But it is no economic disaster
OPINION
It is a bitter irony that the European Constitution that was meant to bring Europe closer to its citizens, by strengthening the power of the European Parliament, involving national parliaments in law-making, by clarifying the roles among the different EU institutions and getting rid of some of the appallingly opaque Eurocrat lingo, was rejected by the very people it was meant to reach out to.
However, it is not the total economic disaster which it is being made out to be.
First, economic reform was already on the rails. In countries where restrictive labour markets have led to high unemployment, especially among the young, there is already a backlash against the very liberalisation that has been proven to solve the problem (just compare French and UK unemployment rates).
The Bolkestein directive that would have opened up the EU’s vast services sector was already on the rocks, thanks not least to French resistance, and a really free market in financial services such as crossborder pensions remains a distant dream.
The French result, therefore, just confirms what we already knew: that Europeans are having an identity crisis and it will be some years before progress can be made.
Yet there are two reasons to remain optimistic. First, the crisis of confidence that is gripping “core” Europe will probably usher in new governments. President Jacques Chirac, who has obstructed all kinds of reform, is finished, even if he hangs on until the election next year. The favourite to replace him is reform-minded Nicolas Sarkozy.
Early elections in Germany this September are expected to usher in a Christian Democrat-Liberal government that will have a large enough majority to tackle labour market and tax reform in Europe’s largest economy.
The Christian Democrats will also have luck on their side. A report by ABN Amro investment bank shows that unit labour costs have risen so fast in eastern Europe that Germany’s highly productive workers are beginning to look like an attractive option again. Moreover, a weaker euro brought on by the French no will help to boost exports.
Governments should help to educate us
Another reason to be optimistic is that it has given a very big wake-up call to member state governments that they need to do their part to educate citizens about what the EU is really all about.
How many citizens of Europe know that the laws of the EU are passed by member state leaders and their ministers (with input from the democratically elected European Parliament), and not by the European Commission?
Very few, because too many governments have used the Commission as a scapegoat for all the unpopular rules (such as minimum rates of VAT, fiscal discipline, withdrawal of subsidies), while taking credit for the more popular rules, such as equal pay for women, equal pension rights for men, lower telephone costs, cleaner water, cleaner air, safer food and so on.
Although the European Commission itself spends a great deal of time and effort trying to limit the damage, by keeping the journalists informed of developments in policy, the sorry fact is that unless the policy issue is mentioned by a member of a journalist’s own government, most journalists (Financial Mirror excluded) simply send the information to the trash can.
Think about it. The EU’s public healthcare policy gets wide coverage in Cyprus, where the Commissioner in charge is our own Markos Kyprianou, while the EU’s trade policy gets a lot of coverage in the UK, where Britain’s Peter Mandelson is in charge.
But member state governments could do so much more to engage citizens in the debate. For example, a draft directive on air services should be accompanied by a statement from the Minister for Communications and Works, along with information about how businesses and citizens can engage in the debate.
A draft directive on financial services should be accompanied by a statement from the Minister of Finance, or the head of the Securities and Exchange Commission. That would provide some guarantee that the local journalists would take notice and the citizens could be informed.
Until member state governments see the European Commission as a partner and not a rival, citizens will remain ignorant about how the EU works, what it is for and why it is so important that this great peaceful democratic experiment survives.
Fiona Mullen
