This summer, the CEO of JPMorgan Chase, Jamie Dimon, bluntly told the American Council on Foreign Relations think tank that Europe was trapped in a high-tax, ultra-regulation model.<\/p>\n
\u201cWhen Mark Carney said, \u2018The middle powers should get together\u2019 \u2013 it\u2019s a fantasy. They did that, it\u2019s called Europe,\u201d Dimon said. \u201cThe GDP of Europe has gone from 90 percent of America to 70 percent. And in our view, it will probably continue to erode over time because of high taxes.\u201d<\/p>\n
The 27-country European Union\u2019s response to such criticism has been to double down on its bad policies and try to enlarge its membership.\u00a0On Sunday, their latest attempt came crashing to earth as Iceland\u2019s electorate voted 53 percent to 47 percent not to even begin talks on becoming an EU member.\u00a0Elites in the capital of Reykjavik were the only part of the country to vote \u201cYes.\u201d<\/p>\n
\nIn the Iceland referendum campaign, EU backers made big mistakes<\/p>\n<\/blockquote>\n
Iceland may be home to only 400,000 people, but it has become one of the most prosperous nations in the world. A majority of its voters didn\u2019t see why it should be shackled to a European superstate that could dilute its sovereignty and control over its fishing waters.<\/p>\n
EU officials were pinning a lot of hope on Iceland moving toward joining the club.\u00a0A \u201cYes\u201d vote would have been \u201can endorsement of Europe\u2019s attractiveness in the world,\u201d an EU official told Politico. After a Gallup poll showing a three-point lead for the EU side in mid-August turned into a six-point loss on election day, the disappointment in Brussels was palpable. \u201cIt\u2019s like being rejected by someone you haven\u2019t even asked out,\u201d another EU official mourned. \u00a0<\/p>\n
What should also worry the EU is which groups were most opposed to the organization. In June, 37 percent of people aged 18 to 29 said they were likely to vote \u201cNo\u201d and 63 percent said they were likely to vote \u201cYes,\u201d according to a Gallup poll. By the end of August, however, 60 percent of young people said they were leaning toward \u201cNo\u201d and 40 percent toward \u201cYes.\u201d If it is older generations nostalgic for an \u201cever closer Europe\u201d that end up being the core of the EU\u2019s support, its long-term appeal will be limited.<\/p>\n
That\u2019s why some clear-eyed figures in Brussels are speaking up in the aftermath of the Iceland vote. Sandro Gozi, a member of the European parliament and secretary-general of the centrist European Democratic party, told the Financial Times that the vote was a \u201cwarning\u201d to the EU:\u00a0<\/p>\n
\nEurope must keep earning trust by becoming more democratic, more effective and closer to its citizens: faster decisions, simpler institutions, less bureaucracy and stronger democratic accountability.<\/p>\n<\/blockquote>\n
There is, sadly, precious little evidence those lessons are being learned.\u00a0In the Iceland referendum campaign, EU backers made big mistakes. They were convinced that Donald Trump\u2019s rhetoric about annexing nearby Greenland would panic Icelanders into embracing Europe, but that argument bombed. Iceland remains a Nato member and its 75-year-old defense treaty with the US has never been questioned.<\/p>\n
The campaign also revealed some of the EU\u2019s cynical motives for enlargement. Icelanders were not amused when\u00a0an EU official was quoted saying he hoped Iceland and Montenegro would join at the same time because the financial contributions from Iceland would cover the cost burdens of Montenegro joining. Indeed, a senior EU diplomat confessed to the Financial Times that he was worried that EU membership was being sold as \u201can economic golden ticket for poorer Eastern European states.\u201d<\/p>\n
The final mistake was to oversell the EU as a desirable partner.\u00a0The EU has a bleak near-term future, as recent economic blueprints issued by the former Italian prime ministers Mario Draghi and Enrico Letta have pointed out.\u00a0Both men say that the EU must overhaul its policies to avoid falling permanently behind the US and China. Hannes H\u00f3lmsteinn Gissurarson, a professor emeritus at the University of Iceland, told me it is inexplicable that \u201cdespite these challenges, the Brussels elite is trying to turn the EU into a federal state, against the wishes of most European voters.\u201d<\/p>\n
But the refusal for Europe enthusiasts to compromise and adopt more elements of federalism and decentralization to steer Europe may have a simple explanation. Enrico Ciappi<\/a>, a postdoctoral research fellow at LUISS Guido Carli University in Rome, is a firm supporter of the European Union and thinks the Icelandic rejection was \u201cwrong and narrow-minded\u201d. But he acknowledged that there is a wide gap between European elites and average voters that needs to be bridged. He says the explanation:<\/p>\n
\nIs almost spiritual and concerns the technocratic identity of Europeanist circles. They believe the show runs better without the noise of the people. But referendums as in Iceland reveal the huge gap between elites and popular opinion.<\/p>\n<\/blockquote>\n