EUROPEAN UNION AND NEW REGIONALISM – MARIO TELO’ - ASHGATE – 2014
PART:1 THEORETICAL PERSPECTIVES
1.REGIONAL BLOCS, WORLD ORDER AND THE NEW MEDIEVALISM
Since the end of the cold war there has been a trend towards globalization and the creation of a
more interconnected world. This has been associated with the erosion of the power of nation states
and the rise of new forms of global governance. Four different futures of the world order:
Borderless world: a cosmopolitan global economy
Regional blocs: division of the world into protectionist spheres of influence controlled by a few
great powers
American empire: a world dominated by a unilateralist US
New medievalism: a world in which there is no single source of legitimacy, but a complex set of
levels
Borderless world
For theorists of globalization the world economy is best characterized as a global rather than an
international economy. An international economy is made up of separate national economies
controlled by states. In a global economy, transnational companies operate across national
borders, economic decisions are shaped not at the level of national governments but through
global financial markets. In this changed environment national governments are losing their
autonomy; a new cosmopolitan society is emerging, unified around a single set of principles.
Hyper-globalization claims that borders are becoming obsolete. Yet, states can still obstruct the
development of the global economy. They can raise taxes and redistribute resources according to
the pressures of special interests. The national government becomes the enemy of the wider public
interest. The supporters of hyper-globalization want the powers of states to be dismantled and the
growth of region-states encouraged.
There is little evidence that a global economy is emerging which overrides the states system.
Regional blocs
The second perspective claims that the new global economy has regional and national foundations.
The emerging economic geography is regional rather than global with the creation of regionalist
projects.
In the 1940s, Carr analysed how the world order sustained by British hegemony had fallen apart.
After the WWI there was a tendency of fragmentation of larger political units, followed by the
reorganization of the world into a system of regional blocs. The US strengthened their hold over the
American continent, Germany reconstituted Mittel-Europa and pressed forward over the Balkans,
Soviet Russia established vast territories, Japan attempted the creation of a unit of Eastern Asia.
(Carr, 1946). The formation of regional blocs in the 1930s was the consequence of the collapse of
the British hegemony. The institutions of the liberal world order collapsed because of the inability
of Britain to supply the public goods necessary to stabilize the global economy. After the WWII, the
US emerged as the new hegemon and contributed to the prosperous reconstruction of the world. In
the 1970s, the US was no longer able to guarantee the conditions for a stable liberal order. If no
power is able to supply the public goods which a liberal world order requires then states will
respond with protectionist policies.
Critics of regional blocs claim that as the world economy becomes more interdependent, it is
rational for states to prefer cooperation to conflict.
Globalization and regionalization are not state projects but complex processes of social change
which involve interaction between non-state actors. Regionalism is a set of state projects which
intersects with globalization. The global economy in the 1990s developed three cores: North
America, EU, East Asia. These cores share the commitment to open regionalism. One of the
benefits of greater regional cooperation has been the possibility of enabling regional companies to
be successful in global markets. There are distinctive models of capitalism that are regionally
specific. The dominant Anglo-American model, with its emphasis on free trade, contrasts with the
Japanese model and its emphasis on strategic trade. The new regionalism of the 1990s reflected
the continuing ideological leadership of the US. One of the forces driving recent regionalist projects
has been an attempt to protect different models of organization. A limited regionalism which
promotes some diversity within the advanced capitalist world has been the result.
American empire
The third perspective sees a world in which the US keeps extending its power. The huge military
preponderance allows the US to intervene in every continent and secure its basic geo-political
objectives and access to markets and resources, particularly oil. Since 1991 the US has no rival,
and it acquired an unprecedented position of dominance. New emerging powers, such as China,
can challenge the US. The designation of the US as an empire became popular when Bush
elaborated the doctrine of pre-emptive action and with the invasion in Afghanistan and Iraq.
However, the US lacks the capacity to impose direct territorial rule and imperial jurisdiction. The
number of territories permanently administered by the US is quite low. The US may be supreme in
the military sphere, but it is far from supreme in other areas, and it is unable to impose his will, but
must work through negotiation and compromise.
New medievalism
,New medievalism is a metaphor which draws attention to some similarities between contemporary
developments and certain features of the medieval political system. The fundamental aspect of old
medievalism in Europe was that there was no ruler with supreme authority over a particular
territory; authority was shared, and boundaries were overlapping. New medievalism highlights the
current weakening of states, which are obliged to share their authority with other actors. Hedley
Bull identified five major trends which gave support to the idea of a new medievalism:
Regional integration – Bull speculated as to whether the European Community (EC) was a new
hybrid, in which sovereignty would be shared between the EU and the member states,
producing uncertainty about where sovereignty was located.
Disintegration of existing states as a result of secessionist movements – interesting is the
intermediate stage in which existing sovereignty is questioned but new sovereignty is not fully
asserted.
Revival of private international violence, such as terrorism, mafias. States no longer have the
monopoly on the use of violence.
Growth of transnational organisations
Technological unification of the world. The emergence of new economic and cultural spaces
which are global rather than national is another potential challenge to the state system.
Cities are once again meaningful centres of global interaction, provinces are achieving autonomy.
The result is the emergence of a new world order characterized by a multi-level structure: states,
micro-regions, macro-regions. The extent of the integration of modern economies means that no
return to earlier medievalism is possible. A new universal doctrine embracing human rights and
environmentalism has begun to be elaborated, but it is a long way from enjoying the authority that
Christianity enjoyed in the medieval era. The authority of states have definitely weakened, but they
are still indispensable within the governance of the world system.
One of the paradoxes of the current debate is that there is a double movement. On the one hand
there are pronounced trends towards globalization in finance, production and commerce. On the
other, the state is still the preferred means of political rule, as many nations still seek the creation
of their own independent state.
2.THE POLITICAL ECONOMY OF NEW REGIONALISM AND WORLD GOVERNANCE
Over the past two decades, the distribution of economic power has been changing as new global
players – such as India, China, Russia, Brazil – have been playing an influential role in world affairs.
The world has been moving away from a unipolar structure towards a multipolar one.
The top-down approach considers how globalization affects regional agreements, and how the
latter affect the domestic politics of the states. The bottom-up approach looks at how the
development of regional agreements shape the characteristics of the new international system.
The global system in institutional disequilibrium
The global system is in a post-hegemonic condition, in which no state can provide unilaterally the
public goods required for the operation of the system itself. The global system is in institutional
disequilibrium in the sense that there is an excess demand for international public goods, but the
supply is decreasing because of the redistribution of power away from a hegemonic structure. The
current configuration of the global system is often described as regionalism pursued in response to
the failure of the post-hegemonic world in supplying public goods. There is a list of conditions that
must be met if agreements to supply international public goods are to be reached:
The number of actors involved must be small in order to deal with free riding
Actors must adjust to the international environment in order to reach agreements
International institutions must be available as they facilitate exchange of information
Cooperation is achieved if states adjust their economic and their political equilibria.
Economic aspects of regional agreements
Partial elimination of barriers following integration will generally improve the allocation of
resources which allows the exploitation of national comparative advantages. Factors of production
will be allocated in sectors where the country enjoys a comparative advantage, while production in
other sectors will be reduced or stopped. Once reallocation is completed, inter-industry trade –
trade in goods belonging to different sectors – within the region will increase. International trade
falls short of global liberalization due to special interests that obtain protection from national and
regional governments. Without cohesion – equal distribution of employment opportunities, of
wealth, of quality of life – political support for a regional agreement is likely to fail.
Regional agreements as clubs
Club theory deals with problems related to the establishment of associations for the production of
excludable public goods. Marginal costs and benefits are functions of the size of the club. Costs are
related to management and decision-making activities; they increase with the extension of club
membership because management problems rise and each member must be given equal
opportunity, irrespective of its economic size. Optimal club membership is obtained when marginal
benefits equal marginal costs.
A trade agreement guarantees partial exclusion of non-members from free trade benefits.
Membership in a trade club is more valuable in the presence of a possible external threat, for
example the threats deriving from aggressive trade blocs. The benefit of joining a club is more
, security to small, isolated countries. There are also political benefits, for example the fact that
members will be admitted in so far as they share the same political beliefs, such as democratic
ideals. Globalization and destabilizing capital movements increase the benefits of a monetary club
as a protection. Outside threats may come from aggressive behaviour as part of foreign monetary
policies. For example, it is believed that one of the driving forces behind European monetary
integration has been the aggressive macroeconomic attitude of the US.
Marginal benefits decrease with the number of countries as they are not identical in terms of
economy, degree of liberalization and policy behaviour. This explains why membership to
monetary clubs requires the fulfilment of appropriate requirements: so as to make the members as
similar as possible.
Marginal costs include exogenous and endogenous components. They are determined by
management problems; voting rules are complicated by the increase in the number of members
and the consequence diversity in preferences. Institutions provide information about other actors’
behaviour, thus facilitating communication.
The crisis of the euro
Between 2010 and 2012, sparked by the crisis in Greece, the euro area entered a period of
increasing fragility. The possibility of a number of countries leaving the monetary union became
more concrete. The risk has been pushed back by the intervention of the European Central Bank.
Several members of the euro area were revealed not fit to be part of the single currency. European
institutions provided liquidity and support to countries under severe market pressure. A further
move is the decision to move towards a banking union with common supervision. This leads to a
decrease in managements costs of the monetary club. However, to restore full viability of the
monetary club, diversity among countries needs to be narrowed. The crisis may have lowered the
benefits and raised the costs of integration for vulnerable countries. As a consequence, willingness
to keep the membership to the club decreases. As the size of the club shrinks, the benefits of
integration decrease for other countries as well.
From top-down to bottom-up
Regional agreements always imply an exclusion of other countries. A global multilateral regime
should be understood as a situation of cooperating among clubs, which still maintain their specific
identity. Consider the case of international investment as an example. Multinational enterprises
(MNEs) increase the degree of economic interdependence and lead to convergence in
governments’ policies. MNE activities decrease the incentives for national governments to supply
protection to their economies. International mobility of capital weakens the strength of
protectionist policies. Increasing capital mobility may represent a powerful element of convergence
of preferences as it creates incentives in domestic politics to pursue more open and less
protection-oriented policies. Regional actors tend to reciprocate with their partners to pursue
selective market access in order to obtain liberalization of their domestic markets. Domestic
opening is seen as a condition of obtaining market access abroad as the result of reciprocal
bargaining.
3.CULTURAL DIFFERENCE, REGIONALIZATION AND GLOBALIZATION
Economic globalization is perceived by Third World countries as a direct threat to their traditional
cultural identities. A radical resort to religiously founded political fundamentalism is one of the
most frequent answers.
Robert Cox states that the libertarian character of the globalization economy causes the economic
deprivation and exclusion of some social sectors in all parts of the world.
Huntington: the leading paradigm
According to Huntington’s theory, all of the great cultures are based on mutually exclusive
programmes. It is particularly in the fields of social and political basic values such as
equality/inequality, individualism/collectivism, where the fault lines of civilization separate distinct
cultures sharply from each other. There can be no sustainable coexistence between the cultures.
According to Huntington, the West should try to contain the Islamic and Confucian parts of the
world or otherwise prepare for a global cultural war. The variety of conflicts in the post-communist
world appears to deliver some evidence for the Huntington paradigm.
Cross-cultural empirical data
Huntington’s model is not in tune with more recent comparative research.
Empirical studies corroborate three generalizations:
It is not the cultural identity itself to determine the role of the different cultures, but the social
and political forces that control its mainstream interpretation
All cultures provide a vast scope for internal differentiation and modernization
The contradicting styles of civilization have more in common with their counterparts in other
cultures than with their rivals within their own culture of origin.
Socio-political values cannot be determined by religion-based cultural traditions. Differences in
values appear to be more dependent on the socio-economic level of modernization of different
societies. The key values – participation in politics, more humane society, civil liberties,
individualism - varies exclusively with the level of the GNP of a society. This set of values has a
significant impact on political culture. This research indicates an increasing tendency of cross-
PART:1 THEORETICAL PERSPECTIVES
1.REGIONAL BLOCS, WORLD ORDER AND THE NEW MEDIEVALISM
Since the end of the cold war there has been a trend towards globalization and the creation of a
more interconnected world. This has been associated with the erosion of the power of nation states
and the rise of new forms of global governance. Four different futures of the world order:
Borderless world: a cosmopolitan global economy
Regional blocs: division of the world into protectionist spheres of influence controlled by a few
great powers
American empire: a world dominated by a unilateralist US
New medievalism: a world in which there is no single source of legitimacy, but a complex set of
levels
Borderless world
For theorists of globalization the world economy is best characterized as a global rather than an
international economy. An international economy is made up of separate national economies
controlled by states. In a global economy, transnational companies operate across national
borders, economic decisions are shaped not at the level of national governments but through
global financial markets. In this changed environment national governments are losing their
autonomy; a new cosmopolitan society is emerging, unified around a single set of principles.
Hyper-globalization claims that borders are becoming obsolete. Yet, states can still obstruct the
development of the global economy. They can raise taxes and redistribute resources according to
the pressures of special interests. The national government becomes the enemy of the wider public
interest. The supporters of hyper-globalization want the powers of states to be dismantled and the
growth of region-states encouraged.
There is little evidence that a global economy is emerging which overrides the states system.
Regional blocs
The second perspective claims that the new global economy has regional and national foundations.
The emerging economic geography is regional rather than global with the creation of regionalist
projects.
In the 1940s, Carr analysed how the world order sustained by British hegemony had fallen apart.
After the WWI there was a tendency of fragmentation of larger political units, followed by the
reorganization of the world into a system of regional blocs. The US strengthened their hold over the
American continent, Germany reconstituted Mittel-Europa and pressed forward over the Balkans,
Soviet Russia established vast territories, Japan attempted the creation of a unit of Eastern Asia.
(Carr, 1946). The formation of regional blocs in the 1930s was the consequence of the collapse of
the British hegemony. The institutions of the liberal world order collapsed because of the inability
of Britain to supply the public goods necessary to stabilize the global economy. After the WWII, the
US emerged as the new hegemon and contributed to the prosperous reconstruction of the world. In
the 1970s, the US was no longer able to guarantee the conditions for a stable liberal order. If no
power is able to supply the public goods which a liberal world order requires then states will
respond with protectionist policies.
Critics of regional blocs claim that as the world economy becomes more interdependent, it is
rational for states to prefer cooperation to conflict.
Globalization and regionalization are not state projects but complex processes of social change
which involve interaction between non-state actors. Regionalism is a set of state projects which
intersects with globalization. The global economy in the 1990s developed three cores: North
America, EU, East Asia. These cores share the commitment to open regionalism. One of the
benefits of greater regional cooperation has been the possibility of enabling regional companies to
be successful in global markets. There are distinctive models of capitalism that are regionally
specific. The dominant Anglo-American model, with its emphasis on free trade, contrasts with the
Japanese model and its emphasis on strategic trade. The new regionalism of the 1990s reflected
the continuing ideological leadership of the US. One of the forces driving recent regionalist projects
has been an attempt to protect different models of organization. A limited regionalism which
promotes some diversity within the advanced capitalist world has been the result.
American empire
The third perspective sees a world in which the US keeps extending its power. The huge military
preponderance allows the US to intervene in every continent and secure its basic geo-political
objectives and access to markets and resources, particularly oil. Since 1991 the US has no rival,
and it acquired an unprecedented position of dominance. New emerging powers, such as China,
can challenge the US. The designation of the US as an empire became popular when Bush
elaborated the doctrine of pre-emptive action and with the invasion in Afghanistan and Iraq.
However, the US lacks the capacity to impose direct territorial rule and imperial jurisdiction. The
number of territories permanently administered by the US is quite low. The US may be supreme in
the military sphere, but it is far from supreme in other areas, and it is unable to impose his will, but
must work through negotiation and compromise.
New medievalism
,New medievalism is a metaphor which draws attention to some similarities between contemporary
developments and certain features of the medieval political system. The fundamental aspect of old
medievalism in Europe was that there was no ruler with supreme authority over a particular
territory; authority was shared, and boundaries were overlapping. New medievalism highlights the
current weakening of states, which are obliged to share their authority with other actors. Hedley
Bull identified five major trends which gave support to the idea of a new medievalism:
Regional integration – Bull speculated as to whether the European Community (EC) was a new
hybrid, in which sovereignty would be shared between the EU and the member states,
producing uncertainty about where sovereignty was located.
Disintegration of existing states as a result of secessionist movements – interesting is the
intermediate stage in which existing sovereignty is questioned but new sovereignty is not fully
asserted.
Revival of private international violence, such as terrorism, mafias. States no longer have the
monopoly on the use of violence.
Growth of transnational organisations
Technological unification of the world. The emergence of new economic and cultural spaces
which are global rather than national is another potential challenge to the state system.
Cities are once again meaningful centres of global interaction, provinces are achieving autonomy.
The result is the emergence of a new world order characterized by a multi-level structure: states,
micro-regions, macro-regions. The extent of the integration of modern economies means that no
return to earlier medievalism is possible. A new universal doctrine embracing human rights and
environmentalism has begun to be elaborated, but it is a long way from enjoying the authority that
Christianity enjoyed in the medieval era. The authority of states have definitely weakened, but they
are still indispensable within the governance of the world system.
One of the paradoxes of the current debate is that there is a double movement. On the one hand
there are pronounced trends towards globalization in finance, production and commerce. On the
other, the state is still the preferred means of political rule, as many nations still seek the creation
of their own independent state.
2.THE POLITICAL ECONOMY OF NEW REGIONALISM AND WORLD GOVERNANCE
Over the past two decades, the distribution of economic power has been changing as new global
players – such as India, China, Russia, Brazil – have been playing an influential role in world affairs.
The world has been moving away from a unipolar structure towards a multipolar one.
The top-down approach considers how globalization affects regional agreements, and how the
latter affect the domestic politics of the states. The bottom-up approach looks at how the
development of regional agreements shape the characteristics of the new international system.
The global system in institutional disequilibrium
The global system is in a post-hegemonic condition, in which no state can provide unilaterally the
public goods required for the operation of the system itself. The global system is in institutional
disequilibrium in the sense that there is an excess demand for international public goods, but the
supply is decreasing because of the redistribution of power away from a hegemonic structure. The
current configuration of the global system is often described as regionalism pursued in response to
the failure of the post-hegemonic world in supplying public goods. There is a list of conditions that
must be met if agreements to supply international public goods are to be reached:
The number of actors involved must be small in order to deal with free riding
Actors must adjust to the international environment in order to reach agreements
International institutions must be available as they facilitate exchange of information
Cooperation is achieved if states adjust their economic and their political equilibria.
Economic aspects of regional agreements
Partial elimination of barriers following integration will generally improve the allocation of
resources which allows the exploitation of national comparative advantages. Factors of production
will be allocated in sectors where the country enjoys a comparative advantage, while production in
other sectors will be reduced or stopped. Once reallocation is completed, inter-industry trade –
trade in goods belonging to different sectors – within the region will increase. International trade
falls short of global liberalization due to special interests that obtain protection from national and
regional governments. Without cohesion – equal distribution of employment opportunities, of
wealth, of quality of life – political support for a regional agreement is likely to fail.
Regional agreements as clubs
Club theory deals with problems related to the establishment of associations for the production of
excludable public goods. Marginal costs and benefits are functions of the size of the club. Costs are
related to management and decision-making activities; they increase with the extension of club
membership because management problems rise and each member must be given equal
opportunity, irrespective of its economic size. Optimal club membership is obtained when marginal
benefits equal marginal costs.
A trade agreement guarantees partial exclusion of non-members from free trade benefits.
Membership in a trade club is more valuable in the presence of a possible external threat, for
example the threats deriving from aggressive trade blocs. The benefit of joining a club is more
, security to small, isolated countries. There are also political benefits, for example the fact that
members will be admitted in so far as they share the same political beliefs, such as democratic
ideals. Globalization and destabilizing capital movements increase the benefits of a monetary club
as a protection. Outside threats may come from aggressive behaviour as part of foreign monetary
policies. For example, it is believed that one of the driving forces behind European monetary
integration has been the aggressive macroeconomic attitude of the US.
Marginal benefits decrease with the number of countries as they are not identical in terms of
economy, degree of liberalization and policy behaviour. This explains why membership to
monetary clubs requires the fulfilment of appropriate requirements: so as to make the members as
similar as possible.
Marginal costs include exogenous and endogenous components. They are determined by
management problems; voting rules are complicated by the increase in the number of members
and the consequence diversity in preferences. Institutions provide information about other actors’
behaviour, thus facilitating communication.
The crisis of the euro
Between 2010 and 2012, sparked by the crisis in Greece, the euro area entered a period of
increasing fragility. The possibility of a number of countries leaving the monetary union became
more concrete. The risk has been pushed back by the intervention of the European Central Bank.
Several members of the euro area were revealed not fit to be part of the single currency. European
institutions provided liquidity and support to countries under severe market pressure. A further
move is the decision to move towards a banking union with common supervision. This leads to a
decrease in managements costs of the monetary club. However, to restore full viability of the
monetary club, diversity among countries needs to be narrowed. The crisis may have lowered the
benefits and raised the costs of integration for vulnerable countries. As a consequence, willingness
to keep the membership to the club decreases. As the size of the club shrinks, the benefits of
integration decrease for other countries as well.
From top-down to bottom-up
Regional agreements always imply an exclusion of other countries. A global multilateral regime
should be understood as a situation of cooperating among clubs, which still maintain their specific
identity. Consider the case of international investment as an example. Multinational enterprises
(MNEs) increase the degree of economic interdependence and lead to convergence in
governments’ policies. MNE activities decrease the incentives for national governments to supply
protection to their economies. International mobility of capital weakens the strength of
protectionist policies. Increasing capital mobility may represent a powerful element of convergence
of preferences as it creates incentives in domestic politics to pursue more open and less
protection-oriented policies. Regional actors tend to reciprocate with their partners to pursue
selective market access in order to obtain liberalization of their domestic markets. Domestic
opening is seen as a condition of obtaining market access abroad as the result of reciprocal
bargaining.
3.CULTURAL DIFFERENCE, REGIONALIZATION AND GLOBALIZATION
Economic globalization is perceived by Third World countries as a direct threat to their traditional
cultural identities. A radical resort to religiously founded political fundamentalism is one of the
most frequent answers.
Robert Cox states that the libertarian character of the globalization economy causes the economic
deprivation and exclusion of some social sectors in all parts of the world.
Huntington: the leading paradigm
According to Huntington’s theory, all of the great cultures are based on mutually exclusive
programmes. It is particularly in the fields of social and political basic values such as
equality/inequality, individualism/collectivism, where the fault lines of civilization separate distinct
cultures sharply from each other. There can be no sustainable coexistence between the cultures.
According to Huntington, the West should try to contain the Islamic and Confucian parts of the
world or otherwise prepare for a global cultural war. The variety of conflicts in the post-communist
world appears to deliver some evidence for the Huntington paradigm.
Cross-cultural empirical data
Huntington’s model is not in tune with more recent comparative research.
Empirical studies corroborate three generalizations:
It is not the cultural identity itself to determine the role of the different cultures, but the social
and political forces that control its mainstream interpretation
All cultures provide a vast scope for internal differentiation and modernization
The contradicting styles of civilization have more in common with their counterparts in other
cultures than with their rivals within their own culture of origin.
Socio-political values cannot be determined by religion-based cultural traditions. Differences in
values appear to be more dependent on the socio-economic level of modernization of different
societies. The key values – participation in politics, more humane society, civil liberties,
individualism - varies exclusively with the level of the GNP of a society. This set of values has a
significant impact on political culture. This research indicates an increasing tendency of cross-
