Constitutional Fantasy

If Guy Verhofstadt​ did not exist, Eurosceptics would have had to invent him. He is the cliché of a Brussels insider, whose motto would be: ‘Whatever the problem, the answer is more Europe.’ Verhofstadt is, among other things, a former Belgian prime minister and one-time candidate for president of the European Commission (supported by France and Germany, but vetoed by Tony Blair). Today, he leads the liberal party group in the European Parliament. Known for his brash rhetoric, he lays into right-wing leaders, justly accusing Viktor Orbán, for instance, of accepting the EU’s money but not its values. He has it in for leftists too, lecturing (also justly) Alexis Tsipras on how to end clientelism in Greece, shouting: ‘Do it!’ One of his previous books was subtitled ‘How Europe Can Save the World’.

Verhofstadt seemed to be one of the very few politicians ready with a strategy after the Brexit result. He conceded that the British had been right to find fault with the EU. Hence the next step, after pushing Britain to leave as quickly as possible, would be to transform what is currently a confederation of nation-states into a proper federation. Presumably his fellow parliamentarians appointed him chief Brexit negotiator because of his toughness; it isn’t obvious that so many of them are keen on what, in Europe’s Last Chance, he calls his ‘grand federal project’: a United States of Europe.

The book is part Federalist Papers, part self-serving memoir. It will confirm in their prejudices all of those who have a certain idea of ‘the Brussels-based elite’. Verhofstadt trumpets his ‘decades in service to the European peoples’. He also reveals some of his private passions in order to demonstrate how their proper realisation has been thwarted by an insufficiently integrated Europe. When, years ago, he couldn’t get a loan to buy a vineyard in Italy, it was a symptom of Europe’s insufficiently integrated banking system. ‘I love das Auto,’ he confesses, then bemoans the weaknesses of the European car industry. Anyone who has a vision of Europe’s future different from Verhofstadt’s is coolly informed that ‘from a rational point of view, a European federation is the only option,’ while member states are generally faulted for being ‘under the spell of their national identity’.

Yet Verhofstadt’s book is in the end much more interesting than it first appears. Part of his rhetorical strategy is to be candid about some of the current failings of the Union. He criticises ‘the European political elite’s’ penchant for a ‘politics of announcements’: a common European migration policy was announced in 1999; a plan to make Europe ‘the most advanced knowledge-based economy in the world’ was announced in 2000; in 2006, under Blair’s leadership, an energy union was announced. In each case, nothing much happened after the announcement beyond what Verhofstadt calls ‘paperwork’, ‘documents’ and, ultimately, ‘deception’. That, he thinks, is the truth behind the Eurospeak of ‘best practice’, ‘benchmarks’ and ‘peer review’. Such soft measures to nudge states in the right direction – as opposed to hard law – will never make governments get their act together. The consequences form a long list: the conspicuous decline of European industry, the inability to create anything like a single digital market, the embarrassing failure to set up a proper banking union almost a decade after the start of the financial crisis, the abysmal failure to reduce youth unemployment across the Continent. As Verhofstadt reminds us, one in four young adults in Europe is jobless; even if things were to improve quite quickly, many young Europeans will never catch up on lost earnings and life-chances.

Verhofstadt is equally blunt about the Union’s more directly political deficits. Three-quarters of a century after the first postwar attempts to combine some of its defence forces, Europe remains a political (and military) dwarf. Verhofstadt considers the US assistant secretary of state Victoria Nuland’s exclamation in 2014, ‘Fuck the EU’, to be an accurate assessment of the Union’s resolve and resources in Syria and Ukraine. In both cases its much touted foreign policy capacities – the EU, after all, now has a common external representative and a common diplomatic service – proved ineffective; the little that was achieved can be credited to national leaders, namely, Merkel and Hollande. Verhofstadt thinks such Franco-German leadership only reinforces the blindness that Paul-Henri Spaak (another Belgian), one of the founders of European integration, long ago observed. There are only two kinds of state in Europe, Spaak said: small states and small states that have not yet realised they are small. As a result, Verhofstadt laments, France, Italy and Britain have persisted with post-imperial ‘pompous behaviour’, but have de facto become the playthings of the great powers – including Putin’s Russia.

So what is to be done? Verhofstadt is an unabashed centraliser. He thinks that having a large number of spread-out institutions (with, he might have added, incomprehensible acronyms) is typical of developing countries, not of what should be the most powerful economic bloc in the world. All the bureaucracy must be based in Brussels, and an end put to the unseemly game of Europe’s leaders grabbing as many EU agencies (and as much EU cash) as they can for their home countries. The European Parliament should sit in one place, not two; the only purpose of having the circus travel back and forth between Brussels and Strasbourg is to satisfy French pride. There also has to be a proper European army now that ‘playtime is over,’ as Verhofstadt puts it, and European nation-states can no longer plausibly outsource their security to the US (quite apart from anything else, one of the few constant themes of Trump’s interviews over the years has been that Germany, having lost the Second World War, somehow got the better of the victors thanks to unfair trade agreements – though that belief is also widespread in parts of Europe). Above all, the administration of the Eurozone must be centralised. As long as finance ministers are left to continue doing short-sighted deals behind closed doors, the euro will carry on lurching from crisis to crisis. Like many economists, Verhofstadt believes that a proper currency union will only work if the real economies inside the union grow together. Hence his proposal of an official ‘convergence code’ which would reward those countries that adhere to it with access to common European debt financing.

The wish list is long. To fulfil it, the EU will need a quite different political and, ultimately, constitutional architecture (as Verhofstadt candidly admits, it would end up resembling the Belgian federal system). In full Madison mode, Verhofstadt suggests that the EU needs a proper government with an elected president, rather than the current absurd situation in which the Union has five presidents (one for the Commission, one for the Council, that is, the group of member-state governments, one for the Parliament, one for the Eurozone group of finance ministers, and one for the European Central Bank), three of whom showed up to accept the Nobel Peace Prize for the EU in 2012. The Union also needs a parliament with real power to shape the political and economic life of the Continent, which means, above all, the capacity to tax EU citizens directly (which the European Parliament at present conspicuously lacks). Verhofstadt turns the American maxim on its head: there should be no representation without taxation. On top of a grown-up parliament, Verhofstadt would like a senate whose members would be elected by national assemblies. Like the European Council today, the new chamber would be oriented towards the individual member states. In the current situation, national governments call the shots and veto sensible policies left, right and centre. The role of Verhofstadt’s senate would be to check that EU legislation was in accordance with the Union’s underlying constitutional principles (though Verhofstadt doesn’t really tell us what they are supposed to be).

This sort of constitutional fantasy must be diverting during boring parliamentary debates. And, as with most exercises in imaginary institution-building, the blueprint that Verhofstadt wants to sell us as ‘logical’ and ‘inevitable’ has a whiff of the arbitrary about it. Why not have an upper house made up of delegates sent by member-state governments? Why not have the European Parliament choose the leader of the Eurozone government and make him or her more like a prime minister?

British Eurosceptics, if they cared at all, would have a field day with Verhofstadt’s ‘more perfect union’. But gloating aside – ‘We told you they wanted a superstate; thank God we’re out’ – they would have to explain why Verhofstadt’s basic argument is wrong. The EU doesn’t work well, and that may be reason enough for some to want to leave, but whoever stays has to face the reality that making the Eurozone and the Union’s common external border – to take just the most glaring failings – function properly will require more integration. Further integration isn’t inevitable, but it is logical. With respect to money and free movement, as the American political scientists Kathleen McNamara and Dan Kelemen have pointed out, the EU is an incomplete state-building project: there are states without their own currency, but there are no currencies without a state; there are many states without functioning borders, but once an area of free movement has been established inside a territory, there can be no such thing as an external border controlled by different states applying different rules. Most states became states because of external threats, or, in the words of the sociologist Charles Tilly: ‘War made the state, and the state made war.’ By contrast, the EU as we know it has grown out of a market project; states may be able to make a market, but a market won’t make a state.

The European elites simply do not agree on what it would take to make the Union function as it should. Germans think that in the Eurozone, it is vital to apply the rules in a completely inflexible manner. The French favour greater discretion, and are of course pleased when Jean-Claude Juncker, the president of the European Commission, explains a relaxing of Eurozone rules for France with the simple statement, ‘Because it’s France.’ Germans are worried that with Britain gone, the Club Med countries, which want more flexibility (auf Deutsch: more money to be coughed up by German taxpayers), will win out. At the same time, they hope that Emmanuel Macron will at last implement ‘structural reforms’ in France – and for that, they appear to be willing to make concessions, even if the German finance minister, Wolfgang Schäuble, has explicitly counselled ‘respect and restraint’ vis-à-vis the new French president.

On paper, German and French governments have long shared the goal of ‘political union’, which would involve at least some co-ordination of fiscal policies in Eurozone countries. Just after the presidential election in France, Macron and Merkel seemed to agree that a European finance minister and maybe even a common Eurozone budget might be a good idea (they have both ruled out common European debt, or Eurobonds, which the German Social Democrats also daren’t advocate in an election year). According to a recent survey, the German public too is in favour of such a plan, though it opposes relaxing any budgetary rules to make Macron’s life easier.

In theory, a redesigned Franco-German engine could run better, but look more closely at what the engineers have in mind, and the motor is more likely to stutter. Macron wants a European finance minister, accountable to some kind of Eurozone parliament, to invest money; Wolfgang Schäuble, on the other hand, has made it clear that the job would consist in making sure the rules were followed. In any case, what exactly would a common budget be for? To help countries that are making painful ‘structural adjustments’? That, as it happens, was the justification offered when Germany broke the rules and took on more debt under the Schröder government in the early 2000s (an episode many in Berlin have conveniently forgotten). Or something much more ambitious, like a European employment insurance scheme? Macron supports such a scheme, as part of his programme for a Europe that ‘protects’. Such an insurance scheme would help to address economic imbalances by shifting funds to countries in trouble. It could be covered by taxes related to cross-border or financial transactions, thus reinforcing a sense among citizens that the Eurozone can confer concrete benefits as well as issue austerity diktats.

One could be forgiven for thinking that in the end all this will be another example of Verhofstadt’s politics of announcements (and that the outcome would be the same even if the Social Democrats were to win the German election in September; their leader, Martin Schulz, is a committed pro-European). But then again, 2017 might be different. Macron watched up close as Hollande failed in his inept attempt to mobilise Club Med against Merkel. France’s youngest ever president has no choice but to go for a fuite en avant. And for once, that sort of risk-taking could align with the wishes of Merkel, Europe’s most risk-averse politician. Whatever the outcome of September’s election, Merkel is nearing the end of her political career – and she won’t want to be remembered as the German chancellor who ended up dividing Europe. Like Macron, she doesn’t have much time to address the EU’s unfinished business. The president of the European Central Bank, Mario Draghi, by propping up the Eurozone through quantitative easing, has been buying time for Merkel (as well as for Italy, which, from a financial point of view, is Europe’s ticking time-bomb). At the same time, Erdoğan is being bought off while Europeans work on devising a common border regime (and, ultimately, a common refugee and asylum policy). Merkel must use the time she has to construct a lasting European architecture in matters of money and migration.

There are two dilemmas here that Verhofstadt doesn’t address, but which will have to be faced by anyone thinking about a post-Brexit European Union. First, can a highly fragmented Europe, whose different states participate in different forms of integration (Euro and Schengen among others), work properly? Of late, both Brussels politicians and national leaders have talked about a ‘multi-speed’ Europe, where some states will advance and some choose to stay behind (or will simply be left behind).

An à la carte Europe might sound attractive in theory, but in practice, as the problems thrown up by the Brexit shock have made clear, the club cannot ultimately work on the basis of pick-and-choose. Without Britain, for one thing, there is no major state in the self-chosen slow lane, which makes it more likely that smaller countries will be drawn into the core or else feel peripheral and not merely slow, but second-rate. This fear is already pronounced among Central Europeans; Donald Tusk, the former Polish prime minister and successor to Herman Van Rompuy as president of the European Council, is subtly trying to block a multi-speed Europe – even if it means preventing the EU from addressing substantive problems. Another problem, less often remarked on, is that a highly fragmented Europe, with some institutions inside the EU framework and many ad hoc treaties between states (like the ones concluded during the Eurozone crisis), makes the EU ever more incomprehensible to its citizens. Increasing capacity to address problems comes at the expense of basic transparency and a sense of who exactly is to be held accountable when things go wrong.

Verhofstadt thinks the solution is a clear-cut distinction between full EU membership and some kind of associate status. Again, one’s imagination can roam freely: how about a three-tier or four-tier Europe – why not? But the crucial question, which Verhofstadt does not tackle, is whether the core ultimately has to become something like a federal state, or whether it is possible to have elements of statehood – a common currency and a common border, for example – without full federacy. He deflects the issue by asserting, in response to an imaginary critic of his scheme, that ‘anyone who claims to see in this the creation of a superstate is either acting in bad faith or wilfully blind.’ Indeed, the size of the institutions and the competences they start out with could be quite modest – but the essential attribute of the state as such is of course not size, but sovereignty.

Like many​ participants in discussions about the future of the EU, Verhofstadt fails to make some basic distinctions between power, competences and sovereignty. The UK ceded many competences to Brussels, but it never gave up sovereignty; otherwise the Brexit referendum and the bitter outcome of leaving the club wouldn’t have been legally possible (compare Brexit with the secessions preceding the American Civil War). Brexit will indeed return some legal competences to London, but it will mean less power for the UK in the world, as the clout of Theresa May’s ‘global Britain’ (an extreme example of fantasy politics) will be much less than what the UK in conjunction with 27 other countries could have achieved in trade, security and many other areas. Competences can go back and forth, sovereignty cannot.

So the question Verhofstadt would have to answer is whether in his scheme the member states ultimately remain, as the EU jargon has it, ‘masters of the treaties’, or whether the European treaties could in future be changed without unanimity. He writes that his more perfect union ‘would acquire new competences only where they would generate effective added value’. But that’s not the issue. The question is who decides whether a more perfect Union will create effective added value (whatever that means in practice) and hence whether more competences for the Union are justified.

The second dilemma facing Verhofstadt and others like him is: how to get there? Here he deploys sleight of hand, asserting simply that ‘European leaders underestimate the pro-European feelings among their citizens.’ He keeps repeating that all negative feelings about the EU are a result of its not being powerful enough to produce concrete results. There is indeed evidence that Europeans want more joint action – or even state-like features – precisely in areas where their national leaders are most resistant to agree on real co-operation: defence and counter-terrorism measures, for instance. In no country has a majority formed for exiting the Union; nor are there any majorities for leaving the Eurozone, even in the societies hit hardest by austerity. But the question is how pro-EU sentiments could be channelled into an actual political strategy, especially when it comes to highly sensitive issues such as refugee policy. Macron has proposed ‘democratic conventions’ inside the member states as well as a common European list from which to fill the 73 seats to be vacated by British MEPs in 2019 – not much perhaps, but at least these are institutional mechanisms, as opposed to some magical trust in the goodness of the everyday European.

Verhofstadt himself is adamant that national leaders themselves cannot possibly be expected to do the right thing, because they are descendants of Thatcher and De Gaulle, which is to say: politicians who think of the EU as an institution through which to maximise what they believe to be their national interests (or, for that matter, their personal political interests). Who, then, are the people and organisations that can build support for a different kind of Europe? As the German political scientist Claus Offe has pointed out, one of the tragedies of the Eurocrisis has been that the very forces that could have done most to end it – parties and unions disposed to some form of cross-border solidarity – have been progressively weakened the longer the crisis has continued. More mutual trust among Europeans – and, ultimately, a willingness to be governed in certain policy areas by a majority of non-nationals – would be required. Yet the national antagonisms the crisis has exacerbated – or, sometimes, even created from scratch – have made it all the more difficult to give the EU more competences, let alone move in the direction of Verhofstadt’s dream Union.

Still, the Belgian might take heart from the recent surprising show of unity among European governments. It took them little time to agree on a Brexit strategy (as Theresa May put it in a campaign speech, ‘27 countries are lining up to oppose us’ – apparently an unexpected and scandalous thing in an entity calling itself a Union). Support for EU membership is at a ten-year high. This prompts a not very nice thought: the worse Brexit turns out to be, the better for the likes of Verhofstadt and their belief that Europe can get its act together if only people think hard enough about what coming together could achieve – and what a disaster dissolution would be. Trying to drive home the reality of a hard Brexit, Verhofstadt wrote recently that ‘come the summer of 2019, unless the government requests transitional arrangements to the contrary and these requests are agreed by all EU countries, UK citizens will have no more of a right to holiday, travel and study in EU countries than tourists from Moscow or students from Mumbai.’ This suggests a very hard line indeed vis-à-vis Britain, perhaps partly pour encourager les autres, to indicate to the rest of Europe just how valuable their Union is, and why it has to be made, if not perfect, at least better than it is today.