Although this article is highly speculative, and somewhat light-hearted and fanciful in tone, it is intended to serve, if not as a beacon, at least a premonition of what such a beacon might look like. There are obviously many serious issues involved in a move toward this model, and not all of them have obvious solutions. We can see in the implementation of Brexit how such issues arise; in foreseeing a major realignment of the relations among and within 27 nations, the degree of complications in Brexit would be exceeded greatly. However, the degree of difficulties in keeping the current European model functioning may be even greater, and less solvable. With that in mind, I am happy to see these speculations given wider circulation within a nation that once again finds itself the centre of a political hurricane.
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The European Union is not nearly as good as the Remainers maintain that it is, nor nearly so bad as the Brexiteers represent. It constitutes a substantial achievement in institution-building, and performs useful functions for a number of its members. However, its various member states have substantially different needs, wants and expectations from the organisation, with the result that not one member state is fully satisfied by it, and many are substantially unhappy. Although no human institution is perfect, there is a certain degree of dissatisfaction beyond which it probably makes sense for the most unhappy members to consider departure. This has now happened with Britain, and it is not unlikely that unhappy others may follow.
Nevertheless, even if the EU were to fall apart under its contradictions, it is not clear that it would merely revert to the status quo ante the Treaty of Rome. The problem with the EU is that is has served some functions reasonably well even while performing others poorly, not at all, or even perversely aggravating yet others. Untangling the functions it provides for the UK that might be kept from those that would be detached has been proving complex and frustrating; a general unravelling of the ties binding all 27 seems irretrievably complex.
However, rather than expecting a dissolution of Europe into a collection of entirely disassociated nation states, it is worth considering an intermediate outcome: one in which the current Union becomes divided, over the coming twelve years, into a small, discrete number of less ambitious but still useful Unions, tied together by a loose set of all-European (and some extra-European) functional organisations.
Many of the current problems of the EU come from its over-ambitious goal of uniting all Europe into a single structure, giving up in the process many of the binding ties that make states function, and substituting economic and technocratic government, a solution that was weak even in prosperous times, and clearly failing in stressful times of economic transition. The Six Unions of this speculation will fall out according to the following principles:
1. Roughly similar levels of development, institutional effectiveness and transparency. The substantial disparities in these fundamental characteristics in the current EU have caused nothing but trouble, reducing the less developed nations to beggary and dependency and the richer ones to resentment.
2. Similar approaches to regulation and law.
3. Historical and cultural affinities, where such are positive. Legacies of symbolism and binding sentiments – Lincoln’s “mystic cords of memory” should be invoked where possible. Preferably, no more than three major languages should be in official use.
4. Relatively equal populations between the six Unions.
These criteria, among others, fall out of the following emerging global trends. Some have been so widely discussed that to raise them seems almost trite. Other trends are only now emerging, and will undoubtedly be controversial. Yet both are there. They are:
Firstly, the collapse of defined-benefits social payment systems. Almost every OECD nation, and many others, have legacy obligations from pay-as-you-earn schemes, in which current payroll “contributions” are used to fund yesterday’s contributors’ pensions. This worked reasonably well when the bulk of the population had four children per family, and thus were expected to always be able to fund without strain their parents’ superannuation payments. The problem with this is then, of course, when births fall below the replacement rate, as they have throughout the OECD, and the system goes into reverse – a smaller and smaller number of workers must fund a larger and larger pool of claimants. The social reformers of the early 20th century had only the best of intentions when they set up these systems – but it should be remembered that even Charles Ponzi did not deliberately set out to defraud his investors. He just did not foresee the inherent limits of his system. The only solution is to transform over time such systems to defined-contribution systems that are sustainable regardless of growth rates. But this leaves a large class of legacy claimants for whom it is too late to start the savings accounts needed to fund sustainable retirement. This has created a huge mountain of accumulated obligations, and growing public and private debt as most states are borrowing to cure their budget shortfalls.
Some states, such as Canada, acknowledge the problem but hope to address it by permitting massive immigration, hoping that the shortfall can be made up by masses of other peoples’ children. They point to past experience of the USA and Canada itself in the late 19th and early 20th centuries in admitting large numbers of immigrants and successfully integrating them into their populations. Yet they ignore the fact that those immigrants came at a time when their economies were in need of large numbers of hands to run their growing industrial systems. These hands did not require higher education to be useful, unlike today. Further, they came at a time when their school systems firmly demanded that immigrants learn English and absorb simple yet basically true national narratives that gave them a patriotic sense of membership in their new nations – a patriotism that was tested as the two World Wars required their service, often against their former homelands, yet found them by and large ready and willing to participate. Today, multiculturalism and relativism undercut any attempts to construct patriotic narratives, and leave the future with the question that can be crudely but validly reduced to: Will young Pedro and Ahmed be happy to see large chunks of their pay-checks devoted to paying the claims of elderly John and Mary, when it is also clear that they themselves will never receive like benefits?
At the same time, rapid changes in the nature of the production of physical goods are changing the nature of employment and the mix of skills needed. In the course of these changes, which may be fully as disruptive as the original Industrial Revolution, many existing jobs will probably be eliminated. It is a matter of hotly contested debate whether new forms of earning a living will emerge in sufficient quantities to replace traditional industrial employment, and whether the individuals made redundant will have the skills, training or mindset to take advantage of new opportunities. Whatever the outcome, it is likely that the transition period will see additional demand on social services and transfer payments whether temporary or permanent, and that they will probably come during the same time period that the bulk of the post-Second World War generation become claimants, while payroll deductions shrink.
Secondly, we are beginning to understand that not only is nation-building difficult and problematic in developing nations, but that is by no means a foregone conclusion in the First World. Placid states that have long considered to have settled questions in terms of their nationhood are undergoing strains precisely along the seams on which they were constructed, often centuries ago. Norway’s separation from Sweden in 1905 was considered a curiosity and anomaly. The emergence of the successor states of the Austro-Hungarian and Russian Empires (in the latter case, Finland and the Baltic states) was seen as an aftershock of the First World War, and the dissolution of the recently-created and fairly obviously synthetic states of the USSR, Yugoslavia and Czechoslovakia was written off as a consequence of the end of the Cold War and its consequent turmoil. Yet since the end of that turmoil, we have seen the fundamental compositional settlement of substantial, prosperous, peaceful, democratic and generally-recognised nations such as Canada, Belgium, Italy, Britain and Spain challenged, and avoiding dismemberment only by surprisingly narrow margins. (Less than one per cent in Quebec in 1995, by five per cent in Scotland in 2014, and actually approving independence albeit in referenda of dubious validity in Venice and Catalonia within the past few years.) Even today parties devoted to fissioning their states form part of the governing coalitions of three of those nations, and hold non-trivial positions in the parliaments of the rest. When important parts of a nation are so close to rejecting the fundamental fact of nationhood, can the building of those nations really be described as unequivocally successful?
Looking more closely, we also see that even those nations not currently in the midst of secession crises are also suffering substantial divisions – the coast vs heartland division in the USA, the Leaver–Remainer split in England, and the establishment vs populist split in Germany and France. These are of course of varying degrees of severity, but all suggest that the nation-state business is trickier than was assumed only a few decades ago, when it was thought to have been reduced to such a simple, readily-applied formula that randomly assembled administrative areas of the British, French and other empires could be turned into functioning, coherent nation states with just a bit of benevolent advice from a few agencies of the United Nations. What have we learned since then?
We might consider the possibility that successful nation-building usually takes a much longer time period than generally recognised. We think of Germany and Italy as “nations of Europe” in the same sense as France and England, for example, but “France” and “England” were recognised entities with much the same core regions in the year 1000 as they are today, and there has been some kind of continuous recognised government that has spoken for them throughout all that time. (This has been confused a bit by the creation of the United Kingdom in 1707, but the British government has been recognisably English ever since then, just as the addition of Corsica or Nice did not change the essential Frenchness of France.)
Germany and Italy, on the other hand, are late 19th-century novelties that have been shooting at the mark of nationhood ever since, with debatable success. Italy has just been a mess the entire time. The failure of public confidence in their elites which has become widespread in the West since the early 2000s occurred in Italy somewhere around 1917 and has not been regained since. Germany keeps overshooting and undershooting, alternating between overly harsh and overly permissive, too centralised and too much local autonomy, and often unsure of exactly what should be Germany and what should not (e.g. Austria). Indeed, Germany was only united for 75 years, from 1870 through 1945, then divided into two states (or three, depending on how you saw Austria) for 45 more years, and now has been re-united for 28, with divisions still lingering. Belgium is another 19th-century confection that has had trouble congealing into something definable, and now seems to be held together primarily because of the complications that its undoing would create. Central Europe continues with two ancient states reconstituted, Poland and Hungary, and a number of new, late 19th/early 20th-century states, problematic at founding but eventually given coherence primarily by Stalin’s ethnic cleansing.
It is, perhaps not necessary, but at least highly helpful for a nation to have a long memory, a long tradition of triumphs and defeats, problems faced and divisions overcome, for citizens to hold in common, that can be summoned as a source of reserve strength in times of hardship. Even relatively new states – like the USA and the Old Commonwealth states – that are able to effectively incorporate the history, mythology and legends of their founding cultures of the British Isles into their own are thus able to build on a tradition that is recognisably ancestor to their own, and draw strength and stability therefrom.
Our understanding of these truths has recently been reconfirmed by the work of the psychologist Jonathan Haidt, whose research has led him to identify values held by people on various sides of the political spectrum. He found that while both the left and right sides of the spectrum valued fairness and care highly (although expressed in different ways), values such as tradition, authority and sanctity were valued highly on the right and lowly, or negatively on the left. One result of this is that people on the right were better able to understand and predict the reactions of people on the left than vice versa. Yet the latter values are exactly those that have helped keep the longstanding nations intact and functioning through periods of extreme stress.
It is unlikely, for instance, that Britain would have been able to maintain support for its stand against the Third Reich between the fall of France and the invasion of the Soviet Union had its leaders been able to call only upon utilitarian or economic arguments for continuing the fight. Hitler had made it clear that he would grant peace to Britain on what would be, for Britain, generous economic terms, with no threat to its overseas empire. Churchill in turn was explicit about the price of continuing the fight, and in turn called precisely on those values of sanctity, tradition and authority to justify continued resistance. And it is the longstanding state whose store of experiences and memories are the largest, and most ready to mobilise for such a struggle.
Following the end of the Second World War, however, the survivors who crawled from the wreckage of the European continent were not impressed by the beneficial results of those values in sustaining the British, American and Commonwealth electorates through the dark hours and on to victory. Rather, they were appalled by the results of those values when used by the Nazis to gain power in Germany and ignite the flame that consumed their homelands. Being for the most part men of the moderate centre-left, they had little appreciation for the role that such values play in the hearts of many men and women, but held the virtues of caring, fairness and equality in high esteem. They wanted to build the new Europe squarely on them, and banish what they considered the dark side of humanity – the traditional values – beyond the fringes of acceptable discourse and politics. (Never mind that the great bulk of the resistance to Hitler was actually from traditionalist conservatives like Count von Stauffenberg, who were motivated primarily by their concern for the honour of the German nation.)
This motivation, combined with the fact that the first sector of the political sphere that presented itself to the reformer was economic, led to a vision of a new Europe that was largely based on economic reductionism. Europe at the zero hour, May 1945, was in imminent danger of starvation, and only the prompt arrival of American food and money prevented a further catastrophe. Furthermore, the next few years carried the additional humiliation of the collapse of the remnants of the European overseas empires, as one by one the flags were lowered and a stream of repatriated colonists and officials returned to a ravaged homeland.
Every facet of the old nation-state that had brought pride prior to 1939 had been ruined – the armies surrendering overnight, the politicians gridlocked before the invasion, and rushing to collaborate afterwards, the police (who were supposed to protect justice) rounding up nice old Dr Goldberg who had treated you since childhood, the proud imperial colours on the map shrinking and disappearing (while it transpired that their native subjects had actually never been grateful at all for that civilising mission) – so, an economic reductionist regime that actually delivered the goods, while adhering to an ideology of care and fairness, had a pretty good chance of gaining acceptance.
And so it was. The Wirtschaftswunder, the trente glorieuses, il surpass – every cafe stuffed with pastries, every little Volkswagen, Fiat or Citroën 2CV that suddenly became within reach, every week on the Mediterranean in a beachfront high-rise, every year delivered more than last and promised yet better next year. Critically, a combination of civil service rules for state employees and highly regulated corporations with powerful unions pretty much guaranteed a job for life for most workers, and an available position for those coming of age.
The photos of sons marched off in uniform and never returned, parents killed in the bombings, and siblings who died of hunger-aggravated disease back in ’44 or ’45, grew more faded every year. If from time to time one remembered with some nostalgia the parades on national holidays, the feeling of solidarity with your neighbours as you cheered, the pride of a son in uniform, then quickly the memories of the hunger of 1946, and the deaths – the many deaths – soon quelled it.
This worked so long as the electorate was dominated by people who remembered living through the war years, and so long as the system delivered the goods. For the next generations growing up, they took the prosperity for granted and for the most part ignored history, or repeated the simple formulas they learned in school. Their natural need for identity and pride mostly came out in events like athletic competitions and the Eurovision song contest. Many of those longing for struggle and commitment turned to various forms of leftist radicalism while a few, seeking something that would truly shock their parents, adhered to various neo-fascist groups. These however were mostly postures and soon faded from blood red to pinkish (and then greenish) electoral politics.
Now a new generation in Europe faces a much different picture. Prosperity and security were both badly shaken by the financial crisis of 2008. The single currency has worked well to keep German export prices competitive, but not so well for the rest of Europe, especially in the south, where unemployment, particularly youth unemployment, is still at depression levels. And the identity question has been called back into question by pressure from three directions: the first, from robust separatist movements re-igniting patriotic feelings, not for the countries on their passport, not for the revival of ancient loyalties; secondly, from the inrush of millions of immigrants, many unauthorised, who reject the identities of any European state, real or revived, but often importing their home tribal identities and religious faiths; and finally, from Brussels, which seeks to impose a new synthetic “European” identity to replace national ones.
Little wonder, then, that across Europe there has been an up-swelling of sentiment responding in one way or another to some or all of these pressures, in various combinations, and with various alternative foci. To date the most consequential of these has been Brexit. Britain has always been different. To some degree it is because, as discussed previously, the British public knows that patriotism was not their curse in 1940, but their salvation. Thus national feeling was despised only among the intellectual class. Combined with the fact that European free movement was highly asymmetrical between Britain and the Continent, flooding working-class neighbourhoods with new demands for hospitals and schools that the state was utterly hopeless at meeting in a timely manner. What was perhaps new was that the British public had begun to lose their historical deference to the great institutions of the country – the government, the media, the universities, the churches, the corporations, the unions and the political parties, all of which substantially leaned toward Remain. (The one exception was the Monarchy who remained neutral, as they were expected to, but the Queen subtly signalled her support of Leave, which may have been the deciding factor.)
Another factor, now just beginning to be noticed, is that the separatists, once ardent Europeanists, have been badly shaken by the reaction of the European bureaucracy to the Scottish and Catalan bids for independence. Far from welcoming the new states into the European framework, the EU – among its other functions it serves as a trade union of heads of government – made it clear that an independent Scotland would be at the back of the queue for EU membership, and have to adopt the euro, while it refused to consider the Catalan claim for membership at all. With so many of its member states facing secessionist movements, this attitude is not likely to change soon. Thus one of the few demographics in Europe who were capable of mobilising enthusiastic masses without extreme racial or economic views has turned from pro-European to increasingly Eurosceptic.
The third trend is one that is only now coming visible. We may call this the Passing of Peak Small State. For much of the post-war era, and particularly the post-Cold War era, it is the smaller states, from five to ten million inhabitants, that have been most visibly successful. Singapore, Hong Kong, Taiwan, the Scandinavian nations (Sweden, the largest such, is only nine million-strong), Switzerland, New Zealand, have all been models of small, modern, competitive, democratic and highly prosperous states that have thrived, while the larger states have stagnated and stumbled under sclerotic systems, constitutional paralysis and growing debt.
Yet the prosperity of the small states has been due in larger degree than generally admitted to the hidden element of the umbrella of the United States and its NATO and other allies, which has relieved the small states of the need for large military expenditures and the financial costs of security. If they had to pay the true costs of a reasonable defence, and the true penalties for financing their national debts pricing in the actual cost of invasion risk, their prosperity would be substantially lessened. Some degree of this can be seen in the situation of the Baltic states, who live in tangible fear of Russian ambitions to re-absorb them, and who put up with the painful internal deflation demand of the European Union in the (probably vain) hope that their membership would be an effective deterrent to Russian irredentism.
In past eras, many of these states would merely have joined themselves to hopefully the least obnoxious, but necessarily the most militarily effective empire in their region, paying whatever price was demanded to come under their umbrella. The Armenians and Georgians have clung to Russia, historically, for precisely this reason. Certainly the EU’s membership in the east has hoped that is what they were doing when they joined. We will probably see more examples in the future, with the old trappings of empire replaced with more modern and more acceptable trappings of confederation. Yet confederations themselves must seek to satisfy to some degree the Haidtean virtues of tradition, authority and sacrality. The European Union has been positively hostile to such needs, and relied instead on economic reductionism. With the failure of the economic justification, it is little wonder that it is coming apart.
The question that remains now is twofold. Some nations of Europe still generate a genuine patriotism for the existing nation unit. For them there is the option of returning to independence and the national narrative, retaining a relatively small number of pan-European ties on a pragmatic basis. In particular this would work for France, with its nuclear deterrent and substantial population. Others have a healthy national narrative, but are too small and isolated. They must seek a confederal solution, but with a smaller, more coherent group than the EU as a whole. Where bonds of history exist, they can be drawn upon, even though it may require some selective forgetting. (Any national narrative must contain a certain amount of amnesia, but that is true of other kinds of narratives as well.) There is a third group of nations, and that is primarily those who have failed so spectacularly and so recently that their recent history would require far too much amnesia, and for whose neighbours a reaching back to such history would be too alarming.
Primary among these are the two most hopeful unification projects of the late 19th century, Germany and Italy. Germans, like everybody else, deserve an outlet for the Haidtean conservative virtues, and it is likely that Europe will never be at rest unless a satisfactory national narrative can be created. The problem is that the last instance of Germany being a unified, strong world power – the Third Reich – is and will remain unusable. And the next most previous instance, the Second Reich, is probably undesirable as well.
Perhaps the solution is to re-imagine, somehow, the idea of what a German is, and in doing so, reach back to the last iteration of a pan-German political entity that did not frighten its neighbours – the First Reich, also known as the Holy Roman Empire. The case for this as a natural political unit is quite simple. Take one of those satellite pictures of Europe on a clear night. Overlay an outline map of the First Reich (in its original configuration including northern Italy) over it. It will immediately be obvious that the area of greatest density of lights – and thus the greatest density of population, wealth and industry – is virtually coterminous with the old Empire. Of course, the old Empire had some problems, particularly with its constitution, which permitted foreign monarchs to have a say in the selection of the Emperor. However, it should also be remembered that the constitution of Switzerland – a chunk of the Empire that broke away early, and thus preserved much of its constitution – was made functional with only a few changes, and those mostly copied from the American constitution. It may be the case that Germans flourish best when they are organised in relatively small units linked into larger loose confederations, a situation that makes it comfortable for their neighbours, such as the Dutch, to join. Certainly some of the greatest cultural achievements of the Germans have been accomplished under such circumstances.
Italy is another matter. Now that we have had well over a century of experience of the matter, it is becoming more likely that the whole enterprise of taking the communities of the North, that flourished as civic republics and the first home of the Renaissance, and subsequently functioned reasonably well as parts of the orderly Austrian Rechtsstaat, and combining these with the pre-industrial Old Order Kingdom of Naples, a corrupt backwater even by the standards of the Bourbon lands, and forging it all into a modern nation-state just because they all spoke various forms of Latin-derived dialects, (Neapolitan being closer to Romanian than to Florentine) was almost certainly an overreach of 19th-century romantic nationalism. A division of the South into a member of a Mediterranean confederation, using a devalued euro or a new lira, and living of tourism and retirement homes, and the North joining a revived Holy Roman Empire (under whatever name) would probably be the most logical disposition of the whole thing. Northern Italians have never minded the idea of Germans handling their money. Vienna used to manage it well in the old days, so there was no real objection in the 1990s to turning it over to Frankfurt. What has enraged the Italians is not that Germans were handling their money once again, but that they were doing it to their disadvantage to such an abusive degree.
Using the principles stated earlier, the following is a possible configuration of smaller, less ambitious confederations into which the current EU could be devolved:
1. The Holy Roman Empire. It will probably not be called that, but it would be essentially that configuration of states: Germany, the Netherlands, Flanders (including Brussels), Austria, Northern Italy, and (possibly) Switzerland and the Czech Republic. Its administrative machinery would be essentially that of the current EU. The euro would be renamed the thaler, and the European Parliament would be renamed the Imperial Diet and moved to Regensburg.
2. France. Possibly including Wallonia. Currency, the franc.
3. The Mediterranean Union. Including the Iberian Confederation (Spain, Portugal, Catalonia and the Basque Country), Southern Italy, Greece, Cyprus, and possibly Romania. Currency, the southern euro.
4. The Intermarium Union. Latvia, Lithuania, Poland, Slovakia, Hungary, Bulgaria, Croatia, Serbia, Montenegro and possibly Romania.
5. The Scandinavian Union – the historical Kalmar Union of Sweden, Denmark, Norway and Iceland, and possibly Finland-Estonia. Greenland as an associate member.
6. The CANZUK Federation. Canada, Australia, New Zealand and the UK. Half in Europe, half out, by population, but with meeting all of our other criteria, as listed above. Possibly picking up Malta, and with Ireland as an associate member. Historically, of course, the British Commonwealth of 1926–49, minus South Africa.
The sequence of events that would lead to such an outcome might go something like this: following Brexit, Macron and the renewed Grand Coalition government of Germany debate once again a Federal Europe including a mandatory adoption of the euro. Sweden and Denmark, loath to give up their currencies, and aware of the successful examples of Britain, Norway and Iceland outside the EU, both vote for EEA status. The local participants in a number of collaborative EU programmes are transferred to the Nordic Council, which acquired more of the character of a loose federation. Finland hangs back, uneasy about giving up EU ties in the face of Russian ambitions.
Meanwhile, a renewed surge of migration from Africa and the Middle East inundates the southern Italian, Greek and Spanish coasts, while populations in the rest of the EU increasingly demand a halt to resettlement of these refugees. The EU crackdown on corruption and waste, given new strength by the increased governance powers of the European Central Bank, and the abolition of physical cash with the introduction of the CyberEuro, hits these areas hardest, and local elitist sentiment turns Eurosceptic. Catalonia, deeply resentful of the EU’s support of Spain in its independence fight, turns strongly Eurosceptic, and negotiates a new confederal settlement for Iberia. The Lepanto League, a pan-Mediterranean movement advocating a federation of Portugal, Spain, Italy, Cyprus and Greece that would take a hard line against migrants and restore physical cash, wins elections throughout those nations, except for Northern Italy, which is too dependent on its industrial and financial integration with Germany to find secession attractive. When Lepanto League governments declare exit from Federal Europe, the northern states make a pro-forma protest but aside from a few doctrinaire Europeanists, nobody resists too hard – and many breathe a sigh of relief. Northern Italy separates from Southern Italy, with a rump Italian Republic that remains an EU member. The new Mediterranean Union immediately restores physical cash and begins to take a hard line with migrant arrivals, while its falling southern euro makes it an attractive tourism and retirement spot for hordes of Northern Europeans. (Historical resonances: Roman Empire, Latin Monetary Union.) Romania is connected to it because of the large number of its citizens living in Italy and Spain.
At the same time the EU renews its pressure on Central and Eastern Europe to accept their quotas of refugees, and conform to EU standards on gay marriage and transgender rights, offensive to the deeply devout Catholic elements of those regions. The President of Hungary defiantly says: “We over-subscribed our quota of Muslims in 1526 and we’re not quite ready to take any more yet, thank you very much.” At the same time the EU demands that Poland, Hungary and other laggards set a definitive timetable for adopting the euro, risking their fragile prosperity. The Visegrád Group meets to coordinate policy, and decides that the economic and socio-cultural costs of accepting the EU demands outweighed the declining economic benefits of membership.
The EU has furthermore disappointed the group in the area of security and standing up to Russia, while NATO has proven surprisingly robust, with Britain assuming a larger leadership role and Sweden joining as part of its Scandinavian Union membership negotiations. Poland revives Marshall Pilsudski’s concept of an Intermarium Union, “between the seas”, i.e., the Baltic and Black Seas. The core group includes Poland, Lithuania, Slovakia, Hungary and Croatia. The Czech Republic is sympathetic but its strong economic ties with Germany cause it to delay a decision to join. Slovenia is torn between its economic ties with Austria and its cultural ties with Croatia. The Intermarium Union forms a looser confederation than the EU, with free trade but less regulation and no currency union. The economies respond accordingly.
The EU is now pared back to close to its original membership, minus Southern Italy. However, this heightens the differences between the French and German visions for the future of the Union. Macron’s Federal plan is rejected in his re-election bid, and the Front National splits, with its more moderate half joining with the Republicans to form a moderate-nationalist, Eurosceptic bloc that wins the 2022 elections. After several years of squabbling with Germany, France holds a referendum on the proposed Constitution of the United States of Europe, and rejects it. France reverts to EEA membership, leaves the euro, and reinstates the franc. The USE Constitution is ratified by Germany, Austria, the Netherlands, Northern Italy and Flanders. Wallonia rejects it, finally splitting Belgium permanently, and the rump state votes for union with France. Brussels becomes an autonomous capital district of the USE.
The split of the EU into northern and southern entities created a dilemma for France, as it could plausibly be either the poorest (but still influential) member of the northern bloc or the richest and most influential member of the southern bloc. In the former scenario, France loses power; an outcome guaranteed to make an administration unpopular. In the latter, she becomes the fiscal supporter of the rest, a role she cannot afford. With France, the Southern bloc would effectively become the Latin Empire advocated by Alexandre Kojève in his quasi-prescient article of that name in 1945. The Northern bloc, with France, would be Charlemagne’s Europe reconstituted. There is a third scenario, which is that France stands apart, relying on her inherent strengths. France, now including Wallonia is, at 71 millions, neither the largest nor the smallest of the Six Unions of Europe by either population or GDP. It has a considerably greater global presence than most others, and has a nuclear deterrent and a UN Security Council seat. It decides to remain part of the European Trade and Cooperation Area but otherwise standing by itself, reverting to the franc and escaping the euro trap. Rather than leading the southern bloc, or being the second fiddle in the northern, it becomes instead the swing vote in European affairs. This is the path that France chooses.
The remaining European power is the one that started it all with Brexit – the United Kingdom. And since the UK is in a unique situation, unlike the other nations of Europe, it took a unique solution, becoming part of a globe-spanning confederation of like-minded Westminster-style Common Law nations. Canada, Australia and New Zealand were the first nations to sign free trade agreements with Britain following Brexit. Buoyed by public opinion, they also signed free movement agreements, modelled on the Trans-Tasman free movement agreement between Australia and New Zealand. There were immediate resounding successes, particularly in regard to free movement. The very success of these agreements, with tens of thousands of nationals taking advantage of their movement rights almost immediately, quickly gave rise to the demand for additional measures to ensure mutual recognition of health and social benefits, employment credentials and certifications, and, before too long, demands for political representation by the growing resident populations from other CANZUK lands.
Meanwhile, the continuing rapid nuclearisation of Northeast and South Asia accelerates the debate, which had returned to the Australian political arena in 2017, over that country’s need for a nuclear deterrent. As the UK struggled with the costs of Trident replacement, deterrent-sharing between the UK and Australia was drawing closer looks, but with closer scrutiny the command-and-control issues of a bi-national command seemed problematic. Need matched need, but a bilateral confederation seemed awkward, and Australians baulked at the idea of being outvoted by 68 million Brits. Canada’s new Prime Minister, however, coming off of his country’s series of uncomfortable confrontations with successive US governments, showed unexpected interest in proposing his country’s involvement.
Both Canada and Australia were in the fairly unusual position of having very large amounts of natural resources relative to their national populations, but having them tied up due to domestic political gridlocks and entrenched NIMBY opposition. Ratifying a confederal constitutional treaty was actually easier for both nations than constitutional amendment, and the new Confederation promised an extensive programme of infrastructure building, unlocking the unused resources of the Canadian and Australian northern regions. An imaginative debt-for-resources swap, financed by London institutions, refinanced the entire combined national and state/provincial debts of all four nations, allowing breathing space to transition to sustainable long-term financing of social obligations, while turning the sparsely-populated resource lands over to exclusive confederal administration. Only London or New York could have handled a deal of that magnitude and complexity, and Australians and Canadians were more comfortable having London take it on, as it could be supervised by a confederal parliament where they would have approximately equal representation with Britain.
Thus, by 2030 a Europe that had been in turmoil for two decades had finally begun to settle down as the six Unions of Europe negotiated the new round of trade and security arrangements that had replaced the wider functions of the old EU. The remnant EU had finally adopted the identity of the Holy Roman Empire, and the media sensation of the year was the lavish coronation of the new Kaiser in Vienna, as King Willem of the Netherlands adopted the regnal name of Kaiser Karl to celebrate his election, and greeted the incoming British royals arriving from Windsor, while the Duke and Duchess of Sussex popped in from their Toronto home.