The UK's relations with the rest of Europe are unsustainableby Wolfgang Munchau / July 17, 2014 / Leave a comment
In the early days after the fall of the Berlin Wall, a joke made the rounds in Germany. “We are one people,” said the East German. “So are we,” replied the West German. As an outside observer of Britain’s European debate for almost 30 years, I feel a similar sense of alienation in the European debate—between Britain and the rest of Europe. The fundamental issue is not that a British Prime Minister disagrees with his continental counterparts. This is not new, and has a long tradition. The problem is that they no longer agree on what they disagree on. When European leaders quarrel about Europe it is as though they are discussing different continents.
Pro-Europeans in the UK are living in a European Union of the single market and the single external trade policy. On other issues, such as foreign policy and immigration, they see the integration as largely completed. The EU is still a Europe of sovereign nation states that have voluntarily transferred important but limited sovereign rights to a centre for the pursuit of economic integration. The debate in Britain is about whether this process has gone too far, and whether some of those central powers should be revoked.
On the continent, they see things differently. The single market has long been superseded as the EU’s main economic project by the euro. The eurozone has proved largely dysfunctional and is now in need of repair. There is no agreement on the nature of the crisis and what needs to be done. But no matter whether you are a Protestant northern European believer in fiscal rules and penalties, or a Catholic southern European advocate of a federal European state, you are likely to favour greater central control over economic policy. If you live in Berlin or Paris or Rome or Helsinki, the issue is not federalism versus supranationalism. The argument is between Keynesian and neo-classical economic policies. They disagree on the role of government and on what the central bank must do. But…