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Britain needs to say No Samuel Brittan: Financial Times: 23/04/04 Some over-enthusiastic supporters of the European Union are gnashing their teeth in dismay now that the UK has joined several other countries that have already declared that they are to hold referendums on the proposed European constitutional treaty. They are mistaken. If there is ground for criticism it is that Tony Blair held out so long in a delaying battle to prevent the inevitable. He might not like the comparison, but it reminds me of Harold Wilson's long, lone and unsuccessful stand against devaluation in the 1964-70 Labour government. Other countries may save the British government embarrassment if they vote "No" beforehand. But it cannot rely on this kind of bail-out. What makes the treaty so elusive is the "Community-speak" in which it is written. The best concise analysis I have seen comes from a paper from the National Bureau of Economic Research*. The authors argue that, far from clarifying the division of responsibility between EU institutions and national governments, the draft document lists 10 areas of so-called "shared competence", including loosely defined ones such as "economic, social and territorial cohesion" and "freedom, security and justice". Member states exercise their competence there "to the extent that the Union has not exercised its competence". There are also unspecified "supporting, co-ordinating or complementary actions" in other areas including industry, culture, education and vocational training. Moreover, "the Union shall have the competence to promote and co-ordinate economic and employment policies". As the authors remark: a legitimate interpretation of the verbiage is that it "intends to leave the door open for future more or less veiled extensions of competence on virtually all possible areas one can think of". The treaty makes sense only on the assumption that there is already a will to create a superstate but that in some areas there is still a lingering need for unanimous decisions. The government is making a mistake in supposing that it is enough to require such unanimity just for tax, foreign policy and defence. The EU has been most intrusive in a dirigiste direction via so-called social policy, health and safety and similar areas; and the existing document lists no areas where power is returned to national governments, despite lip service to subsidiarity. The authors of this paper charitably trace the ideas of the constitution to the dirigiste Latin European tradition as distinct from the more free market Anglo-Saxon ones. But there is an important institutional aspect. The EU functions neither as a union of separate states nor yet a federation. It is a confederation in which different governments can obstruct each other but none has the authority to override sectional interests in the way the US president or UK cabinet can attempt. Historically, confederations have had a sad history. The confederation formed by the original American colonies was soon found to be ineffective and gave way to the present US constitution in 1789. There was in the 19th century a German Confederation, whose only achievement was to hound Richard Wagner out of Germany and into neighbouring German-speaking Switzerland. It was swept aside by the unsentimental "blood and iron" of Bismarck's Reich. This also has a political economy aspect. In no country is there either a pure free market or one where intervention is limited to ascertainable social costs and public goods. Left to themselves, the separate European states make unprincipled concessions to different lobbies depending on their political strengths; France to agriculture, Germany to heavy industry and so on. But in the EU these separate perverse policies are all added together in a way that is avoided in a free trade area. For instance the UK, Scandinavia and the Czech Republic have to countenance a level of agriculture protection geared to French farmers and Bavarian smallholders that could be avoided if decisions were returned to a national level. Mr Blair must not be allowed to get away with saying that opponents of the treaty are opponents of the EU as such. The wider achievements of the Union can be seen each time one walks through a dismantled frontier post or through a common European exit lobby at an airport. There is also a crude defensive point to be made. Despite what the anti-globalists fear, liberalised world trade is far from assured and could easily be victim of a protectionist backlash. The European single market will then be even more worth having as a fallback area where such barriers are less likely. A No vote will not destroy the EU but be a signal that over-centralisation has increased, is increasing and ought to be diminished. * The European Union: A Politically Incorrect View, A. Alesina and R. Perotti, Working Paper 10342
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