Authored by former UBS Chairman Peter Kurer, originally posted at finews.com,
Following an unfortunate combination of wrong decisions at the top and the uncontrolled flourishing of a self-serving bureaucracy, the union has moved in a direction where it has become a prisoner of its own constructed reality. Putting it somewhat simply, the EU, after making good progress in the early years and serving peace, made two fundamental mistakes since the Maastricht Treaty that have become inherited burdens today, and that we would do better to get rid of. They are closely tied and together form the Gordian knot of the continent:
- The first problem is the euro. This artificial currency was imposed on an economic area that is too uneven to support a uniform currency. The euro is too weak for some, too strong for others. In Germany’s case, it is significantly undervalued, boosting the export economy, but at the same time driving up the price of many everyday imported items, causing consumers to lose out and not to benefit from being world champion exporters.
It is the opposite in the south where the euro is overvalued. Industries located there cannot keep up and are being forced out of the market. The consumers in these countries benefit from cheap imports but are often low-income or even unemployed. Balancing measures such as a transfer union or a standardized fiscal policy are not available in the economic area.
«To the elites, the EU is a means to get rich quickly and export their problems»
All this is being accompanied by a certain austerity in state payments, which is more of an exacerbating factor rather than the actual cause of the problem, contrary to what people who blame Germany for everything like to think.
- The second burden is the failed eastern expansion of the union. Again, for political reasons, the states of the east of the continent, formerly under Soviet influence, were too hurriedly pushed into full EU membership. These countries were not and are not suited to so close an alliance with Western states. They lack a sufficient degree of democratization and rule of law. The development of an economic infrastructure and understanding of good economic and state governance are lacking.
To the elites of these countries, the EU is a means to get rich quickly and export their problems. They have nothing but contempt for the well-meaning but somewhat naïve political programmes of the Brussels bureaucracy. Corruption is more than ever the central governing instrument. The region is increasingly a source of discord within the wider European region and produces an abundance of crazy and clueless leaders, such as Orban, Kaczinski and others.
- The third problem is the glorification of the free movement of people. This did not exist in the original European order in its current radical form, but was introduced and implemented in such a way to cushion the negative consequences of the euro and the expansion eastwards. The inclusion of the Eastern European countries into the EU subjected their economies to the harsh demands of the free market and destroyed state enterprise which had provided better job security for workers.
If the strong West could introduce goods and services in the East, the thinking went, then the states of Eastern Europe should have the right to export their citizens to the West, to keep unemployment under control. In the countries where the euro was introduced, this mechanism was strengthened because the most competitive western and northern countries increasingly imported their goods into southern and eastern regions, instead of producing them there, which again increased the migration pressure.
«The traveller enjoyed Europe, despite its allegorical weight»
Over the years, the uncontrolled free movement of people led to a brain drain in the south and east, to the emigration of the brightest and best to the West. The result in the destination countries was an immigration pressure that many could not endure and felt as a threat. The great English philosopher Roger Scruton summed it up drily, when he called free movement a stupid concept: the same could be said about the eastern expansion and the euro.
The traveller enjoyed Europe, despite its allegorical weight. On a beautiful Sunday morning, he drives together with a foreign friend to Fiumicino. Beforehand he attended Mass in the Basilica Santa Maria del Popolo. There the priest let the congregation go with a beautiful vision: the Mass is ended, go in peace. At the airport, the friend asks, as he extends his hand in farewell: And you Swiss, when you will finally join the EU? Or at least sign up to an institutional framework agreement?
«The EU had its chances»
Not in my lifetime, says the traveller, to the question of joining the bloc. A framework agreement is currently being negotiated by the government. But you can already forget it. Politically it has no chance of survival. At the end of the day we are not crazy and also not totally clueless, the European traveller says, somewhat on the offensive.
The EU was a great idea but it has been ridden to death. Back in 1992, almost half of Swiss voted to join the European Economic Area, including the traveller. If there was a vote today on joining the union, the latest polls say just 15 per cent would vote yes.
The EU had its chances. It squandered them, and maybe it will come to an end in the foreseeable future under the weight of its burdens: La messa è finita, andate in pace.
