Defeat of EU Constitution is Great News

The great European unity project has stalled. The solid "non" in France, a leader for five decades in promoting European integration, has left the plan to build a continental colossus on life support.

That’s all to the good.

European attitudes toward America have been chilly of late. Washington’s most steadfast European friend is Great Britain.

Yet backing the United States in Iraq cost Prime Minister Tony Blair’s government much of its massive majority in Britain’s recent election. Although that nation is closer than continental Europe to America, even many Conservative Party politicians bridle at Bush administration policies.

The expected British referendum on ratifying the European constitution looked to be a watershed decision on with whom – America or Europe – the island nation would tie its future fortunes. That decision has just gotten easier with the European constitution moribund.

Luxembourg’s Prime Minister, Jean-Claude Juncker, who currently holds the EU’s rotating presidency, argued, "The ratification procedure must be pursued in other countries." Paris could vote again. But French officials say they will respect the referendum results, which means the constitution is dead.

Although European integration has greatly deepened in recent years, significant national differences obviously remain. No amount of wishful thinking in Brussels can change that reality.

Europeans will benefit because a less unitary Europe is likely to be a freer Europe.

Europe has never been a bastion of economic freedom. Yet initially the European Union helped open some of the most socialized and least competitive economies. The continental market reduced national protection for politically influential domestic industries.

European budget and financial rules encouraged economic transparency and discouraged fiscal irresponsibility, especially among the poorer states that have joined recently. Pressure for political reform also aided their move toward democracy.

However, the EU and euro impose a complex regulatory overlay enforced by an unelected bureaucracy in Brussels. Writes British historian Paul Johnson, "European societies have become a paradise for bureaucrats, trade unionists, centrist politicians and those businessmen who prefer to work under government protection."

Moreover, the euro, which binds together the very different economies of half the EU members, has come unhinged at a time of slow economic growth. France and Germany have brazenly violated the 3 percent deficit ceiling. Rather than hold such large states accountable, the Eurozone members changed the rules.

Formalizing European integration through the proposed monster of a constitution – 448 articles in 450 pages – would do more to micromanage than open Europe’s economy. Which is precisely what the continent does not need.

Existing EU rules are costly enough. Observes Tory MP Liam Fox, a contender for Conservative Party leader: "Bureaucracy will be the end of us. That is the special relationship with Europe." American Enterprise Institute scholar Kevin Hassett calls it a "Red-tape Curtain," combining sclerotic regulation and bloated social welfare programs.

Over the last 40 years, Europe’s spending as a share of gross domestic product has jumped 50 percent while unemployment has trebled. As Brian Carney of the Wall Street Journal Europe recently observed, "These two phenomena are related; in a country with generous welfare benefits, rising unemployment increases government spending rapidly." In turn, he points out, rising outlays require higher taxes, which hike the cost of hiring additional workers, pushing up unemployment.

The proposed constitution has even more obvious, and for America ominous, political overtones. France’s Socialist Party argued that the document would allow Europe to be "strong in the face of the United States." The new phase of European integration is overtly anti-American.

Of course, the desire to counterbalance Washington does not automatically generate the means to do so. And few European nations have demonstrated the willingness to invest in their militaries, which would be necessary to turn the continent into a genuine independent force. Moreover, creating a European foreign minister is easier than creating a European foreign policy.

Where Europe goes from here is unclear. Washington should say little. Europe’s future is Europe’s decision.

But the United States can provide options to countries that decide they want a better alternative. For instance, John Hulsman of the Heritage Foundation has suggested expanding the North American Free Trade Association to any interested European nation.

The United States might be today’s hyperpower, but future challenges can be seen on the horizon. A united Europe could be one.

Although Washington can do little to prevent future rivalries, it could offer expanded economic ties to discourage development of a centralized, monolithic Europe arrayed against America. That might be the most important opportunity for Washington arising from France’s vote against the European constitution.


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