The EU
The EU
is in crisis. Scrub that, the EU is in
crises. It is currently undergoing at
least four different crises simultaneously:
1. An economic growth crisis
2. A debt crisis
3. A crisis of purpose
4. A democratic crisis
Others
will probably add to this list. These
are lousy times for the EU.
The
first two will probably sort themselves out, sooner or later (my money is on
later). Their significance is mainly as
mood music for the other two. When times
are good, the public won’t care very much whether legislation has a true
mandate or whether the EU has a clear way forward. But when times are bad, the public mood will
turn sour and every aspect will be examined in minute detail. This is what is happening now.
So for
me, the two important crises are the crisis of purpose and the democratic
crisis. Let’s take these in order.
Crisis
of purpose
Since
its foundation in the 1950s, the EU has had overlapping purposes of varying
degrees of salience at varying times:
1. To foster peaceful co-operation between its member states
2. To act as a bulwark against Communism
3. To help its poorer members become more economically developed
4. To develop economic prosperity for its members
5. To project European presence and set European standards for a wider
world
In the immediate
post-war generation, peaceful co-operation was incredibly important. Continental Europe had seen three wars
between Germany and France in 75 years, and the continent had been
devastated. But time has passed, and it
is now nearly 70 years since the end of the Second World War. Only the very oldest European citizens
remember the war, and the thought of war between member EU states (certainly in
the west) is barely conceivable. In the
hierarchy of wants of international politics, peace is now taken as read.
The
Berlin Wall fell nearly 25 years ago.
Whatever the EU is for now, it is not against Communism.
The EU
has historically done well at helping its poorer member states become more
economically developed. But the economic
growth crisis and the debt crisis have put these achievements in jeopardy. Greece, Hungary, Italy, Spain, Portugal,
Ireland and Cyprus would not regard the EU as offering them much on this front
at present. So the two economic crises
feed into the crisis of purpose.
And so
they do with the fourth purpose. For
nearly 60 years, the EU has encouraged much greater trade between its member
states – mostly successfully. But at a
time when economic growth in member states is weak, non-existent or worse, that
purpose looks thin.
What
this means is that in practice, most EU citizens can see only one aspect of the
EU functioning at present, which is the projection of the EU presence onto a
wider world. This is not healthy for any
institution, because the public will reasonably conclude that the prime
beneficiaries of the EU are the politicians and the bureaucrats.
This in
turn leads onto...
The
democratic crisis
The EU
is an unwieldy beast, owing to its topsy-like development. That’s not that unusual – many national
states grew in a similar way (and quite a few of them had revolutions to
establish the boundaries between different competing interests). But different decisions in the EU require
agreement between member states in different proportions, votes of the EU
Parliament of different proportions or combinations of the two. We have never been given a clear underlying
principle as to when the EU should decide to intervene or through what
mechanism – because there is none.
As a
result, a lot of decisions get taken in the EU without any clear public backing
for the mechanism under which they are taken.
At a domestic level, voters are used to the idea that they might not
support the current government but that government has a mandate for doing what
it is doing. Citizens do not identify
particularly at an EU-wide level, particularly when decisions are made that
conflict with national priorities.
This has
always been a problem for the EU, but is especially a problem at a time when
voters don’t see many tangible benefits from the EU.
Britain
So far,
I have mentioned Britain only once – in the title. This is quite deliberate. In Britain, far too much time is expended on
considering Britain’s problems with the EU, when the big story at the moment is
the EU’s problems. And Britain’s optimal
relationship with a successful EU would be a very different proposition from
Britain’s optimal relationship with a struggling EU.
Britain
has always had a different view of the varying purposes of the EU that I listed
above from other member states. It was
never devastated by war in the way that France and Germany had been, because it
was never invaded. Britain was always
more outward-looking than other member states, owing in large part to its
history of Empire. It was fiercely
anti-Communist when this was relevant, and approved of helping poorer European
countries (it still does) but this was a second order aim for it.
Britain
was always in it primarily for the money – though it was happy to project
European presence onto a wider world if that helped Britain remain relevant and
influential. So while the EU was
prospering, it was able to put up with the empire-building regulation that came
out of Brussels. It was part of the
tariff for admission for access to a more deeply integrated community. The four fundamental freedoms were of great
importance to Britain.
But the
EU is now stalled economically. Britain
also is flatlining. Does Britain
continue to benefit from the EU or could it do better elsewhere?
The
answer to this question does not lie in Britain. The answer lies in where the EU would be
heading with or without Britain.
Without
Britain, the EU would almost certainly become more protectionist. One of the main voices in favour of free
trade would have been removed from the EU.
The EU would become more French-influenced and more southern. It would be more explicitly anti-banker and
anti-City. Whether or not we maintained
some form of free trade arrangement with the EU (within the EEA, EFTA or
entirely freestanding, and I expect we would), the scope of that arrangement
would probably not be as great as it otherwise would be, and we could expect to
see soft barriers put in Britain’s way.
These barriers would be especially strong in the area of services, which
is particularly unfortunate given that the services sector of Britain’s economy
is its strongest suit.
So we
should definitely stay in? Not so
fast. We need to consider where the EU
would be heading with Britain. And the
direction of travel at present is also alarming. The Eurozone has been integrating rapidly in
the last couple of years – it has had no choice – and is going to need to do
more. With the continuing need for
fiscal transfers between Eurozone member states, there is going to be a need
for more enforceable financial discipline.
This in turn is likely to lead to more integration of taxation. The financial transaction tax is likely to be
only the start. The Eurozone states will
– unless the matter is addressed vigorously right now – inevitably pre-decide
matters among themselves, leaving those outside to scrabble to form a blocking
minority. Progress without the Eurozone bloc
would be impossible. Britain would only
ever be a brake in future.
Worse, Britain
has lost a lot of influence within the EU in recent years. Other EU member states are now ignoring past conventions
of not overriding member states in areas where they are pre-eminent, at least
so far as Britain’s financial services industry is concerned. This is in large part Britain’s own fault,
but the rest of the EU is also being shortsighted. If they want to keep Britain as a member,
they have to reach a stable accommodation with Britain which allows Britain to
opt out of many aspects of developing EU law far more easily than it can do at
present.
And
there’s the key word: if. Other EU
member states have not really engaged with the question whether they want
Britain to remain in the EU. They have
got very used to tantrums from London, and have quite enough other problems to
be getting on with without worrying about how the world looks from across the
Channel.
But the
problem is not confined to Britain.
Other non-Eurozone countries will be looking for similar protection
against Eurozone dominance. So whether
the EU likes it or not, it is going to have to decide how to accommodate those
member states who do not wish to or cannot join the Eurozone. It is hardly as if they are all
supplicants. Sweden and Denmark are in a
very different position from Hungary and Romania.
This
goes right the way back to my original point about the EU’s crises, and in
particular its crisis of purpose. What
is the EU there for? The EU needs to
revitalise the concepts of peaceful co-operation and developing economic
prosperity for its members: all of its members.
If it wants to develop a European-wide demos, it needs to make sure that
it works on a European-wide basis, rather than for a few preferred member
states. The concept of subsidiarity
needs to be revisited with much more intellectual rigour – and then observed
strictly. That might be enshrined in law
by retreating in quite a few areas from the idea of Qualified Majority Voting
back to voting by unanimity. This would
result in less law, but law that was not vigorously opposed at national
level. If we want the EU to have the
moral as well as the legal authority to intervene in member states, it must intervene
more judiciously.
Is the
EU capable of such change? Candidly, I
doubt it. But it needs to be tried. What if that fails? Much depends on how it fails.
Britain
could have joined the intellectual leadership of the EU if it could resist the
temptation on every occasion to throw rocks at the other member states. But there are too many otherwise-sensible British
people whose pupils dilate and throw back their heads to howl, the moment the
full moon of the EU appears from behind the clouds.
So I
find myself, rather to my surprise, believing that David Cameron has got essentially
the right policy on the next stage with the EU, though I should stress that I
don’t believe that he’s got to that position by careful consideration of the
geopolitical concerns but purely through (largely misconceived) attempts at
internal party management. But sometimes
people can do the right thing for the wrong reasons.
antifrank
