Book Essay: The Great Deception (Part 2)

The first part of this essay and review can be found here.

Thanks to Henrik Ræder Clausen of Europe News for sending this to GoV.


Book Essay: The Great Deception (Part 2)
by Henrik Ræder Clausen

The rise of the European Union

[Note: This is an essay inspired by the book “The Great Deception”. What set out to be a review became an essay in its own right. My review opinion is here.

If you want to understand EU, read this book.

Now for the second part of the essay:

Moving into the second part of The Great Deception, we have to go back a bit, to the Exchange Rate Mechanism (ERM) and related treaties. First, note the use of the innocent-looking word ‘mechanism’ for something with profound economical and political consequences. The truth, of course, is that this was no mere ‘mechanism’, but a fully-fledged currency union, a project that, as a matter of cause, sets billions at stake. And the precursor to the Euro, too, a project of even greater significance.

When the idea of a common currency was first floated, the notion that United Kingdom and the other nations of Europe should give up their rights to mint coin seemed far-fetched. Yet, as the ‘supranationalists’ found that their project was stalling in the early 80’s, a decisive move towards a real political union was initiated. It was quickly found that a one-step implementation of the Union would likely be rejected by the European public, and thus the plan was divided into two stages:

Stage one, the ‘Common Market’, was to be presented as a ‘necessary’ completion of what the EEC set out to be, a completely open market between the member countries. Most of the supranational material would then be scheduled for stage two, wherein the European Union would be created. Margaret Thatcher saw through this and argued that the existing treaties would do just fine, and that any required adjustments could be achieved by more use of majority voting (which is supranational by nature), but hit stiff opposition trying to argue her quite obvious points.

Ambush in Milan

At the summit meeting in Milan 1985, the supranationalists led by the Italian presidency argued for setting up another intergovernmental conference (IGC), which would design the new treaties and prepare them for ratification. Thatcher would have none of this. She saw no need for a formal extension of Community powers, and (backed by Denmark and Greece) refused to set a date for such a conference.

One may wonder why simply setting a date would be so important, and to understand this, one needs to understand the nature of the IGC. The real work takes place before the conference proper, and consists of civil servants and ministers preparing all required treaties, declarations etc. to be accepted at the conference. Which, while not being merely a rubber-stamping event, is still expected to largely approve what has been prepared for it. This takes place without much in the way of public scrutiny and is therefore quite dangerous from the point of view of properly working democratic processes.

Bettino Craxi gave up trying to convince the British (Danes, Greeks), and took the interesting move of calling a vote on the IGC issue, thus discarding the unanimity one would usually expect for such far-reaching decisions. He said:

“We would have preferred a general consensus and unanimity, but these were not to be had. I believe we shall work steadfastly to overcome the obstacles before us and to achieve the necessary consensus to go forward together towards the objectives of the European Union.”

Supranationalism won, and ever deeper integration could continue.

At the same summit, Pietro Addenino presented a report on “A People’s Europe”, outlining how to create an “European identity” to stimulate interest in EU matters, like elections etc. An important component of this was to diminish the nation-states’ control of the media, as well as introducing common European symbols, such as the 12-star flag, the “European anthem”, celebrating May 9th as “Europe Day”, adopting teaching materials to promote the “European dimension”, and more prosaic things such as common driving licenses, passports etc.. - all to create a common European identity. Those familiar with the “Sorelian myth” and the rise of fascism in the 1920’s ought to have taken heed. But they didn’t.
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The Rise and Fall of the ERM

Debated before the IGC was surrendering immigration policy to the Union, as well as tax policy (under the label of ‘harmonization’), and not least the introduction of the Exchange Rate Mechanism (ERM), a precursor of the Economic and Monetary Union (EMU). Thatcher was adamantly against this, and fought to avoid having it mentioned in the new treaty. Here she relied on Germany, who she expected not to be willing to give up the D-Mark, to oppose the idea entirely. Germany, however, eventually decided to endorse the ERM, and Britain was left isolated again, as the French-German axis drove forward integration as before. Being alone in a negotiation is very difficult, even when unanimity formally is required, and easily leads to small concessions that may later evolve into big ones. Further, it tends to create a ‘mob effect’, where everyone else attempts to convince you of their ‘sensible’ viewpoint “for the sake of unity”.

Several twisted negotiations later, Britain joined the Exchange Rate Mechanism. The idea was to tie all currencies into a narrow band of variation, in order to prevent ‘speculation’ and ‘undue gains’ that take place in a freely functioning market system. However in 1992, the deal had turned sour. The ‘speculants’, who were supposed to have less to gain, decided to attack the British Pound and press it to leave the ERM. The exact details of how this works can seem obscure, but the hard reality is that central banks can be pressed to spend huge amounts of money defending a certain exchange rate, while interest rates may have to be adjusted to unpleasant levels as well. At the end of the day, Britain had to give up and leave the ERM, its funds badly depleted. Where did the money go? It is reported that George Soros walked away from his attack on the Pound with a billion more of them in the bank.

Later the core countries of the ERM were not able to uphold what was basically a severe restriction on free currency trade, and expanded the ‘band’ from 21/2 percent to a whopping 30. Admitting failure was never much in vogue in the European Union, and this face-saving measure permitted the leaders to proceed with the EMU and the introduction of the euro in spite of what can only be described as the “Catastrophic failure” of the ERM.

The reassuring promises that the Stability Pact underpinning the Euro would severely punish those who broke the deficit limits turned out to be hollow, as France, Germany and others broke the rules without serious consequences or the expected fines. Even Greece, who was found to have fudged the accounting severely in order to join the Euro, was not kicked back to the Drachma.

A continuous failure was the Common Fisheries Policy, which led to ecological disasters and much internal strife, as the have-nots of fertile fishing waters (Spain in particular) exploited access to the waters of the other member states to the limits - and beyond. Greenland (part of Denmark) became so annoyed with the situation that it simply left the community, so far the only major rollback of Community power.

Finally, Thatcher herself met her political destiny over European Union issues. Booker and North outline how the “Iron Lady” becomes increasingly isolated in her own cabinet, where the europhiles won over more and more power with her own supporters falling away, leading to the exit of the most ardent eurosceptic Britain ever had. The reaction to her exit was a predictable quest to be “at the heart of Europe”, meaning abandoning many of the positions she had fought hard to defend. The Conservatives soon lost out to “New Labor”, led by Tony Blair, who pledged to bring Britain “to the heart of Europe”. The book details how he was soon to learn the hard way how difficult it is to defend national interests in the grinder of EU negotiations, not least when a pledge to the contrary has already been given.

Selling England by the pound

The Great Deception moves on through what is almost a mind-numbing array of negotiations and integration initiatives. It looks like once an idea is introduced in the minds of the EU civil servants, it is almost impossible to kill off. One may whack it down at one conference, only to see it bounce back, possibly in slightly altered form, in a later report or in the working papers of an IGC. The tidal wave of integration did hit some speed bumps with Denmark rejecting the Maastrict Treaty in 1992 and Ireland the Nice Treaty in 2001. As could be expected, the treaties were adopted anyway, with Denmark and Ireland being granted national exceptions.

During the 1990’s, a tidal wave of directives and recommendations started flowing from the European Commission, which surprised many businessmen. Britain, quite aptly, had been described by DeGaulle as a “Nation of shopkeepers”. He probably meant it somewhat disdainful, but the almost millennium’s tradition of Britain for private enterprise and independent workmanship had long proved its worth, making Britain the mightiest nation on Earth - an economical position France had never been able to match, until the aftermath of WWII.

Now the ‘shopkeepers’ of Britain faced something they had never expected: Systematic regulation and control, at their own expense, too. Small business never saw much point in lobbying in Brussels or elsewhere, and didn’t have the resources to do so anyway. Many saw no other way than fusing into larger entities or closing doors. This ‘Gleichschaltung’ had not been mentioned when the European Movement had argued the benefits of the European Economical Community. But once in, there was little to do. It was community policy and implemented through English law.

Mentioning English law, the switch to the metric system shows an interesting use of the law. It is quite natural that using forged scales and weights is a criminal offense, as the customers is being defrauded into paying more than advertised for the goods. Now, the switch to the metric system applied this law to make it a criminal offense to use the classical system, and traders where charged with the ‘criminal’ offense of selling goods by the pound. This disproportionate application of law is unfortunately typical of a totalitarian system.

Repeatedly, one gets the impression that the cards were stacked against the British. Fishery has been mentioned, as has agriculture, giving Britain nothing useful in return for its concessions. One problem, however, was a self-inflicted wound: The zealotry of regulations and control. When other countries would use perhaps 2 pages to detail a certain EU directive, the British authorities might use 20, as well as implementing the control much more effectively than the traditionally lax south European countries. The blatant abuse of the British “Mad Cow Disease” by the ‘partners’ in the EU is a scandal worth studying, as other EU member states used the disease as a pretext for reestablishing trade barriers.

These are local worries, of craftsmen and workers who found life more difficult due to EU regulations and troublesome demands to fulfill in order to take advantage of the promised “Inner Market”. The reality was not quite living up to expectations, a fact that the British government let their MiniTruth cover up with biased opinion polls and irrelevant statistics. The gripes of the shopkeepers never made a difference, but one may on the other hand argue that sacrifices are needed “for the sake of the common good.”

For on a macroeconomic level, Britain was doing great. Leaving the ERM had permitted the Pound to ‘float’ to a natural level, and that, aided with the North Sea oil, stimulated economical growth to much higher levels than the ‘core’ EU countries. Despite this, the British government found itself giving ever more concessions to supranationalism.

This is a point where The Great Deception becomes hard to follow, and a more extensive index would be nice. The index outlines just a set of main periods, where the nature of the book would make it good to have more details in the index, pointing out core events in each of these periods.

The book is still quite Britain-centric, which means it is a bit superficial on other important issues, such as the “Big Bang Enlargement” of 10 countries in 2004. On this issue, it is interesting to see the supposedly strict ‘Copenhagen criteria’ being described as mainly a delaying tactic against East Europe. This seems plausible, and would explain why the EU Commission doesn’t pay the supposedly ‘strict’ criteria more than lip service when it comes to Turkey.

Turkey is an issue not really covered in the book, even though it is a classical example of given promises leading to decisions of great consequence without really consulting the opinion of the citizens. It is clearly stated in the EU treaties that only European countries can become members of the Union, yet in 1999, bundled with the decision to attack Serbia, came an elevation of Turkey to becoming a candidate for EU membership. No public debate took place concerning this far-reaching decision. When some countries, particular those with much historical experience with the Ottoman Empire, sought to block the decision, ‘unanimity’ became a euphemism for “the majority bullies the minority.” Even Austria, whose citizens were opposed by 80 percent to the idea, and Cyprus, partly occupied by Turkey, were unable to block the decision.

One of the key elements that perpetuated this process was pressure from the US government, and this demonstrates eloquently why the United States has, since the establishment of the first EU mission in 1954, been in favor of European integration: If Europe is united under a single government, there would be only one government for the US to contact in order to persuade all of Europe into a particular position or action, not an intricate mess of 27 or more possibly quite different governments. The downside to this, of course, is that failing to convince Europe on various issues, or convincing the government but not the citizens, might create a severe cross-Atlantic animosity.

The general relationship between Great Britain and the United States of America is given quite a bit of coverage in the book. The ‘special relationship’ between the two states risks being dismantled by the European Union assuming a military dimension, as this would diminish the role of NATO and the traditional role of the US as provider of military force to protect the West.

Granting China a 20 percent stake in the strategically important Galileo project is one such move away from the classical trans-Atlantic alliance. Interestingly, it is also a deviation from the principle of only forging significant military partnerships with democracies. It is somewhat of a paradox that Europe has frequently been critical of American interventionism around the world, yet strong forces in Europe is working to create a comparable structure that will allow Europe to project its power in similar fashion into theaters of war anywhere on the planet.

Rise and Rejection of the Constitution

The highest aspiration of Monnet’s Project was to give the European Union its own constitution. Having established the Union as a state, with symbols, citizenship and a common currency, proceeding to a constitution would be a natural thing. Basis for this would be the Charter of Fundamental Rights, and the Constitution would in the long run supersede the individual, different constitutions of the nation-states and create the grand unified Europe envisioned by Monnet as far back as in the 20’s.

The citizens didn’t really long to replace their constitutions, which had worked well for quite a while, but since the constitutions weren’t replaced, merely placed under the European one, it should work out.

This, by the way, is an example of ‘engranage’, one of the main tools for EU to gain such power over the nation-states. Rather than competing with or replacing national institutions, EU would ‘direct’ the workings of the national institutions, replacing the control of national parliaments and governments with control from Brussels. This principle had worked well, and was now to be extended to the crown jewels of the European democracies, their constitutions.

Public approval was assumed not to be a major obstacle, as public support for the Constitution Treaty was carried by confidence in politicians and EU, and approval was largely taken for granted. Referendums were planned in a ten countries. The referendums in Spain and Luxembourg went as planned, but in France, citizens read and discussed the constitution extensively, and found things they didn’t like. In particular an orchestrated television debate with French president Chirac went sour, as members of the audience raised issues outside of what was agreed in advance. Chirac proved himself unable to provide adequate answers, and was blamed for turning the whole constitution issue into ‘entertainment’. That didn’t go down well with the French citizens. Polls plummeted from strongly positive to a 58 percent ‘No’ vote. Dutch voters three days later rejected the treaty with an even greater majority of 61 percent.

The stalled Constitution Treaty is where the book winds up, with a chapter debating the nature of deception as such, and whether we are watching deception or self-deception. This is complex material, and it can be difficult to keep track of what is decent political work and what is not.

One particular deceptive practice stands out, namely exchanging EU for ‘Europe’. Europe doesn’t need to be ‘constructed’. We have a deep history and many achievements we can rightly pride ourselves with, in particular philosophical, economical and political systems with roots at least 800 years back, and before then into ancient Rome, Greece and Christianity. The Constitution Treaty does not even acknowledge the Christian roots of Europe, which in my view is a serious shortcoming. But only one of many which neither the civil servants nor the politicians of the European Union have addressed in earnest.

The process of the Constitution Treaty morphing into a ‘Reform Treaty’, later the ‘Lisbon Treaty’ has been followed quite closely by the press. It continues the tradition for decision-making described by Booker & North. Yet, the process has been laid bare much more than before, which resulted in the Irish rejecting of the Treaty, in spite of it being supported by almost all of the political elite. This gap between the elite and the citizens leads back to the subtitle of the book:

Can the European Union survive?

After reading all this material, which frankly is quite intimidating, this seemingly unreal question becomes pertinent. What used to be called the ‘democratic deficit’ of the European Union has evolved into a serious crisis. And while EU usually feeds very well on crises (“Border-crossing crime increasing as a consequence of abolishing border control? Fix the problem by granting more power to Brussels.”), the real crisis is not so much that of the faltering treaty process, but that of the politicians and civil servants not respecting the desires and decisions of its citizens. Democracy is not meant to work this way.

Deception, the theme of the book, runs in and out throughout it. Politicians are forced to adopt points of view they do not really believe in, and in their zeal to prove they have truly adopted it press others to do so. The classical way of conducting foreign policy, to fight hard for what benefits your own country and your own citizens has, throughout the establishment of the European Union, given way to ever more complex negotiations and compromises, leaving the ability of the non-expert to follow it in the dust. While technically legal, this is bad democratic practice.

A related problem is the use of ‘ambush negotiations’, where points of views of political opponents are not respected, but seen as obstacles to be destroyed. This is a very effective means of achieving ‘Unity’, but this represents a false unanimity. As can be seen in the case of Thatcher, standing against this can be severely damaging to your political career, and it is quite tempting to join the majority crowd rather than standing firm on your honest perception of what is good for your own country.

As to the survival of the Union, the process surrounding the Constitution Treaty shows that the “ever closer integration” is devolving into an “ever deeper gap”, as the elite has persuaded itself to pursue a goal not understood or supported by the European public. The increasing reliance on ‘political will’ to force through the Constitution Treaty with whatever means required to do so (see Jens-Peter Bonde for details) constitutes a quest for ‘Decisiveness’, ‘Power’ and ‘Unity’ that anyone versed in European history is bound to find unsettling.

My prognosis

We will see more and more member nations and other organizations (Lithuania and FIFA lately) stand in defiance of EU decisions, the Commission and the Parliament interfere in matters they should abstain from (such as the court case against AKP in Turkey), and more grandiose declarations, projects and initiatives, as well as several false starts to resume the ‘integration process’. But I believe the mutual trust between European leaders has been severely damaged by the Byzantine tradition developed in the European Union. When exposed to the light of critique, EU tends to become defensive and protect itself, rather than address the gripes of the citizens. This is not sustainable.

What we need is a halt to ‘integration’, and a fundamental reform of the European Union. We need it now, or we will have a big mess later.