Magazine article The Spectator

Why Europe Can't Be a Democracy

Magazine article The Spectator

Why Europe Can't Be a Democracy

Article excerpt

LIKE the poor, the weak euro is with us always. It is no longer headline news, but it is still weak. Wim Duisenberg, the wiryhaired president of the European Central Bank, at least for the moment, keeps repeating that the dismal languishing performance of the euro does not reflect economic fundamentals. Markets often do not reflect fundamentals but it is worth asking the question: if the weak euro does not reflect economic fundamentals, is it reflecting something more disturbing? Is there some fatal flaw in the whole idea?

There are a number of alternative explanations for the euro's weakness. One is that the euro lacks a government. The European Central Bank has no political counterpart. Interestingly, the argument that you could not have a single currency without political union was the view of the Germans at the time of Maastricht.

In theory, the lack of a government ought to be a plus-point for the euro. The fact that the European Central Bank was deliberately and firmly put beyond the reach of governments and designed to be the most independent central bank in the world was perceived as a strength.

But the lack of a government may have other drawbacks: firstly, it makes it more difficult to control the deficits of potentially incontinent countries like Italy. Secondly, because Europe is not a state born out of a country, there is no European-wide labour market.

A single currency zone is likely to work better if it has a high degree of labour mobility. But Euroland, compared to the USA, is characterised by an absence of cross-border labour mobility. If a steelworker loses his job in Pennsylvania, he may move to another state in the same country where people speak the same language, where he may have relatives, and where his social-security and pension entitlements will remain the same. In Europe it is quite different.

The problem with the European Union is that it is not a state, or a country, or just a loose alliance of sovereign states. What makes Europe so unworkable is bureaucratic inter-governmentalism, but that is inherent in its nature. Almost every decision is the result of horse-trading between different countries. This makes Europe everything that the tabloids say it is: bureaucratic, inefficient, corrupt, undemocratic and unaccountable. The Eurosceptics have got it wrong. It isn't the superstate that's the problem; it's the sheer dysfunctional nature of the European Union.

The euro enthusiasts' answer is to fill the democratic deficit, and give more powers to the European Parliament. The Europhiles are quite right. Europe would work better if it were unified and democratic. Unfortunately for them, this would not be accepted by public opinion, and, far from increasing legitimacy, would be seen as undermining it. Europe needs democracy, but democracy is undeliverable.

The essence of democracy is that 49.9 per cent of the electorate will, if necessary, be prepared to accept the will of 50.1 per cent. Even in a nation state with a shared history, geography and language, this is not always easy. Could we really envisage a European president, elected by popular vote, precisely as suggested by Joschka Fischer? One wonders what would happen if the result of a European presidential election was as close as the last American election. …

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