Europe: A House Divided…

Vienna Airport, Austria 29 May. On June 16, 1858 Abraham Lincoln made a prophetic speech.  “A house divided against itself cannot stand.  I believe this government cannot endure, permanently half-slave, half-free.  I do not expect the Union to be dissolved…but I do expect it will cease to be divided. It will become all one thing or all the other”.  I have taken a few days to consider the implications of last week’s elections to the European Parliament.  Indeed, amidst the exaggerated talk of ‘earthquakes’ and ‘revolutions’ only two votes are of real significance. First, some 70% of those Europeans who did vote cast their ballot for pro-EU parties.  Second, 52% of Britons who voted cast their ballot for Euro-sceptic or Euro-rejectionist parties.  Therefore, there will be more political integration and the great British reckoning will soon be upon us in which the choice for the British people will be surrender or leave.

No clear theme emerges from a close analysis of the voting patterns.  Yes, the Front National made stunning gains in France but the French are not about to abandon the EU. Yes, AFD, a small German party made a splash but they are anti-Euro, not anti-EU.  Yes, there were significant gains for various extremists, bigots and zealots across the political spectrum.  However, taken together there is nothing that could be said to be the basis for a reasoned and reasonable opposition with the European Parliament save (ironically) for some of the more modern and grown-up members of the United Kingdom Independence Party (UKIP).

That said the EU is at a crossroads. However, it is perhaps not the one that much of media is somewhat hysterically claiming.  The EU political elite is right to claim that much of the opposition is driven by a lack of economic growth but criticism also goes beyond that to issues of governance which of course the elite do not want to consider.  It is not surprising that they are happy to look again at policies but not at themselves. 

The voting patterns also reveal a profound split between the relatively few northern and western European taxpayers who fund Project Europe and those across the rest of Europe who benefit from such largesse.  Given that these transfers will continue for many years to come such discontent will also persist.  However, it is unlikely to reach a level where the existence of the Union itself is threatened.  Even though such transfers are in effect a tax on western European growth the EU elite make sure the Eurozone voter has nowhere else to go.

The EU elite also refuses to acknowledge the economic and social friction caused by huge numbers of poor eastern and southern Europeans arriving en masse in western European societies. Wages have been suppressed and cultural frictions have been generated.  Equally, those against free movement frequently shoot themselves in their collective feet by trying to paint migrants as a host of barbarians.  From first-hand experience I can confirm such a caricature is not at all fair.  However, to dismiss such concerns as racism is not just plain wrong but highlights and deepens the profound gap between the elite and the people the EU has come to represent for millions.

Where the vote really does matter is in the UK.  This reflects not just the growing gap between Britain and the Eurozone but also a lack of trust between political leaders and the British people. It is a lack of trust reinforced by the utter impossibility – political and financial- of the UK’s current position in the EU. 

The bottom line is this; Britain sends £8.6 billion per year (net) to the EU and gets precious little back in return.  The London political elite say such transfers give Britain access to the Single Market.  However, not only does Germany block the completion of a Single Market in Services the one area where Britain is strong but under World Trade Organisation rules the British are in effect paying for access to what should be free markets. 

Indeed, if anything the mass of EU Regulation makes the Single Market not only less ‘single’ but also not at all free. Therefore, that £8.6bn per annum is in effect a foreign tax on the British people and reflects what has been for too long blind faith in the EU on the part of the London political elite. As the EU and the Eurozone becomes one and the same thing the British will sooner or later have to face reality; join the euro or leave the EU.

So, what is going to happen? First, a mainstream Continental Christian Democrat will become President of the European Commission in November. Berlin wants that and the Eurozone is in effect a zollverein (customs union) built on and for Germany. It will probably not be arch-federalist Jean-Claude Juncker as that would indeed be red rag to John Bull.  Second (and however) the British will become even more euro-sceptic.  The current EU is just about defensible by the likes of Cameron, Clegg and Miliband.  However, as the Eurozone inevitably moves towards real monetary and political union the gap between the benefits of Britain’s EU membership and the costs will become even more apparent. 

Third, the various new factions in the European Parliament will spend more time fighting each other than holding the Commission to account.  Fourth, a hybrid form of political union will emerge as the Commission in effect becomes Germany’s proxy and continues its efforts to undermine and eventually replace every other EU member-state as the effective Government of Europe.  

Given that set of scenarios the likelihood that Cameron can persuade Eurozone governments of the need to go back to a kind of pre-Maastricht EU built on state-led structural ‘subsidiarity’ is extremely unlikely.  Indeed, structural subsidiarity would not be possible without the scrapping of both the Lisbon Treaty and the euro and that ain’t going to happen.

As for Europe’s people – they will continue in their current state; half slaves, half free half served by the half democracy that the half Parliament of the EU has become.  And, when all the brouhaha has died down elite business in the EU will continue just as elite usual.

Ho hum!

Julian Lindley-French