Founded in 1993, the European Union is a supranational political and economic bloc comprising 27 member states across Europe. The EU plays a major role in setting rules for the economies of Europe. However, many people feel the EU is too interventionist, setting standards that are too strict and limiting economic freedoms on the continent. So, could it be said that the European Union is actually socialist?
The European Union is not socialist. The EU has a capitalist economic system, which allows private property, free enterprise, and a competitive business environment. EU laws ensure free market principles throughout member states.
…but that’s just an overview. To fully understand why the EU is not socialist, we need to go into a bit more detail.
Why The European Union Isn’t Socialist
As we’ve made clear, the European Union is not socialist. There are many key factors about the EU that clearly demonstrate why it is not run along socialist economic or political principles. These are:
- The European union has a capitalist economy
- The EU has a free labour market
- The EU has a private banking sector
- The European Union promotes individual freedoms
Let’s look at each of these in-turn…
The European Union Has a Capitalist Economy
A first reason why the EU is not socialist is because its economy is run along capitalist principles.
Socialism is an economic model in which the entire economy – known as the means of production, is owned by the workers. Under socialism, the state is the representative of the working class and therefore all enterprise is state owned. The ideal of socialism is a society with no private property and where all business is controlled by the government.
The European Union is not socialist because it allows for free enterprise and private property. In the EU people are free to set-up and run their own companies. They are also able to keep the profits they make from doing so. The European Union actively encourages competition between businesses and ensures there is a free market within and between EU states.
The EU Has a Free Labour Market
A second reason why the European Union is not socialist is because it has a free labour market.
Under socialism, the economy is directed by the state. This means that the labour market is under government control and people cannot freely choose where they work. Wages are also centrally dictated and are not set by the market.
The European Union has a free and open labour market. People in the EU can choose where they work, as well as what jobs they apply for and what they train in. There is little interference in the labour market of the EU. Wages in the European Union are set by the market. Workers can also bargain for higher wages, as well as organise collectively in unions to lobby for increased wages or better working conditions.
The EU Has a Private Banking Sector
Another reason why the EU is not socialist is because it does not have a state-controlled finance sector.
A key characteristic of socialism is a lack of free enterprise. One aspect of this is that socialism does not allow for private financial institutions. This means there are no independent banks, insurance firms, money lenders, or brokerage agencies in socialist systems. Under socialism people have few options for where they can save, invest, or borrow money.
The EU is not socialist because there is competition with its financial market. Across the EU there are a range of banks, building societies, co-operatives, brokerage firms and insurance companies. These private businesses must compete for customers. People in the EU can freely choose how and where to put their money, as well as which institutions they wish to borrow from.
The European Union Promotes Individual Freedoms
A final reason why the European Union is not socialist is because of the individual freedoms EU citizens have.
In a socialist system, the state controls the economy. Although socialism is not a political model, but an economic one, in fact there has never been a socialist country that has not had to exert strict control over their populations, in order to retain control over the economy. This has meant that people living under socialism have lacked basic freedoms, including freedom of speech, assembly, association and of the press. Socialist systems have also lacked independent judiciaries.
In the European Union people have wide-ranging freedoms. People enjoy freedom of speech and are free to assemble and join any organization of their choice. Across the EU there is also freedom of the press. The EU ensures independent judicial systems across its member states.
Has The EU Ever Been Socialist?
So, it’s clear the European Union is not socialist. However, what about in the organisation’s history? Up until only 30 years ago many countries in Europe had socialist-style governments. Was this the case with the EU? Has the EU ever been socialist?
The European Union has never been socialist. The EU was founded on capitalist economic principles and has continued to operate as a free market since it’s creation. There has never been a time in the history of the EU when it has been socialist.
The origins of the EU lie in the European Coal and Steel Community (ECSC). This was a union between six European countries – France, Italy, Belgium, the Netherlands, Lichtenstein, and West Germany, that created a free trade area between them for coal and steel. From the mid-1950s onwards, the ESCE was expanded to become the European Communities. This extended cooperation and free trade principles to other economic sectors.
Both the ECSC and European Communities were far from socialist. In fact, both aimed to further encourage capitalism in member states by increasing competition between European businesses.
The European Union as we know it today was formed in 1993. It has 27 member states and created an economic bloc between them for the free movement of goods, finances, and people. Like the ECSC and the European Communities, the EU is almost the exact opposite of socialist. Rather than limiting private property and capitalist competition, in fact it ensures that European enterprises must remain competitive with other businesses across the continent.
Could The European Union Become Socialist?
We’ve looked at the EU’s history and it’s clear the organisation has never been socialist, but what about looking to the future? Could it be possible for the European Union to ever become socialist?
The EU could not become socialist. The founding principles of the EU include the adoption of free market economic principles across member states. This fundamental idea of the EU would almost certainly not change. There is also no support in Europe for the EU becoming socialist.
Essentially, there are two main reasons why the EU would never become socialist. The first is that the EU was founded on capitalist economic principles, and it is extremely unlikely that it would move away from these foundational beliefs. The second is that there is no support – either publicly or politically, in Europe, for the EU to become socialist. In fact, it’s the opposite, with support for socialism across Europe, especially in the former Communist Eastern Bloc, extremely low.
Is Any Country In The EU Socialist?
Right, so we’ve made it clear the European Union as a supranational political and economic bloc is not socialist, never has been and almost certainly never will be. But what about individual EU member states? Are there any EU countries that are socialist?
There are no socialist countries in the European Union. All EU member states operate a capitalist economic model. Although some EU states were considered socialist in the past, including Poland, Hungry, and Romania, countries such as these transitioned to free market economics before joining the EU.
As we’ve said before, the EU itself was founded on free market principles. In fact, for countries to become EU member states, one of the criteria is that they have a capitalist economy. Nations looking to join the EU must also have an economy strong enough to compete within the EU’s free market. Essentially, no nation can join the EU if it is socialist.