Europe Goes Dutch - The American Spectator | USA News and Politics
Europe Goes Dutch

The great European unity project has stalled. No one was surprised at determined opposition to the proposed constitution among the always distant British. But the solid “non” in France, a leader for five decades in promoting European integration, and the overwhelming no in the Netherlands have left the plan to build a continental colossus in ruins.

That’s all to the good, for both Europe and America.

European attitudes towards America have been chilly, of course. France, a member of the UN Security Council, led the effort to block the Bush administration’s war against Iraq. German Chancellor Gerhard Schroeder won reelection in 2002 by vowing not to cooperate with Washington. Although the friendly Italian government under Prime Minister Silvio Berlusconi continues to hang on under pressure, last year Spanish voters rejected a Bush-friendly prime minister. Since then other European nations have been bringing home their limited forces from Iraq.

Nor can America rely on the influence of “new Europe,” the former Soviet-dominated states which now are entering the European Union. Even the Polish government, which ignored its population’s wishes in supporting Washington in Iraq, has edged away from the U.S. However supportive of America such nations as Hungary and Slovenia may be, they lack the significant economic or military wherewithal necessary to back up their commitments.

America’s most steadfast European friend is Great Britain. Yet backing the U.S. in Iraq cost Prime Minister Tony Blair’s government much of its massive majority in Britain’s recent election. Even Conservative Party politicians bridle at Bush administration policies. British referenda on joining the euro monetary zone and ratifying the European constitution looked to be watershed decisions on with whom — America or Europe — the island nation would most closely tie its future fortunes.

That decision has just gotten easier with the European constitution moribund.

NINE EUROPEAN COUNTRIES HAVE ratified the constitution and Luxembourg’s prime minister, Jean-Claude Juncker, who currently holds the EU’s rotating presidency, argued that “the ratification procedure must be pursued in other countries.” The French and Dutch governments could ratify anyway, despite the popular rejections — or vote again. Indeed, in the past continental elites have responded to popular opposition by holding as many ballots as necessary to get the desired result. But French and Dutch officials have little political choice now but to respect the referendum results, which means the ratification process is over.

The European Union survives, but it may no longer be quite so ready to keep marching eastward, especially to Turkey.

Although European integration has deepened more quickly than most people imagined two or three decades ago, significant national differences clearly remain. No amount of wishful thinking in Brussels can change that.

Europeans almost certainly will benefit because a less unitary Europe is likely to be a freer Europe. The U.S. will also benefit since a more federal Europe is likely to less consciously see itself as a rival of America.

Continental Europe has never been a bastion of economic freedom. France was a great mercantilist power; Bismarck’s Germany created social insurance. The Nordic nations helped pioneer the concept of the suffocating welfare state. Yet creation of a “common market” and later the European Union, supplemented by the euro as a common currency, helped open some of the most socialized and least competitive economies. The continental market reduced national protection for politically influential domestic industries.

European budget and financial rules encouraged economic transparency and discouraged fiscal irresponsibility, especially among the poorer states that have joined most recently. Pressure for political reforms also aided the latter’s move toward democracy.

However, the EU and euro impose a complex regulatory overlay enforced by an unelected bureaucracy in Brussels. Unfortunately, writes British historian Paul Johnson, “European societies have become a paradise for bureaucrats, trade unionists, centrist politicians and those businessmen who prefer to work under government protection.”

Moreover, the euro, which binds together 12 very different economies, has come unhinged at a time of slow economic growth. Official Europe worried about compliance by smaller nations such as Greece and Portugal, which were thought to be more irresponsible and thus more likely to violate the three percent deficit ceiling. But then France and Germany brazenly violated the rules. Rather than hold such large states accountable, the euro zone members changed the regulations.

Formalizing European integration through the proposed monster of a constitution — 448 articles in 450 pages — would do more to increase economic micromanagement than to increase openness. Which is precisely what Europe does not need.

Where Europe goes from here is unclear. In any case, Washington should say little. But it is hard to see how further centralizing continental policy would benefit America.

FORTUNATELY, THE U.S. CAN provide options to individual countries that decide they want out, or at least a better alternative. For instance, John Hulsman of the Heritage Foundation has suggested expanding the North American Free Trade Association to any interested European countries.

They could try to renegotiate the Treaty of Rome, allowing them to join NAFTA. Failing that, they could shift from the EU to the European Free Trade Area and European Economic Area (which include Iceland, Liechtenstein, and Norway), and sign up with NAFTA. Creating a broader free trade association also would offer nations now seeking to join the EU a better, freer alternative.

Or the U.S. could unilaterally lower trade barriers against select European nations — most obviously Britain, but others that indicated an interest in pursuing extensive economic liberalization irrespective of the state of Europe. That would benefit Americans by expanding commerce while encouraging stronger bilateral links.

The U.S. might be today’s hyper-power, but future challenges can be seen on the horizon. China is the most obvious eventual peer competitor to America. India could follow. A united Europe conceivably still could become another.

Although Washington can do little to prevent any of these future rivalries, it could offer expanded economic ties to help discourage development of a centralized, monolithic Europe arrayed against America. That might be the most important lesson for Washington to draw from the French and Dutch votes against the European constitution.

Doug Bandow
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Doug Bandow is a Senior Fellow at the Cato Institute.
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