Wednesday, May 12, 2010

Report on EU’s Long-term Future says: “Reform or Decline.”

May 11, 2010

With all eyes on Europe’s last-ditch efforts to save the eurozone from collapse, it is hardly surprising that a thoughtful, 46-page report on the European Union’s long-term future has gone almost completely unnoticed. But the study, commissioned by EU heads of state and government in 2007 and published last weekend, is worth taking a look at.

It was written by a group of 12 experts led by Felipe González, the former Spanish premier, and including Mario Monti, the distinguished former EU commissioner, Jorma Ollila, chairman of Finland’s Nokia mobile phone company, and Lech Walesa, the ex-Polish president and hero of the opposition Solidarity movement in communist times. There was a good mix of northern, southern, western and eastern Europe on the panel.

They begin with a disturbing observation: “Our findings are neither reassuring to the Union nor to our citizens: a global economic crisis; states coming to the rescue of banks; ageing populations threatening the competitiveness of our economies and the sustainability of our social models; downward pressure on costs and wages; the challenges of climate change and increasing energy dependence; and the eastward shift in the global distribution of production and savings. And on top of this, the threats of terrorism, organised crime and the proliferation of weapons of mass destruction hang over us.”

Another passage in the report carries the headline: “The choice for the EU is clear: reform or decline.”

As it happens, this kind of language is commonplace in Brussels these days. José Manuel Barroso said much the same thing last September when he set out his political guidelines for his second term as European Commission president: “We face a choice - either we collectively shape the new order, or we will become irrelevant.”

What is more, the remedies proposed are usually the same, too. Stronger economic governance for the eurozone. Tougher fiscal rules. Extending the single market. More flexible labour markets, but not at the cost of social protection. Incentives for innovation in business. Better education systems.

Like identical tin soldiers, these proposals have marched out of every box of ideas that I have seen produced in the EU over the past three years. I am not saying they are wrong. Far from it. They are on the right lines. I am only asking: In the light of the dismal lack of far-sighted political leadership in Europe in recent times, why should I have any faith that these proposals will be converted into reality?

Incidentally, the González report does contain one notable paragraph on EU enlargement. The report was originally the brainchild of President Nicolas Sarkozy of France, who wanted a document that would set out explicit limits to the EU’s expansion - and, he hoped, express doubts about Turkish accession. But the report brushes aside the objections to Turkey, saying the EU “must stay open to potential new members from Europe” and “must honour its commitments with regard to the current official candidates, including Turkey”.

Good stuff. But if this report changes Sarkozy’s attitude to Turkish entry into the EU, I will be so astonished that I will make a personal contribution to the EU’s new financial stabilisation fund.

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