Last week, Senator Doug Finley argued in this space against “high-spending European welfare states,” which through “excesses … of socialism” got themselves into a debt crisis. Mr. Finley says that it would be “beyond the pale” for Canada to contribute to the international financial bailout for Europe. There should be no Canadian helping hand, he says, because Europe behaved like an “irresponsible teenager.”
Most of his arguments are factually wrong, and taken together, they are dangerously historically ignorant.
Start with the fictional claim that “there has been no country more generous, on a per capita basis, than Canada.” Actually, Canada is one of the least generous financial donors in the OECD, closer to last than first place. At last report in 2008, Canada gave $131 (U.S.) of official development aid per capita. Norway, which like us is a northern resource-based country, gave $772 in aid per capita – about six times more.
Nor is Mr. Finley accurate in diagnosing Europe’s “big-government approach” as causing “massive debt.” According to the conservative Heritage Foundation and the CIA, the governments of Spain and Canada chew through about the same share of national income (45.8 per cent and 44.1 per cent, respectively), yet Spain’s total public debt (68.2 per cent) remains well under Canada’s (83.5 per cent).
Nor is Mr. Finley right that “ending overregulation” is a panacea for reviving European economies. If it were, then Ireland, which the Heritage Foundation ranks ninth worldwide for economic freedom, should be healthy and Germany, in 26th place, should be in crisis – but the opposite is true. Ireland’s debt crisis began not by overregulation, but sloppy deregulation of Irish banks, whose errors necessitated a government bailout.
But Mr. Finley is at his most ironic in blaming “socialism” for overspending and debt. Spain’s Socialist government inherited a budget deficit in 2004 and deftly reversed it into a large surplus, at least until the Spanish housing bubble burst. In contrast, Canada’s Conservative government inherited a budget surplus in 2006 and ineptly made it into a deficit – and they have no excuse that Canada’s housing bubble burst.
The Senator let his mouth get ahead of his facts. But where all reasonable people agree is that Europe has made foolish mistakes. The design of the euro was one hand clapping – a monetary union, without accompanying fiscal constraints. European leaders also ignored Eurostat’s loud shrieks that Greece was cooking its books. Plainly, the crisis was brought on by pan-European failures of governance, not just Greek, Spanish, Irish or Portuguese failures.
But do Europe’s mistakes justify the Conservative government’s idling and hectoring on an international financial intervention? No. Future – and historical – considerations make that extremely unwise.
About the future: Canada and the European Union are negotiating a free trade agreement, which would give our people (33-million) preferential terms to export to their people (500-million). The possible expansion – or not – of Canadian economic opportunities into a trade bloc 16 times our size is obviously a breathtakingly important, and once-in-a-lifetime issue. Conservative scolding of the Europeans is not helping seal the deal.
But historically, the argument is even stronger.
Europe is a dangerous place. For most of the last thousand years, Europeans were almost constantly at war: the Crusades, the Hundred Years War, the Ottoman-Hapsburg wars, the Italian and French revolutions, etc. Europe’s ethnic and linguistic diversity – tribalism, basically – made Europe the bloodiest continent on earth.
Yet after the Second World War something changed. Statesmen like Konrad Adenauer, Jean Monnet and Robert Schuman sought a new way of keeping Europe’s peace, by stably integrating European economic interests. Simply put, the idea was to turn former enemies into customers, and it made sense: Nobody kills their customers – it’s bad for business.
So began the economic integration experiment of the European Coal and Steel Community in 1951, which through successive treaties grew into the European Union today. Not only has that experiment succeeded in delivering the economic stability on which other sorts of co-operation rest (NATO, for example), but because of it, the world’s bloodiest continent has enjoyed a longer stretch of peace than at any time in the last millennium (excepting the former Yugoslavia). It could well be the grandest political success of the last thousand years.
And now that Europeans are feuding as in a bad marriage, and economic integration is fraying dangerously, what is the Conservative response? Not to help, but to stand mockingly on the sidelines and to humiliate the Europeans. Only fools, ignorant of history, would do such a thing.
We are perilously close to the point where the single currency (the euro) could fail. If it did, it would blow a hole in the EU’s treaties, there would be lawlessness, and the EU could fall apart. And that is only the start; because Europe’s old, warlike habits could easily resurface. Already in Greece, the fascists are rising: The Golden Dawn party rallies under a flag disconcertingly like the swastika, denies the Holocaust, and storms around beating immigrants – and it has 18 seats in Greece’s parliament.
Mr. Finley boasts that Canada has “the scars of two world wars” to prove its place in the world. Let us not prove it again, where otherwise some Conservative sympathy – and genuine help to Europe in a time of extreme need – is the alternative.
Amir Attaran is Canada Research Chair in Law, Population Health and Global Development Policy at the University of Ottawa