Putting Europe back on track

Prince Michael of Liechtenstein, Chairman of GIS and member of the Advisory Board of the Thomas More Institute

October 25, 2017 • Analysis •

Europe is a wealthy and peaceful region. Its relative prosperity and social balance cause millions of non-Europeans to see it as a promised land. The subcontinent, situated at the western tip of Eurasia’s huge landmass, has managed to integrate peacefully after the wars and bloodshed of the early 20th century. This integration was based on common economic interests, a desire for exchange and the huge advantages offered by an internal market. It confirmed again the historic wisdom that the free movement of goods and people is a binding element that promotes peace. The internal market with its four freedoms works. It provided the economic strength that helped the European Union build up the infrastructure of its weaker regions and in new member countries. All this is a towering achievement.

The problem today is that the institution we call the EU has become conflated – in perception – with Europe itself. This political “union” has become overloaded with tasks that go far beyond ensuring the internal market’s smooth functioning. How this occurred was a twofold process. Mostly, it resulted from member states shifting the responsibility for difficult or unpopular issues to the union level (hence the favorite tactic of “blaming Brussels”), but it also stemmed from the EU administration’s own ambitions to grow.

Grand projects

As happens with many mature organizations, the EU increasingly fell into an “institutional trap,” where bureaucratic concerns start being treated as overarching principles. The creation of a single currency was another grand and successful project, in which one can take justifiable pride despite the euro area’s current difficulties. Yet the decision to yoke this monetary project to the EU’s institutional framework is at the root of today’s “euro problem.” The currency and the European Central Bank were politicized, mixing monetary and fiscal policies into a toxic cocktail. German Chancellor Angela Merkel’s remark that “if the euro fails, Europe fails” is a clear example of this misguided impulse to equate institutions with Europe.

Another great project was the Schengen area. Schengen enabled free travel without border controls throughout most of Europe, including non-EU states such as Switzerland and Liechtenstein. It required the creation of an administrative apparatus, including Frontex – the agency responsible for controlling the area’s external borders – but this could easily have been made independent of the EU.

Europe’s strength has always been its diversity, which nevertheless draws on common cultural roots. Today, this diversity could be the basis for a healthy institutional rivalry between regions. Such competition is the best way to achieve continuous improvements while preserving the advantages provided by local identity and character. What Europe requires is subsidiarity – a principle that could help advance integration without excessive “harmonization.”

The other essential element is a well-coordinated, global foreign policy and a common defense system, ensuring Europe’s ability to deter foreign attacks. Mainly due to dissension, timidity and lack of interest in defense among Europe’s political leadership, NATO is no longer up to the task of defending the continent, which has become increasingly vulnerable. A new coalition of willing European governments, including the major military and economic powers (among them the United Kingdom), should be ready to make this common effort.

Wrong track

Institutional overload has plunged the EU into crisis. There is even speculation that the union could fall apart – a possibility I would personally deplore. Yet we must acknowledge that Brexit was not just a consequence of British political incompetence, but also a symptom of a deeper malaise. Among other things, it testifies to a leadership vacuum that allowed European affairs to come to this pass. This is a shared responsibility, since the final decisions are taken by the European Council, which includes heads of governments from all EU member states.

The EU’s core competence and strength is the single market. This includes financial support of structurally weaker areas, to redress gaps in infrastructure and incentivize new businesses. Such was the original intention of the founders of the European Economic Community. Their ideas have worked well and are widely accepted.

However, the train of “integration where necessary” was switched to the track of “ever closer integration” and “harmonization” (which means suppressing Europe’s diversity). Not only was policy on the wrong track, it also ran too fast. Both European institutions and national governments were in the driver’s seat, where they remain today. On the union and national levels, this meant that a centralized bureaucracy gradually supplanted decentralized democracy. The outcome was a technocratic system that did not sufficiently respect local and regional particularities. This led to what the German-speaking countries call Europamuedigkeit – “Europe fatigue.” A much looser union would have an easier time dealing with Brexit, and could conduct negotiations in a more pragmatic way. The same could be said for issues such as Catalonian independence, which would remain an Iberian problem and would not be complicated by the EU’s internal politics.

Issues of democracy, the rule of law and human rights have always been matters for the Strasbourg-based Council of Europe, which is not part of the EU. But the hypothesis of ever-closer political union has led Brussels and some national governments to believe that they have the right and even an obligation to intervene in the domestic affairs of fellow member states, such as Hungary and Poland. This necessarily has a disruptive effect.

Questioning dogmas

A survey of today’s political scene in Europe reveals little leadership or vision. On the national and union levels, there are able administrators but no political figures of courage and statesmanship. This can probably be attributed to the rather sclerotic structure of the mainstream political parties, which has had two effects. On the one hand, it has fostered apathy and frustration among national electorates; on the other, it has hastened the emergence of radical movements.

It is to the credit of France’s new president, Emmanuel Macron, that he is questioning certain dogmas and taboos of European integration. This could allow a healthy debate to start. However, Mr. Macron’s policy proposals, which often stray into the realm of protectionism or central planning, would likely prove detrimental to economic growth and healthy integration in the long term. What is needed is diversity and regional competition. Mr. Macron’s Europe a la carte would in practice bring a centralized “core” Europe, which could then dominate the “periphery.”

Europe is based on diversity. At the same time, the vast majority of Europeans support European integration. The melding of these two widely accepted ideas has been sabotaged by the technocratic, equalizing notions of “harmonization” and “ever-closer union.” European integration would work much better in an “incomplete union,” based on the strong principles of subsidiarity, diversity and friendly competition between systems, states and regions.

The United States fought a cruel Civil War to become a nation. Europe does not need to be one. What it needs is a framework for different nations to work together. Only by bundling its diverse strengths and assets can Europe stay politically and economically competitive, earning international respect and dealing on equal terms with the other powers.