The European Union Isn't a Polity

 

A flag intellectuals and bureaucrats alike can delude themselves into thinking people are loyal to it.

 

 

In “The Problem with the Euro Fix: What’s in It for the Dutch,” Josh Barro discusses the problems lying in the development of a European fiscal union, despite the beneficial effects it could have for monetary stability across the Continent: 

Large, economically diverse areas can successfully share a single currency if they have deep economic links that make it possible for troubled regions to ride out crises. That means shared bank regulation and deposit insurance, so banks don’t face regional panics; a labor market that lets people move from places without jobs to places with them; and a fiscal union, which allows the government to collect taxes wherever there is money and spend it wherever there are needs.

The United States shows that this approach can work: America’s 50 economically diverse states share a currency quite comfortably, in part because of our banking union (Washington State did not have to bail out Washington Mutual on its own when it failed), our fluid labor market (as oil prices rise and fall, workers move in and out of North Dakota) and our fiscal union (states in economic pain benefit from government programs financed by all states). Nevada does not need to devalue its currency to restore its competitiveness relative to California in a severe recession; instead, Nevadans can collect federally funded unemployment insurance and, if necessary, move to California. 

In the course of the article, Mr. Barro misses the point. He focuses on economics and on cool-minded cost-benefit analysis whereas the problem in Europe is a matter of political identity. The Euro Crisis is showing the weaknesses of the dream of a more centralized Europe not because of the fact that some nations will be worst off, but because of the fact that centralization has been pursued furtively at the scale of national governments and beyond without a corresponding shift in the national identities of Europeans. 

 

The United States of America has, for the most part, grown organically as a single nation since 1776. Unlike the European Union, it is a natural policy. Americans largely share the same religion, tongue, and nation mythology. When an American takes out a piece of money from his wallet, on the bill will be a figure that all Americans can recognize as part of his national heritage. The same can be said of the Britons and their pound. Nothing of the sort can be said of the Euro. In the United States, no one even has to ask the question: “What’s in it for Connecticut?” It’s simply a matter of understood duty that the federal government will pursue policies that will eventually favor some states over others. The growth of centralization has been supported by the growth a single national identity. 

The European dream is fundamentally a desire for a United States of Europe. The need for greater fiscal links between nations in order to sustain the Euro Zone isn’t a bug, it’s a feature. It’s a feature that has been hiding in plain sight for the past couple of decades until a crisis such as the one Europe is in right now makes centralization a mainstream talking point rather than an extremist conspiracy theory. The national identity, just like the European flag, isn’t been grown, it’s being constructed through the vehicle of the European Union.  

 

Nevertheless, that is not what the European Union has been sold as. It has been sold as both a necessary mechanism for stopping a Third World War and as an open market. In Germany, voters went separate ways with their beloved Deutsche Mark because Bundeskanzler Kohl took exploited the only things German fear more than inflation: European war. In Britain, joining the European Union was sold as entering a trade pact with Britannia’s largest trade partner. Unlike Germany, the United Kingdom didn’t go as far as to jettison its national 

The European project is unrealistic, but it is unrealistic less for the economic reasons pointed out by Mr. Barro as much as for political ones. He mentions the gradualistic centralization of the United States of America as a possible model for the United States of Europe, but that gradualistic centralization isn’t a mere model, it’s the way that polities evolve.