Former Belgian Prime Minister Guy Verhoftstadt wants a United States of Europe. He’s worth paying attention to—not only has he written a book about it, he is a front-runner to become the next president of the European Commission. A major proponent of greater European integration, he believes that a Europe that acts as one body is one that can lead effectively on the world stage. ‘[European governments] are still thinking that they can solve problems on their own. If you look to the problems—climate change, poverty, Africa, financial crisis. What can a nation state do? Nothing at all. They are global challenges and for global challenges you need global political bodies.’ This clear vision of the need for a European parliamentary democracy with executive powers and an elected President signals a radical shift from the conciliatory Lisbon Treaty—yet Verhofstadt would suggest that a shakeup is exactly what Europe needs. Many nations were unsatisfied with the compromise. Chief among Europe’s problems, as Verhofstadt sees them, is that there is no political majority. ‘We have only [a] majority based on topic… What we need is a classical majority of position, like you have in a national parliament.’
To most, Europe is seen as a fruitless maze of bureaucracy, fiddling with the small problems but never actually governing or accomplishing anything. It’s refreshing to see a European politician genuinely understand this frustration. Verhoftstadt highlights a question that many consider when it comes to European legislation—’Is it really necessary when you have an internal market that you prescribe precisely what champagne is, what chocolate is, what marmalade is?’
However, he advocates more regulation in other areas, suggesting a focus on what is important, without letting small, seemingly irrelevant details distract from the major issues. ‘At the other side Europe needs to be more involved in preparing, for example, strategy for a financial crisis and organising the financial markets. You need more regulation on some issues and less regulation on other issues. Europe is not enough a bureaucracy on a number of issues and too much of a bureaucracy on a number of other issues.’
It is clearly possible to disagree in principle with Verhofstadt’s stance on Europe, as many do. Yet he certainly has the evidence to support his case, and is not alone in seeing that greater integration would provide solutions to some of the more serious problems that individual nations within Europe face, as well as the EU as a whole. Throughout my time with him, he made his case clearly and convincingly, especially in his speech to CapitOx, focusing on his solution to the financial crisis.
It was the financial crisis that animated him most; one gets the sense that he views it as having provided an opportunity for drastic reform. Mr Verhofstadt’s fundamental belief is that the EU can only recover from recession with a united approach, and that what is being done currently is nowhere near enough. ‘The Americans are doing their job, I don’t see the same from the European side.’ For Verhofstadt, 27 individual national plans won’t work, and he argues that the current approach poses a major threat to European growth in the long term. ‘We need to be doing the exact opposite from what we’re doing today.’ Within three years he sees most of the rest of the world entering a period of growth again—Europe, without a universal plan, would be left far behind. This belief is also supported by the IMF who currently project a recovery to some degree for most of the rest of the world, with noticeable stagnation projected for Europe.
Small scale recovery plans are often ineffective, result in an unhelpful multiplication of priorities and a lack of international coordination can bring recovery plans into conflict, further limiting their effectiveness. ‘Europe’s success needs to be based on overcoming protectionism.’ He argues that unless we move forward from a determination to protect each nation with minimal regard for our neighbours we will severely limit the extent to which European economies can be strengthened. Central to Verhofstadt’s argument is the need for better regulation, and regulation that applies to an audience broader than just one country.
He concedes that worldwide regulation and organisation is not a realistic prospect. Nonetheless, he suggests that this is what would be most effective, proposing the IMF as the central body, though admitting that this would involve major changes in internal IMF politics. Clearly, Verhofstadt is a critic of regional control. Yet, should he get his United States of Europe, what would he do with it? First, he would develop a single European watchdog with new standards for financial products – ‘not more but better regulation’. Then, stress test all the banks, giving them ratings and with full transparency about their faults. Finally, he would recapitalize banks that need it. Startlingly similar to Obama and Geithner’s action plan in the US. And ‘how would we pay for this?’ being the inevitable question.
With ‘Eurobonds’. Verhofstadt proposes that these should be issued by a central European investment bank, and that by procrastinating on this we are ‘ignoring vast sums of capital’ that could be used to revitalise the European economy. China, for example, has a savings rate among the middle class of 24% (as opposed to Europe’s 15% or the US’s 4.2%), and there is currently little alternative to US Treasury bonds on the international scale. By providing an reliable alternative in which people can invest their savings, Eurobonds have the potential to begin resuscitating the European economy.
Highly critical of Jose Manuel Barosso, current President of the European Commission, Verhofstadt maintains that he has wasted his time in office. This is clearly an indication of what he would have done in office had he been successful in gaining the presidency in 2005, and what he is likely to do should he succeed Barosso. ‘He has not done what was necessary: to come up with one common strategy. He didn’t do it. People are saying now ‘maybe he’ll do it later on.’ He has had 5 years of time to do it. Too weak in my opinion.’
Verhofstadt is nothing if not an optimist. While in no denial about the grim financial state we’re in, he genuinely sees this as an opportunity. It can provide Europe with the impetus to radically change not only its economy but its outlook. He believes we need an increase in trans-European networks – in communication, transport and energy. It is our chance to develop a carbon free economy, an opportunity for Europe to pioneer and become a pioneering group­—and there really is no limit. ‘Bretton Woods [the conference between major world powers following the war] was what in French we call a coup d’etat, by the Americans on the international financial system. Why not a Bretton Woods II for the Europeans where Europe and the European currency is the strongest group in the IMF?’
His optimism is infectious, and Verhofstadt provides, with compelling conviction, a clear plan for restoring long term growth to Europe and preventing another economic crisis similar to the one that we’re experiencing. This lucidity is something of a rarity at the moment. Take or leave his specific European ideals, but you can’t deny that there is an argument to be heard here, and we need to consider it seriously.