The current trouble began where, since 1789, trouble often has begun in modern politics, in France. There voters rebelled against the hint of a whiff of the austerity required to comply with the “convergence criteria” of the “stability pact” that followed from the Maastricht agreement. (Public resistance to the drive for European unification expresses, in part, wholesome suspicion of a political agenda expressed in freshly minted jargon.)
French voters gave a victory in parliamentary elections to Socialists who want the criteria relaxed. The criteria include budget deficits no larger than 5 percent of GDP and a national debt no larger than 60 percent of GDP. Belgium’s national debt is more than 130 percent. A Rome newspaper branded as “economic racism” a report that Italy is unlikely to meet the criteria. Today the only EU member that can meet them is little Luxembourg, the population of which (406,600) is one tenth of one percent of the EU’s population.
The French Socialists’ interest in relaxation is obvious, given their campaign promises to create 350,000 new public-sector jobs and to reduce the workweek from 39 to 35 hours without reducing pay (thereby raising labor unit costs 11 percent). But even Germany, at whose behest the criteria were written, has recently tried to fudge. The government proposed revaluing gold reserves and counting the increased valuation as current income. The Bundesbank rebelled. Fortunately, Germany’s real national anthem is Bundesbank uber alles. The revaluation ploy was killed. But if even Germany is fudging, imagine what is being done to bookkeeping in countries less inclined to fiscal rectitude.
So enamored are the French of government, in a recent poll 60 percent of those sampled responded favorably to the word “bureaucrat.” Small wonder that 54 percent of France’s economic activity is the result of government spending, or that 25 percent of all workers work for government. Small wonder, too, that the economic activity is so hindered that 12.8 percent of the work force is not working. Unemployment produced by too much government is the European disease. One in 10 EU workers is unemployed; more than 40 percent of them have been unemployed for more than a year. In Spain half the workers under 24 are unemployed; in Italy and France the figures are more than 25 percent.
The French exemplify cognitive dissonance, a mild mental illness common to, indeed pandemic in, democracies. It consists of embracing starkly incompatible ideas and desires. A recent poll in France revealed 60 percent support for pulling up the nation’s socks and meeting the EU convergence criteria–and another poll showed 60 percent support for fighting unemployment by lowering the retirement age to 55.
The common currency, to be called a euro, will supposedly serve economic dynamism by saving substantial sums in “transaction costs,” simplifying exchanges of goods, services and capital. But Germany’s Chancellor Kohl says that the fate of the common currency also will determine whether there will be “war or peace in the 21st century.”
Kohl’s apparent assumption–that people sharing a currency will not wage war on one another-has recently been refuted by Yugoslavia, which had a common currency in 1992. His version of economic determinism–his theory that commerce usually pacifies-has a long intellectual pedigree and is not patently implausible. However, the conservatism of the common man opposes the political aim of the economic reforms.
There has always been something surreptitious about the movement for European unity, a political objective shrouded in economic language. In 1951, with the wounds of war still throbbing, there was born the European Coal and Steel Community, an attempt to weaken national control of two primary commodities for nations’ war machinery. The Common Market came in 1957, the single market in 1992.
Each step has been sold to Europe’s publics as a step toward more certain prosperity, but the real objective has been political. It has been the dilution of nationalism by the siphoning away of national sovereignty to supranational entities in Brussels. The ideological motive for this is the belief that the nation-state is dangerous. However, any attack on the nation-state is an attack on national particularities, including different notions of justice. And supranational entities inevitably are augmented by subtracting from the authority of national parliaments. There is no denying, or hiding from Europe’s publics, the fact that the derogation of national parliaments is a diminution of democracy.
Some people are willing to sell their democratic birthright for pottage–for the hope that membership in the EMU, under the stipulated criteria, would insulate economic life from some excesses of democracy. But the relaxation of the Maastricht criteria may mean that Europeans will get diminished democracy and economic folly, including a debased currency.
The drive for European unification has been stealthy because the drivers-the political elites-have always been at odds with their publics. The elites share the watery cosmopolitan-ism of the intelligentsia, including the belief that patriotism-pride in national particularities–is retrograde and must be superseded by larger, vaguer, more universal attachments. However, nationalism is a healthier and hardier thing than its critics suppose.
