There’s no GB in EU, anymore

Yesterday, Great Britain decided to end their participation in the European Union. While I don’t believe that this step solves any of their problems, and in fact, adds a bunch of new ones for them, I do admire the sense of patriotism and the devotion to democracy that was on display in David Cameron’s speech this morning. I’d be surprised to see Boris Johnson or Nigel Farage hold up this well in defeat.

The EU gets a lot of bad press in the US. The countries are too different, it’s said, the union is poorly designed. The whole thing is basically a bad idea and at some point, soon, everyone will realize it and it all breaks apart. I get it. But I disagree. And I want to explain my take on it.

I am German. It’s been a quarter century since I left the country of my youth to live in the United States, and I won’t likely move back to Germany again. But I am still very connected to the place: My son currently studies in Germany, my mother lives there, I have many other friends and relatives in Germany. And I spend a few weeks every year there. So I look at the EU not from a theoretical perspective, but from practical experience.

To me, the European Union was always a no-brainer. In part that has to do with exactly where I grew up:

Mittenwald, Germany, from Google MapsMittenwald, Germany, from Google Maps

The small village of Mittenwald is nestled in the narrow Isar valley, at the southern-most end of the Bavarian Alps. It sits along the ancient trade route that connects Munich and all of Germany with Austria and Italy to the South. By car, it’s less than 5 minutes to the Austrian border, and another 30 minutes to Innsbruck, Austria, the nearest major city to Mittenwald. Another 40 minutes south from Innsbruck is the Brenner Pass, the northern portal to Italy. Geographic distances in Europe tend to me much shorter than in the US. And yet, back when I was a kid, Austria felt distant. In those days , during the 60s and early 70s, whenever my parents wanted to go shopping or to a theater, they went to Munich, which was twice as far as Innsbruck, but in Germany. When we wanted to go skiing, for the most part we also stayed in the country and went to the Zugspitz, even though Seefeld, Austria, was closer and just as good.

This wasn’t due to any weird nationalism or animosity vs. Austria. Getting into Austria was a hassle: The drive across the border would take 45 minutes or more, because border police on each side checked cars for smuggled goods, causing major trafffic delays. And before we could go, we’d have to exchange a bunch of Deutsche Mark for Austrian Shillings, losing a couple of percent on the exchange. On the way back, it was the same in reverse.

Jobs were hard to find, too, back then. That circle around your home with commutable job locations was only a semi-circle in Mittenwald. And because tariffs discouraged trade in goods and services, they were primarily offered domestically. That, in turn, meant that service centers and production facilities were most efficiently located in the interior of each country, leaving the border regions to be structurally underdeveloped and poor. The problem is, in the patchwork of tiny countries that is Europe, a large percentage of the total population lives in border regions.

The EU has changed all that. Now, one of our friends who still lives in Mittenwald actually works in Austria. And why not? With the border checkpoints gone, it’s an easy commute. The language was always the same on the other side, now the currency is the same, too; our friend’s Austrian employer deposits his paycheck into his German bank account. Income tax, health insurance, retirement benefits are all harmonized and taken care of. That semi-circle I mentioned before, has become a full circle. Mittenwald is no longer on the fringe of Germany, it’s in the center of Europe. What used to be a slightly run-down and congested border town, is now a thriving community with a picturesque and revitalized core that draws tourists from far away. And it’s the same with the villages on the Austrian side of the border.

Having experienced this transformation, it’s not the EU that feels strange or artificial to me, but the national isolation that existed before it. Just as the landscape doesn’t suddenly change when crossing a border, the people are similar on both sides, too. That natural kinship just needed the borders to open up, in order to flourish.

It must have always been different for the British. Britain didn’t stop being an island with the advent of the EU. While I am convinced that European trade and European cohesion benefits Britain just as it benefits all other members, it might have been hard to perceive that for most Britons. In Mittenwald we saw the influx of cars with Austrian license plates on our strets, we saw the Italians in our stores. And we know which goods or services can be bought more cheaply in the neighboring country, because we go there all the time. The benefits of the EU are on full display, every day. I think most Britons lacked that immediate experience. Without it, they never had the sense that the EU advanced their interest. It became too easy for a long string of British politicians to blame all national ills on a supposedly parasitic European bureaucracy.

Among the politicians who favor EU membership, regardless of the country they come from, one can always observe one of two mutually exclusive attitudes towards Europe: On one side, Euro-optimists who view Europe as a shared future towards which they want to build and which cannot be achieved in the confines of their national identity. On the other side are Euro-skeptics, who are nationalists at heart but see Europe as a playing field on which the shrewd tactician and tough negotiator can gain an advantage for his country, over the others.

British Tory politicians since Margaret Thatcher, including David Cameron, were almost always Euro-skeptics. Cameron, like Nigel Farage sees the EU as a foreign entity, not a family to which the UK was bound by fate. Membership was an opportunistic decision and had to create a positive return for Britain, otherwise it was reversible at any point. The disagreement between Farage and Cameron is mainly, whether the European opportunity at present justifies the effort of sticking with it. And in that argument, the European economic crisis, followed by the Syrian refugee crisis left Farage with the better hand.

For many years, the advantages of EU membership seemed so compelling that everyone wanted in. Euro-optimists felt validated, and instead of gradually building and testing and stengthening the European institutions in a few fully committed and relatively homogenous countries, letting the European idea thoroughly take hold there before spreading the word, they spent most of their time signing up new members. As the Greek example illustrates, insufficient attention was paid to whether the newcomers met even the most basic criteria for membership.

Now that the structural weaknesses of the European institutions have been revealed by a few crises, we suddenly find that commitment to a shared future is fraying everywhere. More and more people seem to feel that the view won’t be worth the climb towards a United States of Europe. Why not just revert back to something much more limited. A free trade zone, maybe. Possibly with a discount plan for poor countries.

I disagree with that. I think the idea of a unified Europe is absolutely sound, and that it will be worth the effort for those nations willing to undertake it. There is a large part of Europe that shares common cultural roots and values and would benefit greatly, if their interior boundaries were permanently abandoned. But that’s for voters to decide. And the time has really come for proponents of a united Europe to lay out their vision, and to stand behind it, rather than trying to present their people with populist versions that are unworkable in the long run.

The current situation is definitely unsustainable. The EU fails to address the imbalances that are building up within, in terms of growth rates, labor productivity, sovereign debt, and public governance, while continuing to deliver low interest rates, fixed exchange rates and unrestricted access to capital to all members through the ECB. This is a recipe for failure.

In order to rectify the situation, the EU will need to either end the shared currency experiment, or move forward towads a united Europe. Europe’s government needs to be democratic, transparent and effective, or it needs to devolve its powers back to the national level. Whichever path the EU chooses, it may lose some members. That’s ok. The EU doesn’t need to be large to succeed. It just needs to be structurally sound and cohesive. My hope is that Britain’s exit starts an honest and meaningful dialogue about everyone’s intentions for the future. And that I never see the border checkpoints between Mittenwald and Scharnitz again.

June 24, 2016 at 9:27am · random thought · Brexit · politics · EU

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