COVER STORY: OPINION: The European Union - charting the future
by Colin Teese
News Weekly, June 18, 2005
Europe will continue to be a force in world politics, despite the recent referendum outcomes in France and the Netherlands, writes Colin Teese.
We all know that for more than a week the media helped generate an unhealthy preoccupation with the events surrounding the conviction and sentencing of a young Australian woman for attempting to smuggle drugs into Indonesia.
Because of this preoccupation, only the most careful of media-watchers would have been able to follow another international event of far greater significance for Australia and the world. This was the referendum conducted first by France and later by the Netherlands, to decide those countries' attitude towards a so-called constitution for the European Union.
There was, however, a disturbing similarity about the way the media dealt with both events. Despite its importance, the EU issue and the associated referenda outcomes were handled with the same cavalier indifference for fact as were the circumstances surrounding the Bali smuggling case.
As far as EU events were concerned, ill-informed journalists seem to have taken a position first, and then later to have invented facts in support of that position. One Sydney newspaper went so far overboard as to predict the collapse of the European Union. As for the elite journals, the standard of comment in the British Economist wasn't much better.
What needs to be understood is that treaties on aspects of EU life never become make-or-break issues. Decision-making processes in the EU simply do not work that way. They always operate on the basis that the underlying cement holding Europe together will not be disturbed. The fate of the so-called constitution will not impact on the viability of the union.
The EU is nothing like the Soviet Union; it is not about to implode now or long into the foreseeable future. It is built on a solid foundation of democracy. And, if the collapse of the Soviets told us anything, it is that undemocratic régimes don't seem to stand the test of time. There is far more binding the EU membership together than can be disturbed by indecision about a particular new arrangement.
The view being put forward to the uninitiated by the doomsayers is that the so-called constitution was nothing more than a blatant power-ploy by the EU's Brussels bureaucracy; that clever, perspicacious Euro-sceptics like Britain, Denmark and Poland had seen through the ploy; and that their respective populations would reject the document out of hand.
The characterisation of Poland is especially interesting: it has hardly completed its period of probation as an EU member. Can such a recently-inducted EU member have been so quickly converted to Euro-scepticism? And, if that were so, what possible reason could Poland have had for joining in the first place?
As for Denmark, in the face of an almost universally hostile media, the country's people, having flirted with secession finally voted to remain in the union. The reasons are hardly surprising. Danish agriculture - built around dairy and pork - is hardly Europe's most efficient, and would struggle to survive outside the EU's Common Agricultural Policy.
Britain's Euroscepticism, on the other hand, seems to be more substantial - and infects both government and people. Even so, the hardheaded know Britain probably cannot afford to leave the union.
Nevertheless, the Conservative Opposition is committed to putting the matter of EU membership to the vote, and the Labour Government seemed to have been stampeded into the same policy. However, Prime Minister Tony Blair seems now to be hesitating. Perhaps, accepting realities, deep down he's terrified that, given the chance, the British people will vote to leave.
Whatever may be the outcome of this latest EU experiment, it is unlikely any member-state will decide to leave the EU on that account alone. And it has taken some highly selective reporting to suggest otherwise.
Among the doomsayers, there was undisguised pleasure that first France, and then the Netherlands, had put the matter to referendum and, in both cases, the people had voted "no". Certainly, the architects of the new document will be disappointed at the outcomes of the voting in France and the Netherlands, but they will take comfort from two facts: A Spanish referendum has delivered a "yes" vote for the new document; and a further nine member-states - Austria, Italy, Germany, Slovenia, the Slovak Republic, Hungary, Greece and Lithuania - all have had their respective parliaments endorse the document.
Germany and Italy are of particular significance because they were among the six founding member countries which formed the EEC which, through subsequent membership expansions, ultimately became the European Union.
But what about the document itself? The idea that the document was a power-ploy by the EU's bureaucracy in Brussels does not hold up. It was developed by a group comprising both official and ministerial representatives from all 25 member-states, plus the aspirant members, including Turkey. And since this group signed off on the document, we must assume that there was support at that level for the outcome. And, of course, 10 countries have endorsed the outcome.
It would be more accurate to characterise the work of this group as a further development of the federation of the EU. It is a natural and necessary evolution; and that it should not be able to proceed much faster than the slowest will allow, simply reflects the way the EU makes decisions.
As is well known, even the management of well-established federations - much less their evolution - hardly ever proceeds smoothly. Both Australia and the United States stand testimony to that. Striking the right balance between the centralisation and devolution of power is never easy.
The 400-page EU document attempts to cover much ground. It most emphatically does not purport to be a constitution for the union. Indeed, one is hardly needed. The various commitments which all incoming member-states are required to make, and have made - beginning with the Treaty of Rome - are, of themselves, in the nature of a constitution for what might be considered the governing of the EU.
Perhaps the most controversial aspect of the document is the proposal advanced to confer on the EU the right to make foreign policy on behalf of all member states. At first sight, this seems a breathtakingly huge federating step - much greater even than currency union, which is still proceeding. But in the context of what sovereign member-states have already conceded, and given the EU decision-making procedures, it might have seemed less earth-shattering to the drafters than it now appears to mischief-making outsiders.
From the very start, the original six member states, in creating common import and export policies, conceded sovereignty to the EEC bureaucracy over the conduct of trade policy on behalf of the member-states. Note carefully, "... on behalf of...". EU bureaucrats spoke for, and negotiated on behalf of, member-states. But the policy position was fashioned by the member-states, each with the power of veto. The bureaucratic spokesperson, quite literally, with the member-states looking over his or her shoulder, was bound to the letter of the member-states' instructions. Since that time, every additional power ceded from member-states to the EU - and there have been many - have all been similarly administered.
Obviously, this is a clumsy and time-consuming process, which made negotiation with the EU very difficult. Their negotiators had absolutely no flexibility. Thus, for Australia on agriculture, the EU would only ever get authority to negotiate as far as the French would agree to - which was never very far.
This procedure is the background against which efforts to agree on a common foreign policy fashioned for the EU should be evaluated.
There has been much discussion about the decision process which effectively gives every member-state a veto. Some say it is anti-democratic. It is always easier for a big powerful member-state to exercise the veto than it is for a smaller state. Many of the smaller states believe that the veto power undermines the democratic principal of majority rule.
The current document wrestles with this problem, among other things: How to make the EU's decision-making processes more democratic? And how to involve ordinary citizens more directly? Collectively, the EU is somewhat obsessed with democracy - perhaps because of the experiences so much of its membership had with various form of authoritarian government in 20th-century Europe.
What does all of this mean for Australia? It won't matter much whether or not the current EU experiment, in its present form, succeeds or fails. If it does fail, it may be for an odd reason. Maybe, European voters are angry over the economic rationalism of the Maastricht Treaty agreed to some years ago, and won't risk another leap into the unknown. If so, most "good" parts of the current document may be introduced piecemeal and the rest will disappear. In effect, voters will regain control of the pace and direction of change.
Meanwhile, we can expect the union to keep going much as it was before. It may be that the process of expanding the membership will be slowed. But that may not be a bad thing.
What is important for Australia is that Europe continues to be a force in world politics and economics. Politically, it is beneficial to have another force in its own right, capable of standing alongside the United States and China, and having a capacity for influence. It is also important in an economic sense.
Europe has always been a powerful source of investment in Australia. It continues to be an important trading partner, though the balance of trade lies heavily in its favour. We have had our trade tensions with Europe over the years about agricultural protection. No doubt these will continue while our policies in favour of absolute free trade remain in place.
Free markets vs. social objectives
Nevertheless, Europe is now, and has always been, staunchly in the capitalist camp - though it has always been sceptical about the virtues of unbridled free markets.
It has resisted the strongest urgings from proponents of the free market, and remains committed to over-riding the market process, as and when necessary in order to achieve important social objectives.
And, if we reflect more on this, we will come to better understand why the EU remains so determined to shield its farm sector from the impact of imperfectly functioning markets in the trade in farm products.
Perhaps, one day, we may come to agree with them - at least on the matter of agricultural protection.
- Colin Teese is former deputy secretary of the Department of Trade.