The More Things Change...

Europe is back to its bad old habits.

The election of President Nicolas Sarkozy as President of France was supposed to herald good things for Europe . . . or so people such as I thought. We had hoped that Sarkozy’s admiration of the Anglo-American economic system and way of life, his belief that the French people had to work harder in order to prosper in today’s modern economy and the dynamism he embodies would signal a change for the better in the Old World. Sure, we knew that Sarkozy wasn’t going to ditch all of the old, statist European practices, but we figured that he would be the bridge to a more dynamic Europe in the future.

Maybe he will . . . eventually. But as things stand now, Nicolas Sarkozy just seems like another blast-from-the-past European bureaucrat who thinks that he will be the one who makes the command-and-control economic system — the same one that has failed any number of times — work for the people of Europe.

Let’s start with Sarkozy is doing — or not doing — for the people of France. For one thing, he considers the free market a “pseudo-dictatorship” and is determined not to submit to its dictates. Among other things, he has declined to give up agricultural subsidies, he has refused to work to balance the French budget by 2012 — an act contrary to the budget rules of the European Union — and he is determined to implement protectionist policies that are aimed at helping French energy companies avoid what Sarkozy undoubtedly thinks is the nuisance of international cooperation. In short,

“Sarkozy talks right but rules left. Portrayals of him as a French Thatcher who will shake things up are vastly exaggerated,” said one EU official in reference to the former British prime minister Margaret Thatcher. “He is, after all, French.”

Well, yes he is. But it’s not like non-French Europeans are in a hurry to denounce many of Sarkozy’s statist and sclerotic policies. Because the French rejected a European Union constitution two years ago, and because Sarkozy still wants its principles to be implemented, he pushed to ratify the constitution in treaty form at an EU summit meeting last month. Among the elements of the treaty was language that undermined the EU’s longstanding — if fig-leaf — commitment to free competition in the economic sphere. Thanks to Sarkozy, free competition is no longer considered an end in itself, but at best, a means to an end.

So embarrassing was Sarkozy’s policy change that Tony Blair — appearing in his final EU summit — was forced to hastily go before the press and deny with as straight a face as he could manage that the EU had diminished its commitment to free competition. So thoroughly was Blair outmaneuvered by Sarkozy that Gordon Brown — who at the time, was waiting to succeed Blair as Prime Minister — had to call Blair at the EU summit and furiously demand that the competition language be put back in.

But the damage was done. Sarkozy emerged as the big winner from the EU summit and he got other Europeans — non-French Europeans, one might add — to sign on to his demands that free competition no longer be considered an end of European economic policy. Maybe now that he is Prime Minister, Gordon Brown can work to resist this latest push towards statism in Europe. But Sarkozy’s powerful alliance with German Chancellor Angela Merkel — an alliance whose existence was confirmed at the EU summit — may, along with the statist tendencies of other Europeans, be too much for Brown to overcome.

The British have always been outsiders in the EU club and the Franco-German alliance has traditionally been instrumental in determining how the EU stands on the issues of the day. The EU is aware that French voters rejected the EU constitution back in 2005 precisely because they saw the EU as too much of a free trade/free competition club, and thanks to that rejection, members of the EU are skittish about embracing too much of the free market in anything that they do. Now, it appears that Sarkozy, along with other statist Europeans, is bound and determined to indulge Continental tendencies towards protectionism and command-and-control economics.

Europe ought to know better by now. In the past, Britain’s aversion towards the EU and its outsider status relative to the organization caused many to believe that Britain would be left behind once the EU economic engine got started up. But as Gerard Baker points out, Britain has in fact prospered while the EU has, at best, sputtered ahead. Curiously enough, when Nicolas Sarkozy was campaigning for the Presidency earlier this year, he repeatedly cited Britain and America as economic models for France and the rest of Europe to follow. But instead of emulating Britain and America, Sarkozy has chosen instead to replicate the worst features of French and European statism in the vain hope that somehow, some way, he will be able to make them work.

He won’t, of course. At best, all Nicolas Sarkozy will do is to lull the French and Europeans into a state of complacency, making them believe that he and his policies can save them from the kind of free economic competition of which they are so deathly afraid. But eventually, a day of reckoning will have to come when France and Europe realize that either they must undertake radical reforms, or be left in the economic dust by Britain and America. Nicolas Sarkozy and people who share his views regularly present themselves as friends of Europe. But no enemy of the Continent, no matter how dedicated, could so effectively plan for Europe’s long term decline as well as Sarkozy and his allies are doing now.