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August - September 2005

Political News

The fading of a dream: Why ‘non’ from the French & the dutch in EU Constitutional Referendum

by Sashanka Sekhar Banerjee

The decisive “no” votes cast by the French in the Referendum on the EU Constitution held on May 29, 2005 and a week later by the Dutch has thrown the political integration process of the European Union into a tailspin.

On the economic front, the Euro Zone, was shaken to its foundations. In a fit of over-reaction, a Cabinet Minister of Italy called for a referendum on returning to the Lire. A survey in the German magazine Stern suggested that 56 percent of the Germans wanted to go back to the Deutschmark. While nobody expected the Euro to be ditched so unceremoniously, postures such as these were manifestations of post-referendum popular mood and pointers to how the European Central Bank should act in the future.

The EU President and the Luxembourg Prime Minister Jean-Claude Juncker and Gerhard Schroeder, the German Chancellor bluntly put it : This was one of the gravest crises Europe had ever experienced.

The irony was that almost everybody knew about the outcome except the French President Jacques Chirac, who got carried away and put the Constitution into the domain of the popular vote. If he was careful, he could have taken the shortcut, as 10 other nations among the expanded 25 “new accession members” of the EU had earlier done, by getting the ratification process completed in the National Assembly.

President Chirac’s position is irreparably weakened for the remaining two years of his Presidency rendering it ineffectual. Fearing that he may get caught up in calls for resignation, President Chirac launched two diversionary moves. He formed an alliance with the German Chancellor Gerhard Schroeder and announced that, he would go ahead with the ratification process, irrespective of the negative vote. He also demanded the withdrawal of the rebate of £3 billion per annum out of the British contribution to the EU funding arrangements negotiated by former British Prime Minister Margaret Thatcher in 1984 on the ground that Britain received far less agricultural subsidies than other EU countries. The rebate represented compensation to Britain so that it did not end up paying a disproportionate share of contribution to the EU budget.

Chirac came unstuck in both. He failed to realise that the No Vote of the French people had rendered the draft of the EU Constitution almost dead in water. There was no chance of resurrecting it any more. The question of French ratification through the National Assembly had become irrelevant. He had to drop the idea as a result.

Chirac upset the British Prime Minister so much that Tony Blair was left with no alternative but fire a shot in anger, demanding the re-negotiation of the farm subsidies under the Common Agricultural Policy almost as a quid pro quo. The rebate was tiny in financial terms but was steeped in huge political symbolism. The farm subsidies in the amount of Euros 40 billion comprising 40 percent of the EU’s annual Budget of Euros 100 billion created only 2 million jobs. Most of it was earmarked for French farmers. Since the farm spending sustain an established way of life of the French farmers, the French President would be hard put to slash them. There would have been nation wide protests and demonstrations. Chirac had to fight back. The two-day June 2005 Brussels Summit of 25 heads of Governments ended in a stalemate. Although the poorer new members (former Communist states) wanted Britain to sacrifice part of the rebate at least for their sake. The British Prime Minister would not oblige them without first seeing fundamental changes in the Common Agricultural Policy. Tony Blair declared the CAP as archaic and wanted investments in science and technology as a priority to keep pace with competition from countries like China and India. Angela Merkel, the German opposition leader supported Tony Blair by saying that it was unreasonable to expect Britain to surrender its rebate if France did not cut its farm subsidies.
The lofty notions of European solidarity and a common vision were thus defeated by the dictates of national interest of the member nations and the compulsions of domestic politics.

In the meantime a realignment of power equations in European politics began in right earnest. The British Prime Minister’s insistence on retaining the EU rebate left a negative impact on his effectiveness at the G-8 Summit at Gleneagle in Scotland in July 2005. His aid package for Africa running into at least 20 billion dollars looked somewhat hollow in the face of his refusal to sacrifice even a penny for the poorer European nations. As Britain assumed the Presidency of the EU on July 1, 2005, Tony Blair’s role was transformed into that of a referee within the EU when it became pretty difficult for him to fight his corner promoting the interest of the UK. The acrimonious debates at EU Summit in Brussels and the stalemate that followed, strengthened the belief among the leaders of the continental majors that Britain’s heart was really not in Europe. However the formidable coalition of Gerhard Schroeder and Jacques Chirac was about to crumble with the German elections due in September 2005 where Schroeder was not the favourite to win. Schroeder’s Conservative opponent Frau Angela Merkel with her support to Tony Blair on the rebates issue began looking more likely to be closer to Britain’s view of Europe than Jacques Chirac’s. Chirac was already weakened by the no vote on the referendum. In this turmoil, Blair seemed to have emerged the stronger figure in the new EU political equations.

The Chirac-Schroeder partnership under the banner of the EU challenged the unilateralism of the US under President George W Bush in his war on terror post 9/11 0f 2001. It created a schism in the Western Alliance, weakening the war effort of the US and the UK. Western Alliance’s internal divisions strengthened the enemy camp, which explains why quick success eluded the war on terror. Although India has been working very hard to establish a strategic relationship with the US, it is also a votary of multilateralism. A long-term consequence of the no vote in the French referendum will be the possible collapse of the multilateral challenge of the EU.

If the EU constitution was ratified by all the 25 member nations and had come into force, it would have caused insurmountable legal problems. It did not call for the national constitutions of the member states to be abandoned. All the 25+1= 26 constitutions would have remained in force. Which one was to have priority over the other – the EU or the national constitution?

The EU constitution envisaged a political union with an EU President and his cabinet including a Foreign Minister, a Defence Minister and so on. Then there is the European Army. With an EU President in place what would have happened to the status of the Heads of Government in Britain, France, Germany and so on. Would the Queen have lost her job at the feet of the EU President, something unthinkable for the British people ? With a common EU foreign and defence policy for all 25 nations, countries like Britain or France or Germany and in fact all others who passionately cling to the right of exercising independence in formulating their own national foreign and defence policies would have lost their place under the sun. Secondly an European Union Army would have rendered the NATO irrelevant which the US and Britain would have fought tooth and nail to prevent happening. Britain had all along pleaded for keeping the EU as an Economic Union rejecting the idea of a political union. An United States of Europe has never been acceptable to the British people. It is really mind-boggling that this simple message from Britain did not register with the politicians of what has come to be known as Old Europe. It was left to the ordinary people of France to remind their political masters that they were out of sync with the popular opinion and made common cause with the Britons. The Referendums in France and Holland have thus rejuvenated and re-energised democracy in Europe. Tony Blair said it colourfully : The people are a step ahead of the leaders.

So what did the people of France and Holland vote against?
They voted against the on-going process of political integration of the European nation states into a super-state ruled by an un-elected, centralised, elitist bureaucracy from Brussels. The decisions of the EU ranged from passing regulations to admitting new members to the Union to determining treaties , all affecting the daily lives of the 450 million citizens. These decisions were made behind closed doors with the people unable to witness the deliberations or how their leaders voted. The voters were not interested in seeing their national cultures and identities vanish without having a say in it. The ordinary people wanted to cling on to what they had in the face of change and tumult all around.

They voted against any further expansion of the EU. The fear of the French and the Dutch people, used to comfortable lives, ranged from the increasing numbers of cheap labour from the poor former communist countries of Eastern and Central Europe threatening their jobs to the prospect of people streaming in from Muslim majority Turkey. They feared that there could be an exodus of Turkish Kurds who are over 10 million of Turkey’s population and are pretty much unwanted in Turkey because of their separatist demands. With so many Muslims flowing into Europe there was a lurking fear among the mainly Christian population that there could be a Mosque coming up in every street corner in the next few years. Articulating this fear to me a Frenchman in Paris, just before the referendum was held, compared the imagined street corner Mosques in an expanded Europe with the street corner grocery shops going up every where after large numbers of Ugandan Asians came into Britain. While the Patels contributed to wealth creation in Britain, according to this European gentleman, the Muslims would have polarised society in all Europe leading to avoidable social tensions.

In many ways it was also a protest vote against complacent European political leadership. A psychology of stagnation had overtaken the Europeans. It encouraged people to cling fiercely to entitlements their nation could not afford. Fear shaped their perception of the future. Continental Europe’s unemployment remained stuck at an average of 10 percent, compared to Britain’s 5 percent. GDP growth has hardly registered anywhere above 2.5 percent. By 2040 a third of the European population would be above 65 years old. In this backdrop, David Brooks an US columnist writing in The New York Times warned that in the next few years public spending on pensioners will grow by a third sending Europe into a vicious spiral of higher taxes and lower growth. It was not the constitution itself that the voters rejected. Polls reveal that they were articulating a broader malaise. The highest no votes came from the workers and the industrial north. The no campaign united the fearful right led by Jean-Marie Le Pen, with the fearful left led by the communists.

Valery Giscard d’Estaing the author of the EU Constitution declared “ This was not a vote on the constitution. The French message was, We want change in our political leadership ”. President Chirac quickly replaced the Prime Minister with a long time protégé Dominique de Villepin hoping to restore confidence in Government. Giscard d’Estaing also believed that if full membership of Turkey was not left open, the Constitution would have been voted ‘yes’ in the referendum. Villepin voicing grave reservations about Turkey’s impending membership, told the French Parliament that the result of the Referendum on the EU Constitution had shown the speed of enlargement had shaken the EU citizens. He however asserted that Bulgaria and Romania should be the last to be taken on board. Tony Blair on the other hand has rejected all arguments against including Turkey as a member of the enlarged EU and is committed to support its membership.

Where will the EU go from here? William Rees-Mogg writing in The Times of London believes that the EU is now left with three options. What destination it chooses is for the people to decide.

(a) A return to the normal sovereignty of nation states. This could mean the end of the Euro.

(b) A United States of Europe. The problems with this solution include differences of national cultures and loyalties, and the obstacle of democratic consent. The referendums have shown that this is not acceptable to the people of Europe.

(c) A return to the idea of a common market confined to the creation of a single, free market, leaving everything else to the democratic choice of the independent European nations. This will allow co-operation between nations easier.

According to William Rees-Mogg, a Common Market is not an unworthy idea. It is perhaps the only way to give meaning to “subsidiarity”. The Europeans are best qualified to decide the social arrangements that suit them the best. The French will pay the price of French social welfare. The British will work for longer hours. They all have their own systems of democracy. The Common Market will have space for every nation to pursue its own course.

Is there an Indian connection in all this?
Yes historically speaking there are at least two that I know of :

1. Shortly after the end of the WW2, the German Chancellor Konrad Adenauer, the author of the German economic miracle, made a request to the Government of India personally writing to Jawaharlal Nehru the Prime Minister to allow one million Indians to come over to the Federal Republic of Germany as guest workers to do menial jobs. Although Nehru sympathised with the fact that Germany was running short of labour having lost its men folk in large numbers in the war, he did not like the expression “menial jobs” on offer for the Indians. The Indian Government politely declined the request. Turkey was the next country that Germany approached. Ankara did not lose a day in confirming its approval of the proposal from Bonn. Both Turkey and Germany benefited enormously out of this deal. The ordinary Indians – one million of them - would have benefited through guaranteed employment apart from the remittances they would have been sending home, but the false ego of the political leaders denied them of these perks. With so many Indians making Germany their second home, they could have wielded some influence in policy making in that country. India missed out even on that.

2. The European Economic Community ( EEC ) as it was known in the seventies of the last century had started debating the idea of an European Union. They were fascinated by the Indian experience. India’s linguistic states were conceptually similar to the nation states of Europe, but the difference was that India was a federation while Europe was not. Brussels wanted to know how the federation was structured and working without too many problems. An integrated EU could be almost similar to the Indian Union. The Government of India was approached in 1972-3 to provide the EEC Secretariat with copies of the Sarkaria Commission Report on Linguistic States and copies of the Constitution of India and all the amendments passed in Parliament. India obliged the EEC as a routine gesture.

The French and the Dutch No Votes in the EU Constitution referendum brought the idea of an integrated EU or the United States of Europe crashing down rejected by popular opinion.

The failure of the idea of EU integration process flowed from the lack of the existence of a cultural bonding glue that the disparate nation states of Europe naturally lacked.

India on the other hand is a civilisational melting pot, out of which is born the idea of India.

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