Europe Will Get It Right

Just over a year ago, author Jeremy Rifkin predicted that Europe would soon overtake the United States as a model for the world. The so-called European Dream--a coupling of the national social welfare state with multilateral cooperation in Brussels to promote free markets and common regulations--would supersede the American Dream.

For true believers in that vision, 2005 was a dispiriting year. French and Dutch voters rejected the European Union's proposed constitution. Then came the French race riots. Anglo-American conservatives, took these events as vindication of their own model, which opposes big government, social spending, multiculturalism and multilateralism. After five years of European (and, not least, French) attacks on U.S. foreign and domestic policy, they took satisfaction in concluding that Europe, in the end, is really no better than America.

Nothing proved their point so well as the recent riots. The "Muslim insurrection," as the right-wing Fox News commentator Bill O'Reilly put it, seemed the almost inevitable byproduct of mollycoddling social policies. Conservative military historian Victor Davis Hanson argued that talk of "so-called root causes" served only to "appease" law breakers and to encourage further violence. The subtext: Europeans--tired of multilateralism, yearning to get tough on Islam, deeply suspicious of "tax and spend" big government--secretly long to be more like Americans. If only their corrupt, parochial, paternalistic and, yes, socialist governments would just get out of the way!

It's a great story: Europe destroyed by the bankruptcy of its own socialist cultural ideals. Yet there is little truth in it. The real lesson of both the referendums and the riots is, in fact, precisely the opposite. Over the past year, Europeans have proven themselves to be more committed to both the social-welfare state and their EU institutions than ever. If anything must change, Europeans increasingly recognize, it has less to do with the ideal of Europe (or national social policies) than with something far more prosaic: jobs. At bottom, Europe's real challenges are economic. And they will be solved not by borrowing the American model, but by muddling through to a distinctively European solution.

Let's return to the year's first big event. Far from being a libertarian repudiation of the European Union, last spring's constitutional referendums brought forth a groundswell of support for social democracy. Subsequent polls reveal that opposition had little to do with skepticism about enlargement, anti-immigrant sentiment or even possible Turkish membership. Nor did it signal dissatisfaction with the constitution itself--which, item by item, most Europeans strongly supported. Opponents were instead motivated by fears--largely misplaced--that globalization, budget cuts and unpopular politicians might shrink the social-welfare state.

Despite the constitution's fate, Brussels quickly returned to normal. Turkish accession negotiations were launched. Legislation liberalizing services is moving forward. Squabbling over the EU budget will eventually end in a real cost-cutting deal. For all the hand-wringing, the EU is stable and successful. No significant party in any member state--even the British Tories, if one reads carefully--supports a fundamental retrenchment of its powers.

The French riots have been similarly misunderstood. Simply put, they were not primarily cultural in impulse, but socioeconomic. Far from being an uprising of Muslims or immigrants against secular French authorities, they were a protest by angry, excluded and unemployed youth, the vast majority born in France and essentially non-religious in their world view. Older Muslims tried hard to suppress the violence (after all, it was their cars being burned) and French religious leaders went so far as to issue a fatwa against the demonstrators. The young men wore no religious or ethnic symbols, and they spoke the language of French republicanism--respect, dignity, community.

Ultimately, the question is not whether the EU gets a constitution, or whether the French adopt U.S.-style affirmative action, but how European economic performance can be improved in order to produce more jobs. How can the traditional social democratic welfare state be streamlined and be made sustainable?

This issue will dominate Europe's future. Reform is well underway in Britain, Scandinavia and some smaller countries of Eastern Europe. Sooner than later, it will take hold among the laggards, such as Germany, France and Italy. It will not occur, as Anglo-American conservatives hope, because Europeans have seen the error of their ways and repudiated social-democratic ideals. To the contrary, Europe will tackle its very European problems in its very European way: trimming agricultural subsidies here, relaxing labor market restrictions there, liberalizing trade in services and overhauling onerous regulations. This work is slow and unglamorous. It won't grab the headlines like constitutional conventions and burning cars do. But it's very much about building Europe.