After years of economic and political crisis in Europe, Emmanuel Macron’s election let a sigh of relief escape from Brussels. After years of stagnation, the EU integration has a new captain. While the relief is understandable, there seems to be a concerning lack of reflection on what follows for the European Union. All the discussions on EU integration always lead to the same question: where is the European demos? And yet we have not seen the start of a political response.
Back in the late nineties, Milton Friedman, pointed out the issue with the then nascent Eurozone. He argued that the conditions for a monetary union on the European level lacked. Flexible exchange rates allowed countries to recover much faster from major crises. However, with a common currency, countries would lose their capacity to become competitive again through flexible exchange rates. Instead, they now have to play on wages to become competitive; a move that the EU bureaucracy calls “internal devaluations.”
The United States has the conditions for such a union. Friedman uses the the 1970’s oil crisis in the US to argue that “the different short-run effects were soon mediated by movements of people and goods, by offsetting financial flows from the national to the state and local governments, and by adjustments in prices and wages.” In other words, you cannot have a well-functioning monetary union without a fiscal and political union.
The president of France, Emmanuel Macron, recently pushed for a closer fiscal union. He wants a harmonization of business taxes and a set budget for the Eurozone. This level of integration at this scale would be unmatched in modern history, raising the question of democratic legitimacy. Such close integration may theoretically be a solution to the shortcomings of the Eurozone, but it needs the support of the European electorates.
To create a functioning fiscal union at a European scale you need a European democracy and therefore a European demos. You need a feeling of European nationhood so that the Germans pay for the Italian debt, the French soldiers defend the Greeks and the Poles accept the governance of a Luxemburgish commissioner. A sense that across the continent, Europeans belong to the same entity.
How to create a European demos should be the intellectual endeavor of a generation. A few weeks ago, Pierre Moscovici, the European Commissioner for Economic and Financial Affairs, came to discuss the future of the EU on Georgetown’s campus. When I asked how to create such a European demos, he argued that better institutions will create a European demos. Others argue that we can create a “constitutional” European patriotism. Some want a European patriotism rooted in the continent’s history and its Christian heritage. Others want to designate a common adversary (Russia, China, etc…) to unite the European people. All these responses have their own merit and their flaws.
EU cannot be an undemocratic bureaucracy to function efficiently, but we have yet to scratch the surface of this vital political debate when talking about the EU. I hope the next generation can thing the EU in its political and civilizational dimension, not just through a rigid economic lens.