Eurocracy Is Not the Answer
by Lancelot Finn (Fall 2002)
Julien Serre wrote in a column last week that KSG needs more classes on the European Union. I agree. Despite various indicators of Europe’s economic and demographic decline, Europe still carries weight in the world, and we should understand it. Europe is in many ways an image of our past, and young Americans, with little experience of economic stagnation, high unemployment and the welfare state, or of the resulting political frustration, protectionism and anti-immigrant resentment, have particular difficulty understanding contemporary Europe.
Let’s begin with some anecdotes and news from Europe, then examine the questions they raise. Eight years ago I spent a few months at a high school in Scotland—on discovering I was from America, a number of kids said something along the lines of “I wish I was from there.” Portugal’s (elected) government is in hot water for violating euro-zone rules by running a deficit above 3% of GDP. The Irish held a referendum earlier this year on EU expansion—for the second time. Le Pen of the “fascist” National Front knocked Social Prime Minister Lionel Jospin out of the presidential race last spring—to the shock and rage of Europe’s elite media. A German acquaintance of mine, visiting America, expressed surprise at finding Mein Kampf freely for sale in American bookstores—it seems that Germans require government permission to acquaint themselves with the most influential German text of the 20th century.
Why did my Scottish friends wish they were from America? Well, for one thing, America is richer. The latest issue of The Economist reports that the US has 270m people and a $10.1 trillion GDP; the EU has 370m and a $7.9 trillion GDP. That implies that GDP per head is 70% higher in the US than in the EU, and the gap widens every year. Unemployment has been 2-5% higher in the EU for the past decade, and . Of course, life in America has its risks: if you lose your job, the social-safety net is pretty meager. But to my Scottish friends this seemed a price worth paying. Why is Europe so much poorer? Among the reasons are rigid labor markets and the welfare state, which is costly and undermines the incentive to work, but macroeconomic policy is also responsible, and this brings us to the unfortunate Portuguese.
Why is Portugal’s elected government “not allowed” to run a budget deficit over 3%? Because Portuguese voters voted away their right to discretionary fiscal and monetary policy when they signed the Maastricht Treaty in 1992. Control of interest rates and money supply was relinquished to the ECB, and fiscal policy was surrendered to “stability and growth pact,” which bears the same relation to growth as the Ministry of Truth in Orwell’s 1984 bore to truth. Euro-zone fiscal rules have penny-pinched governments and stalled economies for a decade. For the sake of “Europe,” politicians demanded sacrifices of voters. In return, economic technocrats solemnly promised that European unification would result in increased economic growth. This has not happened, and meanwhile the sacrifices continue. This year, as recession undermines tax revenues, the 3% rule is forcing German prime minister Gerhard Schroeder to raise taxes and cut spending. As any macroeconomist knows, this is a terribly stupid strategy in a recession, when demand needs boosting. Why don’t Europe voters haul Maastricht to the polls and throw it out as a fraud? Well, in a way, they can’t. This brings us to the Irish referendum.
Why did the Irish referendum have to be held twice? Because the first time, the Irish didn’t give the answer that Euro-elites wanted. This has happened before: Denmark, too, held a second referendum after they rejected the Maastricht treaty. When the Euro-elite wants something, “no” is considered a temporary answer, “yes” a permanent one. Repeated referendums are the only tip of the iceberg of “democratic deficit.” But the story of democratic deficit is told mostly by the elections that were not held, and never will be: other countries than Ireland did not get the chance to vote on expansion, nor will repeat referendums on Maastricht be held in countries where the treaty passed, no matter how long Europe stagnates. If democracy is government by the people, government in which expressions of popular acquiescence are organized when it suits the powers that be is—well, something different. The old euphemism “guided democracy” seems applicable.
The reason Euro-elites’ consciences are not troubled by these ham-fisted fudges is that they see themselves as building a new order, a United States of Europe (the phrase, despite its long history, has never quite entered the mainstream of Euro-debates, but it captures the idea nicely) and that order will certainly be a democratic one. To achieve this transfer of power from national majorities to a pan-European majority, some “democratic deficit” is tolerable in the short run. The Euro-elites, like many visionaries, are reluctant to let their plans be contingent on voters. Voters are unreliable. They do things like vote for Le Pen.
Jean-Marie Le Pen is a thoroughly politically incorrect character and a strong opponent of crime, immigration and “Euro-globalization,” who wants to withdraw France from the euro and the EU. Le Pen is politically untouchable in France. He was fined by a French court for calling Nazi gas chambers “a detail of World War II history.” But ask yourself which is more disturbing: that he said that, or that French courts will fine a man for speaking his mind? This is the country where Voltaire proclaimed, “Though I detest what you say, I will defend to the death your right to say it.” It raises a fundamental question—what is freedom? Is Germany free if its citizens are forbidden to read Mein Kampf without government permission? If Mein Kampf, then why not the Communist Manifesto, the Koran, or the Bible?
I’ve never quite believed the black legend surrounding Le Pen and the “far right.” Le Pen denies that he is racist, and in the spirit of respectful democratic dialogue I think it is incumbent upon us to take him at his word.
It is too late for the Euroskeptics to turn back the clock. Yet the Europe that is emerging is defying the plans of its architects. In foreign affairs, the nations of Europe are not converging to a common foreign and security policy, they are developing their own foreign-policy personalities: Britain is America’s best friend, France a statesmanlike warrior for international law, Germany a stubborn pacifist. Italy is ready for war against Hussein. The new EU countries are already proud NATO members, and central Europeans want to downplay the trans-Atlantic rift. The white, ex-Christian population of Western Europe is moving towards a demographic cliff, so Muslim immigrants, however resented now, will be a larger part of Europe’s future, particularly if Turkey joins. Right-wing parties, of both the “center” and “far” varieties, are enjoying a revival, and Anglo-Saxon economics is making headway, in the form of looser labor markets.