The two issues that undermined the E.U.
As we watch Britain go through the paroxysms of Brexit, it is easy to view its decision to leave the European Union as an act of foolishness, a self-inflicted wound that will impoverish Britons for years. Europe is Britain’s largest market, taking in almost half of the country’s exports. Losing special access to it is a high price to pay for some symbolic gains in sovereignty.
But the Brexit debacle also shines a light on Europe itself, and what one sees is a continent and a political project that have stopped working — at least for many of the people at its Western European core. I say this as an ardent supporter of the European Union. The United States and the E.U. have been the two main engines behind a world based on open markets, democratic politics, liberty and law, human rights, and global welfare. These values will probably be eroded worldwide if the strength and purpose of either of these centers wane further.
For the past three decades, the European project has been wandering off course. What began as a community of nations cooperating to create larger markets, greater efficiency and political stability has become obsessed with two massive issues that have undermined its central achievements.
The first was — after the Soviet Union’s collapse — the rapid integration of many new countries that were far less economically and socially developed than the E.U.’s original members. Since 1995, it has expanded from 12 countries to 28. Originally focused on opening up markets, streamlining regulations and creating new growth opportunities, the E.U. soon became a “transfer union,” a vast scheme to redistribute funds from prosperous countries to emerging markets. Even in today’s strong economic environment, spending by the E.U. accounts for more than 3 percent of Hungary’s economy and almost 4 percent of Lithuania’s.
This gap between a rich and a poor Europe with open borders inevitably produced a migration crisis. As Matthias Matthijs pointed out in Foreign Affairs, from 2004 to 2014, about 2 million Poles migrated to Britain and Germany and about 2 million Romanians moved to Italy and Spain. These movements put massive strains on the safety nets of destination countries and stoked nationalism and nativism. The influx into Europe of more than 1 million refugees in 2015, mostly from the Middle East, must be placed in the context of these already sky-high migrant numbers. And as can be seen almost everywhere, from the United States to Austria, fears of immigration are the rocket fuel for right-wing nationalists, who discredit the political establishment that they deem responsible for unchecked flows.
The second challenge consuming the European Union has been its currency, the euro. Launched more with politics than economics in mind, the euro has embodied a deep structural flaw: It forces a unified monetary system on 19 countries that continue to have vastly different fiscal systems. So when a recession hits, countries do not have the ability to lower the value of their currency, nor do they get substantial additional resources from Brussels (as U.S. states do from Washington when they go into recession). The results, as could be seen for years after 2008, were economic stagnation and political revolt.
Brexit should force Britons to think hard about their place in the world and make the adjustments that will allow them to prosper in it. But it should also cause Europeans overall to take stock of their project, a great idea that has gone awry. The European Union needs more than tinkering; it needs to return to first principles, rediscover its central purpose and question which aspects of its current system are no longer working, affordable or manageable. As former British prime minister Tony Blair told me in an interview this week for CNN, it’s crucial that “Britain thinks again but Europe also thinks again.”
Europe is foundering. Although some Americans seem to delight in this prospect, it is bad for our country.
“By the middle of the century, you’re going to live in a multipolar world,” Blair said. “In those circumstances, the West should stay united and Europe should stand alongside America, because in the end . . . we’re countries that believe in democracy and freedom and the rule of law. . . . Otherwise, we’re going to find that as this century progresses and my children and grandchildren work out where they stand in the world, the West is going to be weaker. And that’s bad for them and bad for all of us.”
(c) 2019, Washington Post Writers Group