08 June 2015

Financial Times: If Europe cannot bend it will break

The difficulties of changing Europe are rooted in the size and legal complexity of the EU — an organisation that is now so large and unwieldy that it finds radical change almost impossible to contemplate.

Neither man would appreciate the comparison, but Alexis Tsipras and David Cameron are in remarkably similar situations.

The Greek and British prime ministers both say that they have secured a democratic mandate at home to demand changes in their national relationship with the EU. Both leaders have calculated that the other Europeans will meet their demands rather than risk seeing Greece leave the euro or Britain leave the EU. But both Mr Tsipras and Mr Cameron are encountering a wall of opposition in Europe that could lead them to the destinations that they are keen to avoid — Grexit and Brexit.

Both the Greeks and the Brits have found that an argument based on the results of their own national elections can go only so far in an EU of 28 member-states. When Mr Tsipras claimed that he had a democratic mandate to demand change in Europe, Wolfgang Schäuble, the German finance minister, is said to have responded: “I have also been elected.”

But the difficulties of changing Europe go well beyond a clash of national democratic mandates. They are rooted in the size and legal complexity of the EU — an organisation that is now so large and unwieldy that it finds radical change almost impossible to contemplate.

The British say that securing the changes they want in Europe, on issues such as immigration and the rights of national parliaments, will require treaty change — that is changes to the EU’s basic legal documents. But treaty change requires the agreement of all EU countries, some of which will also hold referendums. The very process of renegotiation also invites every member of the EU to come forward with their own clashing demands. Rather than contemplate that nightmarish prospect, it is easier for the EU simply to refuse to shift — other than in small or symbolic ways.

It is important to realise that this aversion to change is largely divorced from the merits of the reforms that are being requested. Different EU governments have different views on whether Greek or British demands are reasonable. There is some sympathy in France and Italy for Greek arguments that the country’s debts are unpayable and that further deep austerity would be counterproductive. There is some sympathy in northern Europe for British arguments on welfare and increasing the role of national parliaments. But, regardless of the merits of the Greek and British cases, there is a deep reluctance to open the Pandora’s box of profound reform.

Full article on Financial Times (subscription required)

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