Europe has reached a turning point – we now need to rescue it from the EU
THE COMING European Parliament elections could be a turning point: our moment to save Europe from the EU. But for that to happen, Europeans must realise the real future they face under the current system, and the risks involved in underestimating Brussels.
I have been interested in politics since I was a kid, and that is why I remember Denmark’s European Economic Community (EEC) referendum in 1972, even though I was only nine. Turnout was over 90 per cent and almost two in three Danes voted for Denmark’s entry into the EEC. As in other nation states, however, this support has evaporated.
Why did the EU go so wrong? There are many reasons: the ideology of the statists who took control in Brussels; contempt for democracy; distrust of capitalism and the fear of uncontrolled markets that might discipline politicians and their spending; a willingness to sacrifice millions of people’s jobs, lives and savings to a failed vision. The euro has buried Southern Europe. In several countries, it has made more than 50 per cent of young people unemployed and, in their formative years, unemployable. Some states are ahead of the curve, but all will end up in the same uncompetitive place in time.
There is one thing that can rescue the euro, but not Europe. It’s more far-reaching integration: a common financial policy, joint debt issuing, a willingness to pay enormous transfers from the rich to the poor countries. This is a possible route, but not a desirable one. It requires a will to give up national independence to an unacceptable extent and, because of this, it can only be accomplished in an undemocratic manner.
Personally, I’ve had enough of the EU, so moved to Switzerland three years ago. The Swiss respect democracy, and we vote on most things in referendums. Two weeks ago, the serious matter of more snow cannons in Saint Moritz was approved. More controversially, I was pleased to see the Swiss take a stand against the EU. While the vote to restrict immigration levels was populist, it was a protest against the increasing arm-twisting my new homeland experiences from the EU every day. This is one of the first warnings of what is to come from frustrated populations. Starting with a massive protest vote in May’s elections, eurosceptics could soon be the largest group in the European Parliament.
Of course, the EU is already aggressively commenting on the implications for Swiss trade access, as if there needs to be any connection between free trade and a desire to have influence over who you allow into your country. Switzerland’s population is about 23 per cent foreign-born. Immigrants consume social services, but also add to GDP. Why is it difficult to understand that the latter is more welcome than the former? But the EU has only blackmail to ensure others stay subordinated to its interests.
It’s for this reason that I worry about how Europe will develop if the Barrosos and Van Rompuys of this world gain the power they dream of. Look ten years into the future. There will be more uniform and higher tax levels: eliminating tax competition is high up on the EU agenda. Direct EU taxes will go straight to the Commission. There will be massive exit taxes, fines and other barriers for those who want to leave the EU. Veto rights for nation states will surely disappear, and smaller countries will have little influence. The financial sector will have moved to the US, China, Hong Kong and Singapore. The young and talented will be departing in droves. But take comfort. The EU will be still be a leader in irrational activities like low CO2 discharges, green companies, and other costly propositions. But internationally, the EU will increasingly have to do what the creditor states demand. Can we really allow this to happen?
In May, Europeans have two roads to choose from: the Chinese and the European. To some extent, the EU is trying to do the same as China – to create a centrally-managed economy that places limits on innovation and creative forces, and has little faith in local autonomy. We are, however, destined to lose the fight: partly because China better incentivises capitalist innovation than we do; partly because the Chinese are less constrained by democratic considerations and processes than we are in the EU.
But there is also the European road, which focuses on the colossal strengths we still have. It is not all destroyed yet. We have a huge number of wage earners and consumers, a well-developed free trade area. We have variation – different and competing tax systems. We have low salary areas with capacity for service, industry and manufacture. We have high salary areas, with the skills for innovation and creativity. We have the pride of being part of Europe and of being citizens of our own nation states, if not pride in the EU.
These are the two roads. And that is why May will see probably the most important election in many years. If you love your country, if you love Europe, don’t waste this chance to make right what the politicians have made wrong. We need to save Europe from the EU.
Lars Seier Christensen is co-chief executive of Saxo Bank. This is an extract of his speech marking the 25th Anniversary of the Bruges Group.