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The fantasy of European integration is over

By Oliver Hartwich - posted Monday, 17 May 2010

The longer the Greek tragedy lasts, the more it is becoming clear that it is not only the problem of a little country at the south-east fringe of Europe. It is not even just a crisis of the Euro currency, which may not survive the upheaval despite the billions pumped in to calm the markets temporarily. What we are really witnessing is the end of the decades-long project of European integration.

Europe’s political class denying this will make its economic consequences all the more disastrous. They can bail out Greece and the euro as often as they like but they cannot gloss over the basic flaws of the European project.

There are two ways to look at Europe. The first is a sober assessment of the continent’s difficult reality. It acknowledges the social, economic and political challenges as well as the inherent limits of supranational problem-solving. The second is a pseudo-romantic view of Europe not so much as the troubled continent that it is, but as an idealised place in which co-operation and multilateralism have replaced competition and nationalism.


The Greek crisis should have dealt a blow to those who still cling on to this harmonious ideal of European integration. If Greece has demonstrated one thing it is the fact that “ever closer union” cannot effectively conceal economic discrepancies and national interests.

Many European leaders would, however, draw the very opposite conclusion. Instead of recognising the failures of the European project, they call for even more of the same. For example, French President Nicholas Sarkozy has repeatedly advocated a joint economic policy for the whole continent - blissfully ignoring that the EU is an institution in which even an agreement on the definition of chocolate can take 15 years.

Unfortunately, the recent rescue package has moved the EU closer to the French ideas of fiscal union while simultaneously damaging the independence of the European Central Bank. The euro, once promised to be as hard as the Deutschmark, will soon become as soft as French camembert as a result.

The refusal to accept the limitations of Europe makes it so hard for politicians to confront the current crisis in the eurozone. In fact, it exacerbates the problem. As long as Europe’s leaders resort to wishful thinking, they are inviting the markets to bet against them.

No two other European politicians better exemplify the differences between euro-realism and euro-romanticism than Czech president Vaclav Klaus and former German chancellor Helmut Kohl. The reactions to their most recent public appearances point to the core of Europe’s problems. Europe does not want to be told harsh truths. It rather celebrates those who indulge in daydreaming.

For the past decade, the Walter Hallstein Institute at Berlin’s Humboldt University has been hosting a series of lectures on the future of Europe. They are remarkable not only for the high calibre of speakers, among them many past and present heads of state or government.


The Humboldt Speeches are equally remarkable for the fact that the first 20 of them were mainly variations of the same theme. The contributions by former French President Valéry Giscard d’Estaing, Irish Prime Minister Bertie Ahern or Luxemburg’s Premier Jean-Claude Juncker may have differed in nuances, but not in their general direction. They all wanted to drive European unification further.

Perhaps the organisers got bored of so much europhilia, or maybe they just thought that another such speech would sound silly at a time when Greece is literally burning. In any case, they invited Vaclav Klaus to deliver his verdict on the process of European integration.

Among Europe’s political elites, the Czech President has a dubious reputation. As a classical liberal, an economist, and an open admirer of Margaret Thatcher and Ronald Reagan, Klaus is isolated among European leaders. The media treat him with a mixture of ridicule and contempt.

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First published by Business Spectator on May 13, 2010. Republished with permission.

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About the Author

Dr Oliver Hartwich is a Research Fellow at the Centre for Independent Studies. His paper No Particular Place To Go: The Federal Government's Ill-Conceived Support for the Australian Car Industry was published by CIS on March 17, 2009.

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