QotD: EUrocrash imminent?

Is the European Union heading for a Yugoslavian-style denouement? It sometimes looks as if its political class, oblivious to the wishes or concerns of the EU’s various populations, is determined to bring one about. The French and the Dutch voted against the proposed European Constitution, but that did not deter the intrepid political class from pressing ahead with its plans for a superstate that no one else wants. To bypass the wishes of the people, the politicos reintroduced the constitution as a treaty, to be ratified by parliaments alone. Only the Irish had the guts — or was it the foolhardiness? — to hold a referendum on the issue. Unfortunately, the Irish people got the answer wrong. They voted no, despite their political leaders’ urging that they vote yes. No doubt the people will be given an opportunity in the future — or several opportunities, if necessary — to correct their mistake and get the answer right, after which there will be no more referenda.

The European political class was briefly taken aback. What could explain the Irish obduracy? Several explanations came forth, among them Irish xenophobia and intellectual backwardness and the malign influence of the Murdoch-owned press. The narrowest economic self-interest was also said to have played a part. Having been huge beneficiaries of European largesse over the last 30 years, the Irish — who have the second-highest per capita GDP in Europe after Luxembourg — are now being asked to pay some of it back in the form of subsidies to the new union members from Eastern Europe. Ingrates that they are, they don’t want to pay up, especially now that their own economic growth rate has slowed dramatically in the wake of the financial crisis and the economic future looks uncertain.

Another explanation for the Irish “no” vote was that Irish citizens had been frightened by the proposal of the French finance minister to equalize tax rates throughout Europe, thus destroying unfair competition (all competition is unfair, unless the French win). No prizes for guessing whether the high tax rates of France or the low rates of Ireland would become the new standard. Ireland’s golden goose would find itself well and truly slaughtered in the process.

Theodore Dalrymple, "Europe's Unhappy Union", City Journal, 2008-06-18