MUNICH – The motto of the United States of America is: “E pluribus unum” (Out of many, one). The European Union’s motto is “In varietate concordia,” which is officially translated as “United in diversity.” It is difficult to express the differences between the US and the European model any more clearly than this. The US is a melting pot, whereas Europe is a mosaic of different peoples and cultures that has developed over the course of its long history.
That difference raises the question of whether it is worth striving for a United States of Europe – a concept that many refuse to accept, because they do not believe in the possibility of a unified European identity. A single political system like that of the US, they insist, presupposes a common language and a single nationality.
Perhaps the idea of a United States of Europe, the dream of post-war children like me, can never be realized. But I am not so sure. After all, deeper European integration and the creation of a single political system offer solid, practical advantages that do not require a common identity or language. These advantages include the right to move freely across borders, the free movement of goods and services, legal certainty for cross-border economic activities, Europe-wide transportation infrastructure, and, not least, common security arrangements.
Banking regulation is the most topical area in which collective action makes sense. If banks are regulated at the national level, but do business internationally, national regulatory authorities have a permanent incentive to set lax standards to avoid driving business to other countries and to lure it from them instead. Regulatory competition thus degenerates into a race to the bottom, since the benefits of lax regulation translate into profits at home, while the losses lie with bank creditors around the world.