The more power they get, the less popular they’ll be. That’s the inherent tension underlying the EU. But why is it true?
When you can only choose one policy for all of Europe, then that policy will fit badly somewhere. Europe is simply too diverse for one set of rules.
If you’re only making policy on things like agriculture, it’s not so bad. But extend your powers to taxation, spending, refugee policy, border policy and monetary policy, then you have more and more of a problem.
Italians are not like Germans. If you read a history of the various attempts to create a monetary union in Europe, which go back to the 19th century, you’ll notice that the Italians have a very long and illustrious history of being the first to muck them up. In the 70s and 90s the British repeatedly joined the Italians, so don’t get smug.
But in Italy, the problem runs deep. Italian politics relies on the ability to devalue the currency and bail out the government with monetary policy. It’s practically tradition. Just their way of doing things.
The EU tried to pretend this is not the case when it set up the eurozone system. It imposed spending limits and a common currency with tight monetary rules. It never worked in the past. It ain’t gonna work this time. The EU’s popularity and the popularity of the euro are suffering badly instead.
In eastern Europe, the population isn’t so migrant friendly. Perhaps because the migrant-friendly part of the population already left. Or perhaps because they have a proud history of defending the rest of Europe from invasion from the east.
Either way, a unified European refugee and immigration policy does not fit well with the east. In fact, it fits so badly that they just abandoned it. Countries are refusing to take refugees. Borders sprung up across Europe not long ago. I saw several myself. Austria and the Visegrad Group are forming organised resistance to Europe’s open border policy on both internal and external borders.
In my city of birth, the EU’s refugee policy is having a stark effect. The West German Allgemeine Newspaper is reporting that a fifth of schools in Essen have a proportion of migrants above 75%. Three schools have a migrant percentage above 90%.
Before the refugee crisis, I heard family speak about the schools where the teachers don’t bother speaking in German any more. I wonder what they say about it all now.
I’ve been classed as a migrant for about half my life. And I’m trying to migrate my wife to the UK. So don’t bother accusing me of racism. Hypocrisy is out too, because my point is not anti-immigrant. My point is that EU-wide policy is, by its very nature, making decisions for nations which they disagree with. And the dissent is a problem you need to consider. Because it risks breaking up the EU.
The Italians and Spanish, perfectly used to illegal immigration, are furious about eastern Europe’s obstinacy on refugees. Probably rightly so. Southern Europe is complying with EU fiscal rules, but eastern Europe isn’t complying with refugee rules. The Italian response is to defy the EU too. Something that could lead to a major financial crisis in a matter of weeks.
Along with escaping the euro, Britain scored an opt-out of Europe’s refugee policy too. Another success that suggests Brexit could be a good idea.
But even on Brexit, the EU’s awesome powers are causing problems. The law provides for an exit of the EU. The EU’s politics do not seem to. I don’t think the British voter will be particularly comfortable with this gap. Leaders who think they are above the law don’t last.
The German exporters are just as worried as the British importers. Is the EU really going to put European industry and jobs at risk to prove that leaving the EU is hard?
Over in Ireland, they must be especially worried about Europe’s one-size-fits-all approach. The low corporate tax rate, which ended up making my family move to Limerick when I was six years old, is under threat from the EU. They call it tax harmonisation. But if your economy has been benefiting from low taxes for years, it really just looks like tax hikes to the French level to undermine your competitive advantage.
Meanwhile, Britain is leaving the EU and the EU is worried it’ll become a low-tax and low-regulation haven. All the Remainers accusing Jacob Rees-Mogg of hypocrisy for setting up shop in Ireland may get their way when he moves back across the border to escape Ireland’s high-tax environment…
The EU’s message in all this is perfectly clear. You can’t pick and choose bits and pieces of the EU’s framework. You can’t have some elements and not others.
Which is odd on the face of it. Britain’s rejection of the monetary union, its rebate, its escape from Schengen and its opt out of refugee policy have been extraordinarily successful. The Irish have successfully resisted tax harmonisation. Austria and Hungary have imposed borders.
Next month, Italy looks set to violate EU fiscal rules. As many countries did for years anyway.
It seems to me that everybody is already picking and choosing EU policies. And it’s working reasonably well. Compliance, meanwhile, has ruined Greece.
The EU itself is trying to pick and choose on the Irish border. It wants to include part of a foreign country in its regulatory sphere…
The idea that goods can be smuggled too easily over land, but a sea-border will stop them, is absolutely hilarious. Over at my smuggling firm, the Dunkirk Buyers Club, we’ve bought boats, not trucks…
Rising pressure and absurd outcomes
Trying to govern all of Europe never works out well for anyone. Perhaps that’s why so many of its great powers got sick of trying and decided to take over other parts of the world instead. With much greater and more lasting success.
But even then, the locals eventually kicked us out. You might notice that there’s a more and a less peaceful way of dealing with this. Ceding supranational power early is usually a good idea… especially in Europe.
The EU is leading to rising pressure inside Europe. Each nation is getting more and more irritated. The diversity in reasons why shows why the EU cannot work. It’s not just a matter of changing refugee policy. There’s a thousand problems with the EU – different ones in each nation. That tells you the underlying nature of its flaw.
The absurd outcomes the EU is driving highlight the problem too. How much of an immigration crisis would there have been if Europe’s borders stood in the way? Where would EU wide tax rates be if it implemented harmonisation?
These days, it is easier for me to get my Japanese wife into the UK using my German citizenship than my British one. Not to mention it’s a lot cheaper, because it’s free via the EU route.
Why anyone would seek to limit the number of Japanese immigrants is completely beyond me. Life would be dramatically better in Britain with a Japanese influence.
But there’s a far more bizarre policy disconnect. Why Britain restricts immigration from the likes of Canada and Australia is a total mystery. I’m not much of a royalist, even if having our top politician bowing to someone seems like a very good idea. But my point is that our head of state’s own subjects can’t freely move to the UK while anyone from the EU can.
Until next time,
Nick Hubble
Capital & Conflict
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Category: The End of Europe