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Europe: The Grand Illusion

1.

The European community was founded nearly forty years ago, with the stated object of promoting the “ever-closer” union of its members. It is a remarkable accomplishment, albeit not quite so remarkable as its advocates suggest. There are few who oppose its objectives in principle, and the practical benefits it affords its members, such as unrestricted trade, are obvious. That, after all, is why nearly everyone wants to join it. It is now engaging in negotiations among its member-states to construct a single European currency and mechanisms for common decision-taking and collective action, while simultaneously holding out to the countries of former Communist Europe the promise of membership in years to come.

The likelihood that the European Union can fulfill its own promises of ever-closer union, while remaining open to new members on the same terms, is slim indeed. In the first place, the unique historical circumstances of the years between 1945 and 1989 cannot be reproduced. Indeed, the disruptive effect of the events of 1989 has been at least as great in the West as in the East. The essence of the Franco-German condominium around which postwar Western Europe was built lay in a mutually convenient arrangement: the Germans would have the economic means and the French would retain the political initiative. In the early postwar years, of course, the Germans had not yet acquired their present wealth and French predominance was real. But from the mid-Fifties this was no longer true; thereafter France’s hegemony in West European affairs rested upon a nuclear weapon that the country could not use, an army that it could not deploy within the continent itself, and an international political standing derived largely from the self-interested magnanimity of the three victorious Powers at the end of the war.

This curious interlude is now at an end. One economic fact may illustrate the point. In 1990 a chart of French economic influence shows it to be limited to the “Europe of Nine”—that is to say, the original six (Germany, France, Italy, and the Benelux countries)—plus Britain, Eire, and Denmark. With these countries, France was a major importer and exporter of goods and services. But Germany, in contrast, already encompassed within its range of economic influence not only the present “Europe of Fifteen” but also most of the rest of the continent to the south and east. The significance of this is clear. France has become a regional power, confined to Europe’s western edge. Germany, even before unification, was once again the great power of Europe.

The impact of 1989 has also posed new difficulties for the Germans. For just as weakness and declining international power arouse difficult memories for France, so in Germany does an apparent excess of power. German politicians from Adenauer to Helmut Kohl have made a point of playing down German strength, deferring to French political initiatives and emphasizing their own wish for nothing more than a stable Germany in a prosperous Europe; they have thus fallen victim to their own rhetoric, bequeathing to post-1989 Europe a muscle-bound state with no sense of national purpose.

As a consequence, Germany’s national agenda today is a little too full. In addition to the economic and political problem of absorbing the eastern Länder, Germans must deal with the paradox of pre-unification Ostpolitik:that many German politicians, especially on the left, were well pleased with things the way they were and would have been quite content to see the Wall remain a little longer. Germans have also to reckon with embarrassments about their own capacities—now that they can and manifestly do lead Europe, where should they take it? And of what Europe are they the natural leaders—the West-leaning “Europe” forged by the French, or that traditional Europe of German interests, where Germany sits not on the eastern edge but squarely in the middle?

A Germany at the heart of Europe carries echoes and reminders that many people, Germans perhaps most of all, have sought since 1949 to set aside. But the image of a Germany resolutely turned away from troubling Eastern memories, clinging fervently to its postwar Western allies, as though they alone stood between the nation and its demons, is not very convincing.

Europe’s basic economic circumstances have also changed. For a generation following the announcement of the European Coal and Steel Community in 1950, Western Europe experienced an unprecedented combination of high growth and near-full employment. From this was born the belief, reflected in a series of optimistic economic forecasts from the OECD, that the cycle of crises that had marked the European economy for the previous half-century had been broken for good. The great oil crisis of 1974 should have put an end to such illusions. In 1950 Western Europe depended upon oil for only 8.5 percent of its energy needs; most of the rest was still provided by coal, Europe’s indigenous and cheap fossil fuel. By 1970 oil accounted for 60 percent of European energy consumption. The quadruple increase in oil prices thus put an end to a quarter of a century of cheap energy, sharply and definitively raising the cost of manufacture, transport, and daily living. In the Federal Republic of Germany GNP actually fell by 0.5 percent in 1974 and again, by 1.6 percent, in 1975, unprecedented blips in the postwar Wirtschaftswunder that were confirmed in 1981 and 1982, when the West German economy declined again, by 0.2 percent and 1 percent respectively. In Italy GNP fell (by 3.7 percent) in 1976, for the first time since the end of the war. Neither the German nor any other Western European economy has ever been the same again.

The effect of this on the European Community (later Union) itself was severe. An important feature of the community had been its capacity to serve with equal success the varied needs of its member countries, needs deriving from interwar experiences and memories that differed quite markedly. The Belgians (like the British) feared unemployment more than anything else; the French sought above all to avoid the Malthusian stagnation of earlier decades; Germans lived in terror of an unstable, inflated currency. After 1974 the stalled economy of Europe threatened them all with increasing unemployment, slow growth, and sharply rising prices. There has thus been an unanticipated return to earlier woes. Far from being able to offer the advantages of its economic miracle to an ever expanding community of beneficiaries, “Europe” can no longer even be sure of being able to provide them to itself. The events of 1989 brought this problem into the open, but the source of the Union’s inability to address it can be found fifteen years earlier.

The memory of unemployment between the wars varies from country to country. It was never a great scourge in France, averaging just 3.3 percent per annum throughout the 1930s. But in Britain, where 7.5 percent of the labor force was already unemployed during the 1920s, the annual average of 11.5 percent in the Thirties was something that politicians and economists of every stripe swore should never happen again. In Belgium and Germany, where the unemployment rate was nearly 9 percent, similar sentiments prevailed. It was thus one of the glories of the postwar West European economy that it maintained close to full employment through much of the 1950s and 1960s. In the 1960s the annual average unemployment rate in Western Europe was just 1.6 percent. In the following decade it rose to an annual average of 4.2 percent. By the late 1980s it had doubled again, with annual average rates of unemployment in the EC at 9.2 percent; by 1993 the figure stood at 11 percent.

Within these depressing figures one could see patterns that were more truly disturbing. In 1993 registered unemployment among men and women under twenty-five exceeded 20 percent in six EU countries (Spain, Eire, France, Italy, Belgium, and Greece). The long-term unemployed accounted for more than one third the total of those without work in those six nations as well as the UK, the Netherlands, and the former West Germany. The redistributive impact of the inflation of the 1980s worsens the effect of these figures, widening the gap between people in work and the unemployed. What is more, upturns in the economy no longer have the effect, as they did during the boom years after 1950, of absorbing surplus labor and pulling up the worse-off. Who now remembers the fantasies of the 1960s, when it was blithely believed that production problems had been solved, and all that remained was to redistribute the benefits?

The combination of rapid urban growth and subsequent economic stagnation has brought to Western Europe not only a renewed threat of economic insecurity, something unknown to most Europeans since the late 1940s, but also greater social disruption and physical risk than at any time since the early Industrial Revolution. In Western Europe today one can now see desolate satellite towns, rotting suburbs, and hopeless city ghettos. Even the great capital cities—London, Paris, Rome—are neither as clean, as safe, nor as hopeful as they were just thirty years ago. They and dozens of provincial cities from Lyon to Lübeck are developing an urban underclass. If this has not had more explosive social and political consequences, the credit lies with the systems of social welfare with which Western Europeans furnished themselves after 1945.

The crisis of the welfare state is thus the third reason why the European Union cannot expect to project its achievements and promise into the indefinite future. The Western European population is aging. Ever since the mid-Sixties the general trend has been for fewer children per family, to the point that in some countries, notably Italy and Spain, the population is not even maintaining itself. In Spain the birth rate per thousand in 1993 was just 1.1, a historic low. Europeans must now support a large and growing population of older people on the backs of fewer and fewer younger people, many of whom are not employed. A generous system of social services designed for flourishing economies where a large number of employed young people supported the social needs of a relatively small population of the old and sick is now under serious pressure.

In Northern and Western Europe the population aged sixty-five and over has grown by between 12 percent and 17 percent (depending on the country) since the mid-1960s. Moreover, even those under sixty-five can no longer be counted automatically on the “productive” side of the national equation: in West Germany the percentage of men aged sixty to sixty-four who were in paid employment fell from 72 to 44 in the two decades after 1960; in the Netherlands the figures were 81 and 58 respectively. At the moment the underemployed elderly are merely an expensive burden. But once the baby boomers begin to retire (around 2010), the presence of a huge, frustrated, bored, unproductive, and ultimately unhealthy population of old people could become a major social crisis.

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