With every hour that passes, we need the EU less and less
The people of Britain - and Europe - have seen through the great project. When will the elites catch up?
It’s often the unwatched pot that boils first. All eyes this week have been on Greece, which is offering to sell some of its islands in a belated attempt to appease its creditors. The prime minister, Antonis Samaras, has been pleading for more time. “We need room to breathe,” he told EU leaders – though it is, of course, the corset of monetary union that is causing the asphyxiation. Angela Merkel and François Hollande have so far been unmoved, insisting that they have eased Greece’s terms for the last time.
After three years, the rest of Europe has lost patience with Athens. Indeed, there is an uneasy sense in the palaces and chancelleries of the Continent that Greece may be the least of their worries. In the past 72 hours, Cyprus has revealed that its deficit is 4.5 per cent, rather than the 3.5 per cent previously declared, making a bail-out there hard to avoid. Ireland has announced that more than a quarter of its owner-occupier mortgages are now in arrears. Portugal, which had rather dropped out of sight since its own bail-out, has seen a sharp fall in tax revenue, and now admits that it won’t meet the EU-mandated deficit target.
It’s true, of course, that Greece, Ireland, Portugal and Cyprus amount, collectively, to less than five per cent of the EU’s economy. They can be rescued without exhausting the bail-out fund; or, alternatively, their defaults might be managed as controlled explosions.
The same is not true of Spain. A default there would blast a fair chunk of the European banking system to smithereens. On the other hand, a further bail-out in Spain – and the Wall Street Journal reports that talks on such a rescue package have now begun – would require at least 350 billion euros.
Until now, the donor countries have been signing putative rather than actual cheques – cheques whose figures are, in any case, too large to be conceptualised. Voters can’t easily connect headlines about Mediterranean crises with concerns about their pension being cut or their school closed. Rather like Britons in the autumn of 1939, they think of the turmoil as distant, almost abstract.
But distant turmoil has a way of forcing itself upon a nation unlooked-for. The Dutch government recently collapsed over a proposed cut in pensions. While the reform itself was a modest response to rising longevity, voters had a nagging suspicion that they were being asked to retire later so that Greeks and Italians could retire earlier. The populist politician Geert Wilders shook his platinum locks, announcing that he wouldn’t “bow down before the Brussels dictators”. Now the Dutch Socialist party, too, has turned Eurosceptic, and is surging on the back of its promise of a referendum on the fiscal union treaty. Robbing Pieter to pay Paulo turns out to be remarkably unpopular across the political spectrum.
As the sums mount, the backlash grows. The last Finnish election saw every other party lose ground to Timo Soini’s True Finns (which, despite its name, is a centrist party that just happens to be anti-bail-out). How long before the other net contributors follow suit?
Brussels leaders have no reservoir of Euro-sympathy on which to draw. Only in Germany – and less and less so even there – can politicians demand sacrifices in the name of the EU. This is squarely the fault of the politicians themselves, who sold the euro on a false premise. Voters were given three assurances about the single currency: that it would boost growth; that it would make its constituent states get on better; and that it would impose fiscal discipline. All three claims turn out to have been lies. Small wonder that the parties that made them have lost credibility.
Amid all this talk of needing a “growth policy”, it’s easy to forget that we’re living with the consequences of the last “growth policy”. The single currency was supposed to add one per cent a year to the EU’s GDP in perpetuity. Yet the same politicians who told their constituents that the euro would make them richer now unblushingly demand more of the same: Eurobonds, a common taxation system, an EU finance minister and the full panoply of economic and fiscal union.
You really don’t get it, do you, chaps? Your voters are ahead of you: they can extrapolate from the miscarriage of your single most important project. Just as the euro has failed, so has the wider integrationist scheme. The EU was supposed to have “the most competitive knowledge-based economy in the world” by the year 2010; in fact, it is becoming sclerotic, poor and irrelevant. It was supposed to entrench democracy, but has ended up imposing civilian juntas on Athens and Rome. It was supposed to soothe national animosities, but has instead stoked them – read what German newspapers say about Greeks, and vice versa.
For the politicians and functionaries who make a living out of the Brussels system, none of this much matters. Human nature being what it is, people can always interpret events as a vindication of what they already believed. The French even have a phrase for it: déformation professionnelle, the construction of your opinions around your professional interest. But while the elites twist every new development into an argument for deeper integration, their peoples have seen through the racket.
In Britain, too, most politicians are behind their constituents. All three parties still talk of the EU as if it were vital to our economic survival, but the fact is that it is becoming less important by the hour.
In the first six months of this year, our exports to the EU fell by 18 per cent, while our exports to the rest of the world rose by 28 per cent. In May, the Commonwealth’s economy overtook that of the eurozone. On every measure, the EU now accounts for a minority of our trade. That’s not to say, of course, that it doesn’t matter: it remains a large market for our exporters. But it is increasingly becoming just one market alongside Nafta, Mercosur and the rest – and no one suggests that we need to surrender our sovereignty to sell to them.
We joined the EEC (as it then was) because we wanted to be part of a growing trade bloc. In the event, the growth has taken place elsewhere. The basis of our membership is being negated. Sooner or later, we’ll notice.
Daniel Hannan is a Conservative MEP. His latest book, 'A Doomed Marriage: Britain and Europe’, is published by Notting Hill Editions
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