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| My Orchids. Phalaneopsis "Tax Rulings". Photo ET |
Democracy in Europe is
Really a Party
Several decades ago Henry
Kissinger asked this illuminating question: “Who do I call if I want to talk to
Europe?” The Treaty of Rome signed on March 25, 1957 by Belgium, Germany,
France, Italy, Luxembourg, and the Netherlands, was “to lay the foundations of
an ever-closer union among the peoples of Europe”. After almost 60 years of
integrative wandering towards that union, another US diplomat, Victoria Nuland,
Assistant Secretary of State for European and Eurasian Affairs, summarized in a
2013 leaked phone call the European Union’s international irrelevance with a resounding
four letter word. I tend to agree on the substance with Ms. Nuland’s evaluation
of the EU’s geostrategic relevance.
However things did get
accomplished over the past six decades. Most visible is the Union’s geographic
expansion, the EU growing from six to twenty-eight members. Remarkably, there
seems to be no master plan. A nascent Constitution, elaborated by a “European
Convention” under the leadership of former French President Valéry Giscard
d’Estaing was roundly defeated by the French and Dutch voters in 2005. Instead,
by 2007 a reform of the existing old treaties was adopted, a sort of Ersatz
Constitution without some of the key provisions of the initial project.
The main uncertainty ever
since the signing of the Treaty of Rome has been: what is the ultimate goal of
the ever closer union? According to the newly minted President of the European
Commission, my fellow Luxembourger Jean-Claude Juncker, “we don’t want to
become the United States of Europe”. Children would never say what they don’t
want to be when they grow up. They spell out what it is. And Europe is what it
is, a work in progress, on organic growth guided by mutation, and happenstance,
without a blue print. Unless the US model is the stealth blueprint for the EU’s
free flow of people, goods, capital and services.
Having failed to deliver
a plan for the future, the impatient among us might want to consider a shortcut.
Why not just copy the US Constitution? It has all the ingredients of a good
fundamental law. It has been debated intelligently in the “Federalist” papers,
it is rooted in “We the People”, and it has proven to be a valid set of
principles for the world, defining how people can live together. In order to
make my point, let’s have a demonstration ad absurdum. Imagine that for a
moment the US Constitution is replaced by the present European mode of
operation.
First, the US would not have
wanted to become the USA. It would be a union of 50 sovereign States. Each
State would have instead of a Governor either a King or a Queen without power,
or a President with wide power or no power. But let’s simplify and assume the
50 Governors wield the power, and meet in a (European style) Council, the
supreme decision making body, which has an unelected President, who has no real
power beyond arranging for cars and catering, and printing the agenda.
The 50 Governors would
speak in about 45 different languages, and would need at least 2,000
translators. Thirty States would have
adopted the dollar, the others would have opted out or been prevented from
joining the dollar for economic reasons. That leaves 20 States using pounds,
crowns or francs. Persons could travel freely between 43 States, the 7
remaining ones would have border controls. In summary, when traveling from NY
to CT you might pass a border control, change currency and learn another
language!
As there would be no USA,
there would be no US Armed Forces, no projection of power abroad, no federal
taxes, though a hefty contribution by the States to the Union’s budget. There
would be a unicameral Congress, the House of Representatives with a subordinate
role to the Council of Governors. Wyoming would have 6 seats in the House
instead of 1 now, and California 38 instead of 53 now. The Senate would not
exist. Sales taxes would range from 15% to 33%. These for Americans shocking realities
are daily life in the EU. The lack of political will and vision translates into
a lack of checks and balances, and a tremendous loss of opportunity for
Europeans.
In that atmosphere of
expediency Jean-Claude Juncker has been selected / chosen / coopted, and some
say elected President of the European Commission, the Union’s non-elected
government. He had been Prime Minister of Luxembourg for 18 years, moonlighting
for about 8 years in a parallel job as President of the Euro Group, the 17
member states using the Euro. In 2013 a triplet of scandals in Luxembourg brought
him down. He was then designated by his peers of the European People’s Party to
be their top candidate in the elections for the European Parliament of May
2014. However he was not a candidate on the electoral lists, a baffling
innovation in the democratic process. But he claimed victory as he had been
anointed the incarnation of the strongest party. He is thus the first political
avatar winning an election without being a candidate, and to be the chosen one
to the European Commission’s Presidency.
He still got the European
Council’s nod, and a confirmation vote from the European Parliament. Several
forces had opposed him, most prominently British Prime Minister David Cameron.
Jeroen Dijsselbloem, Juncker’s successor at the Euro Group said on Dutch
Television that “Jean-Claude Juncker was
an inveterate smoker, and drinker”.
More politically problematic was his public consecration of lying as a policy
tool. When caught lying in 2005, he declared that: “When it becomes serious,
you have to lie.”
Not transparent either
were Luxembourg’s tax rulings when Mr. Juncker was Prime Minister. Large
companies had an orgy in tax avoidance in Luxembourg. One week in his new job,
Mr. Juncker faced a new crisis when the International Consortium of Investigative
Journalists ICIJ published details about Luxembourg’s tax rulings. The
disclosures were based on documents stolen from PwC. Mr. Juncker survived a
censure vote instigated last week by Europhobes in the European Parliament
based on Luxembourg’s tax rulings. Mr. Juncker went from silent to denial, to “others
do it”, before gradually sliding towards an alternate position: he vowed a
major initiative by his Commission to make tax rulings transparent and
reportable.
At the Commission, Mr.
Juncker can now write his own job description, as the contours of his duties
are in an impressionistic haze. He might surprise more than one if History
repeats itself. I’m suggesting that in the Middle-Ages the Prince-Electors of
the Holy German Empire would often choose Luxembourg Princes to become Emperor,
as they were perceived as weak and creating no harm. Charles IV however
defeated the low expectations and became one of the most powerful emperors
ever, unifying power in his hands as King of Bohemia and Holy German Emperor
during a reign of 32 years (1346-1378). Are we following this medieval
template? Mr. Juncker is already the 3rd Luxembourger to hold that Presidency
in a list of 12. Will he be Charles V?
For the moment, he is
touting a 315 billion euros investment package. This could be his first tour of
magic, as the money is not available. The European Investment Bank is cited and
others including private investors. This exhibition of mostly notional capital
to kick start the European economy sounds like Maynard Keynes spending Milton
Friedman’s money. A real party, but BYOB. Bring Your Own Billions.
