What is Europe about?

By Paul Collier - 25 April 2014
What Is Europe About?

Paul Collier argues that the project of building a United States of Europe sometimes leads to policies which undermine cooperation and convergence.

At its foundation the European project was primarily about peace. Following the murderous preceding decades this was rightly the overriding priority. It was also about power: squeezed between the imperial powers of USA and the USSR unity was essential. These goals determined the path: rights would shift from nations to a United States of Europe (USE), overseen by the Commission. Since the path would be long and subject to periodic political setbacks, a ratchet was introduced: rights once transferred to USE were acquis. Policies would follow from rights.

These goals are now a defunct inheritance from a dead generation. Peace is underpinned by mass rejection of war, not by European institutions. Is Germany more likely to invade Norway than Poland; Switzerland than France? As to the USA and the USSR, the former is now in a phase of isolationism – ‘leading from behind’; while the latter collapsed (and is currently reincarnated as farce).

In place of shrill piety to the visions of the dead, European leaders should be articulating new overarching goals that will actually matter to ordinary people in coming decades. What a European project can now offer is cooperation and convergence. Cooperation between nations is useful: huge unexploited opportunities remain. Convergence is the most basic expression of solidarity. It is also essential: a widening gap between a prosperous core and an impoverished periphery would breed grievance and friction. Cooperation imposes the constraint of mutual benefit: nations agree only to those policies which confer benefits on them (directly or indirectly). Convergence imposes the constraint that the poorer countries gain more than the rich. Between them, these two constraints would do much to restore faith in a European project.

But the rights appropriate for building a United States of Europe dismantle these constraints. Inadvertently, in consequence they sometimes lead to policies which undermine cooperation and convergence. USE has not merely ceased to be useful; it has become an impediment to a viable European project.

The supreme example of this is the Euro. If viewed as a symbol on the path towards a United States of Europe, it is of immense value. If, however, it is evaluated as a tool for convergence it has proved to be a manifest disaster. Southern Europe is diverging from the Northern core with no realistic prospect of anything else. With the inflation rate set by Germany at close to zero, Southern Europe is in process of achieving the large price adjustment that it needs to restore competitiveness through ‘internal devaluation’, a process that has always and everywhere involved prolonged contraction.

The response of the Commission to issues concerning EU migration has been similarly derived from rights. Since in the United States of America a doctor can work in any state, so too in the United States of Europe. In practice, the consequence is an acute divergence in health care. Romanian doctors can earn far more in Paris than in small-town Romania, and so they leave in droves: around a third have already emigrated.

The rights-based approach to immigration into Europe has produced similar tensions. Portugal sells the right to residence: rich Chinese can purchase the right for themselves and their children to live in Portugal. But since Portugal is in Schengen this confers the right to live anywhere in the Schengen area. The sale of residence is a national responsibility, whereas free choice of residence within Schengen cannot be qualified because it is a stepping stone to USE. But the resulting behaviour is in conflict with cooperation: rich Chinese pay Portugal for the right for their children to live in Paris.

The Euro, internal migration, and the sale of residence rights, are merely examples of a much larger class of policies in which the objectives of cooperation and convergence require policies that conflict with USE. Cooperation and the concept of the acquis are alternative approaches to common action, not bedfellows. Through the acquis, common action is generated by common centralized authority; through cooperation it is generated by the negotiation of mutual benefits. From time to time it will make sense to cede provisional authority to the Commission. But in a world of uncertainty why should national governments ever want to lock themselves in to an irreversible loss of policy authority?

It is time for the EU formally to renounce the goal of USE and with it the principle of the acquis. Analogous to the British Labour Party’s renunciation of Clause IV, it would liberate European political thinking. Bogus ends have been used to rationalize dysfunctional policies as means.

This post first appeared on Social Ehurope Journal.

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