This can't end well.

Photographer: Damien Meyer/AFP/Getty Images

Europe's Messiah Complex

Clive Crook is a Bloomberg View columnist and writes editorials on economics, finance and politics. He was chief Washington commentator for the Financial Times, a correspondent and editor for the Economist and a senior editor at the Atlantic. He previously served as an official in the British finance ministry and the Government Economic Service.
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Britain's debate over its membership of the European Union is bound to end badly. The country has no good options. Whatever voters in the U.K. decide, they'll come to regret it.

QuickTake Will Britain Leave the EU?

If Britain votes for exit in the referendum promised by Prime Minister David Cameron by the end of 2017, it will likely suffer serious economic harm. Not long after, the U.K. would probably break up as well: The Scots like the EU more than the English do and might prefer independence inside Europe over remaining part of a post-Brexit Britain. Altogether, not a good result.

On the other hand, if Britain votes to stay in, as Cameron intends and as the polls suggest it will, resentment over the country's lost sovereignty and impaired democracy is likely to keep growing. European integration has both a built-in momentum and an unavoidably non-democratic character. This trend has slowed for the moment but will resume. A British vote to stay in therefore won't settle the question of its place in Europe, any more than Scotland's recent vote to remain in the U.K. laid that issue to rest.

Why do I say that European integration is unavoidably non-democratic? Because there's no real European demos and no sign of one emerging. Lately, movement has been in the opposite direction, with nationalist sentiment on the rise in countries as different as, say, Germany and Greece. The EU has institutions with names that suggest democratic accountability and representation -- the European Parliament, for instance -- but their goal has always been to advance the cause of European integration, and hence their own power, not to attend to what the citizens of Europe's nations might want.

In national parliaments across the EU, political parties debated the right course of economic policy before, during and after the crash. They offered ideologically contrasting programs to their electorates and won or lost office according to voters' preferences. At the European level, there's been no such engagement with the issues -- hence no accountability, and no true representation. Voter turnout in European elections is low and falling. In last year's elections, it was less than 43 percent.

Yet power continues to move from national governments to EU institutions. The adoption of the euro was a momentous shift, but in smaller ways the drift is constant. This week an unelected official of the European Commission declared that the elected governments of the Netherlands and Luxembourg had acted illegally in their tax dealings with Starbucks and Fiat, respectively. The agreements amounted to unlawful state aid, the commissioner said, and extra taxes would have to be paid.

Put the merits of the particular cases to one side. The announcement seeks to extend the commission's existing competence on illegal anti-competitive subsidies to national tax policy -- a new and potentially far-reaching doctrine.

The commission, like the European Parliament, is mainly dedicated to enlarging its own role. This power-gathering process never ends, because there is nothing to stop it. Quite the opposite, in fact: Europe's treaties sanctify it in the name of "ever closer union."

Cameron has been mocked for saying Britain should be exempted from Europe's treaty commitment to that goal. It's just words, say his critics, a mere symbol. Cameron disagrees, and he's right. "Ever closer union" is not just enshrined as an overarching goal in the union's founding documents, it has legal weight. More than that, it's the living, guiding principle of EU politics.

Consider: What justification was there for creating the euro? Certainly not demand from the public. Completing and energizing Europe's single market was part of it, no doubt. But the euro was proposed first and foremost as a great new stride toward the founders' vision of ever closer union -- the EU's manifest destiny. It turned out to be a disastrous error, and the damage and distress it caused have checked the EU's momentum for now. But you'll notice that turmoil has created no appetite for a fundamental reassessment of the union's ambitions and purposes.

The legal scholar Joseph Weiler, president of the European University Institute in Florence, has written about the EU's propensity for political messianism. Lacking legitimacy in terms of process (how decisions are reached) or outcomes (whether the decisions are any good), Europe has tended to fall back on the legitimizing power of its grand purpose -- ever closer union.

Messianism has stumbled. The failure of the euro project has called that vision into question as never before. The result should have been careful and deliberate reform, and an effort to deepen the EU's legitimacy in other ways. Instead, the result is intellectual paralysis.

More Europe isn't the answer because just now voters won't stand for it. Less Europe isn't the answer because the EU lacks the institutional and constitutional resources to recede -- hence the deeply puzzled looks that greet Cameron's plea for a rethink. Europe is stuck, in an unsustainable middle of monetary union without fiscal union, of free-flowing capital without a real banking union, of free internal migration but no joint management of refugees -- of too much Europe and not enough.

The least-bad answer for Britain, as Weiler suggests, might be a formally recognized associate-member status. The U.K., thanks to its wise decision not to join the euro system, is already most of the way there. It shouldn't be impossible to regularize this semi-detached standing. Associate status could be the best way to accommodate prospective new members, such as Turkey, as well.

This model ought to be achievable, but it probably isn't, because resistance to it will be so intense. It's a suspiciously pragmatic approach, all too British. Pragmatism and messianism (even if subdued, for the moment) don't mix. Loosening the commitment to ever closer union and starting a search for lasting constitutional stability are aims that Europe's other leaders should want as much as Cameron does, if not more. They should thank him for pressing the idea, but they won't.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Clive Crook at ccrook5@bloomberg.net

To contact the editor responsible for this story:
Christopher Flavelle at cflavelle@bloomberg.net