Europe on the Brink: Democratic Values and the Single Currency

Europe on the Brink: Democratic Values and the Single Currency

Mini Teaser: The EU is not democratic. Neither the EC, nor the Council of Ministers, nor the European Central Bank is democratically accountable; and they cannot be made so, because Europe is not a nation.

by Author(s): Michael Portillo

We need to bear in mind this history in order to understand the
strength of the impetus to European integration. The momentum derives
fundamentally from an understandable fear of war. That is what lies
behind Chancellor Kohl's famous remark that European integration is
"a question of war and peace." We all subscribe wholeheartedly to the
objective of achieving peace and security.

Furthermore, Europe is right to sweep away barriers to trade,
investment, and mobility across the boundaries of the nation-states
of our continent. But there are many different means by which those
objectives can be achieved. The functionalist, that is to say
centralizing, model now being applied by the European Commission
(EC), and by most of our partner countries, is not the only available
paradigm. Nor are all those who oppose the present course
anti-European, still less chauvinist or xenophobic. General de Gaulle
was famously in favor of a Europe des patries, and opposed the
tendency of the EC to acquire new powers for itself. He employed
rough tactics to establish the principle that nation-states should
not be overruled by majorities on matters of vital national interest.
How could it be that someone who valued Europe, who had fought for
its freedom and knew as much as anyone did about war, still nurtured
a belief in the nation-state?

The answer to that question requires us to consider more deeply the
causes of conflict. Those who want to create a United States of
Europe believe that nationalism has been the principal cause. They
think that if you can replace the nation-states, and make the nations
of Europe dependent on each other in a new European state, you will
have abolished the main cause of war.

But it is not enough to assert that European wars have been caused by
rampant nationalism. Two other elements have also been necessary:
despotism and a sense of grievance. In all the European wars of the
last two centuries the aggressors were despots: French
revolutionaries, kaisers, emperors, Hitler, Stalin. They capitalized
ruthlessly on some supposed injustice done to their nation, some
piece of territory that had to be restored to the mother or
fatherland, some minority that yearned to be set free from its
foreign repressor.

The Centrality of Democracy

Europe owes its security since World War II less to the absence of
nationalism than to the presence of democracy. By far the greatest
achievement in Europe at the end of the Second World War was the
restoration of democracy in Germany and Italy, and the liberation of
those countries that had been conquered by the Axis powers.
Subsequently, Spain, Portugal, and Greece rejoined the family of
democratic nations. My father fought for democracy in Spain and was a
refugee from tyranny for twenty years. To see democracy restored
there brought my family great joy. Following the fall of the Iron
Curtain, most of Eastern Europe and even Russia have become young
democracies, bringing a similar joy to the millions who had suffered
there. Democracy is precious to everyone, but its value is most
appreciated by those who know what it is to be without it.

The European Union, along with NATO and other European institutions,
has played an important part in the extension of democracy through
Europe. The member states of those institutions have provided a
shining example of both freedom and material success, and Western
institutions have supplied the template of democratic values to be
reproduced by the new democracies if they are to aspire to join those
institutions as new members. Europe is more secure from conflict
within the continent now than ever before precisely because there
have never been so many democracies as now, for it is almost
inconceivable that democracies would go to war with one another.

Viewed in these terms, democracy acquires a special value. It is not
merely, as Churchill said, the worst system except for all the rest;
it is the form of government that best assures peace. If we do not
have peace and security, we cannot hope to achieve anything decent in
life. For all its alleged deficiencies, without democracy the abyss
would yawn before us. And that is precisely why European integration
is not the means to achieve the security of our continent. For that
integration is being designed in a way that, if persisted in, will
sharply reduce democratic control. If we shoehorn the nations of
Europe into an artificial union, we will not abolish nationalism; on
the contrary, we shall risk stirring it up, while at the same time
undermining democracy. The danger is that we shall make people feel
that their national interests are being overlooked, and that they
cannot assert them through the ballot. That risks exactly what the
architects of the new Europe wish to avoid: destabilizing Europe,
creating tensions, and releasing resentments that damage the present
good relations among European nations.

The earliest Greek democracy depended on a very small populace--the
people or commons of a city, those who could be expected to gather
together in one place. Their commonality was evident. In the modern
world it is more difficult to be precise about what constitutes a
people. It is obviously a matter of great controversy and can be
subject to change. Most nation-states have a common language, but not
all. Most nation-states have a principal nationality or ethnic group,
but not all. Many nation-states are geographically homogeneous,
containing only one ethnic and cultural group within their borders.
But some are not. The United States of America would not score very
high on any of these criteria, and yet it is undoubtedly a
nation-state. Its people are bound together by a clearly articulated
sense of national purpose and by a set of shared values, by a vision
of themselves and their place in the world. All of that provides them
with the things in common that make them a people. Much the same
could be said of most of the nation-states of Europe, though
admittedly some to a greater and others to a lesser extent.

For democracy to work, people need to have more than just a vote.
They need to feel a part of the institutions to which they elect
representatives, to feel properly represented in those bodies. They
need to believe that their vote can change things. When they do not,
problems can arise even within well-established nation-states. It
seems, for example, that a majority of Scottish people do not now
feel confident on those points with regard to the parliament at

The Scottish example is interesting because there is no ethnic or
linguistic difference between the Scots and English. England,
Scotland, and Wales are, taken together, geographically homogeneous
and distinct. The three nations share many common values and the
sense of a larger national--that is, British--identity. Little
wonder, then, that the Basques, Catalonians, Bretons, Bavarians, and
other groups in Europe are unhappy--or worse--when they feel that the
critical decisions that affect their daily lives are taken in a forum
within which they do not see themselves as properly represented.

The important conclusion for the purposes of my argument with respect
to Europe is that we will be storing up the causes of future
resentment and unrest if policy which affects people's lives and
livelihoods is made by bodies that are perceived as distant, or are
believed to be composed of people who are not democratically
accountable. The sort of domestic political decisions about which
people rightly feel very strongly are those that affect the level of
taxes, unemployment, and interest rates.

The Single Currency

That brings us to the single currency. The proposal to institute such
a thing in Europe involves a bigger step toward centralized
decision-making than any that has been taken before. It seems
difficult for many people in Britain to grasp that the fundamental
motivation for such a move is political, not economic. As Dr. Helmut
Hesse, a member of the directorate of the Bundesbank, has said,
monetary union is to be seen "as the last step in a process of
integration that began only a few years after the Second World War in
order to bring peace and prosperity to Europe." Dr. Hesse sees it in
those clear terms even though, as a banker, one might expect him
rather to highlight the economic significance of the change.

With a single currency, the responsibility for monetary policy will
pass from the governments of the member states, or from their central
banks, to the EU central bank. Member states will be compelled also
to transfer their foreign reserves from their national central banks
to the European Central Bank. They will also be required to limit
their borrowing to maintain convergence. The effect of transferring
reserves will be to make it extremely difficult for any member state
to run a deficit; the motivation for limiting its borrowing is to
provide a means for imposing sanctions against it, should it
nonetheless persist in running such a deficit. It does not take much
imagination to realize that a constraint on the level of borrowing in
practice translates into a severe curtailment of the freedom to
decide both the level of public spending and the rate of taxation.

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