There are three possible ways forward for the European Union in the wake of a failure of the two constitutional referenda last year. They are
(1) a continuation of the existing constitutional process,
(2) the introduction of some specific reforms or
(3) core Europe.
I think that the third of these options is the best one and almost the most likely one. In this talk, I will explain why.
Continuation of the existing constitutional process
This is the preferred option of Angela Merkel, new German chancellor. As I understand it, the plan is that a new French president, the successor to Jacques Chirac to be elected in 2007, can reintroduce the constitution to the French voters after the election. I disagree with those who say that referendums proposing change are impossible to win, in that I think they are potentially winnable in the first few months after the election of a new leader. While the public are generally hostile to politicians, immediately after an election they might be willing to “give the lad (or lass) a chance”. And, once the French have ratified the constitutional treaty, goes the theory, the Dutch might also be persuaded to vote Yes on the strength of the momentum given by the French. However, I don’t think this is very likely. I don’t think that France and the Netherlands can be turned round that easily.
Some specific reforms
If the whole constitutional treaty can’t be introduced, then there are some specific reforms in that treaty that might be brought in on their own. This would certainly avoid ratification by referendums and some of them might not even need ratification by parliaments either, if the existing treaties already allow for them. For example, some of the proposed initiatives in the fields of foreign and defence policy might find agreement among the governments. One of the attractions of these proposals might be that the British would support them, but in my view such reforms don’t solve the problem. We need something much bigger.
This brings me on to the idea of a core Europe, based on the present euro-zone. It needs to move on from being a currency union to a full political union. This is what we are in business for as Federal Union. The creation of a core Europe will be very controversial, especially in the UK and in Poland. There are people who argue that this will break the EU into two parts, but what is the alternative?
Take a step back and you see there are two ways to keep the EU25 together. Either they all agree to integrate together, or they agree that some countries will go ahead without the others but all the while allowing the others to join in later. After all, that’s how integration has always happened in the past.
In this light, the next constitutional innovation in Europe is a serious enhancement of the political dimension of the eurozone, to create a government for the eurozone and a finance minister for the eurozone. The eurozone is a success, with the euro now rivalling the dollar. The dollar only retains its pre-eminence because no-one wants to upset the huge economic imbalances upon which the US economy now depends. In the end, these imbalances will have to be dealt with, and a political eurozone is the way to do it.
We need to give the eurozone a political dimension, so that is not run simply by bankers. To be clear, there is a role for bankers in running monetary policy, but there is also a need for a stronger political role. It is true that an economic government for the eurozone would not, in the first instance, include the UK, but as I said, that’s not a reason for holding back the others. This is an exciting prospect for Europe today, and it’s also based on reality. The constitution was a grand idea, but perhaps slightly fanciful. The euro-zone is a reality.
I would like also to say something about the “apparent purpose” that Richard Laming mentioned this morning. What is all this for? It is an argument that is missing amongst journalists and commentators.
But if you put Europe in a global context, the purpose of Europe becomes clear. The European Union is the means of protecting Europeans in a dangerous world. The new mission for the EU becomes one of security: security in terms of the environment; security in terms of geopolitics and fighting terrorism; security in terms of the economy.
The global scene is moving towards India and China, and relations with the Islamic world are becoming more important. The globalised economy is an increasing problem for more and more Europeans. We need to manage globalisation rather than simply allowing the liberal free for all. This idea of security is the huge new idea that is needed to kick-start European integration.
It could be popular in the UK as well as elsewhere in Europe, if we think of the EU as how Europeans are able to adjust to the global economy.
This article is based on a talk given at the AGM of Federal Union on Saturday 11 March 2006. The opinions expressed are those of the author and not necessarily those of Federal Union.