Don't fudge it: the European question is Germany

Canada has no choice but to accept the United States. We, too, must accept our giant neighbour

Perhaps what is happening to Europe is irresistible, more about physics than politics. A united Germany, with its linguistic and economic mass spreading well beyond its physical borders, is bound to dominate everyone else. It is too big not to. Germany is the elephant on the European bed, and the rest of us feel vulnerable, squashable midgets.

Germany has been the main European question since the 1870s. Attempted answers to the German question have followed in a thunderous roll-call: customs union, empire, grand treaties, war, fascism, war, division, American occupation, common market, unification, federalism. And still Germany is the great question, though one deliberately disguised in the abstract language of the EU.

For instance, after getting the final nod from today's cabinet meeting, the British government's White Paper on the Intergovernmental Conference will be published next week. Apart from Tory MPs, few people will be interested or excited by that. But had it been described, as it could have been, as ``the conference on Germany'', the public might have taken more serious note.

And we should be interested. Apart from the frantic fringes of politics, most people have come lazily to accept the European Union as a fact of life, something that is ``just there''. But this isn't so. The EU cannot carry on without changing radically, and it has the capacity to destroy its old self. What is happening today, however quietly, is that the project is testing its own logic to breaking-point. The EU cannot keep growing larger; and introduce a single currency; and retain its current centralised political structure.

Poorer Eastern countries would struggle desperately, and almost certainly fail, to meet the monetary union tests. These will, in any case, cause further serious social strains in France and perhaps Germany, too, where the abandonment of themark is unpopular. The huge transfer payments from rich areas to poorer areas that would be required by a single currency to avoid mass migrations imply new taxes for people who are already, by world standards, heavily taxed.

Behind those problems, and greater than them, is the question of whether monetary union would not require a single economic and fiscal policy - even a ``single European Chancellor'' to go along with the single European currency. My reading of mounds of paper on the subject (let no one say the life of a columnist is all cheap gossip and warm Chardonnay) suggests there is no economic consensus about this.

In general, the left assumes the need for some continent-wide economic policy to ensure a future for Keynesian welfare states and to help the poorer regions. Nationalistic right-wingers agree, because they think the single currency is a trap leading Europe into full political union. But neoliberals and bankers disagree: they think that so long as countries are punished for over-borrowing (just as US cities are), and so long as people can travel freely from poor regions to more prosperous ones, this can be left to the market.

What I find astonishing and worrying is that this subject is treated so vaguely by the politicians who are determined on monetary union. At a meeting in Paris last year of civil servants, MPs, journalists and academics, it was clear that the French side had no agreed view on the political consequences of the monetary union to which they were committed. It seems a bit like bungee-jumping without measuring the drop.

There are other serious unresolved dilemmas aplenty. As Malcolm Rifkind pointed out this week, a European Union defence system embracing the former Warsaw Pact countries might tip Russia into outright hostility to the EU's plans for enlargement.

And then there is the core business of the looming conference, the cumbersome political system of the EU itself. It simply could not cope with serious enlargement. The point was made well by Perry Anderson, writing in the London Review of Books. Just enlarging the Union by adding the 16 states to the east to the 17 in the west would produce institutional gridlock: ``the size of the European Parliament would swell towards 800 deputies; the number of Commissioners rise to 40; a 10-minute introductory speech by each minister attending a council would yield a meeting of five hours, before business even started.''

Hence the plans for changes to the voting system, powers of the Commission and operation of the Council of Ministers to speed up decisions and stop countries blocking policy. These are, clearly, a threat to national power; but without such changes, the Union is condemned to suffocate in its fat like a beached whale.

These problems confront Europe not because of the manic powerlust of bureaucrats, as some Tories affect to think, but because of Germany and the fear of Germany felt, in particular, by France. European federalism plus the expansion to the east has been the German dream. It gives Germany everything Germany has wanted since it first became a European nation; great but legitimate influence, prosperity and safety.

And, broadly speaking, we should be heartily in favour of that; those are German national interests which are in every other European's interests too. But the real question is whether the full federal project, with all its unanswered dilemmas, doubtful democratic legitimacy and grand political ambitions is the only answer to the German question.

The Tory Euro-sceptics Iain Duncan Smith and Bill Cash, who have published a pamphlet on the subject, end it by stating that ``The European answer to the German question is the missing piece in the jigsaw of the forthcoming Intergovernmental Conference. A failure to find it ... will destabilise Europe and the world well into the next millennium.''

That is going it a bit. My guess is that away from its impact on domestic British politics, which will be concerned mainly with referenda, fish, Sir James Goldsmith and similar matters, the conference will swap stronger institutional powers for more modest political ambitions. I also suspect that the timetable for the single currency will slip badly. There is no awful crunch coming.

But there are those dark, difficult questions about full integration and there may be better answers for Germany, and us. The surrounding big facts of life are relatively benign. The cause of free trade in Europe is mostly won. The alliances and interpenetration of our nations in one another's defences, and the relative prosperity of their peoples, makes serious European war seem almost unthinkable. We are possibly the first generation of Europeans since the heyday of the Roman Empire to feel this way.

And in this Europe, might not a normal German democracy flower, hugely influential but not resented for its size because of the sheer ordinariness of its ambition?

A Europe dominated by Ordinary Germany would be perfectly tolerable. The German language would become everyone else's second one. German culture and finance would be widespread and powerful. We in Britain would grow to regard Germany and its surrounding shadow of nations with the same mixture of exasperation and closeness that Canada feels for the United States. There are many worse fates. It would be a good and honest thing if next week's paper from the British government said so.