EUROPE
Sharing a vision of “the new Europe”
Summer 2008
Former Belgian Prime Minister Mark Eyskens says he understands why Europe’s citizens care little for the details of EU constitutional reform. But he suggests that a glimpse of the future is essential to understanding today’s choices
A good many Europeans are nowadays disillusioned with the EU, and especially with all the fuss their leaders have been making about the Lisbon treaty. Europe’s citizens prefer solutions to constitutions and treaties; they didn’t much care about the contents of a European constitution, nor do they about the new treaty. Their concerns are about very specific issues like the shifting of traditional industries elsewhere, unemployment, law and order, problems associated with an ageing society, Europe’s shrinking populations and social security contributions and income tax they judge to be too high.
Yet, treaties do have a role to play, and especially this one. The Lisbon treaty that is now in the process of being ratified is an essential instrument for improving the efficiency of European decision-making. But that’s the sort of efficiency that preoccupies eurocrats, not the EU’s 500m citizens. Nevertheless, the enormous political and socio-economic challenges that now face the EU mean that it would be totally irresponsible for European leaders to take a wait-and-see attitude and simply allow the treaty to “hibernate”, because it in fact addresses a host of major shortcomings. It simplifies the voting system in the Council of Ministers and the European Parliament, it reinforces subsidiarity and the involvement of national parliaments, it reallocates responsibilities between the parliament and the council and restructures the Commission while providing for a more permanent EU presidency. But it stays short of at least one other institutional reform that would be most welcome – giving restricted powers of taxation to the European Parliament. A small levy on petrol could finance the entire European budget without, as is the case at present, having the EU budget become the focus of lengthy ministerial quarrels, and then having to wait for its approval by 27 national parliaments.
The EU’s core countries these days, besides the original six founding ones, are the 15 member states that make up the European Monetary Union. They have converging economies and coordinated monetary and fiscal policies. For the United Kingdom to become an EMU member would still be very desirable, as the UK should be at the heart of Europe. If the European Union is to progress beyond the limits of a common economic and monetary policy and develop a defence and security policy along with a common foreign policy, the UK needs to be on board. Exchange rate fluctuations between sterling and the euro disturb the market forces among member states, and at times even have a negative impact in London too. In the long run, the UK risks serious isolation if the eurozone starts to exert even greater power.
But other European countries must also understand British arguments in favour of the UK maintaining its own currency, given London’s importance as an international financial centre as well as the privileged relations it has with more than 50 of its Commonwealth countries. The eurozone should therefore offer the UK an honourable compromise in which Britain would be allowed to become a full member of the EMU and take a seat in all of its institutions like the European Central Bank and the ministerial Eurogroup, while also being able to keep the pound in its relations with third countries. The euro would thus have to be accepted in the UK and in the commonwealth countries as legal tender, and this would demand close cooperation between the Bank of England and the ECB so there would be no need to resort to mechanisms like the old “snake-in-the-tunnel” for stabilising exchange rates. Such a compromise would considerably increase the weight of EMU both inside and outside Europe.
Europe built around such a core corresponds to what I have often called “a Saturn-model”, a huge planet in the middle, surrounded by rings, converging sooner or later in the centre. The outer circles are those countries that would be in transition, while the rings around the centre would be EU countries that are still refusing to join the EMU, or which do not yet fulfil all the conditions, like Romania and Bulgaria, or eventually the Balkan countries and Turkey. The Saturn model puts the present fierce debate on enlargement and the eventual borders of Europe into a totally different context, because the core countries would no longer find themselves being asked to accept a Europe divided into different classes of member state. The positioning of EU countries on the rings around the core planet would in any case be transitory, with the aim being to facilitate overall convergence.
The impact of globalisation and of competition from countries like China and India amounts to a direct challenge to the EU. Economic and social reform policies across Europe would be strengthened if the EU authorities were able to co-ordinate them. The European economy needs to become more innovative, and the enlargement of the EU together with the further development of its internal market of almost half a billion consumers can be made to act as a powerful stimulator for economic activity. The accession of Spain and Portugal was a vivid example of that in the 1980s, and it is an argument that should certainly be looked at carefully when talking about such a populous country as Turkey.
The continent of Europe has been unifying gradually for 50 years now, and we can reasonably look forward to more and more inter-continental cooperation and integration, not least because of scientific and technological developments. At the same time, we can expect a growing Atlantic community as successive rounds of trade liberalisation make it easier to develop a free trade area between the EU and the US. Europe’s own experience has taught us that a customs union has to be the first step, and that sooner or later the more intense economic cooperation that a customs union imposes will then compel the partners grouped inside it to set up an economic community that has all the characteristics of a unified internal market. But of course this can only function smoothly if exchange rate fluctuations between the currencies of its members have been eliminated. So it then becomes logical for an Atlantic Monetary Union (or AMU) to emerge between the US and the EU. Although this is very long term thinking, it is a prospect that even today should be recommended to policymakers as a grand design for the future.
After this glimpse into the future, where do Europe’s leaders and their voting publics now stand? They have a choice between the Europe of the past and of the future. The Europe of the past began with the Schuman Plan that sowed the seeds of today’s EU, and concluded when the Cold War came to an end. It was an era of integration that developed so strongly thanks to the heroic drive to reconcile post-war Germany and France and establish a definitive Pax Europea. Europe’s integration was also greatly helped by the threatened expansion of the Soviet Union, making Joseph Stalin an involuntary founding father of the European project.
During the Cold War years, Europe was at first touchily, proud of its achievements, when compared to the alternative model being created behind the Iron Curtain. But after the implosion of communism, the situation in Europe was more or less reversed. The defensive demarcation of borders has been replaced by the removal of frontiers across Europe. General de Gaulle once spoke of a Europe stretching from the Atlantic to the Urals, but defining Europe in purely geographical terms omits other criteria of what it means to “belong” to Europe. These include the European social model and the scale of value it is based on. The whole concept of national borders also needs revisiting to take account of technological innovations that are having many crucial consequences, like the “de-territorialisation” of scientific, economic, financial and cultural developments. The EU’s future enlargements should also be looked at in the light of these revolutionary changes. The vocation of Europe in the course of the 21st century is to become the lever of step-by-step inter-continental convergence and unification. Europe therefore needs to be reinvented in the light of such rapid and overwhelming change. This is what the phrase “the new Europe” really means.