Peace for Europe; W. Watkins, Jr.

THEFREEMAN IDEASON LIBERTY Peace for Europe? bourg) are pushing for a stronger union in which they hope Germany will be content and contained. However, their centralizing efforts could generate the very conflict they seek to avoid as diverse peoples are forced together in unnatural political arrange ments. Voices from Past Mr. Watkins is an assistant editor for The Freeman. The threat of centralization and socialism to peace in Europe is not new. The guns of the Axis and Allies had hardly fallen silent before Eu~opean socialists were holding ~onclav~s In London and Paris regarding Int~gra~lon to promote "a socialist Europe WhICh IS economically and politically inde pendent. ,,2 Little did these intellectuals re ~lize that Europe once was economically Integrated (though protective tariffs did cause stress) by a shared metallic monetary ~tandar~ before World War I. This early Integration emerged naturally "without su per-plans, super-planners, super-bureaucracies, super-conferences, and without a super-state and 'High Authority.' ,,3 In the end, Europe's economic integra tion was" destroyed by an economic foreign policy which had its roots . . . in . . . col lectivist-inflationary policy ... that sailed under the flag of 'planned economy,' 'full employment,' 'cheap money,' and deficit spending. ,,4 Some things seem never to change.

Though there is much talk of free markets in Europe today, many of the same old collec tivist policies of the welfare state remain in place. For instance, in EU countries, each 1~O workers now labor to support 40 pen SIoners. By 2004 each 100 workers will support an additional 10 pensioners on top of the current 40.5 Unfortunately for Europe, the techno crats in Brussels, see "No discernible as sociation . . . between either the level or growth of social spending in member states, on the one hand, and their trade perfor mance, employment or unemployment, on the other." 6 This attitude explains why one-tenth of the workers in the EU are now 448 S ince the end of the Second World War there has been much discussion about European integration. What began as the Europea.n Coal and Steel Community (ECSC) In 1951 developed into the Euro pean Union (EU) with the ratification of the Maastricht Treaty in 1992. Unfortunately, the trend thus far has been toward central ization, but there is one more opportunity to restore the balance between the member ?ations an? the ever expanding bureaucracy In the EU s capital, Brussels.

The year 1996 will witness an intergov ernmental conference on the future of the EU and problems arising with the Maas tricht treaty's one-size-fits-all remedies. If Europe is to develop a system that operates smoothly and secures the peace, next year offers perhaps the last chance to settle major constitutional issues. Since the early postwar discussions about integration, Europe's explicit goal has ?een to bind Germany's future and prosper Ity to peace on the Continent. Hans-Dietrich Genscher, Germany's former foreign min ister, called the EU's structure "a living model for a peaceful European order, with Franco-German cooperation as its centre piece. ,,1 In light of the results of Prussian militarism in this century, it is understand able why France and the Benelux nations (Belgium, the Netherlands, and Luxemby William J. Watkins, Jr.

jobless and why during the first year of the much vaunted single market the EU's GDP shrank by 0.3 percent. 7 Wilhelm Roepke's prediction that in any proposed European economic union "the highest degree of in flation in any member country will be adopted by the others along with the longest paid vacations and the greatest measure of intervention or planning," has fast become a reality.8 Because of the collectivist attitudes in Brussels, there will certainly be future trou ble as member nations seek to revive their economies by abandoning the policies of the past. And if mechanisms are to be designed to allow a peaceful transition to noninter vention, the 1996intergovernmental confer ence is the proper place to begin. Decisions made there will shape the future power arrangements of Europe for years to come. Unfortunately, the French and the Ger mans-both with strong centralizing ten dencies-along with the power-hungry Eu ropean Parliament will make most of the Conference preparations. Nevertheless, there is an opportunity to curb the foolish ness in Brussels that has led to edicts regarding everything from subsidies to the curvature of cucumbers.

National Veto Ever since French recalcitrance over ag ricultural policy sparked the' 'Luxembourg Compromise" in 1965,nations have enjoyed a national veto in the Council of Ministers. This veto applies to areas such as taxation, treaties, the acceptance of new members, and foreign policy. Britain successfully used her veto to strike at plans for further cen tralization last year when she vetoed the appointment of Jean-Luc Dehaene to the presidency of the European Commission. Nonetheless, if each member nation is to retain her national sovereignty, the national veto must be strengthened against en croachments. Encroachments will most likely come from the courts. The European Court of Justice claims the power to declare acts of member states and EU institutions void if 449 they violate the Treaty of Rome (which formed the European Economic Commu nity in 1957). From American history we learn the danger of a Supreme Court that claims final say over the constitutionality of state and national legislation. In the early days of the American republic, Thomas Jefferson saw the danger that the Supreme Court posed and correctly predicted that it would be "the engine of consolidation. ,,9 It should be a priority in 1996 to ensure that a European John Marshall will not have the power to alter the balance between Brussels and the member nations. The nations should have final say concerning the legitimacy of EU as well as their own legislation because they retain their sovereignty and have en tered the compact as equal partners.

Such a power of nullification does, how ever, pose serious risks and could be deter imental to the very idea of a common market. Individual nations could nullify free-trade initiatives, which were the impe tus for the EU in the first place, in order to protect local economic interests. Though this is a possibility and it would be regret table if nations used their power of nullifi cation for frivolous purposes, the risk is worth taking. A national government with exclusive power to judge the constitution ality and breadth of its powers will tend, as in the United States, to become consoli dated. A single consolidated government would be deleterious to the peculiar local habits and customs that are at the heart of European culture. Opt-Outs Along with the precedent of a national veto, since Maastricht a precedent has been set for nations to opt out of certain EU programs that they feel are detrimental to their national welfare. For example, Britain has been exempted from Maastricht's oner ous social chapter and any future European Monetary Union (EMU). Denmark is ex empted from the final phase of the EMU, European citizenship, and common defense and legal policies. Even Germany, a self described "core of the hardcore" regarding 450 THE FREEMAN • JULY 1995 union, insists that her parliament have final say-so regarding the replacement of the mark with a common currency.

Nevertheless, opt-outs, in their current form, have drawbacks. For instance, since opting out of the social chapter of the Maastricht treaty, Britain has lost the power to block trade unions' demands for worker consultation councils and other pro-union measures. These councils demand that workers be consulted about such things as restructurings, closings, or changes in pro duction methods. Though British firms op erating domestically are unaffected, British multinational firms operating in the EU are at the mercy of Brussels. To check such excesses, member nations must retain their veto power over legislation emanating from Brussels whether they have opted out of the particular legislation or not. Member states should be allowed to retain their voices concerning any EU legislation that could affect them adversely. Secession The EU has already caused much tension and is held in disrepute by citizens of many member nations. In fact, 60 percent of the EU electorate.opposed the Maastricht treaty and 65 percent of Europeans are against abandoning their national currencies.10 Nor man Lamont, former chancellor of the British exchequer, predicts that Brussels' centraliz ing tendencies "may mean one day contem plating withdrawal" from the EU. 11 When nations finally decide to abandon welfarism and planning in favor of a more liberal alternative, such a decision will ne cessitate a withdrawal from the EU and its massive schemes of redistribution. And if the nation choosing withdrawal is not a net recipient of redistributed wealth (as willlikely be the case), then the beneficiaries will no doubt try to stop their victim from escaping.

The EU's Common Agricultural Policy (CAP) is already causing divisions similar to the American sectional conflict of the nine teenth century. However, in Europe's case it is the agricultural interests that are ex ploiting the commercial interest. The CAP already eats half of the EU's budget with its guarantee of minimum prices to farmers. As the EU expands and admits the poorer nations of Eastern Europe, transfer pay ments will skyrocket. Under current poli cies, admitting Poland's five millionfarmers to the CAP would require a boost in the EU's budget of $74 billion.12 Such transfers can and willbreed only contempt from those who have their earnings confiscated by the technocrats in Brussels. Tragedy looms ahead for Europe as in compatible cultures are thrust together in unnatural centralized arrangements. Once the intoxicant of political unity wears off, the nations of Europe must be able to coexist peacefullyin a loose confederation or go their separate ways. The 1996 intergovernmental conference offersperhaps the last opportunity for ED nations to secure constitutional guar antees ensuring their sovereignty and future.

For Europe to prosper, it must soon abandon the impoverishing policies of the welfare state. Because such an edict is not likelyto be issued from the mismanagersin Brussels who thrive on power wrought from consolidation, the future of Europe rests on the power of the people acting within their nation-states to do so when the ideological climate finally changes. [] 1. "Genscher calls for an end to European separation," Manchester Guardian Weekly, May 7, 1989, p. A4. 2. For an excellent discussion of the early socialist schemes regarding European integration, see Hans F. Senn holz, "The Socialist Movement for a United States of Europe ," in How Can Europe Survive (New York: D. Van Nostrand Company, Inc., 1955). 3. Wilhelm Roepke, "How to Integrate Europe," The Freeman, May 18, 1953, p. 594. 4. Ibid., p. 594. 5. "Ajob-destroying machine," The Economist, October 22, 1994, p. survey 5. 6. European Commission report quoted in "The enlight ened welfare-seeker's guide to Europe," The Economist, March 12, 1994, p. 57.

7. "A singular market," The Economist, October 22, 1994, p. survey 15. 8. Wilhelm Roepke, "European Economic Integration and its Problems," Modern Age, Summer 1964,p. 237. 9. Jefferson quoted in Albert Jay Nock, Mr. Jefferson (Delavan, Wisc.: Hallberg Publishing Corporation, 1983), p. 163. 10. "No Shortcuts on the Way to a Closer Europe," The Christian Science Monitor, August 3, 1994, p. 19. 11. "European Unity Policy Splits Tories in Britain," The New York Times, October 12, 1994, p. A6. 12. MarkM. Nelson, "Extra Accommodations," The Wall Street Journal, September 30, 1994, p. R13.