"Power_m" is a Munich-based project that successfully advises the unemployed. Also in Munich, "Amiga" helps highly qualified immigrants find jobs. "Guide" helps women start businesses and "BIWAQ" addresses the problems of disadvantaged neighborhoods. The programs cost as much as 10 million euros each and the EU pays 50, 60 or 70 percent of these costs, depending on the project. Europe is present, not just in Brussels but in Munich's Giesing district, in Berg am Laim, Ramersdorf, at the Innsbrucker Ring or on a country road near Tegernsee. Europe helps. Everywhere.

Attention When Something Goes Wrong

When 10 educators from Munich visit kindergartens in Scotland to learn how the Scots treat disabled children, Brussels pays some of the cost. When Munich and Vienna organize a trainee exchange program, Brussels pays some of the cost. The EU provides 31,255 euros for the "Save Earth Life for Youth" program, 72,634 euros for "Mobility of Trainees in the Baking, Confection and Butcher Professions," 34,524 euros for a program called "Fit for Work," and 2,600 euros for "Alpha+ Improving Reading and Writing."

Sometimes there is also a panel discussion on the topic "The EU and the Media." At one such discussion, Josef Schmid, the deputy mayor of Munich, once said that it was certainly the media's job to uncover abuses. But, he added, it is worth asking how a kind of European allegiance is supposed to develop if Europe only gets attention when something goes wrong.

The same questions are asked in the Europe division of the Munich Department of Labor and Economy. Its deputy manager, Anton Tropper, 34, is friendly and matter-of-fact -- and is indisputably a dedicated European. Tropper was born in Graz, Austria, worked in Brussels, and has now been living in Munich for the last four years. The city is so well-connected to Europe that it could fill thick annual reports on the topic of the EU alone.

In the course of a major project called "Smarter Together," Neuaubing-Westkreuz, a Munich neighborhood that has somehow remained stuck in the 1950s, has recently turned into an idea laboratory. Researchers and IT firms have descended on the neighborhood to introduce bike and car sharing to residents and to interconnect everything and everyone. Through all kinds of renovations and urbanistic tricks, carbon dioxide emissions are to be reduced by 20 percent while renewables are to become 20 percent of the energy mix. Energy efficiency is to rise by 20 percent. As a result, quality of life will improve across the board. And the EU is paying about €7 million to find out whether this approach can work, so that other cities and neighborhoods can learn from it. Two other "smart cities," Lyon and Vienna, are also part of the experiment.

'Days of Glossy Brochures Are Over'

What might sound like a classic top-down project is in fact more of a large-scale field experiment with constant citizen participation. The residents of Neuaubing and Westkreuz receive home visits and free consultation, and there are frequent meetings, which are supposedly even well-attended. At any rate, Europe feels very much alive out in the western section of Munich. "We need to go to the people," says Anton Tropper, and by "we" he ultimately means Europe. "The days of glossy brochures are over."

He's right. No one can hear the laudatory speeches about the EU anymore. After all the acrimony over bailout packages and central bank policy, after the total failure of the community in the refugee crisis, after the forays of Hungary and Poland into non-constitutionality, after the crooked deals with Turkey, and after all the years of ongoing inability to bring about reforms, it's finally time to put a stop the devotionals.

The good old appeals have never sounded more hollow than they do today. The big speeches have all been given. We no longer need a top-down but a bottom-up Europe. We need interaction, because enthusiasm can only spring from interaction. The German-French friendship, once the world's biggest "traditional enmity," is the European model for this type of interaction.

To gain new supporters, the EU probably needs to concentrate less on spreading money around Europe and more on sending people around the continent. Enthusiasm is generated when educators from Bavaria meet teachers from Scotland; when trainees from Munich go to Vienna for an internship; when bakers from Paris visit bakers in Budapest; when Swedes explain to Germans how they help refugees; and when envoys from 40 cities get together to discuss how best to help young people.

Europe is when Germans and British install wind turbines together, when Italians, Dutch and Poles get together and think about dairy cows, when people from Lyon argue with people from Munich-Westkreuz over clever ways to use bikes. That's Europe. And when that happens, the European narrative is a positive one.

Translated from the German by Christopher Sultan

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goldles 01/23/2017
1. European Project
A long time ago I voted to join the Common Market, a great idea and still is, but nobody ever asked if I wanted to join the 'European Project' and that's the nub of the discontent. From Maastrict on-wards more and more the EU has nibbled away to gain extra powers for its onward march, on its 'European Project'. As it ever asked the people of the nation states it they agree. Maybe if they had, then the positions they find themselves into day would be different. They should try less listening without hearing more hearing and adhering.
distrak 01/23/2017
2. EU failure
This was very interesting and welcome article. Had the EU done ANYTHING to prevent 1.5 million people--mostly muslim men--just walking into Europe the past two years. If ANYONE in Brussels had shown any leadership, had any guts, shown ANY common sense, I think the people in Europe would pay attention. Right now, all we hear (and see) about the EU is boatloads of Africans inundating Italy, herds of Afghans illegally entering Germany like it was their birthright and a LOT of EU disinterest in doing ANYTHING about it. People don't like being swindled by human traffickers, welfare shoppers, and illegal migrants. And the EU is doing nothing to prevent it.
sinkovec 01/23/2017
3. The Image of the European Union in the United States
Hello, the article I just read portrays perfectly what the US media tells people here every day. I know that they do not speak from personal or corporate experience. They merely parrot what the European press reports. And as you know better than I, the European press drips with criticism, negativism and cherry-picked "horror stories". Beside the fact that the US media are lazy and generally biased against anything European, politicians have their particular reasons for demonizing the "nanny states", the (democratic) socialist aspects of European societies. Germany, the picture book example of a successful EU nation, is frequently criticized for its stupid and misguided "Einwandererpolitik", its immigration politics. There has not been a war on US soil in lifetimes of anybody here. Yet, the folks here just know everything about the foibles and countless errors and omissions committed by Brussels. The uneducated and under-educated the uneducated represent the vast majority of Americans, as exemplified by the election of its new president. No EU member should expect Americans to know where Brussels is located on a map when 70% of high-school graduates according to a recent study can't even find Paris. The "press", which means the electronic "news" media like TV and radio, is willfully uninformed about what makes Europe, Europe and how it is so refreshingly different from US society, its public institutions and its sanitized and spun information apparatus. It has never been easier than today to find real, unbiased news and fact-checked or peer-reviewed reports, documents and papers on just about anything. And yet, at no time in its short history have people been as uninformed, misguided, incurious and have put such low value on learning and knowledge. The hit song "We don't need no Education" sold over a million records. There you have it.
david.lawrence 01/23/2017
4. Where does the money come from?
I understand that much EU money is spent across the EU and that some is spent on UK projects but the UK makes a net contribution to the EU as does German. i.e. the UK and Germany people contribute more that they receive back via projects. This means that the UK puts in more than it gets back directly. I know much of the contributions made are also eaten into by the bureaucracy in Brussels. It would make much more sense to put the funds into the local communities and manage them via locally devolved powers and not governed by bodies which are at arms length to the real needs of the local communities. The EU has funded many ridiculous projects such as statues being erected in town centres of Wales when what is really needed is Jobs and houses. Money needs to be spent wisely. Local people feel that they are told where the EU money is to be spent and not consulted accordingly. Much of the money that has been earned in the UK by non UK nationals coming to work in the UK is sent out of the UK and back to the employees home countries. I realise this helps those non UK nationals and their families which I recognise as a good thing but we need to see the money staying in the local communities and those communities profiting from that money. In addition it is my opinion that while Germany also makes a larger contribution to the EU than it receives back in EU projects it also receives additional indirect benefits as many German Companies profit from these EU projects. So, its German Turbines that are used for Wind farms that are built in the UK etc. I do agree that the best companies should get the work but the work needs to be shared with the EU nurturing and encouraging the development of new industries across the EU and not to continue to consolidate manufacturing in Germany.
Inglenda2 01/23/2017
5. Just the opinion of a European citizen
The mistake being made by many, is to speak of the EU as if it is Europe. It is definitely not! Few people in Europe have anything against a co-operation of European states, but what we now see in Brussels, is a club of self-satisfied, over paid politicians, an army of lobbyists and a huge crowd of civil-servants, who appear to believe they are our masters and can spend our tax money on a whole array of useless regulations and unnecessary projects. Very little of that, which the EU now does, could not be done better by regional governments, at a much more economical price
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