Peter Foster: More heat than light in euro debate
Peter Foster, National Post
Monday, Jun. 4, 2012
Toronto lecture shows that Europe is a dream that no one wants
Some brave and/or benighted souls apparently continue to believe in the viability of Europe’s monetary union and its future as a noble supernational experiment. The euro rose on Monday, reportedly on the belief that “a plan was in the works.”
No doubt about that. The problem is the likelihood of any plan (a) being agreed upon and (b) working. The most bizarre vote of confidence in the European experiment came from the audience at the [external] Munk debate in Toronto on May 25, despite the fact that the most prominent debater, superstar Harvard historian, Niall Ferguson, appeared to have become even more pessimistic (He was promising “blood in the streets” three years ago and noted that it had now arrived).
‘Their arguments were based on a political will that was entirely absent’ On Saturday, billionaire speculator and self-confessed Big Thinker George Soros [external] gave a speech in which he expressed the view that although the eurozone had been a policy disaster, Germany just had to be persuaded to keep on giving, since the alternative was too horrible to countenance. Mr. Soros suggested, however, that there was only a “three-month window” in which to achieve salvation. If that’s so, the eurozone is toast.
Within the zone, Germany is now reportedly sending “strong signals” that it might support Europe-wide deposit insurance and bank resolutions as long as countries are prepared to take more fiscal direction from the responsible centre, that is, Berlin. But haven’t we known that for a couple of years? What debt-­burdened euro governments want, by contrast, is German backing with no nasty conditions, other than solemn promises to clean up their act. Germany wants “a broader discussion about the future of Europe and the structure of the eurozone.” Doesn’t sound like anything that would fit through a three-month ­window.
The acrimony underlying the euro situation was on abundant display at the Munk debate, whose motion was that “The European Experiment has failed.” The motion was proposed by Prof. Ferguson and Josef Joffe, the publisher-editor of Die Zeit. The con side was represented by Daniel “Danny the Red” Cohn-Bendit, prominent soixante-huitard and co-president of the European Parliament’s Greens/Free European Alliance Group, and Lord Peter Mandelson, former British minister of “New Labour” and “one of the most controversial political figures of his generation.”
According to the usual practice of polling the audience before and after the debate, the socialist cons won, 55-45, by grabbing the vast majority of the undecided. This was more than puzzling since Messrs. Ferguson and Joffe appeared to put forward extremely cogent arguments, while their opponents mostly unleashed a torrent of emotive vitriol.
Prof. Ferguson noted that one of the main rationales for the EU integration was economic, but that integration had in fact brought about decline. Monetary union was the ­ultimate ­“experiment gone wrong.” Everybody had broken the rules from the very beginning. Jacques Delors, one of the EU’s socialist masterminds, had said in a report in 1989 that a ­monetary union wouldn’t work without a fiscal union. There was no fiscal union. Moreover, noted Prof. Ferguson, everybody had violated the growth and stability pact (by breaking the rules about debts and deficits). Worst of all, European ­nations now appeared inclined only to kick the can down the road.
Mr. Cohn-Bendit, clearly outraged, accused Mr. Ferguson of saying “stupid things.” Europe was needed because nation states couldn’t handle fiscal crises or climate change alone. Europe was a “dream” and we should allow ourselves to dream. It was also necessary to defend an aging society, presumably against fiscal reality.
Mr. Joffe begged to differ. He said that integration was like climbing an increasingly steep mountain. The “sheer cliff” at the top was the core of national sovereignty. The climbing party wasn’t up to it, but the stragglers didn’t want to go back to camp and get in shape. Germany was unwilling and unable to bear the burdens of getting everybody to the summit.
Lord Mandelson’s arrogance varied inversely with his substantive arguments, which were — like those of his partner Mr. Cohn-Bendit — full of nebulous stuff about the whole being bigger than the sum of its parts, and the self-evident desirability of “pooling” sovereignty and decision-making. He suggested that Niall Ferguson was just a historian, whereas politicians such as himself and Mr. Cohn-Bendit had to be more practical.
Nobody laughed.
Mr. Joffe came back to note that the arguments of Messrs. Cohn-Bendit and Mandelson were based on a “political will” that was entirely absent. Nobody wanted to give up national sovereignty. He noted that Lord Mandelson’s Britain in particular didn’t want to be ruled from Brussels. Moreover, the socialists were pushing against an open door when they praised the “wonderful economic space” of the continent. Nobody was arguing about the desirability of free trade, but the nations of North America had managed to negotiate NAFTA without political union.
The main point stressed by both Prof. Ferguson and Mr. Joffe was that there was no sign that the Germans were prepared to take on the burden of further costly integration (whatever “strong signals” they might be sending).
Prof. Ferguson concluded that the European situation could be leading us into a Depression-era scenario, in which the failure of European monetary union would be piled on top of the failures of overblown welfare states and multiculturalism. Mr. Cohn-Bendit suggested that Europe was like scrambled eggs that could not be unscrambled. Prof. Ferguson responded that if Europe was an experiment, it was like one of those in the school lab, where you would add more and more elements until the mixture blew up.
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