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The future of the European Union
The future of the European Union
Soviet collapse or Germanic reform?
THE latest issue of Diplomaatia, the Estonian foreign-affairs journal, published to coincide with the annual Lennart Meri conference in Tallinn earlier this month, is filled with great insight on the European crisis. My contribution on the euro's turmoil appears in the next post. But I want to draw readers' attention to other articles that offer some good perspective.
Ivan Krastev, head of the Centre for Liberal Strategies, a Bulgarian think-tank, compares and contrasts the collapse of the Soviet Union with the woes of the European Union.
He warns European leaders:
The Soviet collapse teaches us that just because the economic costs of disintegration would be very high, this is not a reason for it not to happen. To believe that the EU cannot disintegrate simply because it would be too costly offers only weak reassurance that the Union will continue to be stable.Paradoxically, the belief that the Union cannot disintegrate, backed by the economists and shared by Europe's political class, is one of the risks of disintegration. The last years of the Soviet Union are a classical manifestation of this dynamic. The perception that disintegration is 'unthinkable' could encourage policy makers to try to push dangerous policies under the assumption that 'nothing really bad can happen' in the long term, and foster the idea that anti-EU policies or rhetoric might even be helpful in the short term.The Soviet collapse is the most powerful demonstration that the disintegration of the EU need not be the result of a victory of anti-EU forces over pro-EU forces. More likely, it will be the unintended consequence of the growing dysfunction of the system and the elites' misreading of the political dynamics in their own societies. Reflecting on the Soviet collapse, the eminent historian Stephen Kotkin is convinced that the real question to be asked is, "why the Soviet elite destroyed its own system?" The Soviet collapse is the best demonstration that the rise of anti-integration forces can be the outcome, rather than the cause of collapse.
Quentin Peel, the FT's man in Berlin, reports that Angela Merkel is thinking about far-reaching political reforms to the EU, including tighter controls on spending by euro-zone national governments and, eventually, the introduction of Eurobonds.
For Ms Merkel it is a question of the democratic legitimacy of the entire integration process. She sees a dangerous disconnection between national politics, and national parliaments, and the European parliament. Her party wants to see the Commission president directly elected.
The chancellor knows perfectly well that these are profoundly important political issues, and hugely controversial. But she has decided that only with such fundamental reforms can European monetary union survive.
And finally my predecessor as Charlemagne, who now pens this newspaper's Bagehot column on British politics, parses Britain's semi-detached attitude to the EU. The Brits, he says, approach Europe is not with the heart, but with a book-keeper's mindset.
Once, the most powerful British Eurosceptic arguments were all to do with sovereignty, and the threat of the jackboot of Brussels stamping on ancient British freedoms. Now, with many British voters convinced that the European single currency is on the point of collapse, the most potent line of attack is the assertion that Britain is "shackled to a continental corpse". Britain should be seeking new growth opportunities in the emerging world, and trying to expand its trade with such giants as China, India or Brazil, this argument goes. But Britain is instead bound to a sclerotic, slow-growing, ageing, over-regulated Europe that is fast losing its relevance.
Such arguments appeal greatly to many British voters. They pander to a sense of British exceptionalism, and they stir memories of Britain as a great maritime trading nation, free to roam the world's oceans in search of new markets and exchanges.
Tell a typical British Eurosceptic that half of Britain's trade is with the rest of the EU (and some 40% with the eurozone countries that use the single currency) and he will retort: "exactly, they are in danger of dragging us under if we cannot cut ourselves free from endless EU environmental, social and employment rules that are choking our businesses." Remind the same Eurosceptic that his country still trades more with Ireland than with Brazil, China, Russia and India put together, and he will cry: "that's my point precisely: we are tied to the wrong markets".
But such arguments rest on a double miscalculation. First, if Britain - the largest and loudest spokesman for free market liberalism within the club - walked away from the councils of Brussels, those regulations would almost certainly become more burdensome, and would still ensnare the British. Britain is not some nimble sailing ship that can sever its mooring lines and set off round the world's oceans. The British Isles will always lie a short distance off the coast of France, and will thus for the foreseeable future be massively affected by the market rules and regulations operating on the continent.
Second, it is too easy to blame EU membership for Britain's relative lack of success when it comes to emerging market exports. Germany, a world champion in selling to the Chinese, is a part of the EU, bound by the same employment, social and environmental rules that supposedly kill British businesses. That is not to say that the EU is not capable of excessive regulation: it is, and some of the plans for financial supervision emerging from EU discussions at the moment would be genuinely damaging to the City of London. But Britain's real challenge is competitiveness, and making and selling the sorts of goods and (above all) services that are likely to sell in the 21st century. In that quest to stay competitive, it would be a grave blunder to decide that Europe's single market was more a liability than an asset.
Source: The Economist (May 28th 2012)
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