Prime Minister David Cameron called Margaret Thatcher, who died on April 8 at age 87, Britain’s greatest peacetime leader. She deserves the accolade. Taking office in 1979, Thatcher transformed an economy crippled by militant unions and a moribund public sector. She declared war on organized labor and state-owned enterprises—and won. It’s a testament to her success that subsequent Labour governments tried to unwind almost nothing of her economic legacy. In domestic policy, Thatcher settled the big arguments once and for all.
In her policy toward Europe, things were different. Again she declared war, this time on the visionaries who wanted to change the European Economic Community from a free-trade zone with benefits into a United States of Europe, and on their dupes (as she saw them) in her own Conservative Party. In this battle she gave her life, politically speaking. The argument over Britain’s place in Europe wasn’t settled, though. It rages as fiercely as ever today.
Thatcher was ejected from 10 Downing Street in 1990 not by voters but by her own party—and the subject that aligned her former allies against her was Europe. Reluctantly, Thatcher had acceded to demands from her economic ministers that the U.K. should join Europe’s exchange rate mechanism, the precursor to the single currency. But she refused to bend further.
Returning from a European Community meeting in Rome, she gave a speech in Parliament that attacked plans from the European Commission (the Community’s executive branch) for a politically integrated Europe. “No, no, no,” she said. Her exasperated deputy prime minister, Geoffrey Howe, decided to quit. Howe, until then a Thatcher loyalist, was one of the most boring speakers the House of Commons ever produced—a former Labour minister once said that facing his criticism was like being “savaged by a dead sheep”—but his resignation statement was electrifying. It dispelled the illusion of Thatcher’s power and sparked the rebellion that brought her down.
Here’s the question Britain is still wrestling with almost 25 years later: Was Thatcher right about Europe? On the whole, history has been kinder to her assessment of the European project than to that of her assassins. If anybody in the U.K. regrets Britain’s decision to stay out of the euro system, they’re keeping quiet. The European Union’s serial bungling over its economic crises, seen most recently in the Cyprus debacle, seems to justify Thatcher’s most withering rebukes, and then some.
But how well did her contempt advance her own cause? Not that well. When it came to Europe, Thatcher had an attitude problem, one that other Europeans would recognize as characteristically British. She was right on points of substance but expressed and inflamed a national disdain for the European project that served her country badly.
British euro-skepticism has two strands, and Thatcher exemplified both. The rational strand is pragmatic and liberal (in the European sense). It’s fearful of big government and hopes to keep a self-replicating bureaucracy in check. It wants to locate democratic accountability mainly at the national level until a real European political identity has established itself, and it thinks that process shouldn’t be rushed. It recognizes Britain’s acute dependence on a thriving European economy, celebrates the gains from trade in Europe’s single market, and is open to further integration to serve that purpose, but it rejects political union as a goal in its own right.
There’s also an irrational, illiberal strand. Its core is chauvinistic and attached not just to Britain’s history—“We will fight them on the beaches,” and all that—but also to the myth of its undiminished geopolitical weight. Britain doesn’t need Europe, according to this view. What’s Europe ever done for us?
In 1988, Thatcher gave a speech to the College of Europe in Bruges that stands as an eloquent statement of liberal euro-skepticism. “Britain does not dream of some cozy, isolated existence on the fringes of the European Community,” she said. “Our destiny is in Europe, as part of the Community.” At the same time, “the Community is not an end itself. Nor is it an institutional device to be constantly modified according to the dictates of some abstract intellectual concept. … [It’s] a practical means by which Europe can ensure the future prosperity and security of its people.”
Well said. The problem was that most other times, Thatcher gave every appearance that she really did dream of some cozy, isolated existence on the fringes of Europe. Howe accused her of seeing “a continent that is positively teeming with ill-intentioned people, scheming, in her words, to ‘extinguish democracy,’ to ‘dissolve our national identities,’ and to lead us ‘through the back door into a federal Europe.’ ” He was right: That’s what she saw. Many British voters saw the same, and still do.
Unlike Thatcher, Cameron is pro-European. He’s trying to express the rational part of British euro-skepticism and suppress the irrational part, which lives, as Howe put it, in a “ghetto of sentimentality” about the past. It hasn’t worked. At home, the failure of the euro project has strengthened the skeptics’ resolve. In Europe, Britain’s decision to stay out is no less resented for having been proved right, and patience with the U.K.’s endless equivocation is all but exhausted.
Cameron recently announced a review of powers transferred (Thatcher liked to say “surrendered”) to Brussels in successive treaty revisions, to see whether some should be returned to national governments. Guided by this, he says he’ll renegotiate Britain’s membership in the EU and put the new deal to a referendum—in or out—by the end of 2017.
With the U.K. economy reeling from the crash and from Cameron’s efforts to revive it with austerity, the prime minister and his party are on track to lose the next election. The promised referendum is in part geared to help the Conservatives’ chances. It serves the goal of appeasing Tory euro-skeptics and cloaking the party’s divisions. It’s likely to be popular with voters, too, even if politicians in the rest of Europe see another stunt that sets Britain at odds with the rest. France and Germany say they’ll have nothing to do with Cameron’s review.
Regardless of his tactical calculations, an exercise of the kind Cameron proposes is needed. The EU is caught between two models. In fiscal terms, it’s still an association of nation states subject to the push and pull of democratic politics, but in monetary terms, the 17-member euro area is one place with one central bank and one policy.
The economic crisis has put these models in violent opposition. Stabilizing the financial system without further fiscal integration will impose enormous stresses on the euro area’s weaker economies. There’s no going back: Dissolving the euro system would make an even bigger mess. The only option is closer fiscal coordination and more burden-sharing—which, in turn, demands another look at the obligations of countries such as Britain remaining in the EU but outside the euro area.
With goodwill, this overdue discussion might satisfy not just Cameron and his allies but also others still intent on “ever closer union,” the goal enshrined in the Union’s founding documents. The answer is a formalized multispeed Union, one that can accommodate countries seeking full political integration as well as those that wish to remain, until further notice, nation states. But there is no goodwill, so this conversation isn’t happening. Europe’s sense of purpose and common welfare has evaporated just when it’s most needed.
For this, Thatcher and the Tories who venerate her are partly to blame. Suspicion and resentment in dealings with Europe—embodied, for instance, in the rebate she insisted on of British contributions to the EU budget, which has acquired a kind of sacred status in U.K. politics—are part of her legacy. She aggravated Britain’s chauvinist tendencies and put its European partners eternally on guard against the grievances and machinations of perfidious Albion.
Her advocates will doubtless argue she stands vindicated. In a way, it’s true. Thatcher expected little of Europe, and Europe has delivered. And note the irony: Germany, for years the principal champion of “ever closer union,” today espouses a quintessentially Thatcherite position that bailouts are wicked and German taxpayers won’t pay one more euro to help the weak and worthless, who have only themselves to blame.
The point is, the chauvinist Thatcher was wrong then, and stone-hearted Germany is wrong now. It’s partly a question of self-interest. Britain can’t succeed if Europe fails, nor can Germany. The success of the whole depends on reviving a spirit of cooperation, generosity, and mutual respect. Thatcher would have scorned the idea, but Britain the perpetual foot-dragger has a larger obligation in this than most.