“(The German Chancellor Angela) Merkel will not be deciding who will live in Hungary” was a warning by the country’s Prime Minister Viktor Orban. Germany took that as a lèse-majesté of sorts at a time when Merkel was trying to rescue her disastrous open-door immigration policy in 2015 by dumping on the EU massive migrant waves Berlin could no longer manage.

Revisiting old enmities, Orban was at it again last week. Reacting to a blistering (German-led) EU attack on Hungary’s recent legislative actions, he said: “"This is a colonial approach … They just give no thought to what they can and cannot say about another nation and the laws of another country."

And to round it all off, Slovenia’s Prime Minister Janez Jansa, who will be chairing the EU’s rotating presidency until the end of this year, emphatically stated last Thursday that: “We are not a colony, or a second-class member (state).”

What’s all that fuss about?

It’s a very serious and divisive business about imposing “EU” value judgments on sovereign decisions taken by countries with different histories, cultures and sociopolitical values systems.

Make the euro the EU’s legal tender

That’s an ominous show of Europe’s “old demons” – fed by centuries of wars and hostilities, enduring hatreds and deeply-rooted prejudices. They are all there, in spite of more than 70 years of efforts to smooth things over with treaties and institutions to promote reconciliation, friendship and solidarity.

To be fair, the EU has achieved a lot to keep peace thanks to some of its great statesmen. But that wisdom is long gone. And the cases of Brexit, Orban and Jansa show that incompetence and excessive haste to foist on the EU a de facto centralized political system are backfiring.

The UK joined the European Community in 1973 because London wanted a free-trade area. The vote to leave in 2016 came as the British realized that trade had a high cost of sovereignty transfers to the EU Commission and the EU Parliament with legislative traditions, social and political principles and values they did not share.

Unfortunately, the remaining 27 EU members have not absorbed the Brexit lesson. They don’t seem to understand that old nation states’ histories, cultures, traditions and values cannot be obliterated in the name of something that simply does not exist.

Trade and economics are a different story. Indeed, establishing a free trade among the economies of the original 6 members, and expanding that to a community of 27 nations is an impressive accomplishment.

But it took more than 40 years to go from a struggling common market to a complete customs union with a single market and a single currency. That’s a world of difference, where trucks transporting Spanish tomatoes or Italy’s grapes are no longer high-jacked and emptied on French highways because they were “disloyal competition” from weak currency countries.

That’s still work-in-progress, though. Instead of petty and divisive political fights, the EU leaders should realize that a genuine customs union and a single market only exist among the 19 members of the European monetary union, where the euro serves as a legal tender. Their priority now should be to help the economic convergence with the eight countries remaining outside the euro area.  

They can take the example of earlier generations of European leaders who patiently worked from 1969 to 2002 to replace national currencies with euro-denominated notes and coins.

And they should acknowledge, with respect and gratitude, that the euro and the European Central Bank (ECB) their elders created are among the most outstanding achievements in the world’s modern economic history.

The euro and free trade are a peace project

Those are epochal changes. Acting in the best European monetary tradition, the EU’s new central banking authorities have already made a significant contribution to the theory of economic policy by showing that a credible and stable currency serves as a strong foundation for noninflationary growth and rising employment.

That’s what we see now in the euro area’s unfolding recovery. Retail sales and industrial production in April were soaring at respective annual rates of 24% and 40%, while the unemployment rate declined in May to 7.9% as the number of job seekers fell by 306,000 from the previous month.

In spite of that vigorous pickup of economic activity and employment creation, the euro area core inflation rate (CPI minus energy costs) in June was still a tame 0.8%.

And the euro remains a strong currency, with a 6.3% gain on the dollar over the last twelve months.

The summary of all that good news is a 28.3% annual growth of EuroStoxx 50 in dollar terms -- an honorable performance compared to a 32% gain on the Dow Jones.

Without any hesitation, you can credit all those impressive results to ECB’s great work.

By contrast, the EU politicians and bureaucrats are busy trying to prevent access to the €750 billion stimulus package by allegedly illiberal and manifestly inconvenient EU leaders.

The EU can never be a geopolitical power. The EU can only be what it now is: A customs union of nation states. And that’s enough to make it the peace project of its founding fathers. Germany, in fact, never wanted anything else. That’s all Berlin needs to play the trade hardball with the rest of the world, while pursuing its highly successful export-driven economic growth.