A Different Sort of European Union

I’m on vacation in Central Europe at the moment, and while I have had little time to work over the past few weeks, I would like to report on one conversation I had with Mojmir Hampl, Vice-governor of the Czech National Bank, and a prominent proponent of a certain sort of euro-skepticism which is common in the Czech Republic.

I say a certain sort, because the Euro-skepticism associated with the Czech ODS party mostly takes the form of “Euro” skepticism, as opposed to EU skepticism – in other words a preference for labor/services markets integration over fiscal/monetary integration. It’s a distinction I think that is important to make both to understand the perpetual European neigh-sayers, and to plot a future course for the EU.

As a visual aid, Hampl points to a graph produced by the Czech National Bank charting the percentage of total IMF funds directed towards European countries. Currently continental Europe is consuming 80% of dispursed IMF funds, the EU is consuming close to 60%, and the Euro-zone around 35%. The moral, he says, is that Europe, and more specifically Europe’s high spending levels, is currently the world economy’s biggest problem, and a fundamental change of attitude is necessary in order to stem a decline. 

There are some issues to be taken with this analysis – Greece’s difficulties are much more easily accredited to out of control spending than Ireland’s – but the point is more that such a diagnosis implies cures that could be well provided by the European Union. Just a European Union of a different kind. Among the policies that Hampl advocated or supported during our somewhat meandering conversation were:

1. Slower integration into the Eurozone

2. EU membership for Turkey

3. Improved labor mobility (more a statement of support for the Schengen area)

4. Better cross border access to services. 

Three of those four issues are explicitly pro-European integration. They also happen to be issues which the European Union has turned away from during the recent crisis, as countries have vigorously defended their social insurance systems and national champions. To Czech Euro-skeptics such as Mr. Hampl this has made staying out of the Euro-zone all the more important.

The Czech right, led by their caustic and confrontational president Vaclav Klaus, have so far presented their vision of Europe mostly in the negative, which is regrettable, as they have a lot of ideas to offer those looking to build a strong European market, and a strong European Union. Now seems to be a good time for them to make their statement as to what the future of the European Union should look like.