By RISTO PENTTILÄ*
British Prime Minister David
Cameron’s much awaited speech on the European Union on Wednesday was a declaration of an
ideological war, a war of ideas. Britain, he said, wants to create an
alternative vision for the German order-liberalism that is currently driving
European integration. Can he succeed? If history is any guide, he just might.
Cameron’s speech spelled out what everyone has known for some time:
Europe is no longer a single project. Today, there are two Europes: One is the
German-led inner group interested in further integration; the other is an outer
group of states interested in free trade but not interested in transferring
political authority to Brussels.
Cameron volunteered to lead the latter group. “I don’t just want a
better deal for Britain,” he declared. “I want a better deal for Europe too.”
We have been there before. For almost 30 years, Western Europe was
divided into two economic zones: The Inner Six were members of the European
Economic Community (E.E.C.), which later became the European Union; the Outer
Seven were the European Free Trade Association, or E.F.T.A.
The E.F.T.A. was founded in 1960 as a free trade alternative to a more politically oriented
E.E.C. Founding members included three neutral states — Switzerland, Sweden and
Austria — and four Atlantic nations — Britain, Denmark, Norway and Portugal.
The former did not think the E.E.C. was compatible with their neutrality. The
latter did not want to restrict their political and trade relations to Europe
and opted for a looser arrangement. Finland became a special member in the
E.F.T.A. once it worked out a way to do so without antagonizing its eastern
neighbor, the Soviet Union.
Over the course of decades the E.F.T.A. lost members to the E.E.C.
Britain, Ireland and Denmark joined the Inner Group in 1973. A second migration
came in 1995 when Austria, Finland and Sweden joined the European Union. Today,
the E.F.T.A. exists as a lobbying organization for four small countries outside
the European Union — Norway, Switzerland, Iceland and Liechtenstein.
With his speech, Cameron has rekindled the spirit of the E.F.T.A. He is
speaking to those Europeans who have misgivings about the direction Europe has
taken over the past years. He speaks for free trade and a well-functioning
market economy. He upholds national sovereignty against intrusions from
Brussels. In short, he is trying to create a free market vision for Europe to
compete with the more bureaucratic vision that Germany promotes. “Power must be
able to flow back to member states, not just away from them,” he said.
“Countries are different. They make different choices. We cannot harmonize
everything.”
Berlin sees Anglo-Saxon neo-liberalism as one of the causes of the global
financial crisis. Their answer to the excesses of the 1990s and the last decade
has been “ordoliberalism.”The German term can be conveniently translated as order-liberalism, or
regulation-based liberalism. The key idea is a free market economy under the
strong regulatory control of the state. The aim is to ensure the survival and,
eventually, the smooth functioning of the euro. If this leads to a further
transfer of sovereignty to European institutions, so be it. Sacrifices have to
be made.
The British are afraid that the German vision will lead Europe back to
the mixed economies of the past. That’s why they have become increasingly
hostile to Brussels over the past few years. Now they have come up with their
own answer. It is a new version of the old E.F.T.A. — more free trade and less
bureaucratic control of the economy. Like the founders of E.F.T.A., the British
are unwilling to transfer more sovereignty to European institutions. They like
Europe but they do not like its supranational institutions. It is a clear choice
that many Europeans welcome.
Berlin, Paris and Brussels should wait a moment before trashing
Cameron’s ideas. He is not against further integration within the euro zone. He
wants to ensure that those outside the euro zone have fair access to the single
market. This is not a destructive but a constructive approach.
We can pretend that Europe is still one big project and reject Britain’s
new vision. Or we can admit that there are two mutually reinforcing Europes. If
we do the latter, Cameron’s speech appears more constructive that many in
Brussels will admit.
* Risto Penttilä is
president of the Finland Chamber of Commerce and secretary general of “Northern
Light,” the European Business Leaders’ Convention, which meets in Finland every
two years to discuss Europe’s challenges and opportunities.
Internation Herald Tribune Published: January 23, 2013: http://www.nytimes.com/2013/01/24/opinion/global/camerons-vision-europes-challenge.html?_r=0
