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European Union is a victim of tragic overreach

More than 20,000 people gathered July 2 in central London to protest against Great Britain leaving the European Union.
More than 20,000 people gathered July 2 in central London to protest against Great Britain leaving the European Union. Los Angeles Times / TNS

Because he had once hurled out of a C-47 over the Netherlands, my platoon sergeant in the 82nd Airborne personally knew how a complicated, overly optimistic and poorly thought-out multinational effort can turn into a debacle.

Moreover, with four other combat jumps, he understood that when complex undertakings go awry, confusion and panic can quickly set in and leaders can collapse into incompetence and cravenness. In other words, he would have understood the current plight of the United Kingdom, and the rest of the European Union, as they embark on an unprecedented political and economic dissolution following the “Brexit” referendum.

The analogy has ironies.

Nijmegen, where the 82nd Airborne jumped, is only 115 miles from Brussels, seat of EU governance, and only 90 from Maastrict, where a common European currency was decided in 1992.

A British general ruefully acknowledged the overly ambitious goals in this attempt to grab strategic river crossings as “a bridge too far.” That captures the fundamental error of the EU. It might have succeeded if goals had been more limited. Now its future is cloudy.

To understand, review some history. When the war ended in 1945, Europe was devastated. The USSR posed a threat. By 1951, leaders of six countries agreed to free coal, iron ore and steel from trade barriers to meet the needs of cold and unhoused populations more efficiently.

This “European Coal and Steel Community” led to the EU. But a political subtext — to so tie old enemies together economically that they would never again go to war — outweighed the stated purpose

These six countries grew to 10 and then 12. Unhampered trade in coal and steel became a general free trade area, with no tariffs between members.

There were knotty questions. Could France keep out sparkling wines labeled “champagne” that flouted its own criteria? Could others bar French cheeses made from unprocessed milk? Was it fair to trade openly if one country required its employers to provide much higher fringe benefits than another?

Resolving these prompted bureaucracy. But economic integration was generally popular as the market grew.

There always was politics in new admissions. French president Charles DeGaulle kept the United Kingdom out until 1973. Spain, Portugal and Greece all were admitted, at least in part, as a reward for their turn to democratic government — but without considering long-term economic viability.

In the 1980s, the European Union seemed on a roll. If it had progressed from basic commodities to all merchandise and some services, why not make it apply to all services, including retail financial ones? If British tourists could get dental work done cheaply while vacationing in Portugal, why not let Portuguese dentists set up practice in London? Why not just let all resources, including labor, flow freely between member nations?

That led to an immense effort to achieve such free flows by 1992. Doing so required many regulations to accommodate entrenched interests and differences in historical institutions. But it was largely a success.

This probably was where things should have stopped. But, as in war, short-term successes can breed hubris. If free resource flows are good, wouldn’t things be even better with a common currency? It was no accident that the Maastricht Treaty calling for a common currency and monetary policy by 1999 was signed in 1992, when the Union declared victory in economic integration.

This was not in a vacuum, however. Communism collapsed, Germany reunified and Czechoslovakia broke apart, all peacefully. But Yugoslavia fissured into bloody civil war. Allowing once-eastern bloc nations like Poland and the Czech Republic in consolidated democracy and markets in these neighbors. Admitting the Baltic States demonstrated resolve to Russia. Holding out eventual membership as a reward for not fighting was a tool in bringing peace to ex-Yugoslavia.

As is often the case, bad metaphors cast a spell. The EU was said to be like a bicycle: If not kept moving forward, it would fall over. Membership rose to its current 28. A subset of nations, now 12, adopted the euro in 1999.

Observers saw internal tensions developing, but as in financial booms and battlefield successes, naysayers find few hearers.

When my old sergeant and comrades pulled back from eastern Holland, civilians left behind went into two winters of near starvation. A cohort of Dutch, Danes, Germans and Poles was permanently stunted by hunger experienced as small children in 1944-46. That generation was willing to pay much for European integration that maintained peace. But they are now approaching 80. Their children have other priorities, including jobs and slow economic growth.

One UK referendum does not mean that the EU is ended. But June 23, 2016, will go down in history as a watershed, not just for Britain, but for Europe as a whole.

The EU is a political and social experiment unprecedented in history. So we have no historical examples to go on when it encounters head winds or runs on a reef. Pundits can speculate, but no one knows how British withdrawal from a complex institution built up over 60 years will affect either that country, the other 27 in the Union or the rest of the world. This is uncertainty in its deepest sense.

Financial Times writer Martin Wolf, one of the best economics columnists in the world, says withdrawal is the most momentous mistake in modern UK history. Whether or not he is right, I think the UK and Europe are in for a rough patch indeed. It will be impossible for the United States — or even Idaho — to escape unaffected. But exactly what will happen is unknowable.

St. Paul economist and writer Edward Lotterman can be reached at boise@edlotterman.com.

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