After two days of summiteering, and what has been described as “acrimonious” haggling behind closed doors, last weekend, leaders of the 25 European Union nations failed to reach a budgetary compromise and returned home “more divided and uncertain” than ever about the future of a united Europe.
Coming just weeks after voters in France and Holland dealt a fatal blow to the union’s proposed new constitution, one wondered whether the collapse of the summit will leave the EU adrift for a long while to come, and whether the idea of a United States of Europe was all pie in the sky to begin with, doomed to fall apart when it came to the nitty-gritty of things.
The collapse of the summit in Brussels took place after France and Britain denounced each other, often angrily and tendentiously, for blocking a proposed budget that involved the latter country’s annual rebate of the funds it receives from the union treasury. British Prime Minister Margaret Thatcher had negotiated the terms of the rebate in 1984, a time when Britain was ranked, among EU countries, as being one of the lowest in the pecking order in terms of its income per-capita.
Behind the dispute between Britain and France, however, is a deeper ideological divide. Whereas Britain’s Tony Blair, along with some of his allies from the newly admitted East European countries want the EU to reduce barriers on trade, employment and free market principles, France’s Jacques Chirac, stung by the referendum defeat of the constitution that he had championed so ardently, wants to preserve the short work week, high welfare benefits and the restrictions on the influx of low-paid guest workers from Eastern Europe who may be “overwhelming” Western European countries (“Inonder le marche,” he said — literally, to open the floodgates, or to “flood the market”).
The fact of the matter is this: It is not just Britain and France that are going through European Union blues, as was demonstrated by the bruising session between Blair and Chirac last Friday (“I hate to see grown men bickering at each other like that,” Irish Prime Minister Bertie Ahern told reporters), but a great many old member states as well. Germany, the most populous nation with the most powerful economy in the EU, is one case in point. Very simply, Germany may now have gone on to become the sick man of Europe soon after it strained its budget by reunifying with the impoverished East Germany, becoming a country with a productive western part and a dependent eastern one.
To be sure, Germany continues to manufacture high standard luxury cars, to provide commuters with precision scheduling of trains (the envy of a pathetic, debt-ridden railway system like Amtrak here in the US), to maintain the virtuosity of German engineering, and to continue its overseas exports despite having one of the highest labor costs in the world, but the country is in trouble.
Holland is in trouble too, or put another way, Holland is in a bad mood, with a culture war looming between the country’s large Muslim immigrant population and the native Dutch. This had been stirring, though on a subterranean level, before a North African fanatic ritually slaughtered the filmmaker Theo van Gogh, affixing a five-page letter to the corpse promising the same fate for Hirsi Ali, the Somali-born legislator, and for another Dutch politician, who had criticized Islam.
The murder triggered intimations of fear and anger in Dutch society, and sparked dozens of attacks on mosques and schools.
France too is in similar turmoil. And the Swedish model, which at one time represented an intellectual challenge to those who argued against high tax rates and extensive state intervention in economic affairs, is not working.
Other countries in Western Europe are foundering. But all of that is the least of it, for there is a larger reality that modern Europe is going through here. And that reality is embodied in the imperatives demographics.
For the European population to level out, according to figures released by every demographer and his uncle on the continent, as well as cogent analysis recently by the noted American economist Robert J. Samuelson, each woman of childbearing age should have on average 2.1 children. For Western Europe as a whole, the rate is 1.5. In Germany it is 1.4 and in Italy 1.3.
Today one-sixth of the population of Western Europe is 65 and older. By 2030 that will be one-fourth, and by 2050 almost one-third.
“In a century, if these rates continue, there won’t be many Germans in Germany or Italians in Italy,” wrote Samuelson. “Wherever they look, Western Europeans feel their way of life threatened. One solution to low birthrates is higher immigration. But many Europeans don’t like the immigrants they have — often Muslim from North Africa — and don’t want more. One way to revive economic growth would be to reduce social benefits, taxes and regulations. But that would imperil Europe’s “social model, which supposedly blends capitalism’s efficiency and socialism’s compassion.”
Contrast that with the US, which will soon be facing the same demographic problem — so many elderly people floating around dependent on government benefits to survive, resulting in higher and higher taxes having to be paid by a shrinking pool of young workers. “The nation faces a severe economic threat from the aging of its population combined with escalating health costs,” a Washington Post editorial warned recently. But we’re talking about the US here, a very wealthy nation indeed with more than abundant resources, and an ever-expanding economy, to sustain the challenges of an ever— grayer America. Old geezers, in other words, are not likely to end up robbing the young, bankrupting the government and shifting society’s economic rhythm.
Western Europe, which does not have that luxury, maybe facing a monumental challenge in the decades ahead. And if the continent does not find ways to impede or block that disintegrative process it will go out of business. The end of Europe as we have known it in our generation may be a historical blink away.
