In a recent blog I looked at ECB President Jean-Claude Trichet’s vision of how Europe could resolve the euro’s dilemma of a monetary union plagued by the lack of any fiscal union, via the “benign crisis” theory (each crisis allows Europe’s political elite to bump the assembly of 27 independent states a little further along the road to union). As Trichet’s lengthy term of office nears its end, scheduled for this October, he has become much more willing to speak of how the “European dream” could be implemented despite the clear desire of the people of Europe to retain their national sovereignty, as demonstrated in poll after poll on the subject.
On 28 June Trichet broached the subject again in a speech entitled: “Revitalising the European Dream: A Corporate View,” given at the gala dinner at the State of the European Union conference.
One of the central planks in any European unionist’s armoury is the argument that ever closer union is the only way to prevent another devastating European war spilling over into World War III. Germany has to be integrated into the European project, the argument goes, or the Germany-uber-alles philosophy will rise from the ashes to the ruin of us all.
The argument is used as forcefully by key German politicians as it is by French politicians. Is it true? God knows, but it is certainly a well-beaten drum in the service of the vision of a united Europe where sovereignty has been reduced to the status of local government. Trichet begins his speech by a gentle sounding of this particular chord:
“These days, “Europe” and the benefits it brings have come to be taken for granted. Thanks to the success of European integration, the threat of war has become a memory of the past for many Europeans, in particular the younger generation. This makes it all the more urgent to develop a renewed vision of the kind of Europe we want and indeed need – a vision that is easily understood and shared amongst EU citizens.”
It should not be necessary to point out that this is pure rhetoric. “Urgency”? Excuse me, where’s the urgency again? As far as I am aware, no one anywhere is talking about the major countries of Europe going to war with each other. There is no more “urgency” here today than there was yesterday, or last year, or ten years before that.
Of course, the thread that Trichet is pulling on is the idea that if bits of Europe break off, then, possibly, a concatenation of events might develop which could conceivably lead to an outcome that none of us would want. But then, the same sort of argument could be made for any set of events. All you need to do is string enough “ifs”, “buts”, and “maybes” together. It’s the old trick of herding the sheep in a particular direction by putting something they fear, namely the sheepdog, in all the directions you don’t want them to go in. The spectre of a European war is the busy sheepdog in this argument.
It should be pointed out that the same argument could be pressed into the service of a campaign for a united world government – any bits “left out” could be the discordant note that leads to catastrophe, so we’d all better hurry up and bond together. Great if you like big government, not so good if you don’t.
For better or worse
What Trichet wants is quite clear. He wants fiscal union in any form he can get it. The only route open at present is to get strong agreement on the mutual oversight of national budgets by all the nations of Europe, with real, toothy sanctions available to, well, let’s say the ECB, for any country that gets out of line. The reason that this is the only route open is that while the French were happy to give up the Franc, and the Germans were prepared to be cajoled into giving up the Mark, very few French people are prepared to even contemplate giving up France and not that many Germans will give the time of day to the idea of letting Germany fade away.
National states are here to stay. Check out the World Cup. No one is shouting for “Team A” or “Team B”. They’re yelling their heads off for France, for Spain, for Germany and in the case of the UK, for England, Wales, Scotland and Northern Ireland (or they would if only the various bits ever all made it through the qualifying stages together). Which just goes to show how parochial we all are.
So fiscal oversight is the only game in town. But it’s a starting point, not an end point. It’s much easier to have fiscal oversight if you have common policies on all the key budgetary issues, such as health, defence, social security, infrastructure, etc. And hey, if you have that, how united are you? Actually, pretty united. So presto, you have the United States of Europe and Trichet is in his element.
More than just football
The problem for Trichet, and all the “big Europe” politicians is that European history is the history of individual nation states forging their own destinies, often through repeated bloody conflict with each other. Individual national identities were hard won over the centuries and will not be given up lightly. (For an excellent account of what I'm talking about see this Viewpoint by Stratfor’s Marko Papic.)
Of course it is better that we all work together to secure a better future, but it is far from clear that bringing about The United States of Europe is the only or best route to this better future, just as it is proving far from clear or compelling that the euro is “better” than individual national currencies. You would find a lot of agreement amongst the Irish, Greeks, Spanish and Portuguese for the proposition that Ireland, Greece, Spain and Portugal would not be in the mess they are in today if they had stayed outside the euro. And it is self evident that the UK would sure as hell be in a far worse plight if it had not retained the Pound. Moreover, it may not be many months before the Italians are wishing they’d hung on to the lire…
Further reading on the European sovereign debt crisis, with some geopolitics and a bail-out thrown in:
- Europe and the Euro: A Geopolitical View—An Implausible Currency but the Best Alternative to Naked Conflict? by Marko Papic
- Stealth bail-outs – an economist’s furore with a twist. Part 1 by Anthony Harrington
- Nothing but Painful Choices Ahead as the Global Debt Supercycle Ends by John Mauldin
Tags: benign crisis , ECB , England , EU , European Central Bank , European Union , France , French , German , Germany , Ireland , Italy , Jean-Claude Trichet , Marko Papic , Northern Ireland , Portugal , Revitalising the European Dream , Scotland , sovereign debt , Spain , Stratfor , Trichet , United States of Europe , Wales , World Cup