Friday, June 03, 2005

Europe - for richer but not for poorer 

Some interesting research is now coming out on why the Dutch rejected the EU constitution (bearing in mind that the referendum was non-binding and that the ultimate decision still lies with the parliament):
Slow economic growth in the Netherlands is seen as a key reason for the massive rejection of the European Union constitution, with "no" voters listing gripes such as the high value of the euro, the cost of EU membership and possible job losses to immigrant labour.

Last year the Dutch centre-right government, led by the Christian Democrat prime minister, Jan Peter Balkenende, announced extremely unpopular austerity measures to raise tax revenues and cut spending to improve public finances. At a time when the Dutch are asked to tighten their belts, the fact that the country has gone from being a net receiver from its membership in the EU to becoming the biggest net contributor is not sitting well with many voters...

Some 62 per cent of "no" voters named the high Dutch contribution to the EU budget as a reason to reject the treaty, according to a poll conducted Wednesday.
The European Union (or the European Community as it was then known) was never quite an equal affair and particularly throughout the 1970s and 1980s the richer states were routinely subsidizing the newer members such as Spain and Greece. Such wealth transfers from the rich, heavily industrialized north to the poor, developing south were never popular with the electorate, but three things have changed since then, making the political climate today far less friendly to trans-continental egalitarianism.

Firstly, the Euro voters now have some avenues to voice their dissent, such as the constitution referenda. Secondly, increasingly disenchanted and emboldened, the mood of the electorate is far more restive than it ever was, which lead us to the third, and perhaps most important point: good times aren't around anymore. When the European economy was experiencing high rates of seemingly unending growth it was much easier to share some of the bounty with the less fortunate European brothers and sisters -– the pie was growing so fast that it seemed no one would mind too much if the southerners helped themselves to a few slices.

That comfortable and optimistic Europe is gone now. Stalled economic growth, overgenerous welfare system which can't cope with people's expectations, and the social fabric frayed in part by concerns over immigration and multiculturalism all make for a volatile electorate. It would be overdramatic to speak about "shadows of the 1930s" with their economic dislocation and the rise of ugly, xenophobic politics, but then again, as Karl Marx said, history repeats itself, first time as a tragedy, the second time as a farce.

The first thing to go out of the window in times of unexpected uncertainty is solidarity. "Europe" sounds like a nice enough concept, but only if it's a club of prosperous equals, not a 25-state behemoth which now includes poor eastern cousins like Poland or Latvia. If you're an average Pierre or Pieter worried about your own economic position, the last thing you need is Piotr on the other side of the continent getting your hard earned tax euros, if not actually coming over and taking your job. This fear and resentment is reflected in the Dutch polling as well as the French hysteria about "Polish plumbers" (not to mention the fear that possible future EU membership for Turkey will bring even more Muslim migrants into Europe). The post-enlargement reality, however, is far less colorful, both in terms of wealth transfers to the east (significantly less than expected) and the flood of cheap labor west (despite labor mobility provisions, still much restricted by Old Europe governments).

In this context it is difficult not to think of the vote in France and Holland not so much as the referendum on the new constitution as a retrospective referendum on the EU expansion which took place just over a year ago.

Quite simply, the Old Europe electorates want to turn back the clock and go back to the good old days of secure jobs-for-life, generous welfare, and prosperity for all. In the new EU, the pie has stopped growing, while at the same time there are now more mouths to feed. Any attempts, however feeble and half-hearted, by the national governments to reform the economy and roll-back some of the unsustainably generous safety net (or rather the safety hammock) elicit frenzy of protest from the electorates fearful about further erosion of the lifestyle they have become so accustomed to.

Of course, not many understand -– or want to understand -– that the choice faced is not so much one between the gentle and generous European model and the wild, rapacious Anglo-Saxon laissez-faire capitalism, but between pain now or even more pain later.

While the European Commission president Barroso took a view that the new EU constitution has become a "scapegoat for everyone'’s problems", it's more accurate to say that the more power you hold, the more you will be blamed for everything, whether rightly or wrongly. So while the constitution might have indeed become a convenient lightning rod of popular discontent, the discontent itself owes much to what the EU has become and what it had done -– and that includes both the geographic expansion and some faltering steps towards economic reform -– issues that in many ways are actually linked. As James Kirkup writes in "The Scotsman":
Will countries like Poland - who have already gone through the pain of opening up their economies and are now reaping the benefit - side with Old Europe when Tony Blair uses the British presidency of the EU starting next month to urge some serious and long-overdue economic reform?
Unlikely, thinks Kirkup. Ironically, while the EUlites tend to see the latest additions from New Europe more as Atlanticist Trojan horses, the people themselves see them as free market Trojan horses. On this point, at least, the rulers and the ruled, are both right.


This page is powered by Blogger. Isn't yours?