20 September 2018

30 years after Bruges, Margaret Thatcher is still right about Europe


When Margaret Thatcher stepped in front of the College of Europe in Bruges exactly 30 years ago today, no one – not even the Iron Lady herself – expected her to change the debate on European integration forever.

At the Austrian Economics Centre, we have examined what we can still learn from the former Prime Minister’s words, three decades later.

In her memoirs she would later write that “not even I would have predicted the furore the Bruges speech unleashed”. Nonetheless, the speech became one of the most important and well-known on the EU. It is also now often seen as the beginning of the end of the UK’s membership of the club.

However, Thatcher did not use Bruges, or any other speech at the time, to call into question the future of what was then called the European Community. She herself called Bruges “far from ‘anti-European’” and in a subsequent debate in the House of Commons, two years later, she was even ready to go further in integration efforts, including monetary reform: “Britain intends to be part of the further political, economic and monetary development of the European Community,” she told MPs.

Nevertheless, Bruges was a stark warning for Brussels. The Prime Minister had increasingly seen “an inclination towards bureaucratic rather than market solutions to economic problems” and an “overt federalist and protectionist agenda” at the European level. If this were to continue, Thatcher argued, the European project, which had brought many benefits over the years, could fail. In this sense, it was not an argument against the EU. It was an argument to save the EU.

What is perhaps most striking about the speech is that everything Thatcher said still rings true – indeed, most of the things she said are even truer now.

For instance, the EU and Europe are today treated as almost entirely synonymous. Whoever criticises Brussels, regardless of how innocuously, will automatically be stigmatised as being against Europe and everything it stands for.

For Thatcher, this did not make any sense whatsoever. “Europe is not the creation of the Treaty of Rome,” she noted. “Nor is the European idea the property of any group or institution.” As the Prime Minister meticulously showed in her speech, Europe is a millennia-long history – a history which we can be proud of, regardless of what we think of the EU. It was Europe after all, where political freedom and liberal institutions reigned for the first time.

The European Union, meanwhile, can only boast a sixty-year history (or back in her day, thirty years). It is not the story, nor the values and ideas, which Europe consists of. It is merely one tool which we can use to continue the European story: “The Community is not an end in itself”. Instead, it is “a practical means by which Europe can ensure the future prosperity and security of its people”, as the Prime Minister reasoned.

It is this understanding of the EU and Europe which Britain always held. For the UK, the Union was never an ideal, nor an ideology or a possible end-state to progress toward. From this viewpoint it simply did not make sense to join the euro. For federalists from mainland Europe, the euro was another step toward their dream of a mega-state. For Britons, it was nothing more than a defective currency which could ultimately spell doom.

Being merely a tool to “ensure future prosperity and security,” it was important that the EU would continue to follow its core principles. Those principles were in essence economically liberal. Indeed, these principles could be summed up by Thatcher herself in her call for “action to free markets, action to widen choice, action to reduce government intervention”. For the Prime Minister, this was the recipe for success – and it was so from the start: “the Treaty of Rome itself was intended as a Charter for Economic Liberty”.

Nonetheless, federalists demanded something else. Centralisation, regulation and harmonisation began to be brought to the agenda in Brussels. This was exactly the opposite of what most Britons wanted: they had joined the Community “to deregulate and to remove the constraints on trade”.

Today, one can almost imagine her saying that if the EU were to leave its initial path, a country might leave sooner or later. As probably the most famous line of her speech makes clear “We have not successfully rolled back the frontiers of the state in Britain, only to see them reimposed at a European level with a European super-state exercising a new dominance from Brussels”.

Unfortunately, Brussels has slowly crept down this path, one step at a time. For instance, Thatcher thought it important that the EU  continue to reduce regulation. After all, the “lesson of the economic history of Europe in the 70’s and 80’s is that central planning and detailed control do not work and that personal endeavour and initiative do”. Instead, the EU has moved on by imposing one regulation after another, while penalising entrepreneurial success.

For Thatcher, it was important that the EU would work for global free trade, not just for free trade inside the Union. “Europe should not be protectionist”, she made clear. Today, while some free-trade agreements are in the working, Brussels still lags behind, while forcing every member state to comply with its trade policy (not to mention the trade war with the US, which is certainly the fault of both sides).

Finally, for Thatcher, it was important that the EU would remain a tool rather than an ideal for Europeans. It was crucial for her that Europe would stay democratic instead of being ruled by an unelected bureaucracy. Democratic votes against an “ever closer union” have taken place everywhere in Europe ever since Bruges, from Ireland to Denmark to France, the Netherlands and Greece. The fact that they were simply ignored has undermined democracy on the continent.

The EU must not become a utopia, Thatcher warned. This “utopia never comes, because we know we should not like it if it did”. Instead of trying to create a European identity or forging ahead with a federalist European state, regardless of what the populace thinks about it, the EU should promote “willing and active cooperation between independent sovereign states”. To this day, the federalists do not seem to have taken this idea on board.

Thirty years on, Margaret Thatcher’s “Bruges Speech” is still important. It is a tale of a Europe which has battled through so many challenges, while still being able to come out on top eventually. It is a tale of Britain as a fundamental part in the European story regardless of institutional relationships. It is a tale in favour of free enterprise and free trade. It is in favour of European co-operation, rather than ever more stifling integration.

Most importantly, though, it is also the tragic tale of why the EU has lost one of its most important members – and how it can only fault itself for it.

Kai Weiss is a Research and Outreach Officer at the Austrian Economics Center and a board member at the Hayek Institute.