A troubled EU is nothing to snicker at

WELLS: Rather than point fingers, European leaders should fix the pathologies that have crept into the system

A troubled EU is nothing to snicker at

Christian Hartmann/Reuters

The good news is that when the cover of Canadian Business magazine says “Europe’s Still Doomed,” they don’t actually mean tens of millions of Europeans are about to die a horrible death. For centuries that was the standard for measuring a bad day in Europe.

France lost more of her citizens in the Franco-Prussian War of 1870-71, about 139,000, than Canada lost in the First and Second World Wars combined, and it was barely getting warmed up. Next came 1.7 million French deaths in the First World War, then another half-million in the Second World War. Maybe seven million Germans died in the latter war, and nearly six million Poles. Belarus, at the time a Soviet republic, lost a quarter of its population. It’s easy for us to be glib about these things. They remain present and felt in Europe.

Canadians who chuckle at Eurocrats and Brussels bean-counters don’t pay enough attention to what those tweedy legions of paper-pushers have replaced. They’ve replaced hell. That doesn’t mean they’ve brought heaven, far from it, but the distance travelled is worth remembering. Germany and France work far more closely together than Canada and the U.S. do. Europe’s attractive power has pulled a dozen countries away from Russia’s grasp and closer to prosperity. The European Union’s eastern border, even with quasi-failed states like Belarus, is at least peaceful.

European life since the late 1940s has been shaped by “a miracle of world-historical importance,” Robert Kagan wrote in 2003: “the German lion has lain down with the French lamb.” Kagan is a party-line Republican hawk, a foreign-policy adviser to John McCain in 2008, but he will take Eurocracy over slaughter any day. Fortunately, wherever the European Union is headed, it’s not where it came from. Most of the changes there are permanent. Whether the euro currency lives or dies is a marginal difference.

Still, Europe’s architects have been cutting corners and backing away from hard decisions for years. The limitations of their handicraft are catching up to them.

There were always going to be richer and poorer countries in the European Union. Transfer payments are a reasonable response, but they create resentments at both ends. The rich countries don’t like to pay; the poor ones don’t like to be told what they can do with the money. This is the way of the world, but within countries—say, between Alberta and Atlantic Canada—people are more willing to make sacrifices for their neighbours than between countries. It doesn’t feel right to Germans that they pay for more generous social programs in Greece. They didn’t complain for a long time. Now, when everyone has to make sacrifices, they notice, and they don’t like it. But the Greeks are tired of lectures on fair play from France and Germany, because France and Germany have gamed the system too.

“Neither [Angela] Merkel nor myself were in office when they decided to let Greece into the eurozone,” Nicolas Sarkozy told an interviewer last month. “That was a mistake.” Why? Because to abandon a legacy currency and use the euro, a country had to have its fiscal house in order: inflation and interest rates close to those of the best-performing member states, a budget deficit under three per cent of GDP and public debt under 60 per cent of GDP. Greece missed a bunch of those criteria.

But it’s not as though Greece was alone in this delinquency. Germany’s debt was too high in 1998, when it was supposed to meet the convergence criteria, and it was heading up, not down. Belgium, France and Italy used what the Belgian economist Paul de Grauwe has called “creative accounting” to hide deficits that should have disqualified them. Sarkozy has been less creative. France’s deficits have been well above the three per cent limit for as long as he has been president. The euro rules are “instruments that are used in arbitrary ways to pursue political objectives,” de Grauwe wrote. And yet Sarkozy and Merkel lord it over other countries without shame. In August they called for constitutional amendments in every eurozone country to require balanced budgets. They called for automatic penalties against transgressor states. Would those penalties apply to France and Germany? Don’t be silly.

So the divisions in Europe don’t have much to do with fiscal virtue. Nor do they have enough to do with the consent of the governed. George Papandreou became Greece’s prime minister fair and square, in a 2009 election in which his party won a clear majority of seats. His political career ended when he suggested Greeks should vote in a referendum on the deal they will have to live with. Nobody elected his successor. This sort of thing is annoying enough on an ordinary day. In a global financial crisis, when Greek families have made plans under old assumptions that no longer apply, it must be infuriating.

Now most of Europe’s leaders want to hurry toward deeper integration, on the theory that the only way out of the current mess is to do more of what got them into it. They’d be wiser to pause, and fix some of the pathologies that have crept into the system. The biggest fight in Europe, the battle for peace, is won. Making the union align more closely with Europeans’ sense of fairness is enough work to keep every European leader at home, and it’s a worthier task than finger-wagging across borders.




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A troubled EU is nothing to snicker at

  1. This article is a nice change from the often reflixive euroscepticism seen in the trans-Atlancit English press. As I see it, the problem in Europe has not so much been anything to do with the EU or integration, as much as an out of control political elite that sets up rules domestically, and internationally and then proceeds to observe or break those rules as it suits them. This is true across the continent and has led to the unsustainable economic situation we see today. The euro may have aggravated the current economic crisis but only because its internal logic has not been respected by the Member States which created it.

    • Certainly the EU structure has given those political elites a variety of new opportunities to run amok with little in the way of democratic checks and balances. Not that checks and balances alone can save you. Look at the US, a country whose very Constitution was set up to ensure checks and balances. Today, they’re all checks and no balances. I don’t have answers. But it appears the EU certainly is part of the problem. 

  2. I am just thankful that Europe is mostly disarmed and they can’t do much damage to one another, at least militarily. As my 90 year old Scottish nan said the other day, the bloody Germans are now doing politically what they couldn’t do by war last century – take over Europe. EU and its unelected bureaucrats have removed three elected PMs and installed technocrats friendly to EU over the past year and who knows who’s next. 

    Marianne and Fritz’s marriage is coming apart at seams. Initial goal after war – both countries remain disarmed and encourage much trade between two behemoths – was good one but EU technocrats are out of control and dictating domestic policies of member nations. Lesser countries are being sacrificed to save Big 2 and no votes are being allowed to see if electorates agree with plan. 

    It is all going to end in tears. 

  3. Credit for pacification of Europe is wrongly ascribed to formation of the EU and no case at all is made that a unified currency contributed anything.  Germany had been “tamed” long before the EU project was even a glimmer in anyone’s eye, partly through being soundly beaten destroying their sense of superiority and infallibility, partly through horror and shame at what they had done, partly by required reparations and partly by surprise at how decent the victors were with the Marshall Plan for rebuilding Europe.  The unification with poor relative East Germany also drained a lot of money and energy.  This canard that European countries were headed right back to warring among themselves except for being united by an unelected elitist bureaucracy is ridiculous.  The threat to them and peace was the USSR which conveniently imploded.  Instead of drawing lessons about the unwieldiness of centralizing disparate entities while trying to erase centuries’ old nationalities, European leaders continued with their centralization project mainly out of power hunger, calculating that with a bigger bloc they could throw their weight around on the world stage and even upstage the United States.  The EU was a cure for a non-problem.  Imposing a unified currency on an artificially created “family” with hardworking savers and idling spendthrifts was never going to work out in the long run when the ants no longer wanted to pay for the grasshoppers’ excesses.

    • Interestingly, much of the cost of removing the threats to European peace (Nazi Germany, Soviet Russia) was borne by the US, not the EU.

    • Great post. The argument that the integration of the EU was the final step towards forever burying the horrors of WWII was never anything more than emotive rhetoric. 

  4. So the rational response is to set up a non elected government in Italy. Thomas Friedman may get his wish.

    • …do you mean Milton Friedman?…

      • Thomas is the guy constantly going on about being China for a day.  The whole “experts with good intentions” thing that always works out so well, because they are always so tolerant when unforeseen consequences rip their plans to pieces.

  5. “The biggest fight in Europe, the battle for peace, is won.”

    Come again?  There’s been relative peace in Europe for about 3 years, since the invasion of South Ossetia.  Prior to that there were genocide and a multinational bombing campaign in 1998-1999 in Kosovo.  Prior to that there were numerous atrocities behind the Iron Curtain, including a Soviet invasion of Czechoslovakia in the late sixties.
      
    Sure, these didn’t involve EU member states, but neither did any other European conflicts between WW2 and the formation of the EU (or its precursor the EEC).  The short-lived peace in Western Europe has little to do with the EU and a lot to do with WW2.

    Also this:  “…tens of millions of Europeans are about to die a horrible death. For centuries that was the standard for measuring a bad day in Europe.”

    Until the 20th century, “tens of millions” of Europeans dying a horrible death was only ever remotely possible due to disease, not war.  And surely we’re not now trying to credit the EU with curing the bubonic plague.  The casualty numbers from wars were tiny compared to the slaughters achieved in our not-so-glorious modern age due to a combination of less sophisticated weaponry and the antique (albeit spottily adhered-to) notion that military personnel were supposed to be clearly delineated from civilians, and the latter were to be left alone.  

    I fully expect that when the next large-scale European war breaks out, the number of dead will again number in the tens, if not hundreds, of millions.  I also expect that the tensions exacerbated by the EU will add fuel to that fire rather than being any kind of tempering influence.

    • Where is war going to break out in Europe in the near future? I’m not saying it can’t, I’m just saying I don’t see that threat on the horizon. The Balkans again maybe? Perhaps ethnic conflict in some of the eastern European countries? But how does that result in tens of millions of dead? 

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