Let’s be honest: the eurozone crisis is not all that is wrong with Europe, but the final straw that did the damage, bringing to the surface pretty much every grievance and complaint people have about the European Union and the process of European integration. And guess what? A lot of it is true. It has been a top down process, and whilst the union is not the EUSSR that the headbangers describe, the truth is, it is not a democracy by any standard that any member state would recognise. Many eurosceptics raise legitimate points of criticism. Having said that, the inability of European leaders to act courageously has been caused primarily by the failure of those same leaders to explain the need for European integration to their own people.
Yet it has worked, and even the most ardent of British eurosceptics still want to preserve many of the aspects of the union, in particular the single market. Here are a few things that I think we should consider to save Europe.
1. Eurobonds. We need to deal with the massive debt. At the same time, Germans, Finns and others can’t be expected to just carry the burden. They fear, not unreasonably, that in the middle of their apple strudel in the great European restaurant every other country is going to suddenly leg it for the door stiffing them with the bill. Supposing we agree to create eurobonds, issued centrally by the European Council, with the contributory nations like Germany having a veto over the amount raised, and with the specific spending of those bonds controlled directly by the Commission. This is not Daddy writing another cheque to be spent on beer, but Daddy paying for your college fees directly in the hope it gets you a paying job. Those member states that require them must sign up for the Fiscal Compact, and cede their right to issue national bonds. A EU-wide tax on a common commodity (Petrol?) could be levied in the countries using bonds to create a revenue to pay down the bonds, and possibly pay compensation to those countries who have higher borrowing costs having ceded national bonds. Consideration could also be given to the temporary transfer of public revenue raising assets like airports or toll roads as collateral against the bonds. An act, incidentally, that would create a powerful EU-owned multinational corporation to manage those assets on behalf of the union.
2. Such a radical proposal should be put to the electorate of each country wishing to have access to eurobonds, to seek a democratic mandate for the tough fiscal discipline required.Those countries that vote No do not get access to eurobonds.
3. We also need to recognise that the union must offer different things to different countries. Some countries see the benefit of a closer union, perhaps even a federation. Others want access to the single market. It’s time that we negotiate those two different types of membership, and the option of complete withdrawal, and let every member state vote, on the same day, on a new variable geometry settlement, letting their people choose which form of membership they sign up for. In short, for Europe to survive as a project, it must receive a mandate from the people of Europe.
4. For the inner core, the Democratic Disconnect has to be resolved once and for all. The people of Europe should elect directly a combined Commission/Council president of the eurozone. Throughout this European crisis, it has become very apparent that no one speaks with a mandate for Europe as a whole, despite the fact that this problem cannot be solved by any single country. It’s like a soccer team without a manager, no one is in charge of the big picture. The phrase “faceless unelected bureaucrats” has got to be destroyed, and only the people can do that with their ballots.
Also, member states should commit, over a ten year period, to holding national elections within the same 12 month period. The constant cycle of elections in Europe is contributing to paralysis, and needs to be addressed in a way that does not damage the democratic legitimacy of national politics.
5. Europe needs to create a European Defence Force. This may sound like a strange issue to bring up in the middle of a financial crisis, but it matters. EU countries spend nearly 70% of what the US spends on defence, yet were nearly beaten by Libya. By creating a small but well resourced EDF (alongside, not replacing national armies) Europe could free up national forces (and money) from combined operations like Somalia, Libya and Afganistan whilst allowing member states to get better military capabilities for less money by reducing duplication. After all, the EU has more soldiers than the US.
These are just ideas, flaws and all, that I’m throwing into the pot for discussion. Will they work? I don’t know. But I do know that Europe has failed throughout this crisis to get ahead of it and come up with a solution bigger than the problem. Maybe it’s time to think big, because the potential for failure, and its cost, will almost certainly be bigger.
Additional: my apologies with regard to US/EU defence spending. Read the data wrong. EU defence spending is closer to one third of the US.