Archive for June 17th, 2008

Rethinking the European Union

A few days ago voters in Ireland rejected the Lisbon EU reform treaty, causing supporters of the EU to panic and skeptics to rejoice. I am a Europhile who believes that the EU is an amazing success story. It has turned one time enemies into partners who trade, cooperate and even share a common currency. Nonetheless I believe that the vote in Ireland was a good thing.

The treaty itself isn’t bad. It deals with some very thorny issues caused by the recent expansion of the EU from 15 states to 27. The institutions were designed originally for six states, and they need to streamline their organizational structure. However this vote, along with the failure to pass a much ballyhooed European Union Constitution in 2005 sends a clear signal to the leaders of Europe: give us real reform! Bring an expansive bureaucracy under control and stop increasing centralization. In short, the people are telling the leaders to rethink their vision of the EU’s future.

The European Union is, undeniably, a success. It has surpassed expectations of almost everyone, able to survive expansion, the end of the Cold War, and various budgetary and political crises over the years. From DeGaulle’s empty chair to Thatcher’s demanding her money back, there have been many times people predicted this historic effort at supranational integration would fail. It hasn’t and it won’t. However, political leaders have forgotten what makes the EU so vibrant: it is a vehicle for cooperation, not a centralized state. The message from the voters in Ireland reflects the view of a lot of Europeans: do not make a European super state. 500 million people cannot be governed from Brussels, and the diversity within the EU works against common policies and regulations.

Past efforts to coordinate regulations, like the Single Europe Act, had benefits that outweighed the costs. The SEA allowed a much freer flow of goods across Europe, and created tremendous new opportunities in transnational investment, leading to pressure to create a common currency, the Euro. I’m convinced that one of the reasons Italy experienced it’s “revolution” in the early 90s was because it was no longer possible to maintain the old corrupt system. With capital flowing across borders, Italy had to not only entice investors, but also tighten accounting rules and increase financial scrutiny. The dramatic collapse of the old system came in the form of a series of corruption trials and arrests, hitting the most powerful figures of the old ruling class. The most powerful political parties were destroyed, the most influential political leaders forced into retirement, exile or jail. This was supported and allowed by the business community, who understood that rules had to change if Italy was to compete in the new Europe. In other words, regulatory coordination led to a reduction in local corruption and opened up economies to new competition and investment.

At this point, though, while institutional reform is necessary, there is a danger that EU officials will focus on continuing to integrate and regulate, with the goal of being more like a traditional nation-state. The new nation would be Europe, the new state the EU. That kind of thinking lacks the creative rationality that Jean Monnet demonstrated when he spearheaded the drive for European integration.

Moreover, an alternative lies within the existing framework, explicitly put forth in the Maastricht Treaty as a fundamental principle of the EU: Subsidiarity. The word itself sounds pedantic and bureaucratic, but the principle is not. It states, simply, that governmental functions are best administered at the most local level possible. Things move up the ladder from the individual to the local to the regional to the state to the EU only as necessary to deal with specific issues and problems. Monetary policy requires EU coordination; regulations about local issues can be handed by cities or provinces.

In my opinion, the EU should, instead of trying to become more like a state, embrace this notion of subsidiarity. The traditional sovereign state is not really viable in an era of globalization, sovereignty itself has already been severely weakened by interdependence. Trying to copy that model is 20th century thinking. The EU should create a 21st century alternative to the fading sovereign state. Reject more uniform regulation and central control. Limit the functions of the Eurocracy, and focus instead on re-defining governance to emphasize local and regional (even cross-borders regional, such as the German-Czech-Polish border area) power. At the EU level, monetary, trade and foreign policy can be integrated, but otherwise devolve power to local and regional levels.

This would not only create more effective governance, and a viable European model for the future, but it would also gain support by people who currently fear losing their identity to a European behemoth. It would make it easier for Euroskeptics to accept the reality of a European identity, since it would emphasize rather than try to eliminate local identities and policies.

Bureaucratic and monolithic governments are becoming obsolescent; it’s time to explore fragmentation and local variance. With modern technology, local governments now have the capacity to act, get information, and cooperate with other localities. A strong central government is not only increasingly unnecessary, but stands in the way of local and regional governments being able to act effectively. The EU could focus on aiding local and regional efforts, and expressly embrace a new kind of political organization. Central governments don’t give up authority easily. The EU, not yet a super state, still can reject the path of centralized power and develop a post-sovereign alternative. The vote in Ireland was a good first step. The Europeans invented the sovereign nation state with the treaty of Westphalia (1648), borrowing heavily from the work of Hugo Grotius. Now it’s time for the Europeans to work on coming up with a viable replacement.