Wealth of Nations June 2005

After 'Non' and 'Nee,' Where Does Europe Go Now?

In rejecting the new European constitution, voters in France and the Netherlands have done themselves and their fellow citizens of the European Union a great favor.
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In rejecting the new European constitution, voters in France and the Netherlands have done themselves and their fellow citizens of the European Union a great favor. One sign of just how much Europe's leaders needed this punch in the face was their remarkably inept response to the votes. The expectation that the Union would be run to suit its leaders and civil servants, regardless of the wishes of its peoples, had become so deeply ingrained that popular rejection of the planned constitution resulted in total intellectual paralysis. The referendum result had looked possible, at the very least, for weeks. It still reduced France's Jacques Chirac and Germany's Gerhard Schroeder to a kind of gibbering idiocy.

How come? Because, when it comes to the European Union (very different from domestic politics in the respective member states), this was a completely new experience. The leaders did not get their way. The outcome rendered them speechless. Only a badly broken polity—one that urgently needs fixing—can breed that kind of reaction.

Looking forward, it appears that the no votes have thrown the whole European project into crisis. In a way, that is true, although it would be more accurate to say that the leadership's reaction to those votes is mainly to blame. The reaction may yet plunge the enterprise into even deeper difficulty.

People who voted against the new constitution in the French and Dutch referendums did so for a mixture of reasons—just like those who voted in favor. In France, the strange idea that the new constitution would entrench a brutal Anglo-American species of capitalism often came to the fore. (My reaction to that fear was, "If only.") In both France and the Netherlands, voters were also worried about their weak economies, their stagnant living standards, immigration, and other issues. A desire to punish their leaders, for domestic reasons as much as for the leaders' views on the future of Europe, also played a part. But none of this means that the referendum verdicts were an inaccurate or occluded take on what most European citizens think about the issue at hand—Europe's constitutional identity. That issue underlies many of the others, and the referendums gave the citizens an opportunity to pronounce directly upon it.

Europe's present constitutional arrangements are a scandal. This is not because the constitutional arrangements are "inefficient," though they certainly are that as well. To be sure, the rules by which member countries vote on new initiatives are muddled and unwieldy: The constitutional designers were right to say that in the interests of good government, these needed reforming. But in concerning themselves almost exclusively with this notion of constitutional efficiency—that is, with making the Union easier for its political masters and their bureaucrats to run—the designers of the new constitution almost entirely neglected the far more important question of constitutional legitimacy—that is, the holding of political power to account.

Over the past 20 years, a great deal of political power has moved, by accident as well as by design, from Europe's national capitals to Brussels and the European Commission, the E.U.'s mongrel executive-cum-legislative branch. People feel that political decision-making has been moved by stealth away from national legislatures to a distant realm of unaccountable executive action, where the ordinary rules of democratic politics do not apply. And the fact is, they are right to think that. This is exactly what has happened.

The most important task for the new constitution was to repair those broken links of popular sovereignty. Hard though it may now be to believe, this task was understood when the effort to draw up a new constitution began. As the drafting got under way, it seemed pretty clear what was needed: first and foremost, a settled division of duties and powers between national governments and Europe's center—one that restored genuine democratic control over European politics.

In this, the E.U. had two broad ways to go. One was to acknowledge and accept the extent of the shift of power to the center, to let that stand, and to restore democracy by greatly increasing the powers of the elected European Parliament to hold the Commission in check. The other was to put new, binding, and intelligible limits on the powers and duties of the center so that the principal locus of accountability in European politics could safely remain, as now, national governments, which are already (for the most part) soundly democratic.

The first course would have been brave, not to say crazy, given the fact that political debate across the Union is wholly national in character, and that you cannot create a new political identity for Europeans by a mere expression of constitutional ambition—least of all if Europeans show little sign of wanting such a thing, which is the case. Still, that first course would at least have been intellectually coherent. And so would the second, much better, approach: that of curbing the powers of the center and giving national parliaments more sway. But the draft constitution, despite its remarkable length and complexity, did neither of these things. It did not even try, in fact, to do one or the other. Incredibly, it actually made matters worse.

The constitution is both unintelligible and unstable—in many ways deliberately so, because most of the designers wanted to accommodate or even encourage the possibility of deeper political integration in the future. It is therefore vague yet ambitious, and full of anomalies that demand judicial resolution, all of which adds additional uncertainty. It is a constitutional litigator's dream. For everybody else, it was the worst possible outcome. The constitution offered no clear account of where the Union was going, constitutionally speaking, which only increased popular anxiety about the project. And since the document was so unclear on what the Union would become, it could not address itself properly to the task of making the E.U. more democratic.

Europe's leaders should have responded to the no votes by saying that they would listen to the people and start over. Would that really have been so difficult? Instead, their reaction has been to say, in effect, "We came up with the only possible constitutional solution to Europe's political problem. You have rejected it for reasons we cannot understand, even though we told you there was no alternative. Who knows what happens next? Why are you asking us?"

Tony Blair's response, let me say in passing, was more creative. A resilient fellow, he prefers to move on. Relieved that he will no longer have to campaign (hopelessly) for a yes vote in a constitutional referendum of his own, he must look for a new "great issue" on which to stake his historical reputation. No problem. This week, Blair more or less announced that, having given up on Europe in that regard, he would take up the cause of Africa—and he started by traveling to Washington to beg the Bush administration to increase its aid. Such are the odd repercussions of Jacques Chirac's little setback.

Europe's citizens, meanwhile, continue to be interested in the way they are governed, as well as in the fate of Africa. They may soon become even more concerned, if the paralysis in Europe's capitals continues. This week, there were intimations of financial crisis when the euro stumbled in the currency markets. A rogue minister in Italy got the ball rolling by saying that his country would be better off if it could have the lira back. The idea was echoed here and there across the Union, notably in Germany, where the new European currency was introduced despite the consistently expressed desire of a majority of Germans to retain the D-mark.

There was no reason for the rejection of a bad constitution to provoke a crisis of confidence in the euro. If that happens, the blame lies with Europe's leaders. The Union's economic problems, which are real enough, are not because of the single currency—although the euro has complicated matters, admittedly. Interest rates across the Union were kept too high for too long; fiscal policy, which might have been loosened more aggressively to buoy demand, was constrained needlessly by the so-called stability and growth pact; and many European countries have been slow to lighten the burden of cost and regulation on their companies, and to help them adapt to shifting demand. All of those things can be fixed without discarding the euro.

A few weeks ago, it would have seemed inconceivable that a no vote in France's referendum would have precipitated the collapse or dismantling of the euro. This week, that outcome, though still extremely unlikely, actually seemed thinkable. It is a tribute, of a kind, to the amazing incompetence of Europe's political leadership—and to a constitutional complacency, now finally shattered, that has been eroding the political liberties of Europe's citizens for many years. For striking that blow, whatever their views on Anglo-American capitalism, thanks are due to the voters of France.

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Clive Crook is a senior editor of The Atlantic and a columnist for Bloomberg View. He was the Washington columnist for the Financial Times, and before that worked at The Economist for more than 20 years, including 11 years as deputy editor. Crook writes about the intersection of politics and economics. More

Crook writes about the intersection of politics and economics.

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