Categories: EuropeFinance

The European Conundrum

The European Union is an interesting project that – once logic is duly applied – must end up with the foundation of a United States of Europe (USE). Strangely enough, very few of the union’s citizens actually want to live in such a sovereign construct. Opinion polls time and again attest to the plain fact that most inhabitants of European nation states cling to their national identities and see their neighbours as, well, utterly foreign, strange and even incomprehensible.

While we all get along jolly well in Europe since the conclusion of our last spat some 69 ago, scratch the surface a little and a xenophobe – mostly of the moderate and thus fairly innocuous kind – will invariably appear incanting the many stereotypical deficiencies of other nations: The Spanish talk too loud; the Italians talk too much and employ arms and hands while doing so; the Finns and Swedes talk too little; the French talk with too much pomp; the Germans talk with too much authority; the Dutch talk a lingo that is neither here nor there, while the Belgians talk in too many tongues altogether.

Until a few years ago, a Dutch family driving towards the sun for its annual four week vacation would not cross the border without a few sacks of Bintje potatoes and other home-grown culinary delights and necessities. The cuisine south of the border was not to be trusted and any sampling would surely result in rather embarrassing emergencies.

“Without some form of integration and mutual dependency, Europe will, before long, revisit its turbulent past.”

Now that the EU has expanded from its humble beginning as the European Coal and Steel Community (1951) to include all of 28 members, covering a geographical area of well over 4.3 million km2, there is more foreignness than ever before. Vastly increased intra-union travel, instant communications, and common legislation have taken the edge off the nationalists’ objections but have not succeeded in moulding a European identity. In fact, there simply is no “European feeling”, nor is there likely to ever be one.

Once cooperation was set in motion in 1951, there was no stopping it. In fact, the process is self-perpetuating: Increased cooperation between nations inevitably gives rise to the need for further integration and, eventually, the full merger of sovereign countries.

Take free trade: The disappearance of tariff walls promptly lead countries to further selfish national interests via cumbersome regulations. This, in turn, necessitated a streamlining of codes and rules. Once product and safety guidelines were harmonised, governments started to manipulate their currencies in order to gain a competitive advantage.

The distortions to free trade thus caused, eventually brought the much-maligned euro into existence. The common currency has now given rise to a call for fiscal integration which, given time, will impose a shared economic and financial policy. Once that is in place, states will have little left to do and may very well wither away.

However, while these processes are taking place, the cacophony of national identities will not disappear. It doesn’t demand exceptional powers of prescience to predict that at some point nations will want to slam on the brakes and reassert their sovereign powers. This is already happening now in the UK, The Netherlands, Hungary, and France.

The trouble with this is that European integration is a process that either moves forward or breaks. At best, the pace of integration can be slowed down a bit. It cannot be stopped altogether without falling apart into 28 national bits and pieces.

So, it’s either the United States of Europe or nothing at all. The latter option is fraught with dangers, as much as the former is: A conundrum if ever there was one.

European nations are not very skilled at living together in peaceful harmony. In fact, Europeans are a warring bunch. Without some form of integration and mutual dependency, Europe will, before long, revisit its turbulent past. However, the alternative – a United States of Europe – is a pipedream. Europe lacks a shared history other than one tainted by violence and lacks a common identity. The European Union speaks in 24 languages and its many administrative and legislative organs are stages where 28 different mentalities clash on a daily basis resulting in policy compromises that satisfy no one.

The European conundrum has no real outcome. Still the countries of the continent are condemned to get along one way or the other. The European project may be doomed to failure as national identities reclaim their primacy. The only hope is that when they do, as they eventually must, we have all become too civilised to wage war. There is always hope, right?

CFI

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