46 Europe The Economist January 8th 2022
RewiringEurope
C
rank upthe power flowing into a building and the lights
shine that much brighter. Without an upgrade in its wiring,
though, fuses will soon blow or smoke emerge from unexpected
places. Political structures are much the same. A surge in power
delights all involved—until some not altogether welcome things
start happening.
Across the world the political current is swelling. The role of
the state is expanding. The pandemic has eroded the alreadysha
ky consensus about the limits of governments’ role in liberal soci
eties. National polities, those ageold edifices, have ample experi
ence navigating such surges and sags. For the European project, a
hotchpotch of creaking foundations and shaky extensions im
provised over the years, more state power will require a rethink of
the institutional cabling that keeps the lights on.
Big government ought to be familiar territory for Europe. Med
dlesome public sectors are the norm at national level, crowned by
euinstitutions long derided by critics as a bonkers bureaucracy
hellbent on dictating the curvature of bananas. In fact the Euro
pean project has more often been a force for governmental re
straint. From its origins in the 1950s, the Brussels machinery has
been less a Leviathan dictating new policies so much as a selfim
posed straitjacket constricting national politicians. Why, the con
sensus went, should Europeans compete senselessly against each
other when too often the culmination of such contests involved
soldiers crossing borders and bombers flattening cities?
The project’s most impressive achievements (and the emer
gence of its latest iteration, the eu, in 1993) came at a time when
politicians the world over accepted that the public sector was
bloated and overmighty. Few national leaders tried as hard as Mar
garet Thatcher to restrain it. But many outsourced the job to the
Eurocracy. Brussels became an unexpected force in the checking
of governmental power, a fountainhead of edicts to grudgingly
obedient national politicians not to do things they might other
wise have got away with.
The single internal market, created 29 years ago, still requires
the elimination of all obstacles to the free movement of goods,
people, money and services—tying the hands of politicians who
would like to stem migration from other eucountries, for example.Schengen forbids the erection of border barriers between its
members. Trade deals negotiated by the euremove tariffs in a con
tinent where protectionism is sometimes popular. Stateaid rules
bar politicians from throwing public money at favoured indus
tries, no matter how keen they are to promote national champi
ons. Above all, the introduction of the euro in 1999 eliminated the
possibility of devaluation and, in theory at least, put tight controls
on budget deficits.
Now those who favour more government have the upper hand,
from London to Washington and from Paris to Berlin. Can Europe,
and more generally the fluid apportionment of powers between
national and federal levels, adapt? Not easily. For the eu, banning
stuff is straightforward: you only have to decide what to ban. Actu
ally doing things is harder. First you must decide what to do, then
figure out how to do it. Take public subsidies to industry. Forbid
ding them, as Europe has long done, merely involves chastising
those that break the rules. But creating new handouts involves
picking which companies should receive public largesse, and how
much. Should it be microchip plants or defence firms? Who de
cides when priorities ought to change? Who pays?
There are two ways that Europe can shift gears as government
swells, argues Fabian Zuleeg of the European Policy Centre, a
thinktank in Brussels. The first involves the eu getting out of the
way. Countries can simply resume doing what they were once or
dered not to do. For example, the rules around state aid and budget
deficits were suspended as covid19 raged, and are unlikely to snap
back fully. That gives national governments more scope to indulge
in onceforbidden behaviour. The drawback is that it throws the
European project into reverse. The second path is for big govern
ment to happen at the European level. Some powers are shifting to
euinstitutions. In 2020 the European Commission, the bloc’s ex
ecutive arm, was given the job of sourcing vaccines for everyone
from Finland to Portugal. Europe’s ambitious green agenda is
largely piloted from Brussels. The Next Generation eu (ngeu)
fund, a €750bn ($846bn) pandemic response, is a step towards a
federal budget. All that comes on top of already powerful bits of
the edifice, notably the wellrun European Central Bank.euturn if you want to
This “more Europe” approach raises questions about whether the
eu’s current institutional wiring is good enough. The Brussels
machine is a fearsome regulator and legislator, but are its execu
tive skills up to snuff? If the vaccine procurement episode is any
thing to go by, the answer is no. Early fumbles meant Europeans
got their first jabs long after Americans and Britons did.
A lot more centralisation would also require more oversight.
The commission is acquiring vast new powers. For example, it can
withhold ngeufunds from countries that fail to enact the reforms
they have promised in order to get their hands on a share of the
cash. With such powers should come more accountability. Yet
what happens in Brussels is seldom much scrutinised beyond its
bubble. The European Parliament ought to do the job, but is often
focused on dogmatically demanding a bigger role for the eu(and
for itself ).
Homeowners faced with vast electrical projects often settle for
makedo solutions. Europe is likely to do something similar. No
body is keen on a grand package of institutional reform, which on
ly cumbersome treaty changes and consequent referendums
could bring about. A new eu programme here, a fresh fusebox
there, will do the trick for now. But it may not prove a lasting fix.nCharlemagne
The return of big government sparks questions for the European project