Wednesday, April 16, 2014
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The Value of European Values

Europe's leaders have revived the constitutional talks that broke down last December in a dispute about voting rights. Such disputes are, of course, subject to compromises, which are likely to be found. What still needs to be settled is a clear understanding of what the constitution is meant to achieve.

Two fundamental principles have underpinned European integration: solidarity and subsidiarity. Both principles lie at the crossroads of philosophy, politics, economics, sociology, and law. For years they have been present in the legal and institutional framework of the European Union - in treaties, in the Charter of Fundamental Rights (which quotes them in the Preamble), in the recent draft Constitution. They are, in short, inscribed in the EU's history and ideals. But what do solidarity and subsidiarity really mean?

Consider solidarity, which is open to at least two interpretations: static solidarity, which concerns only the distribution of income and wealth, and the broader concept of dynamic solidarity, which concerns the production of income and wealth as well.

In the postwar history of European integration, dynamic solidarity was strong in the first period - that of the European Coal and Steel Community - both in its economic development strategy (reconstruction) and in the Treaties, particularly the Treaty of Rome. This does not mean that dynamic solidarity was subsequently suppressed: European Monetary Union, for example, is an expression of it.

Some countries did not immediately benefit from the euro, but accepted it for the sake of solidarity. They were convinced that it would have positive effects in the long run. Dynamic solidarity, in other words, means favoring policies that foster investment, innovation, economic growth, and employment.

However, as GDP growth in the EU indicates, dynamic solidarity has been undermined over the last decade. What is particularly worrying is the research and development lag. Realization of the EU's so-called Lisbon strategy, adopted in 2000 with the promise of creating the world's most competitive economy, is threatened by a growing emphasis on static solidarity, reflected in high social welfare costs and the high taxes needed to finance them.

The primacy of static solidarity is due to an aging population, which, along with slower growth, has led to structural fiscal imbalances. One of the biggest challenges for the future of the EU is addressing today's prevalence of static solidarity oriented towards old people over dynamic solidarity favoring young people. After all, the Union cannot afford to permit current consumption to continue to prevail over the investment needed to ensure future prosperity.

Subsidiarity is similar to the concept of solidarity in that it, too, has two interpretations: vertical subsidiarity and horizontal subsidiarity. Vertical subsidiarity concerns the distribution of powers among different levels of government and sovereignty: the EU, national states, regions, and municipalities. The best-known application of this principle is federalism. In the European Treaties, we find a clear expression of vertical subsidiarity. But is this enough to encompass the emerging institutional and constitutional settings of the Union?

Horizontal subsidiarity concerns the responsibility and freedom of human beings, as well as social and economic powers. It encompasses the relations between state, society, and market. But society and the market have their own rights and sovereignties that are not granted by the state. So the problem comes in assuring the autonomy of each realm.

An example of horizontal subsidiarity is the internal European market, which created a new kind of economic freedom and increased competition between firms because they are no longer protected by national governments. Horizontal subsidiarity means that in both society and the economic sphere, the state cannot violate individual freedom and responsibility, which must be respected to the greatest possible extent. It also means that support must be given by a "superior power" whenever individual freedom and responsibility do not suffice to achieve the ends necessary for human dignity.

This support, however, should be implemented in ways that the natural potential of individuals, society, and the market is promoted. But that is possible only when the role of horizontal subsidiarity is clearly formulated, which it has not been in the European Treaties, the Charter of Fundamental Rights, or the work of the European Convention.

In short, solidarity has come to mean redistribution rather than growth (which is how today's generation expresses solidarity with respect to future generations), while subsidiarity has come to mean the distribution of political power, rather than a careful delineation of the boundaries between the state, civil society, and the market. Today, both values are defined in ways that favor the state. Indeed, focusing on market-based growth has often been identified with the semi-alien values of America. But these values are deeply ingrained in Europe, and should be brought out again.

The EU should restore its economic vitality by pursuing a model of solidarity and subsidiarity that is more balanced in favor of the market and society, and that reduces the state's socio-economic influence. State institutions should deliver public goods (like defense, justice, and fiscal and monetary policy), society should deliver social goods (like culture, education, and assistance to needy people), and the market should deliver economic goods (which are connected with profits, growth, and employment).

In the 21st century, Europe must reconsider the value of both principles - solidarity and subsidiarity - if it is to attain integration's historic goal: the freedom and well being needed to overcome the differences and political divisions that incited tragedy in the 20th century. That is the spirit in which the European Constitution must be written.

Read more from our "Europe's Nobel Project" Focal Point.

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