Democracy in Europe is Really a Party

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 3^rd 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.