Open Europe: Grand European plans are doomed to fail
Open Europe's Pieter Cleppe says that where the EU has gained a lot of decision making power, it has failed most of the time. He sees democracy best performed in sovereign nations and wants the European institutions being lean and efficient.
GERMAN BUSINESS NEWS: There is a new book by Daniel Cohn-Bendit and Guy Verhofstadt. Both authors claim that only a political union will solve the Euro crisis. What do you think of this approach?
PIETER CLEPPE: The authors want to dramatically centralize power in Europe: This is first of all bizarre. The main achievement of the European Union, the free movement of people and businesses, has been realized without transferring much power to the European level. Countries need to open their borders for that. Harmonizations of standards is most of the time not needed to achieve this.
Where the EU has gained a lot of decision making power, it has failed most of the time. The common agricultural policy provides wealthy landowners and banks with large sums of European taxpayer’s money, the European Commission has itself admitted the failure of its long standing fisheries policy, regional subsidies have completely failed to achieve “convergence” in the South of Europe, while a lot of waste and fraud goes along with it, and also the euro – project can’t exactly be called a great historic success.
GERMAN BUSINESS NEWS: Cohn-Bendit hopes for a trans-national society, where single nations lose their importance. Is this a realistic view?
PIETER CLEPPE:No. Whether one supports his view or not, it is clear that there is hardly any support for letting the EU level take important decisions. Opinion polls in both Germany and France consistently prove this, and politicians are always very reluctant to give in to these demands. The EU – level, or rather the eurozone level, has nevertheless gained a lot of power in the eurocrisis, but this happened because politicians wanted to shift hard decisions into the future, rather than take them now and the gap is growing ever wider.
GERMAN BUSINESS NEWS: Do you see democracy and nation as parts of the same medal?
PIETER CLEPPE: That is something which is hard to deny. Would Germany be happy if the rest of Europe would tell it how to conduct its energy policy, whether it should close down its nuclear power plants or instead build a lot of new ones? Where-ever you stand in the debate in Germany, you will always think that German energy policy is a matter for Germans, not for Italians, Estonians and British to decide.
GERMAN BUSINESS NEWS: Can true democracy exist in a trans-national conglomerate, where people don`t even speak the same tongue?
PIETER CLEPPE: I think it’s hard. One only accepts to be put in a minority by other members of the same “demos”. We can perhaps hope that Europe will one day become one economy and one people, but this isn’t the case yet. Would 500 million Europeans be happy to take decisions together with 1,3 billion Chinese over their fate? Europeans enjoy trading with the Chinese, but it doesn’t mean they want to be governing with them. The same is true inside Europe.
Looking at history, one can see that decentralization is a very European thing. It therefore is almost anti-European to call for more centralization of power in Europe. The fact that Europe has been so decentralized in history, made sure it was always very expensive for countries to be protectionist. If you’re small, you need to open up: for busines, for people, for foreign cultures. This openness has made Europe great. It’s the basis of the Western-European civilization.
GERMAN BUSINESS NEWS: Why are the Greens so opposed to the concept of nations?
PIETER CLEPPE: I don’t think all Greens are. A lot of them attach value to minority rights and appreciate the importance of “subsidiarity”. Some of them however, at least in some European countries, are the intellectual heirs of the European Communist movement. They apparently still haven’t admitted defeat and still believe that centralized command and control leads to good results. Luckily, most people have learned from history and know better.
GERMAN BUSINESS NEWS: In Europe, we see a powerful group pushing for more central forces and less rights to the national sovereigns. Can this prevail?
PIETER CLEPPE: I hope not, and I think not, but as Thomas Jefferson said: “eternal vigilance is the price of liberty”. In economic terms, one can’t solve the eurocrisis through more fiscal transfers. Spain, for example, is struggling with a lack of competitiveness. With Open Europe, we’ve just published a paper showing Spain still needs to implement half of its trajectory in order to be able to compete with Germany again. Already, the protest is massive. Even if Spain would make it, it will still suffer from excessively high private debt levels. And even if Germany and the other triple A countries would help to pay off this private debt, or if Spain would default, the problem remains that the ECB needs to set an interest rate which can never be optimal for both Germany and Spain, two different economies which grow at a different pace. That is what has gotten Spain in trouble in the first place: that the ECB’s interest rates, which were intended to serve Germany, were far too low. Sending money to Spain will only help to pay the unemployment benefits over there. It won’t make Spain any more competitive or deal with the problem that Spain and Germany need their own interest rate policies, which is hard as long as they share a currency.
GERMAN BUSINESS NEWS: Do you see at any point a pan-European electorate, or will voting always be a national element?
PIETER CLEPPE: There is something as a common European culture, like there is something as a Western culture, or Asian culture, or African culture. The European culture isn’t strong enough to justify a majority ruling over a minority within this context. Even if a European culture would emerge, to the example of the American culture, I still think it would be a very good idea to let decisions be taken as closely to the ground as possible. Perhaps therefore the true core concept of a European culture is that it is decentralized. Therefore the EU should become more like a Ludwig Erhard – Europe: keep all the good aspects of open borders and trade, and get rid of all the unnecessary bureaucracy and grand plans which are doomed to fail.