The Conservative’s Case for the European Union

Those of us who believe in freedom and free markets must defend Brussels from the Euroskeptic onslaught.

BRUSSELS, BELGIUM - OCTOBER 24:  European Union flags are pictured outside the European Commission building on October 24, 2014 in Brussels, Belgium. Alongside criticism from outgoing European Commission president Jose Manuel Barroso on the UK's stance on EU immigration and a plan to quit the European Court of Human Rights, the UK has now been told to pay an extra £1.7bn GBP (2.1bn EUR) towards the EU's budget because its economy has performed better than expected.  (Photo by Carl Court/Getty Images)
BRUSSELS, BELGIUM - OCTOBER 24: European Union flags are pictured outside the European Commission building on October 24, 2014 in Brussels, Belgium. Alongside criticism from outgoing European Commission president Jose Manuel Barroso on the UK's stance on EU immigration and a plan to quit the European Court of Human Rights, the UK has now been told to pay an extra £1.7bn GBP (2.1bn EUR) towards the EU's budget because its economy has performed better than expected. (Photo by Carl Court/Getty Images)

If the number of tasteless analogies is any indication, few things make for targets of conservatives’ disdain like the European Union. In a speech to the European Parliament in 2009, Vaclav Klaus, then the climate-change-denying president of the Czech Republic, celebrated in free market circles for the radical economic reforms he put in place in the early 1990s, compared the EU to the Soviet empire. Nigel Lawson, Britain’s former chancellor of the Exchequer, in turn, called the EU a “bureaucratic monstrosity.” The conservative historian Andrew Roberts sees a parallel between Napoleon’s hubris and the “Brussels empire,” which “over-reached, and became more concerned about its own expansion and glory, its own ambitions for hegemony, than about the daily economic wellbeing of its citizens.” And then there’s James Delingpole, the English columnist and author of How to Be Right: The Essential Guide to Making Lefty Liberals History. He wrote this year that “the EU isn’t quite Nazi Germany but it does employ some of the same techniques to advance its power, such as the way it takes care not to erode our freedoms all in one go but slowly, drip by drip, like Chinese water torture.”

When I started my own career in the conservative think-tank industry five years ago, I spent much of my time criticizing the EU’s overregulation, its moral hazard, the damage created by the common European currencyEU structural funds, or the Common Agricultural Policy. I still harbor very few illusions. The critics of the EU are making many valid points. From the introduction of the euro to agricultural protectionism, the EU has often stood in the way of free enterprise and prosperity. And today, faced with the inflow of refugees from the Middle East and North Africa, the EU’s dysfunctional asylum and border protection system risks destroying the freedom of movement within the Schengen Area.

But being critical of various elements of the European project should not stop conservatives from appreciating its successes. For almost 70 years, Europe’s great powers have been at peace. By historical standards, the era of European integration is the closest that European nations have come to a limited, constitutional, democratic government. For all its “socialist” excesses, the degree of economic openness in the EU is without precedent. The EU has helped post-communist countries establish democratic institutions, liberalize their markets, and offer a safeguard against Russian expansionism.

Euroskepticism is on the rise today across Europe. The EU’s centrifugal forces are now being amplified, aside from the continent’s chronic economic malaise, by the nationalist backlash against the mass influx of asylum-seekers from the Middle East and North Africa. With the exception of its leftist incarnations, such as Syriza in Greece or Podemos in Spain, most Euroskeptic parties and politicians occupy positions on the political right. Some of them — for example France’s National Front — see themselves as defenders of traditional European values against the onslaught of multiculturalism and immigration from culturally distant societies. Others, such as the Czech Party of Free Citizens and German politician Bernd Lucke, are vocal advocates of free markets. And some, most prominently Nigel Farage’s U.K. Independence Party, have tried to combine libertarian rhetoric with an opposition to immigration, whether it comes from Eastern Europe or from outside the EU. Although Euroskeptics can be found in several parliamentary groups in the European Parliament — including Europe of Freedom and Direct Democracy, European Conservatives and Reformists, and Europe of Nations and Freedom — many of them have voted consistently together on various issues, including sanctions against Russia.

The rejection of the EU has placed some sincere conservative defenders of free markets and democracy into the company of the most unsavory undercurrents of European politics. Lest conservatives are to become “useful idiots” of enemies of free society, they have to rethink their opposition to the EU — and, in fact, come to its defense.

* * *

Some criticisms of the EU are vastly overstated. Take the famous “democratic deficit” as an example. When he addressed the European Parliament in 2009, Klaus complained of “a great distance (not only in a geographical sense) between citizens and union representatives, which is much greater than is the case inside the member countries. This distance is often described as the democratic deficit, the loss of democratic accountability, the decision-making of the unelected — but selected — ones, as bureaucratization of decision-making.”

For very good reasons, conservatives are no fans of giving unelected international bureaucracies powers that belong to democratic states and their citizens. In their view, such bureaucracies erode democratic accountability and constitutional checks that keep political power from becoming tyrannical. But at the time of Klaus’s speech, decision-making in the EU followed the model articulated in the 2001 Treaty of Nice, which required that practically all EU decisions be reached by consensus of member states represented by their leaders in the Council of the European Union. It’s hard to argue that a system founded on the unanimous consent of politicians, each of them accountable to their respective electorates, was fundamentally undemocratic. True, the situation changed with the 2009 adoption of the Treaty of Lisbon, which opened the way toward decisions by qualified majorities in some important areas. Still, all it takes to block any decision of the council is a coalition of four member states with 35 percent of the EU population.

Blaming EU bureaucrats for the bloc’s problems is often misplaced. The EU does include a large and influential bureaucratic apparatus: the European Commission. But the commission is only as powerful as Europe’s politicians want it to be. And, in general, the commission can issue legislation only in a small number of mostly technical areas, such as competition policy, expressly delegated to it by the council. All other EU legislation is adopted through a democratic process by elected European parliamentarians and ministers from member states. They bear the responsibility for the EU’s flaws, excesses, and overreach.

Some conservatives may still be unconvinced. “[D]emocracy is rooted in the nation-state — and thus far only in the nation-state,” John O’Sullivan, the former editor of National Review and formerly British Prime Minister Margaret Thatcher’s speechwriter, said in 2007. Of course, democracy first requires a “demos” — a polity whose members share a certain moral like-mindedness. But why do the demos and the Westphalian nation-state have to be inextricably linked? The latter, after all, is a distinct product of modern European history, including the Thirty Years’ War and the romantic nationalism of the 19th century. The European nation-state seems without obvious counterparts either in its numerous Western offshoots, such as the United States, Canada, or Australia, which emerged through mass immigration, or in multiethnic, multilingual democracies such as India. Yet in all of these states, democratic governance has taken deep roots.

The golden age of the democratic nation-state, unencumbered by the EU — which the Euroskeptics claim they want to revive — is an ahistorical myth. Europe’s history is complicated and often violent. The democratization of European states started only in the second half of the 19th century. Unlike today, Europe lacked a formal system of political cooperation, which helps explain the bloodshed of the Franco-Prussian War and, more importantly, World War I. The democratic nation-state also wasn’t resilient to the rise of totalitarian ideologies and nationalism, which plunged the world into the biggest killing spree in human history. It was only after World War II that democracy in Europe’s nation-states started to flourish. But it also happens that this period birthed pan-European political institutions, from the European Coal and Steel Community, created in 1951, to the smorgasbord governing the EU today.

The period of European integration has been an unprecedented period of peace on the continent. American leadership in the Western world and the existence of NATO were the essential preconditions for this state of affairs. However that may be, the historical uniqueness of this situation should make everyone wary of any dramatic overhauls of Europe’s political architecture. Conservatives oppose radical change because they appreciate that attempts to improve political institutions, which emerge from a slow process of evolution, can easily backfire. They should thus view the idea of dismantling the EU as an exercise in radical social engineering and worry about its unintended consequences.

* * *

Economic openness is a key part of the free enterprise system that conservatives rightly cherish, and few would dispute that the free movement of goods within the EU is a good thing. Indeed, it has been one of the EU’s greatest achievements. Free trade in Europe should not be taken for granted. Euroskeptics argue that the EU and its complex political structures are unnecessary for free trade. Many free market economists agree, saying that all that is needed for free trade is a simple removal of barriers, not the creation of supranational bureaucracies.

This may sound nice, but that view finds little support in European history. Protectionism, not free trade, was long the historical norm on the continent. How about the second half of the 19th century, which culminated in the “first age of globalization“? Yes, in the mid-1800s many European countries eased trade restrictions and removed tariffs. But that progress was short-lived. Fin de siècle Europe was far from being a free trade zone, due to measures such as Germany’s “iron and rye” tariff of 1879 and France’s Méline tariff of 1892. The rapid growth in the volume of international trade during that period was driven more by technological improvements than by sound trade policies.

The failure of late-19th-century Europe to sustain free trade was not an accident. The idea that good policies, such as free trade or free movement of capital, can be guaranteed only by political fiat at the level of the democratic nation-state ignores the problem of political commitment. Free trade can be achieved if responsible, economically literate politicians are elected. But that says little about whether a free trade regime can be sustained. Typically, wise and benevolent politicians are succeeded by those who are keen to please their voters or appease a specific interest group by introducing barriers to trade and competition. To take another example, at the time of the Great Depression, politicians on both sides of the Atlantic quickly succumbed to the temptation to introduce capital controls and increase import duties to stimulate their ailing economies. After the introduction of the Smoot-Hawley tariff in the United States, other countries followed suit, bringing about a near collapse of international trade in the early 1930s and hugely exacerbating the effects of the Great Depression worldwide.

The value of international arrangements, such as the EU — and like the World Trade Organization — lies in the fact that they enable the more enlightened politicians who originally signed the agreements to bind their successors by increasing the cost of reneging on a free trade regime when temptations to do so arise. This institutional innovation is what distinguishes the Europe of today from the Europe at the turn of the 19th century. It makes the continent more resistant to the temptations of economic nationalism.

Nowhere can the power of the EU as a commitment mechanism be seen more clearly than in the post-communist countries of Central and Eastern Europe. The prospect of membership in the EU and NATO served as an impetus for economic and institutional reforms and also as a safeguard against their reversal. Reflecting on his experience as a pro-market reformer, Ivan Miklos, the former deputy prime minister and former finance minister of Slovakia, speaks often of the “integration anchor,” which “was very helpful in passing necessary changes, which would otherwise have encountered the resistance of some of the coalition parties.” In the following years, Slovakia became the fastest-growing economy in the EU in 2007, 2008, and 2010, with a growth rate exceeding 10 percent in 2007.

Citizens of countries such as Ukraine and Moldova understand this well. In the absence of an “integration anchor,” the commitment of their political elites to building a functioning, non-corrupt state has been extremely weak. One reason that Ukrainians took to Kiev’s Maidan to protest in the freezing Ukrainian winter of 2014 was they did not want their country to be run as a personal fiefdom of a small group of oligarchs. What Ukrainians wanted, as a student who had taken part in the Maidan protests told me recently, were European values and a European mode of governance. Ukraine’s more successful Central European neighbors became liberal democracies only because political elites were faced with the credible prospect of EU and NATO membership. If conservatives want democracy and free enterprise to triumph not just in the West, but also in republics of the former Soviet Union and beyond, they should see the EU as an ally, not a foe.

What exactly is the Euroskeptic alternative to the current model of European integration? Petr Mach, a Euroskeptic member of the European Parliament from the Czech Republic, argues for an exit from the union by writing: “Seceding states would be able to arrange free-trade deals with the entire world in addition to the current 28 Member States and four [European Free Trade Association] members. They could easily deregulate by simple parliament majorities. They would not be forced to bail-out bankrupt projects like the euro.”

But such cheerful visions of a market-friendly life outside the EU is at odds with what most critics of European integration actually advocate — particularly those who do not belong to market-friendly circles. Take the manifesto of France’s National Front, which calls for “strategic planning of reindustrialization,” under the auspices of the prime minister, using the insights of leading academics, representatives of business, and the government, which is “to take place in parallel with the introduction of reasonable border protection against unfair international competition (targeted tariffs and import quotas).” Other policy ideas from the National Front include the regulation of banking fees, unspecific policies aiming to “establish an equilibrium between independent business and large supply chains,” and a ban on financial derivatives. In short, it requires a large dose of imagination to believe that, following their exit from the EU, European countries would become friendlier to free markets, free trade, and free capital flows.

* * *

The biggest threat to Europe today is not the diktat of the EU but Vladimir Putin’s Russia. The fall of the Soviet empire gave the small Central and Eastern European countries a chance to become a part of the West. The liberation of some 100 million people in the region from the shackles of communism and their embrace of markets and democracy constitute a momentous achievement, one that is now under threat from an increasingly aggressive regime in Moscow.

True, the EU is not a military alliance. But it managed to stand against Russia in the aftermath of its annexation of Crimea in 2014. Stronger pushback would have been better, but the absence of sanctions and of a reasonably unified EU front would have certainly emboldened Putin in his foreign-policy adventurism.

Euroskeptics seem oblivious to the risk that a collapse of the EU — or its protracted dysfunction — would drive its more vulnerable member states into Russia’s firm embrace. Yet that risk is very real. The Kremlin is nurturing its ties with political elites in the region, from Prime Minister Viktor Orban of Hungary to President Milos Zeman of the Czech Republic. Energy dependence, corruption, and subversive propaganda are perhaps the most important tools used by the Russians.

In the aftermath of Russia’s invasion of Ukraine, many Euroskeptics came to Putin’s defense. At a recent discussion at the Heritage Foundation in Washington, Farage, the U.K. Independence Party leader, channeled the Kremlin’s interpretation of the events in Ukraine: “There was a democratically elected leader of the Ukraine that was brought down by a street stage coup d’état by people waving European Union flags.” Klaus, in turn, described the annexation of Crimea using the chess term “forced move,” which refers to a move that has no viable alternative and is therefore “forced” by the opponent — insinuating that the Kremlin was merely reacting to the events in Ukraine. Others have been even more brazen. The National Front’s Marine Le Pen famously called Putin “a patriot.” “He is attached to the sovereignty of his people,” she said, adding that “he understands that we are defending common values — those of the European civilization.” She has been a frequent visitor to Moscow, receiving red-carpet treatment in 2014, only weeks after the annexation of Crimea.

There are exceptions, of course, such as Conservative European Parliament member Daniel Hannan, who condemned the Russian invasion and stated that his Euroskepticism “leaves no place for Putin.” But too many Euroskeptics refuse to see Putin as a threat to the free societies of Europe. Instead, they follow the logic of the adage “the enemy of my enemy is my friend.” And even those, like Hannan, who acknowledge that Putin is a kleptocratic tyrant with contempt for constitutional democracy and international law remain silent about how exactly a politically divided Europe would keep Russia’s autocrats at bay.

* * *

The EU does need profound reforms. The current refugee crisis is an illustration of the consequences of the EU’s flawed architecture. The authors of the Schengen Agreement forgot that free movement of people cannot survive without common systems for border protection and asylum. Leaving the matter in the hands of member states has created the chaos that now risks unraveling the entire edifice, unless European leaders take quick steps to provide those missing institutional elements before it is too late.

Similarly, the early critics of the common currency might feel vindicated by the chronic debt crisis in Greece. Europe is too diverse a continent, with too little economic flexibility and without the political infrastructure needed to be a well-functioning monetary union. The EU should abandon the dogma of an “ever closer union” and allow its member states to permanently opt out of joining the eurozone, while enjoying other benefits that come with EU membership.

Conservative critics of the EU have been correct in pointing out that the introduction of the common currency has been an instance of overreach, driven by political motives. It led to an excessive accumulation of public and private debt in countries such as Greece and Spain. And when the crisis hit, instead of devaluing, the affected countries had no choice but to proceed with politically difficult reforms, providing fuel for populist movements on both the far left and the far right.

What is the way forward? Countries that do want to keep the euro as their currency have no choice but to move toward a closer political union. They will have to accept tighter, more enforceable fiscal rules and constant scrutiny by nosy Eurocrats, perhaps even empowered to veto national budgets. But the prospect of structural reforms and fiscal discipline, designed to avoid the doses of sudden austerity seen during the Greek crisis, is something that conservatives should find appealing.

To remain an economic powerhouse, the continent will also need massive 1970s-style deregulation, as well as stronger institutional safeguards against the unchecked growth of economically destructive rules in the future. In spite of a nominal commitment to a single market for services, the EU has been behind the curve, doing little to curb the various forms of protectionism that are still keeping Polish plumbers (a preferred stereotype of French and British xenophobes) from offering their services in France and Britain. And neither does the EU have a common digital market, which goes a long way toward explaining why Europe has no equivalent of Silicon Valley.

But, contrary to what many Euroskeptics believe, the EU is not a top-down imposition created on a whim by unaccountable social engineers in Brussels. It is a work in progress, a slow-moving evolutionary project crafted by generations of democratically elected European politicians in order to provide some fundamental Europe-wide public goods, including peace, economic openness, and joint action against external threats. And while there are reasons to be dissatisfied with its current functioning, its existence has coincided with a historically unprecedented period of peace, economic openness, and prosperity on the European continent. There is no guarantee that dismantling the EU would preserve these achievements, instead of returning the continent to an era of protectionism, nationalism, and conflict. With their appreciation for history and their suspicion of ambitious social and political engineering, conservatives should understand this risk better than anyone.

Image credit: Carl Court/Getty Images

Dalibor Rohac is a senior fellow at the American Enterprise Institute. Twitter: @DaliborRohac

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