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Sep 22nd 2012 | from the print edition
ANYBODY who has played (or watched their children play) life-simulation
computer games, such as SimCity or The Sims , will know how engrossing they
can be. Countless hours are spent creating an intricate synthetic world, be it
a house or a whole city, inventing characters that speak a nonsense tongue
known as Simlish, controlling their actions and sometimes visiting disaster
upon them. A similar craze is gripping Brussels: call it SimEurope.
Guido Westerwelle and Radek Sikorski, the foreign ministers of Germany and
Poland, have spent much of this year locked away with nine colleagues (almost
all boys) engaging in make-believe. This week they revealed the fruits of their
Future of Europe Group . It is a world that includes an elected European
president, a more powerful European foreign minister, a European border police
and perhaps even a European army. The British spoilsports were not invited.
Just a few days earlier, Jos Manuel Barroso, president of the European
Commission, gave his annual State of the Union address and spoke of a future
federation of nation-states , a notion he has repeated in countless op-ed
articles since. Mr Barroso has thus revived the term coined by his predecessor,
Jacques Delors, but has not explained what he means by it. He says only that he
will present some proposals by 2014.
With his words, Mr Barroso is breaking away from the three other presidents
Herman Van Rompuy of the European Council, Mario Draghi of the European Central
Bank and Jean-Claude Juncker of the Eurogroup of finance ministers who are
collectively planning a genuine economic and monetary union. Having set out
the building blocks in June, Mr Van Rompuy has now produced an issues paper
that proposes, among other things, a central euro-zone budget. An interim
report may be presented at a summit in October and the final version should be
out in December.
In many ways Angela Merkel, the German chancellor, started this craze for
make-believe with her calls for a political union (including more power for
the flawed European Parliament). This is awkward in France, where parties have
been deeply divided over Europe since the referendum in 1992 for the Maastricht
treaty (approved narrowly) and the one in 2005 for a constitutional treaty
(rejected). Yet Pierre Moscovici, the Socialist finance minister, recently
uttered the word federalism . And Fran ois Fillon, the recent conservative
prime minister, has proposed a new pact for Europe that would include a
European finance minister.
All these ideas have their origins in an old game: More Europe. The aim is to
avoid cataclysmic war, or domination by one country, by uniting while still
pursuing national advantage. Each level of integration becomes more difficult
as problems deepen. Players must not only negotiate away more power, but must
then sell the new treaties to their reluctant populations.
In SimEurope the people are synthetic, divided into good Europeans and bad
nationalists or populists. The baddies can be defeated by More Europe. In the
real world things are rather more complicated. There is growing scepticism
about the European project. According to recent polls, a majority of Germans
think they would be better off without the euro, and many would be rid of the
EU too. In France a majority of those who voted for the Maastricht treaty would
not do so again. In Spain, though, a majority wants to deepen euro-zone
integration.
Eurosceptic and Europhobic parties are claiming substantial chunks of
electorates. In the Dutch elections this month centrists may have made a
comeback, but often by adopting a tough line on bail-outs for troubled
countries. In many places, there is a growing cry for citizens to be consulted
directly in a referendum, albeit for different reasons. In Britain,
Eurosceptics hope to win a vote to leave the EU whereas in Germany the pro-EU
elite wants a referendum to change the constitution to give more powers to
Brussels.
Back to reality
By turning an imaginary currency into reality, Europe s leaders have created a
real-world crisis that they must deal with. Returning to the old marks, francs
and lire would be more painful than trying to fix the euro. That means some
more integration, and giving up the studied ambiguity about the ultimate
objective of Europe so that citizens can make a clear choice.
Leaders are at least discussing the right issues. But the problem with many
recent ideas is that they obfuscate the essential questions more than they
clarify them. Foreign ministers may like the idea of playing with a European
army, but it is hardly central to resolving the economic crisis. Similarly Mr
Barroso s federation of nation-states misses the point. He raises the standard
of federalism, which is inevitably contentious, without saying how integration
is to be reconciled with the nation-state rump that is left.
The euro zone is heading towards the worst of both worlds nation-states feel
violated by Brussels s ever-expanding controls, even as the European level
remains too weak and opaque to have an impact or win popular allegiance. A
better approach might be to set aside labels and think of a narrow set of core
functions that need to be deeply integrated. A coherent banking union makes
sense, as do some joint bonds. Germany rejects mutualisation of debt on the
grounds that not even America expects states to guarantee each other s debt.
Yet America has federal bonds, backed by federal taxes, which in turn provide a
safe asset for all banks to hold. American states go bankrupt, as do lots of
banks. Call it what you want; integration, centralisation, federation,
confederation the objective should be to stabilise the system sufficiently to
allow badly managed banks and states to go bust safely.
http://www.economist.com/blogs/charlemagne
from the print edition | Europe