TCS Daily

It's Tony's Turn

By Carlo Lottieri - July 1, 2005 12:00 AM

European unification is undergoing a crisis, and most observers are skeptical that a solution to it can be found. After the double  "no" to the Constitution expressed by French and Dutch voters, European countries are also divided over the European Union budget. A few weeks ago they couldn't reach a compromise on it because Jacques Chirac and Gerhard Schrder weren't willing to forgo subsidies to French and German farmers, Silvio Berlusconi wouldn?t agree to a cut in funds for the Mezzogiorno and Tony Blair stood firm for a change in the underlying philosophy of the Union, and a reduction in the waste of public money.


To properly understand this situation, we need to remember that the decision to unify the Old Continent is largely connected to the interests of politicians and bureaucrats, who want to transfer to Brussels a large share of the powers currently enjoyed by the several nation-states. Facing a reduction in the role and importance of the nation-state in a globalized economy, the idea is to repeat the logic of the past at a continental level. To explain the present political clashes we have to consider that when the governmental framework is made of well-defined territorial entities, it becomes harder to implement distributive policies. The crisis of the European budget is the consequence of this simple fact and it is best understood in this light.


Before the establishment of the welfare state in Western societies, it was possible to unify a nation without causing undue tensions. In the empires of old, for instance, very different cultures and traditions could live together, and the relations between them were usually relaxed, since the areas subject to public decisions were restricted. But the logic of the social-democratic state radically changed this circumstance.


Today, state agencies manage health, social security, research and charity, and they thus benefit some groups and damage others. The basic unfairness of redistribution can be accepted - as it happens in the nation-states - only if it is impossible to ascertain who exactly are the taxpayers (the victims) and who are the tax-consumers (the exploiters).


In Europe, however, we know reasonably well which nations are benefiting from the budget and regulatory arrangements, and which are paying for them. These latter (especially United Kingdom) are opposed to repeating the mistakes of the past. The British desire to cut the budget shows that Euro-skeptic forces have more influence than they did a few years ago. In such conditions, only a reconceptualization of Europe as an "open space" (as opposed to a "superstate") can satisfy all the member states and open a new future to European institutions.


The redistribution within the European Union framework (embodied by structural funds and the Common Agricultural Policy) has produced a resurgence of nationalism, an ideology that we believed had been vanquished forever. Europe can thus save its future and the likelihood to live in peace only if it will choose a free-market approach, for instance by implementing as soon as possible the liberalization promised by the Bolkestein directive. This is a crucial element for a genuine integration of the European economies.


In this respect, the next few weeks could be decisive because Tony Blair is beginning his six-month presidency of the EU. Although we can?t be certain of the course he will choose, we can make some guesses.


In an effort to reach a compromise on the Union's budget, Blair will strive to change the bad habits of EU. In his view a renewed Europe needs less aid to the agricultural sector, and more investment in research. From a libertarian perspective, we can doubt the viability of such an approach to public spending: the experience of recent decades shows convincingly that politicians are just as capable of wasting huge amounts of resources in high-tech areas (the Concorde, or Bull computers) as they are in more traditional sectors such as agriculture.


Still, Blair's vision is more in tune with the current outlook and could be easier to integrate into the Lisbon agenda, with its aim to close the technological gap between Europe and America. The goal of the Labour leader is therefore not so much the end of the EU, but rather the acceptance of the notion that Europe will have a future only if it embraces a new vision.


Into this perspective, the whole agenda --from the Constitution to the enlargement to Eastern Europe-- needs to be seen in an altogether different light. The French and Dutch votes show that the membership of new countries and the ratification of a Constitution cannot continue. Embracing poor and culturally different countries, and endowing Brussels with more powers are two mutually exclusive endeavors.


We can expect Blair to oppose the approach outlined by, among others, German Foreign Minister Joschka Fischer, who envisages a core Union (composed of Germany, France, the Netherlands and few other countries) and a wider area less involved in the most important decisions. But Blair doesn't like this model of integration and he will fight this idea of a small consolidated federation at the core of an ever more powerful Europe. Since British public opinion is largely against the Union, Fischer's project would marginalize London.


In these circumstances Blair needs to envision a different Europe: more open toward post-communist countries, but for this very reason also more oriented to the creation of a vast area of free economic and cultural exchange. He cannot subscribe to the vision of a federal state, with its capital in Brussels. Instead, London could envision Europe as a new Commonwealth, utterly devoid of any sovereign powers, but leaving the task to create a sense of union and belonging to the free interactions and sovereign decisions of all its members.


During his six-month E.U. presidency Blair could try to reverse the trend of the last few years. After a long period of political unification, he could suggest that Europe revert to a more realistic path, more appropriate to our times, less harmful to individual freedom, and more aware of the importance of a cultural pluralism in the law, religion, economy, and social mores.


TCS Daily Archives