The Trouble with Europe

‘The EU is the most important thing that stands between Europe and success.’

Six decades ago Europe’s leaders had a noble dream: to prevent another terrible war, and to act as a beacon of co-operation rather than conflict. The European Economic Community eventually became the European Union, and so began a seemingly inevitable march towards a federal super-state, culminating in the creation of the totemic single currency: the Euro.

The European Union is now at a crossroads. Its original objectives, the logic of existing relationships and monetary union, are pushing it towards full political union – some sort of United States of Europe, at least of the Eurozone. In other words, more Europe; deeper integration. But the EU is no longer working well in today’s world – let alone tomorrow’s.

The EU needs fundamental reform, Roger Bootle argues. It was conceived in a world of large blocs, before globalisation and the rise of the emerging markets. Its agenda of harmonisation and integration inevitably leads to excessive regulation and the smothering of competition. It hasn’t delivered the prosperity and growth it promised. The clearest example of the EU’s tortured politics producing poor economic performance is the formation of the Euro, which was undertaken for political reasons intrinsic to the European project. It has turned out to be the problem rather than the solution. What is more, if nothing changes, the EU’s share of world GDP is set to fall sharply and, with it, Europe’s influence in the world.

Furthermore, the EU has a profound identity crisis, Bootle says. No one is clear what the EU is for, or how ‘ever closer union’ can be matched with expanding geographical horizons and huge disparities of income and culture.

The EU has ineffective and often undemocratic institutions. It is the most important thing that stands between Europe and success.

We can – and should – attempt to reform the EU. Cut down to size, renationalized, limited and properly controlled democratically, the EU could prosper. But there are serious political barriers.

Without fundamental reform, some countries may withdraw – or the EU may even break up. Bootle offers a bracing and rigorous analysis of alternatives: different models for political and economic relations between the UK and Europe, and most importantly alternative political and institutions that could serve Europe – and the world – better in the future.

Leaving the EU would not be pain and risk free, but nor is the only option to stick with the current institutions. It’s time to raise the level of debate, examine the options, and tackle the trouble with Europe.

New Book

The Trouble with Europe

by Roger Bootle

"Right on every count"
The Guardian

Buy now on Amazon

Get the App

The Capital Economics apps are a great way for clients to keep up to date with our latest research.

Capital Economics AppsFind out more