In the Eurozone
To the Editor:
For a Central European of my generation (I was born in 1946) it has been especially painful to see the widening fissure between the U.S. and much of Europe since 9/11. Most of the blame can be ascribed to the European side—but not all of it. On the American side there seems to be an abysmal lack of factual information about Europe and about the European Union in particular, leading at times to blind anti-Europeanism. Unfortunately, Michel Gurfinkiel’s article on the rejection of the European Constitution by French and Dutch voters shows that even a magazine of Commentary’s quality is not immune to this trend [“Europe’s ‘No,’” July-August].
Consider Mr. Gurfinkiel’s treatment of the European Commission—the eternal bogeyman of ill-informed outsiders. Like others, he presents the commission as comprising unelected bureaucrats who foist their burdensome regulations on hapless European citizens. But its members are elected, and are impeachable.
What about the commission’s power? Mr. Gurfinkiel writes that it is in charge of setting wages and prices, and that it is in some respects more powerful than its constituent nation-states. This assertion is a tragic mixture of truth and falsehood. The commission has no power to set wages, except those of its own staff. Nor can it set market prices.
What it can do, following the general guidelines of the Council of the European Union, is manage import tariffs and subsidies to agricultural producers within the framework of the Common Agricultural Policy (CAP) of the EU. The CAP is indeed an abomination—just like farm subsidies in the U.S.—but it is a creation of the constituent nation-states and not of the commission itself.
The states gave the European Commission the power to enforce their commitments to each other. Once a directive or regulation is adopted by those states and the European Parliament, the commission can sue any state that fails to implement it. Any other arrangement would either make the EU a sham or open the door to endless bickering among states accusing each other of breaching the agreed-upon rules.
Describing the 2004 “Bolkestein affair” that reinforced sentiment in France to vote no, Mr. Gurfinkiel writes that Bolkestein, the EU’s market commissioner, “had issued a directive effectively deregulating the service sector”—as though he himself had promulgated a new law that was binding on all citizens in the EU. But Bolkestein had only proposed his directive to the member states and the European Parliament. And it was member states—France and Germany—that killed it.
In these dangerous times, we cannot afford such misunderstandings about the European Union.
Prague, Czech Republic
To the Editor:
Michel Gurfinkiel’s article provides a knowledgeable description of the thinking that guided the “founding fathers” of the European Union when they created the basic EEC institutions in the 1950’s. I agree with him that the French and Dutch voters’ rejection of the constitution was a belated reaction against the European elite’s tendency to impose new structures regardless of public opinion.
The evolution of EU institutions has been marked by uncomfortable compromises between liberalization and centralization. The constitution and the euro represent attempts to impose a centralizing, one-model-fits-all structure on a union consisting of 25 member states and 450 million inhabitants. But Europe is not a homogeneous entity, and developments across the Eurozone diverge. One fails to capture variety if one subsumes too much under the label “Europe.”
Mr. Gurfinkiel’s own economic analysis demonstrates how such generalizations prevent clarity. His statement that the euro has been a “prescription for zero growth” for the countries that adopted it, while countries that resisted it, “like Britain and Sweden, are in good shape,” is more than partly wrong and less than partly right.
True, the growth rates in real GDP of the UK and Sweden have been consistently higher than the Eurozone average, and their unemployment rates approximately half of the Eurozone average. But Ireland, which belongs to the Eurozone, has higher growth and lower unemployment than either country. Little of this is related to the euro.
Mr. Gurfinkiel’s conclusion that the prospects for continent-wide economic growth “can hardly be said to be bright” is too sweeping. Countries in “New Europe” have introduced flat taxes with low uniform rates. Relying on market forces, they have become magnets for international investment and have achieved growth rates rivaling those of China and India. The pressure of competition from Eastern Europe and East Asia has also forced Old Europe to act. Even in slow-reforming countries like France and Germany, one sees a lot of corporate restructuring. Decentralized wage-formation is spreading, and regulatory burdens have been lightened to allow companies greater flexibility to hire and fire.
Politicians like Helmut Kohl and François Mitterrand may have had visions for Europe, but in their ambitions they were notoriously unconcerned about getting the economics right. That must change.
To the Editor:
Michel Gurfinkiel writes that “it is not the constitution itself that the French and the Dutch were bent on rejecting” with their no vote, “nor was it even the concept of European unity. Rather, it was the impact on their lives, direct and indirect, of actual EU governance under the Maastricht regime.” This is probably true, but I would add to it.
Many French conservatives (and some radicals) deeply need a patria, a fatherland, to identify with. Europe could become a state, perhaps even a world power, but could it become a country? To French conservatives, the Europe proposed by the constitution seems like an absurd “community.” It lacks a common territory, a common history, and a common culture, and its notion of political correctness bans the Judeo-Christian tradition and makes it blind to the problems posed by Islamism.
At the same time, French radicals, following Rousseau, believe that political freedom is achieved only by the creation, through the “social contract,” of a single sovereign, in whose activities all citizens may and ought to take part equally. Those in France who favor such an arrangement would be willing to participate in a radical European republic, but such an entity being impossible, they prefer to go no farther than a radical French republic.
Conservatives dislike the EU’s liberal ethic and political correctness. Radicals dislike the EU’s free-market and free-enterprise principles. Combined, the two groups outnumber the Europhiles.
To the Editor:
Michel Gurfinkiel describes Europe’s “Islamist threat” as a “crushing problem” that looms “in the background” of the no vote on the European Constitution. On a recent trip to Europe, I found the Islamist threat very much in the foreground for the intellectuals I met.
Of all the decisions taken by senior European officials in recent decades, few have been as historically consequential as the one permitting the entry of large numbers of Muslims, many of whom reject assimilation into their host countries. In a widely discussed 2004 interview in Die Welt (Hamburg), Bernard Lewis stated that “Europe will be Muslim by the end of the century.” Other observers see a possible Muslim majority in France by mid-century. Already, the Muslim population’s influence can be seen in the EU’s foreign policy, especially vis à vis Israel, as well as in domestic politics. As Mr. Gurfinkiel concludes, Europe’s prospects for escaping “from its massive, self-inflicted harm” are not very bright.
Richard L. Rubenstein
To the Editor:
Michel Gurfinkiel’s excellent article affirms the popular wisdom in the vote on the European Constitution. The form of the constitution foretold the content, and its content the downfall.
A product of the French bureaucracy, the constitution was swollen with no fewer than 448 articles, differentiating areas that are the exclusive competence of the European Union (like monetary policy, common commercial policy, and the customs union), areas that are the exclusive competences of member states (like industry, health, education, youth, culture, and civil protection), and areas that are “shared competences.” What is behind the third category? This provision: “Member states shall exercise their competence to the extent that the Union has not exercised, or has decided to cease exercising, its competence.”
In other words, with regard to things like security, transportation, energy, social policy, employment, the environment, consumer protection, and other matters, the European Union could make decisions without the states. What patriot, of the Left or the Right, could agree to this? What socialist could give such a free hand to the elites who would rule?
University of Paris
To the Editor:
Michel Gurfinkiel’s article features a crucial insight that is worth underscoring. “The problem of Europe,” he writes, “was that Monnet’s twist—economics first—led to a bizarre, quasi-political arrangement.” The reference is to Jean Monnet, the planning commissioner of postwar France and a strong advocate of a “United States of Europe.” Indeed, Monnet worked to erect an economic house of Europe that, he hoped, would in time be crowned by a political rooftop.
Despite the extraordinary accomplishments gained through this pragmatic method, it contained a paradox that is now proving fatal to the project. As the “Common Market” tried to turn itself into a political entity, it encountered the sovereign will of the peoples of Europe, who had generally assented, but never consented, to the changes being wrought in their name. Having finally been consulted, the French and the Dutch have now toppled the entire edifice.
Michel Gurfinkiel writes:
Pavel Bratinka groups me with “outsiders” on European issues, so I should probably begin by pointing out that I am a citizen of France, born in Paris in 1948 and still living there. As for my familiarity with the workings of Europe yesterday and today, let us proceed to test it.
Under present provisions, the members of the European Commission (EC) are not “elected,” as Mr. Bratinka contends, but rather nominated by the various member states and then formally appointed by the European Council, the main decision-making body of the EU. They are then confirmed or rejected by the European Parliament: this is a comparatively recent dispensation, reminiscent of the screening of judicial nominees by the U.S. Senate. Nor are they “impeachable,” but merely subject to review by the Parliament. One commission in the past—chaired by Jacques Santer of Luxemburg—was so damaged in the reviewing process as to resign en masse.
I did not say that the EC was in charge of setting wages and prices, as Mr. Bratinka maintains. On the contrary, I acknowledged the EU’s “longstanding commitment to a single, highly competitive European market.” Nevertheless, by enforcing unified VAT rates throughout the EU and similar measures, the commission does exert considerable leverage on the economies of member states, including wages and prices.
Mr. Bratinka’s remarks about the so-called Bolkestein directive do not comport either with my own words or with the facts. EU directives and regulations are usually engineered by the EC, then approved by the Council. Although not laws in their own right, they must be passed into law by the member states, and once formally promulgated they take precedence over existing domestic provisions. True enough, the Bolkestein directive was stopped by the government of France—but only after a French Euroskeptic, Philippe de Villiers, made an issue of it, as I explained in my article. More often than not, directives are passed with little debate or no debate at all, no matter how disruptive or blatantly absurd they may be.
I do indeed believe that, in Mr. Bratinka’s paraphrase, “the commission is in some respects more powerful than its constituent nation-states.” This, after all, was the main point of my essay. As I wrote, Jean Monnet and the other founding fathers of Europe had to reconcile the need for immediate European cooperation in the postwar period with the unfeasibility of an early political federation or confederacy that would have included Germany. They therefore deliberately “circumvented politics,” i.e., the normal workings of democracy, by devolving as much power as they could to the EC. Their strategy worked quite beautifully for a time, but in the long run it undermined the entire political culture of Europe, and is largely accountable for the severe difficulties the European nations are facing today. Both the French and the Dutch “no’s” to the draft European Constitution were essentially an attempt to restore sovereignty to the European peoples.
Peter Stein raises a very interesting question about Ireland. A Eurozone member, it is currently as prosperous as Britain and Sweden, which stayed out. Does that mean, as Mr. Stein asserts, that the economic squalor of most other Eurozone countries, France and Germany included, is unrelated to the single currency, and that other factors are at play? In theory, yes. In practice, no.
The euro is basically a very tight, deflationist currency. It may work in Ireland, which by European standards is a libertarian paradise with a small government, few regulations, low taxes, very limited welfare, no industrial tradition, and no unions. It cannot work at all in continental Europe, the locus classicus of big government, regulations, taxes, welfare, industry, and unions.
Where the state pays for a lot of things, you need a flexible currency. If you don’t have it, you either collapse or end up fudging your real figures on inflation and the deficit. France, Germany, Italy, and others are both deteriorating and fudging.
The secret dream of some euro-fanatics is to force continental Europe overnight into a drastic conversion to economic libertarianism. As committed as I am to market freedom and to reform, I do not think this is a practical option. Regarding “new Europe,” I am prepared to share some of Mr. Stein’s optimism. Still, with the possible exception of Poland, these are very small countries. And, mind you, they are still out of the Eurozone.
Henri Hude’s remarks about the patria deficit in the European Union are very much to the point. So are Richard L. Rubinstein’s stern comments on the Islamicization of the Old Continent. Many Europeans feel there is a correlation between these two trends, and would like both of them to be resisted.
I thank Yves Roucaute and Laurent Murawiec for their readings of the European constitutional crisis, which complement mine, only with greater alacrity and talent.