THE EUROPEAN UNION

John Andrews

SUMMARY: After a success built on dreams, the European Union is beset with problems. In the present survey, John Andrews deals with the social, economic and political aspects of the crisis that the EU have to cope with, and argues that to solve them the future must be built on realism. (The Economist, October 22nd 1994)

1. FAMILY FRICTIONS

It is easy to caricature the European Union: a dozen countries squabbling over subsidies, 18,000 Brussels bureaucrats quarrelling over perks and 567 Strasbourg parliamentarians moaning about their relative lack of power and fame. Meanwhile, even as economics switch from recession to recovery, a tenth of the EU'S workers remain without jobs. No wonder that in June's elections for the European Parliament, the turn-out (despite compulsory voting in three EU countries) was barely 56%. An opinion poll this summer suggested that only one in two Europeans thought their countries had benefited from EU membership. A cynic might well ask: if this union did not exist, would anyone bother to invent it?

Actually, yes. There are perfectly sound reasons for Europe's nations to join together. As a Belgian prime minister, Théo Lefevre, once pointed out in a cutting reference to fading imperial powers: "In Western Europe there are now only small countries - those that know it and those that don't know it yet." Some 31 years later that argument for collective strength applies just as much to the countries of Central and Eastern Europe, freed from communism and now queuing up to join the EU.

Why, then, the caricature? One reason is cultural: the free-trading British and some others mistrust the expensive interventionism of the agricultural and regional policies of the European Union (as the European Community declared itself to be when members signed the Maastricht treaty in 1992). A union in which some contribute much more than others, and receive much less in return, seems wrong to them. A second reason is popular bewilderment. If politicians stumble over the arithmetic of "qualified-majority voting" and the "blocking minority", and if Eurocrats have trouble working out the minutiae of the common agricultural policy, what chance has the man on the Paris metro? It is easier to lampoon than to understand.

But the biggest reason is that Europe's leaders promised what they could not deliver. The "single market", with the economy-boosting free flow of capital, goods, people and services, opened on January 1st last year, only to coincide with the worst recession since the 1930s. The "common foreign and security policy", launched by the Maastricht treaty, was mocked by Bosnian blood shed on the Eu's doorstep. And the Maastricht journey towards " economic and monetary union" (EMU, in the EU'S acronymic jargon for the achievement of a single European currency) was abruptly sidetracked-not least by high German interest rates, which made Europe's economic troubles worse. Add the painful process by which the German parliament, the last to act among the 12 national parliaments, ratified the Maastricht treaty in October last year, and even the most gung-ho Euro-enthusiasts feel somewhat abashed.

Perhaps that is why the quarrels over Europe's post-Maastricht future are becoming so ugly, two years ahead of a special intergovernmental conference on the subject. There is talk of a two-tier European Union, of "concentric circles" of commitment, of multi-tracks and multi-speeds, of some countries "being more equal than others". Is this grand endeavour doomed to disintegrate under the strains of its own diverging ambitions?

Such questions would be less troubling if Europe felt more confident. After the dismal recession of the early 1990s, most Eu economies are rebounding. France and Germany, for example, are having to double the cautious growth predictions for 1994 that they made in January. Yet still the gloom lingers. The main reason for this is that recovery is shortening dole queues by barely a smidgen; and half of the queues consist of people jobless for more than a year.

When that dismal record is compared with the job-creating records of America and japan, even the most arrogant Eurocrat or government minister must worry about the future. Last December the European Commission (the EU'S executive) issued a special report on growth, competitiveness and employment. This quickly provoked responses from virtually every government and industrial lobby. But there is no miracle cure for Europe's joblessness short of thinning the welfare cushion that makes unemployment preferable to many sorts of work. The unemployed might then price themselves into some kind of job. And even this hard-headed logic can work only up to a point. Already, Europe's big cities are scarred by ghettoes of the unemployed, uneducated and disaffected-an "underclass-in-waiting", the politicians fear, if Europe deflates the welfare cushion too far and too fast.

Just as there is no miracle cure, perhaps there is no painless one either. Europeans take for granted a quality of life that many others might envy. GDP per head is generally higher in America and Japan, but few Europeans believe that America's extra purchasing power makes up for its horrendous murder rate, or that Japan's is adequate compensation for what Sir Roy Denman, a now-retired Eurocrat, once described as "living in rabbit hutches". What sensible Parisian or Roman office worker would envy his job-insecure counter-part in crime-ridden Washington, DC, or the exhausted sarariman making his daily two-hour commute to central Tokyo?

The question is how to sustain Europe's quality of life. Unfortunately for the German car worker, with his six weeks' holiday a year, or the disabled Belgian who receives benefits equal to 97% of the average industrial wage, many trends in productivity, unemployment, debt and demography are working against their interests.