Guy Verhofstadt and 'The United States of Europe'

not commented formally on the manifesto,British rejection of its proposals can beconfidently expected. The combination ofenhanced sovereignty-sharing and thepursuit of a particular European SocialModel in the integrated Eurozone areawould not be acceptable to any foreseeableBritish government. While Ireland mightwell be initially less hostile to MrVerhofstadt’s ideas than the UnitedKingdom, it has been as resolute as theUnited Kingdom in rejecting any taxharmonisation within the European Unionthat might undermine its competitiveness.The Republic would be one country fromthe existing Eurozone which would be onthe face of it a very uncertain candidate forthe 'United States of Europe'. TheVerhofstadt model for these 'United Statesof Europe' demands acceptance both ofeconomic co-ordination and a particularmodel of Social Europe. Ireland might wellfind it difficult to accept the entirety of thispackage.In other Member States, there is morepotential sympathy for Mr Verhofstadt'sanalysis. While there is as yet no officialbacking for the suggestions presented in hismanifesto, this does not necessarily implythat there is no possibility of such plans tobe supported in the medium to long term.In France, for instance, on both the left andright of the political spectrum, there are thebeginnings of a debate on the governanceof the euro, and what France’s role (perhapslinked to that of Germany) should be in anenlarged European Union. Mr Verhofstadt’svision of a 'core Europe' geared around theeuro and the European Social Modeldovetails neatly with a number of recentFrench concerns about French loss ofinfluence in a larger Union and thesupposedly liberalising tendencies of thisenlarged Union. The Italian view of 'coreEurope' clearly depends in the medium termon the outcome of the Italian GeneralElections in April, where a government ofMr Prodi could be confidently expected totake an altogether more favourable view ofMr Verhofstadt’s ideas than anotheradministration of Mr Berlusconi would.Given its enthusiasm at the time of itselection to be seen (in contrast to itspredecessor) as ardently pro-European, MrZapatero’s Socialist government in Spaincould well be a potential ally for theVerhofstadt theses if they came to generatesupport elsewhere within the Eurozone.The long-term key, however, to the politicalsalience of Mr Verhofstadt's proposals willbe the new German Chancellor, Mrs Merkel.She has been widely described as havingonly limited knowledge of or interest in theaffairs of the European Union. Shesurprised, however, many observers by thecentral and constructive role she played inthe resolution of the European budgetarynegotiations in December 2005. If sheconcludes that there is merit in MrVerhofstadt’s argument that bettereconomic co-ordination within theEurozone will make the euro work better,then her lack of any long-standingcommitment to the overall goal of Europeanintegration, which is so powerful in MrVerhofstadt’s thinking, need not be a barrierto her taking up the European mantle ofher political patron, Helmut Kohl. Ironically,a central reason why the euro was set upunder the Maastricht Treaty with such alimited infrastructure of governance was thedesire to reassure the Bundesbank that themonetary discipline provided by theEuropean Central Bank would not beundermined by irresponsible politicalinterference. It will be a very interestingsubject for political commentary over thecoming months whether Mrs Merkel reflectsthe intellectual legacy of the Bundesbankor tends more towards the model of MrVerhofstadt. The difficulty of predicting herfinal reaction to the Belgian Prime Minister’sproposals is symbolic of the uncertainterrain over which Mr Verhofstadt haschosen to fight his new campaign.Public political acceptanceand the politics of reforms:concluding remarksMr Verhofstadt is convinced that an'overwhelming majority' of citizens wouldaccept his proposals in a Europeanreferendum. This conviction is largely basedon his belief that a more sophisticatedgovernance structure for the euro wouldlead to more efficient and effectiveeconomic policies in the Eurozone, whichwould in turn make the Union moreattractive to the wider public. In thisconnection, an obvious problem of timingpresents itself. A referendum to endorseMr Verhofstadt’s proposed new structuresfor the Eurozone would not, by definition,have been able already to benefit from thesestructures. The European electorate wouldneed to be convinced by arguments ratherthan facts that a more tightly integrated'core Europe' could deliver the economicadvantages promised by its proponents.It may seem strange to some of MrVerhofstadt’s critics that he should beputting forward his ambitious proposals sosoon after the rejection in the French andDutch referendums of the EuropeanConstitutional Treaty, of which he was anenthusiastic advocate. One line of analysisexplicitly calls now for a period not merelyof reflection, but rejection of any Europeanintegrative initiatives for many years tocome. This in essence is the view of theBritish government, although this approachis by no means confined to the UnitedKingdom. Nevertheless, it would be wrongfor the British government and those whoshare its relief that the EuropeanConstitutional Treaty has apparently diedby French and Dutch hands to assume thatthe discussion about the European Union’sconstitutional future has disappearedentirely. Mr Verhofstadt’s ideas may findno echo in the current Eurozone, or theymay act as the catalyst for a major newdebate on the Union’s future. He is entirelyright to sense the paradox which led to theTreaty’s being rejected in France because ofits supposed excessive economic liberalismand might well have led to its rejection inBritain because of its supposed excessivecorporatism. Paradoxes are always capableof two resolutions and Mr Verhofstadt hasput forward his own resolution, in a waythat tries to make the future developmentof the Union more attractive to most Frenchvoters. Freed of the need to accept thecompromises of the EuropeanConstitutional Treaty, Mr Verhofstadt hasset out a vision which is at the same timemore compelling and more controversialthan what has been rejected. He will beawaiting the results of the hand grenadehe has thrown into the debate with greatinterest.NotesKatharina Gnath1Guy Verhofstadt, The United States ofEurope. Manifesto for a new Europe,December 2005. To be published in Englishby The Federal Trust in February 2006.