The European Union is one reason not to fear the spectre of the 1930s
A WHIFF of cold-war menace hung over the European Union summit on March 1st. A “new iron curtain” threatens to divide rich western Europe from the east, declared Ferenc Gyurcsany, Hungary’s prime minister, as he pleaded for a €180 billion rescue plan for the countries of central and eastern Europe. Mr Gyurcsany had a second plea: for eastern countries to secure early membership of the single currency. Neither idea found favour.
Germany’s Angela Merkel said aid should be given on a “case by case” basis, as eastern countries had “very different” needs. As for speeding up euro membership, she thought not, though newcomers might get faster entry into a scheme to peg currencies to the euro. The Poles, Slovaks and Czechs were also hostile to the Hungarian plan. Their economies are in better shape than debt-laden Hungary or credit-crunched Latvia, and they fear contagion from the belief that eastern Europe is uniformly troubled.
But there is another reason why Mr Gyurcsany’s cold-war rhetoric failed to resonate: another period, the 1930s, haunts Europe even more. This year violent anti-government protests in Greece, Latvia, Bulgaria and Lithuania have spooked leaders across the EU. The European elections are in June. This time, extremists on right and left may do well—including in Hungary, home to some of Europe’s least savoury political groups. Could 1930s economics lead Europe back to 1930s politics?
There are reasons to hope that liberal, multiparty democracy is in pretty good shape across the EU. For a start, everybody knows how the 1930s ended. Europe then was a more dangerous place: its poorest citizens were starving and welfare safety-nets were non-existent or inadequate. At times, Italians in Sardinia ate wild plants to survive. In Denmark unemployment topped 40%, and the government bought surplus cattle from desperate farmers. In 1933 almost-two thirds of Greek public spending went on servicing foreign debts, before the country defaulted. Equally, the first world war had left Europe with much unfinished business. Despite hyperinflation and punitive bills for reparations, Germany remained a big power, yearning to redraw its borders. Austria and Hungary were wounded ex-giants. Italy dreamt of controlling the Adriatic. The Soviet Union’s rise sparked instability as far away as Spain.
Yet for all the differences, intriguing echoes from the 1930s can still be heard. It is not that bits of Europe are flirting with fascism again. It is rather that the same issues irk voters then as now—and politicians are responding to them in similar ways. Today’s German and French governments talk loudly about clamping down on tax havens: this is a highly visible way to seek extra revenue and punish errant plutocrats. Almost 80 years ago, an identical outrage gripped Europe, when French police in 1932 raided the Paris offices of a Swiss bank for customer records, coming away with the names of French members of parliament, newspaper editors and a brace of bishops. (In a nice irony, the raid persuaded livid Swiss authorities to enshrine banking secrecy in law.)
Before the depression, France also had one of Europe’s most open labour markets, home to millions of Poles, Czechs, Belgians, Italians, Spaniards and Swiss, plus impressive numbers of political refugees. But between 1932 and 1935, a string of laws and decrees set quotas on foreign workers and stopped them moving from job to job. Tens of thousands, mostly Poles, were eventually expelled by force. The middle classes also protected themselves: new laws closed the French medical and legal professions to foreign-born graduates, often Jewish refugees.
Today British tabloids rage about jobs for migrants, seizing on Gordon Brown’s infamous phrase about creating “British jobs for British workers”. Spain, which welcomed immigrants in boom times, is offering unemployed foreigners money to go home. Italy’s Northern League wants a freeze on non-EU immigration and last year pushed for the expulsion of EU migrants without adequate means of support, a measure aimed at Roma, or gypsies, from Romania. The expulsion plan was dropped only because it fell foul of an EU directive on freedom of movement.
And therein lies the biggest reason to think that the 1930s will not be repeated. EU membership binds national politicians into a set of essentially liberal, free-trading, internationalist standards.
It is true that competition rules and the freedoms of the single market are being sorely tested, as politicians try to steer rescue funds to domestic companies, banks and workers. But among EU leaders there is a consensus on the need to defend “fundamental rights”. The EU can be expected to block blatantly discriminatory laws on housing, employment or schools. No hothead nationalist can close borders to a neighbour’s goods.
Governments can be taken to court or threatened with suspension. But the EU also operates by peer pressure. This can be pompous and ineffective, as in 2000, when European leaders shunned high-level contacts with Austrian politicians because Jörg Haider, a far-right politician, had joined the ruling coalition. That boycott fell apart when Austria’s government was found to be sticking to mainstream policies. Or it can be brutal and effective: in 1998 the EU warned Slovaks not to re-elect Vladimir Meciar, a nasty nationalist, if they wanted to join the club.
Bad things could happen as this crisis deepens. In one nightmare, a fragile EU member could become a failed state. But the EU stands for international solidarity and interdependence. Its maddening complexity amounts to a permanent compromise between competing interests that also makes it a bulwark against extremism. That may not always make Brussels popular with voters. But it does make one thankful that the EU exists.