To imagine that the economic life of a vast area comprising many different people can be directed or planned by democratic procedure betrays a complete lack of awareness of the problems such planning would raise. Planning on an international scale, even more than is true on a national scale, cannot be anything but a naked rule of force, an imposition by a small group on all the rest of that sort of standard and employment which the planners think suitable for the rest.
F. A. Hayek, The Road to Serfdom
First published in the Salisbury Review
Bewitched by the Idea of Europe and ignoring all warnings of future dangers, Europe’s administrators march towards the edge of the pit, which, they promise, will be the foundation of a new European age, but is more likely to be the mass grave for all their preposterous Euro-vanities and tricks. What madness then compels the UK to follow in the wake of this Totentanz?
On economic grounds alone the case against the UK’s joining the United States of Europe (USE) is powerful and cogent. Add cultural-historical and political factors as well, and the case against is overwhelming, especially for England. One of the oldest nation states in existence, England’s success as a nation, her contribution to the world, is out of all proportion to her size. Her achievements are the bedrock of the civilized Western world: fundamental discoveries in science; one of the world’s great literatures; the founder of parliamentary democracy, Common Law and the great practitioner of economic liberalism. The refusal to worship der Staat has created a country where individual freedoms are respected and venerated. England, as the author of Paradise Lost reminds us, is ‘a nation not slow and dull, but of a quick, ingenious, and piercing spirit, acute to invent, subtle and sinewy to discourse, not beneath the reach of any point the highest that human capacity can soar to.’ Those who would have England join the USE offer no convincing reasons why Englishmen should abandon their independence when it has served them and the rest of the world so well. And in the Dis-united Kingdom England will once again have need of her ancient strengths and virtues.
The idea that England could not survive outside of the European Union is the reaction of the defeatist. In a global economy there is no reason why England should have to stay in the European Union. Global trade means that we will trade with any country. We already do. England does not have to join a currency union to trade with Japan or America or South Africa. Why, then, will it be necessary to stay in the European Union if we wish to continue to trade with Germany and France? France and Germany are not going to cease to trade with us because we are no longer in the European Union (though the possibility of trade sanctions cannot be excluded as part of a wider set of measures to punish us, should we leave. See below). They will want our goods and services; we will continue to want theirs. We are major investors in North America and Asia. London is the financial capital of the world. Global trade is the best guarantor of our economic prosperity, not dreams of super-European autarky.
With the highest rate of home ownership in Europe, Britain’s economy is especially vulnerable to changes in interest rates. Past membership of the exchange-rate mechanism illustrates what would happen, and is likely to happen again, if, prior to our joining Economic and Monetary Union (EMU), sterling must observe ‘the normal fluctuation margins provided for by the exchange-rate mechanism of the European Monetary System, for at least two years, without devaluing against the currency of any other Member State’ ([emphasis added] Article 109j, TITLE II, Treaty on European Union).
For Gordon Brown, a chancellor, who favours Britain’s adopting the euro the high level of home ownership in Britain poses a real challenge. Home owners who will be hit by high interest rates are not likely to vote for joining the common currency in any referendum. There is also evidence that the present chancellor is using progressive increases in stamp duty as a way of killing off the house-owning aspirations of the British, so as to make the European-wide interest rate less of a problem, were Britain to join EMU. To this can be added, in due course, the application of European rates of Value-Added Tax (VAT at 20-22%) to the British housing market, currently zero-rated, which without any increases in stamp duty will finish off the house-owning aspirations of all but the very wealthy. One wonders: was the belief that Britain would sign up for EMU, with all the implications for the housing market, a factor in the decisions of the former building societies to abandon their mutual status and become banks?
The high level of home ownership in Britain also says something about the psychology of Britain. The idea that an Englishman’s home is his castle stands in the way of state control and interference. It was, after all, the great socialist dream that privately-owned housing would give way to hideous blocks of state-owned flats for the masses. Owning one’s home confers independence from the state and its patronage. It is one of the foundations of our freedoms.
During the first 5 to 10 years of the euro’s existence enormous and determined efforts will be made by the French, Germans and the European Central Bank (ECB) to convince people in and out of the euro-zone that it is working. EU expertise in fudging, distorting, lying, propagandizing, obfuscating and wasting vast sums of taxpayers’ money will be deployed in full. No effort will be spared. This early period of the euro’s existence will have the greatest importance for the UK, since some time after 2002 that is at a time when the euro has been adopted by the majority of the EU, Britain will hold the referendum on whether to abandon sterling. We can take it for granted that the efforts to make the euro work in these early years will be aimed at the undecided nations of which, for the Euro-bureaucracy, Britain is the real prize. Consequently, any decision to enter the euro-zone on the basis of its rigged performance in these early years will give a thoroughly misleading indication of the euro’s real and long-term worth as a currency. In other words, only after we have joined the euro-zone - and there is no longer any requirement to cook the books - will we discover the true operational strengths and shortcomings of the currency. One obvious consequence of this is that we will need to spend a much longer period outside the euro-zone before an accurate assessment can be made. Cooking the books to make it easier for a British chancellor to sell the euro to an undecided British public cannot be maintained indefinitely. So once again, there is much to be said for delay, and the longer the delay, the greater the likelihood that the cracks in the Euro-project (monetary and otherwise) will be revealed, even, perhaps, that the euro-zone will collapse or be discredited beyond redemption.
Also, the longer we remain out of the euro-zone, the weaker the argument for our joining will become. If after some 10 to 20 years of the euro’s being operational our economy is growing at least in line with members of the euro-zone, then the question of joining need hardly arise. Moreover, the fact of our being outside the euro-zone may well serve as a reminder to some of Europe’s more sceptical, but brow-beaten leaders and populations, that there is economic life and prosperity outside of EMU. Our role outside would be analogous to that in the summer of 1940 outside of German-occupied Europe, a reminder that national freedom and sovereignty whether threatened by Messerschmitts or coerced membership of a common-currency zone, are worth fighting for.
From this it follows that, for the Euro-planners, Britain’s membership of the New Europe is absolutely imperative: there must be no safe havens for Europe’s disgruntled investors; no reminders of what the ancient states of Europe have given up; no free-trading economic commandos scourging the follies of the over-regulated, over-controlled, neo-socialist Europe. All must be united in misery and penury.
EMU is a question of power: who does what to whom. Once we join a common currency we cease to be an independent nation. The other fundamental objection to the creation of the United States of Europe is that it will not work, and that in its failing enormous damage will be done to those countries that join. The possibility of armed conflict cannot be ruled out.
Some five years ago I wrote to my Member of Parliament, arguing that were Britain to join EMU, and were we to discover that it did not suit us at all, and we wanted to leave, that Britain could face the possibility of being at war with a Euro-Army. He dismissed me out of hand. In a recent issue of Foreign Affairs, Martin Feldstein has made exactly the same point about military conflict (see ‘EMU and International Conflict’, vol 76, No 6, November/December 1997, pp.60-73). The danger of armed conflict, or at the very least trade sanctions, which could escalate to war, arises from the fact that there is no provision in the Treaty on European Union - the Maastricht Treaty - for a state to leave EMU. For example, Protocol 10 (On the Transition to the Third Stage of Economic and Monetary Union) declares ‘the irreversible character of the Community’s movement to the third stage of economic and monetary union...’ and of the Community’s entering ‘the third stage irrevocably on 1 January 1999’ (emphasis added). Having signed the Treaty on European Union, with no provision for a state to leave constitutionally, the United Kingdom would be in breach of its Treaty obligations, were it to leave EMU unilaterally. In any conflict over our leaving we would be at an immense legal and psychological disadvantage from the very beginning.
It is indeed possible to create the United States of Europe but only at the expense of living under the very heavy and inflexible hand of bureaucracy. Everything will have to be harmonised and standardised. The word Gleichschaltung comes to mind. Once regulations are established they will have to be implemented and their effectiveness monitored. The lust for regulation will reach into every nook and cranny of our lives. Here, too, we should note the very specific way in which the word “regulation” is used in the Maastricht Treaty. A regulation ‘shall be binding in its entirety and directly applicable in all member states.’ (Article 189, Title II). Likewise, a ‘decision shall be binding in its entirety upon those to whom it is addressed.’ (Article 189, Title II). Of course, regulation sounds less threatening than decree or edict. Without strong centralised control and a powerful army of bureaucrats and their flood of rules and regulations, and the corresponding loss of freedom, the United States of Europe cannot exist. Such an artificial creation will not be able to compete with more flexible, less-regulated economies, which is another reason why France and Germany want to force Britain at some stage to sign up to the 1989 Social Charter. None must be allowed to outshine, or to outperform the others. This is socialism, pure and simple. Given the inability of French and German workers to come to terms with their having to do without the generous welfare provisions to which they have become accustomed, and given, moreover, the unwillingness of the French and German governments to act to remove the largely structural causes of high unemployment, then the United States of Europe will fall back into protectionism and tarrifism. At times of crisis there will be pressure to control flows of capital, thereby negating one of the free-market mechanisms by means of which incompetent and profligate governments can be punished. The Maastricht Treaty leaves us in no doubt about that such regressive measures will be taken, if necessary. [The Council] ‘may, acting by a qualified majority on a proposal from the Commission, adopt measures on the movement of capital to or from third countries involving direct investment - including investment in real estate - establishment, the provision of financial services or the admission of securities to capital markets’ (Title II, Provisions Amending the Treaty Establishing the European Economic Community with a View to Establishing the European Union, Chapter 4, Capital and Payments, Article 73c). Article 73f reinforces these savage limitations on the free flows of capital, if capital flows to or from third countries ‘cause, or threaten to cause, serious difficulties for the operation of economic and monetary union.’
We need look no further than what happened in the Soviet bloc to get some idea of what the bureaucratic terror of the United States of Europe forged and run by the Franco-German axis - with its British collaborators - would be like. Granted, it might be without concentration camps, but it would be like living in a Kafka novel. Only coercion and violence held the Soviet Union together; and Yugoslavia as well. Things would be no different at all in the United States of Europe. The collapse of the Soviet empire and Yugoslavia also carries another warning that nationalism cannot be suppressed indefinitely. Age-old hatreds which Tito and Soviet leaders believed they had eliminated were simply made worse. Again, why are the builders of the United States of Europe convinced that the nationalist pressures which blew Yugoslavia to pieces after being suppressed for so long will not do the same to the United States of Europe? And while on the subject of nationalism let us be absolutely clear whose nationalism it was that caused two world wars: it was German nationalism, not British, French, American, Russian or even Italian. Germany’s striving for hegemony in Europe (und morgen die ganze Welt, as the song goes) caused these wars. So the next time we hear Kohl or any of the European bureaucrats issuing dire warnings about the dangers of nationalism, we should just remind ourselves whose nationalism was the real danger. The other lesson from Yugoslavia and the Soviet Union is that the longer these national loyalties are suppressed, the more violent, and virulent they are when they explode.
Monstrous Orwellian fraud as it was - and possibly for that reason - the fourth Soviet Constitution adopted by the Supreme Soviet in 1977, has some uncanny echoes with the Maastricht Treaty. We find the same theoretical waffle about equality, social cohesion and economic progress, the attempt to be all things to all men. All major decisions were taken by the centre but every attempt was made to present them as having come from, and enjoying the support of, the “masses”. In the language of the Soviet Constitution this was known as “democratic centralism”. In the language of the Maastricht Treaty it is called “subsidiarity”. Soviet legislators, unlike the authors of the Maastricht Treaty, have no qualms about using the f-word. The Union of Soviet Socialist Republics is formed, we are told, on the basis ‘of socialist federalism’ (Article 70). Moreover, and in contrast to the Maastricht Treaty, there is provision for the republics to secede from the union (Article 72). Naturally, as long as they did not try to exercise this right they had nothing to worry about. Curious also is the use in the Soviet Constitution of the word “nation” which has been totally purged from the lexicon of the Maastricht Treaty. In its place we find “Member State”, but never “Nation State”. A Nation State can only go so far in any form of alliance before its leaders and electorate must confront issues of independence and sovereignty. The term Member State is misleading. For it suggests that a psychological transition from Nation State to Member State has taken place, that Germans and Italians no longer see themselves as Germans or Italians, but as Europeans, and thus, as well, that the Member State has moved beyond considerations of old-fashioned, reactionary sovereignty, or more accurately, that objections have been brushed aside or just ignored. Such is the aversion to the “Nation State” that states which are not Member States are referred to as “States”, not “Nation State” (Article 238, Title II). It is as if the authors of the Maastricht Treaty are trying deliberately to erase any association of “nation” and “state” and the very idea, indeed, of a nation with its associations of independence and unique history.
That the Soviet Constitution could bait its enslaved populations with talk of rights of secession, freedom of worship and expression, respect for national cultures and so on was due to the very nature of the totalitarian state and its brutal cynicism. Rights and freedoms could be promulgated in the knowledge that they could be totally disregarded. Mindful of their disgruntled populations, the Euro-bureaucracy has to be more careful and advance their case by stealth, omission and endless euphemisms rather than by reasoned argument.
Some of the most worrying provisions of the Treaty on European Union are those which affect defence and security. In the bitter arguments over monetary matters, the defence implications have not received the same attention, publicly at least. The EU is to have a ‘common foreign and security policy, governed by the provisions of this Title and covering all areas of foreign and security policy (emphasis added). So reads Title V, ‘Provisions on a Common Foreign and Security Policy’, Article J.1, paragraph 1. Had the provisions of Articles J.2 and J.3 of this Title, with their insistence on qualified majority voting and the need to adopt a common position, been binding at the time of the Falklands war, the UK might well have found itself acting in defiance of a common European position. Closer to home, the European factor has forced British governments to rule out a far more aggressive response to Sinn Fein/IRA terrorism. The real problem with defence, however, arises from the provisions of Article J.4 which advocates ‘the eventual framing of a common defence policy, which might in time lead to a common defence.’
A common defence policy for a future United States of Europe based on conventional weapons and deployment is bad enough, one that includes the nuclear factor, as it must do with France’s inclusion, and maybe Britain’s, assumes nightmarish proportions. A unified Euro-military command will include representatives from all the member/nation states, who would have to be consulted on such matters as: the peace-time operational deployment of the nuclear deterrent; target planning and acquisition; and the procedure for any retaliatory response. The non-nuclear states which means all but France, would expect to be treated as equals in all nuclear matters since the use and deployment of such weapons would affect them all. It will be very interesting to see how the French military establishment reacts when their nuclear policies are vetoed by majority voting. And what if the United States of Europe decides, against the wishes of France’s senior officers, to scrap all nuclear weapons? I suggest that the acrimony arising from disputes as to who should be the first head of the ECB will be nothing compared thereto.
Non-nuclear states, which are now participating fully in nuclear-contingency planning and are, in any case, no longer independent sovereign states, cannot maintain a non-nuclear status. As a result, the entire United States of Europe can now be considered a single nuclear power and, crucially, for its 300 million inhabitants, a single nuclear target.
A common European defence policy with a nuclear element, certainly French, possibly British, must bring about a profound and dangerous shift in the nuclear-contingency planning of the Russian Federation. Were Member States, other than France, to take part in nuclear planning and, possibly, even be involved in the authorization and authentication procedures prior to the use of nuclear weapons, then the Russian Federation would be justified in regarding all the states of the USE, not just France, as legitimate nuclear targets. Under the NATO umbrella, non-nuclear members of NATO could argue that since they did not allow the deployment of nuclear weapons on their territory (Norway for example) they were not nuclear targets. While it seems highly unlikely that such niceties would have been respected by the Soviet Union - witness the fate of Hungary, Czechoslovakia and Afghanistan - the distinction between the nuclear and the non-nuclear states in NATO, as well as the distinction between the non-nuclear states allowing the deployment of nuclear weapons on their territory and those non-nuclear states that did not, were, nevertheless, factors that even a lawless, predatory state such as the former Soviet Union would have had to take into account.
Now, it is extremely difficult to see how any unequivocal guarantees from the French and British defence establishments, such as they will be at this time, to the effect that their respective nuclear deterrents will be strictly subordinated to British and French government control, will in any way mollify or reassure the Russian Federation, since such national government control and veto would render any common defence policy incoherent. Furthermore, by the time the political entity of the USE has been created, the assertions of the British and French “governments” will count for nothing. Traditional areas of decision-making will, by then, have been transferred to, or been taken over by, the USE government. There will, in effect, be no British or French governments. There can, therefore, be no reassurances.
There are two further dangers arising from the creation of a nuclear-armed United States of Europe. In some respects, perhaps, they are the most worrying of all for they violate if not the substance, but certainly the spirit of the 1968 Treaty on the Non-Proliferation of Nuclear Weapons. In conditions of a common European defence policy prevailing within a United States of Europe, the inclusion of a nuclear-armed France (and maybe the UK) effectively renders all the former non-nuclear states nuclear. The danger here is that if the European states can get away with this sleight of hand, there will be nothing to stop China and the Russian Federation from extending their defence obligations to non-nuclear states, so as to justify further, nuclear proliferation, or maintaining their nuclear forces at current levels. India, already testing nuclear weapons, would then accelerate its own programme. Pakistan would follow suit. And would Japan, amid the rush to acquire nuclear weapons, maintain its non-nuclear stance? Unlikely. The danger is greatest in the Middle East. A nuclear-armed, Pan-Arab state would be a dire threat to the West.
The second danger is this. With a population of 300 million people, large market and influence, the USE will find it difficult to resist the temptations of superpower status. The question here is whether a nuclear arsenal that was suitable for an independent France will be suitable for the United States of Europe. Its leaders might well argue that being a superpower comparable in size and market to the USA, that it is entirely justified in building a nuclear arsenal comparable to its new status. This would mean a massive European nuclear-arms programme, a dramatic and unforgivable escalation. We can only hope that the failure of EMU will leave no money for such ghastly ambitions. Nevertheless, the danger is there and the monumental egos of Europe’s political establishments should not be underestimated.
The European project threatens the integrity of the United Kingdom from without and from within. It must be acknowledged that there always has existed a minority of Scots and Welsh who have not regarded Scottish or Welsh membership of the United Kingdom as a good thing and have actively campaigned in favour of secession. It is the growth in importance for Britain of the European Steel and Coal Community, the European Economic Community and currently the European Union, and if Kohl is allowed his way, the United States of Europe - and the decline of empire, which has greatly assisted the growth of the independence movements in Scotland, and to a much lesser extent in Wales.
As the process of imperial withdrawal accelerated after 1947, so opportunities for personal advancement diminished. British people who in an earlier generation would have looked to the British Empire as a source of employment were forced to stay at home or look closer to home. Some people in Britain believed that with the gradual and irrevocable loss of empire that Britain’s future lay in the political concept of Europe. The decline of conservative party fortunes in Scotland parallels the decline of empire and the growth of the European idea in the British mind.
What drives the Scottish National Party (SNP), for example, towards independence is the belief that they can go to Brussels or Berlin with their begging bowl instead of Westminster. Scots in the Highlands will tell you about the regional development schemes and grants from the European Union and how the nice European Union, unlike the flinty-hearted British government in London, cares for them and helps them. What these subsidy-receiving Scots do not seem to realise is that the disbursements received by the Highlands and Islands come from a central European fund. And why are subsidies necessary in the first place? The answer is that the Highlands and Islands cannot pay their way in the world, or rather, without the subsidies their standard of living would be a lot lower than the rest of the United Kingdom. Without the subsidies, and the taxes raised to pay for them, the Highlands and Islands would experience depopulation on a scale way beyond anything experienced during the clearances.
Britain is a major contributor to that fund and so some of the money that comes to the Highlands and Islands from Brussels is British money being recycled. Recycling other people’s money results in the growth of a bureaucratic class who have a powerful interest in ensuring that the money-allocation schemes continue (as is also the case with the Department of Health and Social Security in Britain). Reallocating money is extremely vulnerable to corruption and cronyism and, naturally, these bureaucrats have to be paid; they have their nice expense accounts, indexed-linked pensions; comfortably-furnished and centrally-heated offices; chauffeur-driven cars and generous allowances, all funded by the taxpayer. These people contribute nothing at all: they are parasites. Europe cannot afford to maintain this parasitic class of bureaucrats in such comfort indefinitely.
The SNP are devoted, so their leaders tell us, to leaving the United Kingdom and becoming an independent nation. Yet at the same time they want Scotland to remain inside the European Union, and eventually the United States of Europe. It is a mystery how a Scotland, which is outside of the United Kingdom but inside a European Union, and one which is committed to ever closer union, can possibly be considered to be an independent nation. Genuine independence can only mean that Scotland will assume the same relationship towards the EU as Norway. Scotland’s continuing membership of the EU, outside of the United Kingdom, is not independence at all: it is dependency on the decisions of bureaucrats and officials in Brussels.
The European Union currently consists of the following: Ireland; UK; Germany; France; Denmark; Portugal; Greece; Spain; Italy; Austria; Sweden; Belgium; Holland; Finland and Luxembourg. The UK is tried and tested. Yet even here there are internal strains, as witnessed by the growth of independence movements. Why, then, do the Scots, Welsh and their English supporters believe that these tensions will be less inside the much larger, more historically-different, more culturally-diverse, more bureaucratically-rigid and cumbersome, more multi-lingual EU than inside the UK? And all these tendencies will get much worse - they are already bad enough - if, as is planned, the former-communist states, Poland, the Czech Republic, Hungary and the Baltic states, eventually join the EU. At the back of this queue we find the real basket cases of Bulgaria, Romania and Albania, and maybe even the Russian Federation as well.
Once the euphoria of Scotland’s leaving the United Kingdom (or being ejected by England when the English wake up to the enormity of the devolution fraud) is over, the “independent” Scotland is going to discover some very harsh facts of life. As a small nation Scotland will count for very little in the councils of Europe. France and Germany are going to make all the running in the EU and any objections that the “independent” Scotland might have will be brushed aside by the army of Euro-bureaucrats. The Edinburgh “parliament” will be no more than an expensive body for rubber-stamping decisions and edicts emanating from Berlin or Brussels. In the newly “independent” Scotland, Scots will learn that unconditional obedience and execution of Europe’s edicts are the highest virtues to which they can aspire. Scots will then discover that one of their traditional complaints about Westminster’s being too remote or too distant to understand what Scots really need, is far more applicable to their relationship with the massive, relentless, centralizing tendencies of their European masters. The distance between rulers and ruled is not essentially a question of geography: it is a question of the nature of political power. Those who wield power are always distant from those who are the objects of that power. When that power is unaccountable, life becomes intolerable. Inside the United Kingdom, Scotland has a much greater chance of being heard and listened to than as an “independent” nation inside the European Union/United States of Europe. The English, I suggest, have been just a bit too willing to listen.
Those in Scotland who voted for the establishment of a parliament in Edinburgh, but voted against tax-raising powers, give the game away. What these people want is independence, well almost, but they want someone else - the English - to fund it. At the moment it seems that the vast majority of Englishmen are not aware of the full implications of the devolution fraud. The West Lothian question has not been answered. Scotland continues to benefit disproportionately from central-government subsidies. Wales is to have an assembly, whereas England’s fate is to be divided into 8 regions. Are Englishmen just going to accept this administrative butchery? Will they do nothing to prevent their great and ancient country from being divided into 8 regions so that each one can be played off against the other by the Paris-Berlin Axis? And will there be yet another referendum in twenty years time to decide whether to reconstitute the United Kingdom, when the Scots and Welsh discover that their experiment has gone horribly wrong? Let us hope that at some stage there will be a robust English-nationalist backlash; that Englishmen will wake up to what is happening. Better still, in the aftermath of the devolution referenda, England should consider taking all measures to liberate herself from the whining and ungrateful Celtic fringe, as well as the incubus called Europe, and assert her own independence. And do it quickly. For the time is at hand.
Those of us who have read the fine print, those of us who have learned something from history, are filled with unease, even dread. A Europe consisting of independent states cooperating closely with one another on issues such as, defence, the environment and combatting crime, is a Europe that will endure and prosper. The creation of a state called Europe - the United States of Europe - is all about the ambitions and pride of French and German politicians, with a fair few British collaborators to be sure. True, there are no plans for concentration camps and mass murder in the European Idea but the flood of regulations and the relentless growth of an unaccountable class of bureaucrats bears more than a passing resemblance to the former Soviet empire. Corruption is another important index of comparison with the Soviet system the eradication of which may well prove to be impossible.
The liberal order of men and nation states, the benefits of which Europe has enjoyed since 1945, is an order of human existence and commerce that will not survive the forced collectivization of independent nation-states. And whether we are locked in to the bureaucratic monstrosity of the United States of Europe or no, we shall all pay the price in the Time of Troubles to come.
Frank Ellis, University of Leeds, 1998
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Note: This article was first posted in the Salisbury Review in 1998, but remains relevant today
