Europe Contemplates an Economic Constitution
February 12, 2002
The European Union is considering adopting a constitution. The EU's 15 member governments have appointed a constitutional convention to compose a text by the middle of next year. What's contemplated would be a far cry from a U.S.-style constitution, with a strong federal role. But the U.S. Constitution also set ground rules for such economic issues as trade, commerce, taxes, bankruptcy and patent protection -- issues which might be addressed in an EU constitution.
A European constitution could lead to the creation of a true single market -- a goal that has eluded Europe since the creation of the so-called "common market" in the 1950s.
- At present, the EU's Brussels bureaucracy has power over trade and antitrust issues (but not much else), and is said to be chaotic and inefficient.
- Under current EU treaties, France has stalled continental energy deregulation, Germany has killed changes in corporate-takeover laws and non-English-speaking nations have ganged up to kill a European-wide patent.
- Continent-wide changes involving taxes, competition, immigration and other significant issues require a unanimous vote of the EU's member states.
- And recent EU report said that regulations are so onerous and vary so much by country that starting a business in Europe costs 10 times as much as it would in the U.S.
While the U.S. constitution created a single national economy, observers warn that a constitution could make Europe less efficient if member nations use the process to peel away powers already granted to Brussels.
And they point out that Britain has progressed economically for centuries without a written constitution.
Source: Bob Davis, "The Outlook: Constitution Could Spur Europe's Economy," Wall Street Journal, February 11, 2002.
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