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Europe’s Southern Future

PARIS – Economic crisis has now reached both shores of the Mediterranean, and the risk of a lasting depression has become very real. Austerity policies in Europe threaten to backfire, causing enduring harm to growth prospects and thus stoking unemployment and budget deficits. And southern Mediterranean countries can’t hope to make up in America and Asia the opportunities and investments that they are losing in Europe, certainly not in the short term.

In these circumstances – and especially in view of the political upheaval in the countries of the southern Mediterranean – re-launching the Euro-Mediterranean process, and putting it on a new footing, would benefit both sides.

The Barcelona Process, which Jacques Delors initiated in 1995 as head of the European Commission, had its merits, but failed to meet the expectations that it created. In 2005, on the 10th anniversary of its launch, I joined political leaders from both sides of the Mediterranean in calling for a re-formulation of the partnership through the creation of a Euro-Mediterranean community.

Such a community has now become an urgent necessity. Europe has technology and provides a secure framework for investment, but it is the southern Mediterranean that increasingly can point to strong economic growth. Europe is aging and will lose 20 million people by 2030, while the southern Mediterranean has a dynamic young population that desperately needs job opportunities.

The EU currently imports half of its energy supplies – in 20 years, the import share will be 70%. Yet, to its immediate south, energy resources and raw materials are plentiful. A European energy community would accelerate Europe’s low-carbon transition and stimulate development of renewable energies. It could also eventually lead to a Euro-Mediterranean energy community – one of the proposals made by the European Commission earlier this year.

These complementarities hold great potential for both sides. A return to economic growth is crucial for Europe, which needs secure new investment flows. North-South flows are already extremely low, with the southern and eastern Mediterranean countries receiving only 3% of global foreign direct investment.

To boost investment in both directions, a zone of monetary stability should be created. A Euro-Mediterranean monetary system would avoid the discrepancy between euro- and dollar-denominated trade – indeed, eventual expansion of the eurozone should not be ruled out. A reliable legal framework for exports and investments is also needed, and a targeted development bank would help to create a financial environment favorable to investment.

Industrial re-deployment might also be the answer to outsourcing by European companies, so we need to build an integrated Euro-Mediterranean structure that encourages industrial, agricultural, energy, and job mobility. Central and Eastern Europe is the example worth studying closely: in tandem with Germany, these countries developed and strengthened high-value-added industrial sectors.

At the same time, jobs mobility should replace unwanted migration. Mobility for students and professors should be accompanied by improved occupational mobility for both European and African workers. Europe could finance more and better training to help meet its own labor shortages, while African countries would be able to provide employment for their young people. And a Euro-Mediterranean and Euro-African version of the Erasmus student-exchange program would not only attract African students to Europe, but would also boost European students’ interest in the development of the southern Mediterranean and Africa.

By 2050, Europe and Africa together will have 2.5 billion people, a quarter of the global population. With so much human potential, it will be possible to build on shared economic, social, and ecological strengths. A great North-South regional grouping of this type could negotiate in international institutions – most notably the World Trade Organization – from a stronger position, and so preserve its own development model, one based on proximity, complementarity, and solidarity.

Fair trade and the sharing of added value should replace free-trade imbalances and the export of unprocessed raw materials. International trade must bring about a rise in social and environmental standards, which requires a multilateral Euro-Mediterranean system. This, in turn, presupposes a North African “common market” – and thus rapid resolution of the conflict between Algeria and Morocco, which has been holding back both countries’ development (as well as that of Tunisia and Mauritania).

A Euro-Mediterranean Union leading to a Euro-African Union could open the way to balanced mutual development. As Europe knows, constructing an economically and socially integrated zone offers the best opportunity to resolve conflicts and overcome political and cultural enmities. But all partners must first get their own houses in order: Europe must strengthen its economic and political integration, and Africa must improve its governance by fighting corruption and establishing the rule of law more firmly.

Asia revolves around ASEAN, and the Americas around NAFTA and Mercosur. Europe, too, needs to help organize a large hemispheric region. Building a joint future for Europe and Africa, starting with the Mediterranean, will be difficult, but that is no reason to delay. Indeed, a Euro-Mediterranean and then Euro-African union may well be the only political project capable of preventing global rule by a G-2 of the United States and China.