EVENTS

Date:	Thursday, June 2, 2005
Time:	10:00 AM -- 11:30 AM
Location:	Wohlstetter Conference Center, Twelfth Floor, AEI 1150 Seventeenth Street, N.W., Washington, D.C. 20036

June 2005

Europe: Better Off without a Constitution?

Adam Posen, Denis Pietton, Radek Sikorski, Wim Geerts, David Frum

The people of France and the Netherlands have spoken and rejected the proposed European Union Constitutional Treaty. The Constitution will likely fail, despite the fact that most major political parties in all European countries support it. What are the implications for the future of Europe? What will be the economic repercussions? What does the result tell us about how representative Europe’s governing elites are of their own societies? Is the European project about to fail? These questions were considered at a June 2 NAI conference.
 
Denis Pietton
Deputy Chief of Mission, Embassy of France

Several factors contributed to the defeat of the EU Constitution. The economic situation in France is sagging, with slow growth that has not increased employment. The Constitution has been perceived as a tool to liberalize the job market and expose it to further competition from cheaper non-French labor. The EU is perceived as distant and lacks transparency in its proceedings. Many people thought the Constitution threatened to end the French way of life. They belatedly expressed doubts about enlargement. Despite the French and Dutch rejections, however, the EU continues: it is not the end of the European dream. The ratification process of the Constitution is not over. Eleven countries have already ratified the Constitution, ten of them by parliamentary vote, and one (Spain) by referendum. Every country should vote on the treaty. It is important that all Europeans express themselves and that the leaders of Europe are able to assess the mindset of their countrymen on such a vital topic.
 
Wim Geerts
Deputy Chief of Mission, Royal Netherlands Embassy

The debate over the EU Constitutional Treaty has been very lively, which is sign of an open democratic process. There are different reasons behind the Dutch “no.” The Dutch people feared losing sovereignty to the Brussels bureaucracy. This fear has been fed by the too-rapid pace of change recently marked by the adoption of the Euro and the enlargement by ten countries. Presenting the treaty as a “Constitution” was also misleading. The Constitution should have been presented for what it actually is: a consolidation treaty. Economic factors have also played a role. The Dutch, just like the French, fear foreign competition, further enlargements to poorer countries, and resent the lack of commitments of bigger countries to the Euro Stability Pact. Dutch people also resent the surge in prices that followed the introduction of the Euro and deem it unfair that the Netherlands is the biggest per-capita contributor to the EU budget. Finally, the results of the French referendum strengthened the Dutch “no” and expressed general discontent with the ruling coalition.
 
Adam Posen
Institute for International Economics

The results of the French and Dutch referenda are going to harm the European economy. Europe is on a fast pace towards stagnation. The vote against the Constitution is a vote against globalization and enlargement. Despite some regulation excesses, which were usually the results of inter-state fights, the EU Commission has mostly been a force for liberalization. The results of the French and Dutch referenda have weakened Brussels’ authority in favor of national governments. This will push the national governments away from much needed radical economic reform. In the long term the resistance to change will translate into a less dynamic economy burdened by further demands for social protection. Europe will grow even slower, and this will add friction to the transatlantic economic quarrels over protectionism and subsidies.
 
David Frum
AEI

The opposition to the Constitution among certain American circles was not determined by a desire to undermine the EU but by the will to avoid a weaker Union hostile to the United States. It is in the U.S. interest to support a fast growing, economically integrated EU. The Constitution would have transferred powers from the national governments to the EU Commission and the Court of Justice, neither of which are democratically elected. Europeans are alienated from Brussels and funnel their frustration into “irresponsible” extreme parties that appeal to national identities. European governments need to recover and foster their national identities, which the Constitution undermines. National identities are a fundamental step on the road of Europe’s economic success. The people of Europe will be more willing to accept economic change if this will be done in the name of their own countries’ successes, rather than in the name of an abstract document named the “Constitution” or in the name of the EU Commission.