As this year is ending, our whole team wishes you a very happy new year, full of happiness, peace and success. It is also the opportunity to have a look over the past year and how the EU evolved, facing the crisis that affects in particular the euro area…
The previsions of the Cassandra of all origins have been refuted by the facts: the euro still exists and is worth over 1.30 USD (more than last year, if I remember well…), so it seems to remain a solid currency. The commitment of the ECB, last summer, through the voice of its President, Mario Draghi, to do whatever it takes to save the euro has, of course, greatly contributed to this.
This situation also shows that a purely economic analysis is not enough to assess the future of the single currency; there must also be a political component. Indeed, the reality is more complex than economic theories such as the optimal monetary zones. The euro is also a political symbol, a concrete realisation of the Union that is visible in the daily life of the citizens.
However, this does not mean that politics is above the rules of economics. And it leads me to the second aspect of the European crisis: a political crisis. To my view, the current crisis is even more political than economic.
This year, we have seen a multitude of “decisive” summits, which were too often disappointing. There was nevertheless some progress, with the adoption of a stronger fiscal discipline (the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union, better known as “fiscal compact”), enhanced mechanisms of solidarity (the European Stability Mechanism will be permanent; its weakness is that it could not cope with the insolvency of a big country), plans to create a banking union (though the modalities are subject to tough negotiations) and, last but not least, the commitment of several European leaders to a deeper political and economic integration, at least within the euro area. Politicians have to take the lead and need to inspire trust again. To succeed, they must set clear targets, a clear goal. For me, this goal must be a federal Europe.
Trustworthiness and clarity shall also help to face the worrying growth of populism (from both the left and the right wing) which relies on over-simplifying lies, is disconnected from reality, and does not offer any solution to the true problems we are facing.
Introversion is indeed not a solution. And this leads me to the third crisis in Europe: a crisis of society. Any civilisation in world history that isolated itself from external influence declined, e.g. the Arabs in the Middle Age or the Chinese in the 17th century. Furthermore, today’s world is characterised by global interdependences and has to tackle global problems such as pollution and global warming, terrorism, “failed States”, wars, the unequal distribution of natural resources, etc. In this world, European Nation-States are too small to weigh on the global stage: France and the UK retain some importance thanks to the atomic bomb, Germany is only an economic power, but none of them possess all factors of a big world power. Moreover, the demographic situation in Europe requires being open, even if it is normal to regulate immigration… So, globalisation should be seen as an opportunity rather than as a threat.
My belief – and conclusion on that point – is that if everyone showed more openness towards the other people, respected more their culture, tried to know them better, our societies would live much better. It is not always easy to adopt this attitude, but I prefer to be optimistic…
Once again, happy new year!