Europe 50 Years On

October 2005 Hans Arthur Black

This has not been the best summer for the European Union (EU); on its fiftieth anniversary things were supposed to be going differently.

The last couple of years have been reasonably fruitful for the EU. Euro banknotes and coins were successfully introduced in 2002 and just this past winter the EU underwent its largest and most symbolic expansion ever, taking in 10 new member states (eight of which were former communist states), effectively re-unifying Europe after it had been split in half by the Iron Curtain sixty years earlier. But at the same time, below the surface, unrest has been growing on the continent of Europe fueled by the economic stagnation prevalent in the largest euro-bloc countries. This dissatisfaction has come to the surface this summer in the rejection of the new EU constitution by voters of France and then the Netherlands, the subsequent failure to agree on a new EU budget and finally the unsightly public fight over whether the EU should backtrack on its promise to begin membership negotiations with Turkey. Compounding the situation, the EU has also seen a major disappointment in its attempt to develop a unified common foreign policy with the failure of its efforts to persuade Iran to give up its nuclear weapons program.

Ultimately, the political failures of this summer, and to a lesser extent the economic ones of the last couple of years, can be blamed on the current leaders of the European Union, particularly Messrs. Chirac and Schröder. As the heads of the historic — and very much still current — leading countries of the EU, they have consistently failed to exhibit true leadership and confront the underlying issues facing the EU as it enters its second half-century. To be fair to them, all of these problems predate their respective tenures and were largely ignored by their predecessors as well, but that does not excuse their blatant neglect ultimately allowing the EU to fall into its current predicament. The current deficit of leaders who are able to provide a coherent vision of where the EU is going and explain its purpose to the public leads us to ask, where are the Jean Monnets of today?

The rejection of the EU constitution, a document that was supposed to unify a whole host of European treaties going back nearly fifty years, made the EU’s decision to give up on the current version inevitable. While it is true that the rejection by voters in The rejection of the EU constitution, a document that was supposed to unify a whole host of European treaties going back nearly fifty years, made the EU’s decision to give up on the current version inevitable. While it is true that the rejection by voters in France and the Netherlands had at least as much to do with domestic politics as with those of the Union, the politicians of the EU are to blame for failing to propose any real coherent vision for it. For most Europeans, the EU is a distant, unaccountable bureaucracy that makes annoying restrictions on all aspects of everyday life. The problem for the younger generation of Europeans is that they have no idea what the EU stands for. Attempts to build a European identity have been largely superficial; there is a European flag and there is a pan-European song contest but no single lucid conception of where the EU is going. How large should it be, how deep should the integration go and what role will European nation-states have in the future? The now-failed constitution did not really answer any of these questions and it therefore deserved to fail. At 448 articles, it was too much bureaucracy and not enough vision.

A symbol of just how badly things fell apart this summer within the EU has been the failure of member states to agree on a new six-year EU budget. The EU budget is dominated by agricultural subsidies to farmers that account for 40 percent of Brussels’ total outlays. Member countries pay a fixed percentage of their GNP to the EU, which is then redistributed, primarily as agricultural subsidies. The United Kingdom has traditionally received a substantial rebate because it receives much less through agricultural subsidies proportionately than other countries. The UK has offered to give up its rebate if the amount of agricultural subsidies is cut. France, which is the biggest recipient of agricultural subsidies from Brussels, has refused to consider a change in the formula by which subsidies are calculated while insisting that the UK forgo its rebate, effectively killing any potential deal. The nearly $6 billion paid as a rebate to the UK and the hundreds of billions paid in agricultural subsidies to Western European farmers is money that could be much better spent on aiding the considerably poorer economies of the EU’s eight new Eastern European members. (The rejection of the EU’s constitution by the voters of The Netherlands was at least partially a product of the current inequalities of the EU’s budget, where the Dutch are the highest per capita contributors, paying three times per capita what France does, and receiving virtually nothing back.) The deadlock is very much a product of the backroom deal struck between Mr. Chirac and Mr. Schröder in 2002 to keep the current level of agricultural subsidies unchanged until 2013. The United Kingdom and The Netherlands have never forgiven them for what they felt was essentially robbery of their citizens.

The ironic twist in this state of affairs is that the failure of the traditional leaders of the EU, namely Germany and France, to take the lead on the current challenges facing the Union might well leave open the opportunity for the peripheral states under the leadership of the United Kingdom to become the leaders of the EU at the beginning of the 21st Century. Not only is the UK in relatively better economic shape at the moment, but despite the terrorist attacks this summer the country has been experiencing something of a political renaissance. The Labour government has been re-investing in and modernizing public services, and while the economy has slowed, it continues to grow at a reasonable rate and unemployment remains low. Prime Minister Tony Blair, who currently holds the EU’s rotating presidency, has already taken on the ambitious goal of remolding the Union’s agenda. He is promoting the UK’s economic and social model of liberalized markets and semi-privatized public services as the future of Europe compared to the past of generous social welfare states with strict restrictions on market freedoms.

In view of the recent round of membership expansion, this initiative by the UK could well shift the Union’s political center of gravity. It has long been asserted that there were two camps within the member nations of the EU, the core original six member states and the peripheral nations. The ascendancy of the peripheral nations will have major effects on the long-term foreign policy of the Union, most importantly in relation to the United States and further expansion of the club. Already one beneficiary of the UK’s lead in Europe has been Turkey, which has recently agreed to terms to begin membership negotiations with the EU. The negotiation and implementation period will surely last nearly a decade and since it is far from certain that many of the EU member countries around the table actually want to see Turkey in the Union, the benefit of having the UK, which really does want Turkey in, as a leader in the Union could end up being instrumental. This is similarly true for the EU’s still-developing relationship with the United States: how much the UK and the new member states are able to drive the policy process will determine how close cooperation will be. Indeed, Mr. Blair may well be able to influence the agenda over the remaining four months of his revolving presidency, but the UK government’s commitment to reforming the EU may not survive once Mr. Blair steps down as prime minister.

It is also unclear whether countries like France and Germany are willing to seriously reform their unsustainable social models that underlie much of the Union’s current problems. The verbal insults and the level of denial among European leaders this summer have been extremely discouraging as was the outcome of the recent election in Germany. The effective stalemate between the two major coalitions is the worst of all possible outcomes, making it unlikely that significant reform will be possible for some time yet. However, with France facing a presidential election in 2007 and the prospect of significant political change, Germany may well be encouraged to take more radical action, particularly if the economy fails to improve and unemployment remains unacceptably high.

In 1943, the father of European union, Jean Monnet, said, “There will be no peace in Europe if the States rebuild themselves on the basis of national sovereignty, with its implications of prestige politics and economic protection.” Over 60 years later, although much has been accomplished, that vision has yet to be achieved.