Towards an Imperfect Union: A Conservative Case for the EU (Europe Today) by Dalibor Rohac
Dalibor Rohac, a Slovak scholar at the US Free Market think tank, the American Enterprise Institute, has bravely waded into the debate on the EU.
Over 7 chapters he tears apart the case advanced by some so-called both conservatives and free market supporters against EU Membership and often the not so hidden agenda of ending the EU.
I will highlight two areas. First, he provides an excellent survey of the opponents of the EU. He ends with genuine and serious proposals to improve the EU and encourage Europe’s prosperity.
A genuine classical liberal
He does not give the EU an easy ride. He is very critical of it. But, he makes constructive and feasible solutions to solve these challenges. He does not embrace “Year 0” thinking of some anti-Europeans, calling not only for the UK or other countries to leave the EU, but for the EU to collapse.
Mr Rohac examines the issue from the perspective of a genuine classical liberal, steeped in rich and honourable tradition of Hayek, Mises and Röpke. This rich tradition of openness and free trade has all too often be silenced in the Brexit debate, and those who claim to be classical liberals been conspicuous in their silence on the anti-migrant and free trade agenda embraced by the Leave campaign.
The clarity of Rohac’s case is such that I’ll use his own words in this brief review. As a free trade social democrat I think much of his prognosis and medicine should be considered as cross party.
Meet the discontents – a survey of the anti-EU groups.
He paints an interesting portrait of the groups who have embraced the anti-EU cause.
First, there are those who see the EU as an actack on Free Markets. Václav Klaus, , the Czech President, is critical of the EU as he claims to be a free marketer. Rohac questions his free market credentials. He observes he has this reputation despite “… his actual record as a reformer was mixed. While the Czech transition was broadly successful, Klaus’s government failed to privatize the banking sector and open it to competition”.
He observes “The main reason for his bona fides among conservatives and libertarians lies in his free-market rhetoric, rather than in the actual track record as a politician.” He points out this is the same man who poured praise on anti-free market Marie Le-Pen when he met her in the Czech capital for a beer.
Second, at the opposite end, some see EU as “Neoliberal” Cabal. These EU opponents condemn the EU for its supposed embrace of “too much unregulated free-market capitalism in the bloc”. Some in the UK Labour Party and other Socialist Parties fall into this camp.
Third, many see the EU as an “Anathema of National Greatness”. As Rohac notes “Nationalist critics of the EU see the organization as an affront to national greatness.”. France’s Le Pen falls into this camp. The National Front want an end to the Euro, the return of the French Franc, nationalization of banks, and capital controls to limit “speculation.”
Rohan rightly notes “Needless to say, this would represent the end of the freedom of movement of capital in the EU, one of the key components of the single market…The likes of Le Pen aim to restore France’s full sovereignty and empower the French government to pursue policies that are essentially incompatible with the existence of free markets in the EU, including protectionist measures and activist industrial policy.”
He concludes “In short, Le Pen’s is an agenda that ought to make every free marketer deeply uncomfortable.”
He points out that Hungary’s Fidesz, have taken Eurosceptic nationalism from the realm of rhetoric into practice, and lays out practices and policies of the current government that seem more in place with the mid 1930s than today.
At times Robac seems distressed at the sight of genuine free marketers and ultra nationalists at the same table. He notes that “The EU is a subject that places many well-intentioned conservatives and free-market advocates into the company of nationalists and xenophobes….This does not allow us to dismiss their own criticisms of the EU through “guilt by association.”
Fourth, there are a growing group of “Putin supporters” that see “Europe Is Decadent, so Let’s Turn East”.
Rojas notes “A “Putinist” critic of the EU might start from any of the previous three lines of thought—free-market, leftist, or nationalist—and make the additional assumption that the enemy of one’s enemy is one’s friend…Some Eurosceptics are inclined to believe that Vladimir Putin must be in the right, and the EU in the wrong.” Farage, Le Pen and Orbán have all spoken words of comfort for Putin.
Rohan rightly warns “it is important to remain cognizant of the security threat that the close links between the Eurosceptic right and the aggressive regime in Europe’s neighborhood can pose.”
Fifth, there seem to be a lot of what I’d call cranks who oppose the EU. As he puts it, some seriously think “the EU is a part of a bigger, more or less secret project of global governance, to be imposed on the world’s nations by a narrow clique of Bilderbergers, American neoconservatives, or perhaps Jews” and others “lizard people”. Tragically anti-EU Czech and Hungarian politicians have embraced some of these ideas.
Again Rohac states “Again, it should not serve as a reason for a blanket dismissal of all Eurosceptic arguments…Instead, it should be a wake-up call for conservative critics of the EU, so that they asses the nature of the intellectual alliances they have formed in their onslaught against European integration”.
A Classical Liberal Case for the EU
Rohac draws on Hayek who realised that a ” framework, in the form of an international federation, would mean an abrogation of state sovereignty. For him, that was not an unfortunate side effect but an essential component of a federal system…In fact, “the abrogation of national sovereignties and the creation of an effective international order of law is a necessary complement and the logical consummation of the liberal program.”
Rohan puts it simply that “In short, Europe’s historical experience does not lend much support to the idea that free trade flourished in the world of sovereign nation-states, unencumbered by mechanisms of international governance. To see that, it is enough to read the work of some of the free-market economists of the era, such as Wilhelm Röpke, who complained that without free capital flows (the postwar monetary order was characterized by capital and foreign exchange controls), the attempts to create a common market in Europe were doomed to fail.”
What Can Be Done
Rohan suggests practical and feasible political and economic changes that can easily be introduced. I list some of them:
- Restoring full economic health in Europe will require a much larger dose of free-enterprise medicine.
- All of the Council’s legislative documents could be publicly available.
- The bids in support of candidates (for Commission President) by EU governments could be announced publicly as well.
- member states can do a lot themselves to strengthen the oversight of European affairs by their own parliaments.
- Europeans need to address their economic woes: inflexible markets, aging populations, and unsustainable public finances.
- European institutions have the mandate to complete the single market.
- The Commission need to strengthen proposals on the single market and end arbitrary geo-blocking.
- A fully fledged, single, digital market could give the EU economy a boost of €415 billion, increasing economic growth by 1 percentage point.
- These impact assessment exercises would be effective in constraining the growth of harmful regulation only if the EU also had an independent oversight unit that could assess and strike down proposals
- The Regulatory Scrutiny Board should be thus given the resources and the mandate to review every regulatory proposal from the European Commission.
- However, defenders of free enterprise should not be waging a war against social safety nets. Instead, they should propose making these nets sustainable in light of long-term demographic trends and resilient to economic shocks precisely to avoid the painful episodes of austerity seen in some Eurozone countries during the crisis.
- Eurozone membership has to be uncoupled from EU membership, enabling countries to take advantage of EU membership without necessarily rushing into the Eurozone.
- Europe’s outdated social contract needs to be updated to the realities of the 21st century.
Many of these reforms can easily be introduced. The impact assessment and regulatory scrutiny board have all been introduced with new powers that go some way in the right direction. Much more needs to be done to help Europe to return to leadership and prosperity.