Eurosceptics against the nation state

Saturday, 11th March 2006

David Rennie uncovers the cruel paradox that to save the single market sceptics must support the European Commission

The European Commission is under historic siege. Public support for Europe’s great unfinished project — the border-free single market — has collapsed. In Germany, Italy, Poland and Spain, even in little Luxembourg, workers want their frontiers back, if that means stopping foreign takeovers of cherished local firms. Political leaders are hearing the call, especially those with elections looming. Across Old Europe, ministers are meddling in the markets, whatever the Commission says. In France the right of Brussels to overrule national economic policy is being challenged by President Jacques Chirac and by the candidates of all parties who hope to succeed him.

A titanic struggle beckons. Since the days of Margaret Thatcher and the Single European Act of 20 years ago, the Commission has enjoyed extraordinary powers to quash national laws, ban state subsidies and break up monopolies, as guardian of the single market. Yet France is turning the clock back to the 1970s, proposing to spend billions to take an ineptly run water and energy firm, Suez, back into a form of state control to stop it being bought by Italians.

The Commission will doubtless become the target of heated abuse, in the rhetorical race to the bottom that is French politics. Commission sources are already preparing the ground for a possible climb-down. ‘Don’t make the Suez merger a test of our commitment to the single market,’ murmurs one Brussels official. ‘Not sure we can stop that one.’ The prospect of a slugging match between the European Commission and France might prompt some to echo Henry Kissinger, who reportedly said of the Iran–Iraq war, ‘A pity they can’t both lose.’

But all the current threats to the single market pose a real political dilemma for British Eurosceptics and the Conservative party — indeed anyone who claims to support free trade — and business. There is one mechanism for defending the single market, and it lies with the supranational powers of the European Commission, backed by the unelected judges of the European Court of Justice (ECJ). Just as a loss of sovereignty gave birth to the single market, it will take a fresh assault on national democracy to save it.

The internal market was always an overtly political project, which required leaders like Mrs Thatcher to swallow their doubts and sign away great slices of national sovereignty in the hope of prising open other nations’ closed markets. The paradox cannot be escaped easily. A single market is good, perhaps even vital, for Britain’s national interests. But if you want the single market to work, you need a strong Commission, and that means the Commission has to tell national governments what to do.