Economics

Une pause pour l’Europe

Mar 5, 2013 Ashoka Mody

PRINCETON – La semaine dernière dans un discours très attendu, le président allemand Joachim Gauck a mis en garde contre la poursuite aveugle d’une Union Européenne toujours plus « resserrée », reconnaissant que les inégalités grandissantes entre les états membres génèrent « un sentiment d’embarras, et même une incontestable colère, » et augmentent le risque d’humiliation nationale. Il a aussi souligné qu’en plus de la crise économique, survient « une crise de confiance en Europe en tant que projet politique. »

Gauck a clairement affirmé qu’il demeure irrémédiablement pro-européen, mais il a souligné le besoin d’une réflexion plus concertée sur l’avenir de l’Europe – et surtout de la zone euro. Se trouvant au seuil d’une plus grande intégration, les Européens hésitent, « incertains de vraiment vouloir avancer dans cette aventure. » Cette hésitation, a-t-il déclaré, devra être traitée avec une compréhension réfléchie et nuancée de ce que signifie véritablement « plus d’Europe. »

Gauck n’est peut-être pas allé assez loin : au point où nous en sommes, une union plus forte pourrait être un mirage. Tout progrès significatif vers une stabilisation de la zone euro nécessiterait un engagement financier substantiel – potentiellement sans fin, et l’UE n’est pas politiquement prête à faire ce pas. Prétendre encore et encore avancer, puis se raviser au moment critique, exacerbe l’incertitude politique et la vulnérabilité économique.

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0 Comments on this paragraph, 5 Comments on this article

Zsolt Hermann Mar 6, 2013

A rest stop is good.
Both leaders and the public have understand what the situation is, what the options are, people have to be fully aware before they make the next step.
In terms of the global system humanity has evolved into we do not really have a choice, in a natural, interconnected, organic, interdependent system only full integration is capable of adapting humanity into the existing system.
But people need the information and the positive motivation to enter such a system, otherwise it will fail, as communism, or similar mutual, seemingly altruistic experiments failed in the path.
That is why the first step needs to be a global education program, where each and every human being gets the necessary, open, free, transparent information about the global world system, its laws, about human nature, and how this human nature needs to adjust to settle into the system like a cogwheel in a well oiled machine.
We already have all this information multiple times, but we haven't put the complete picture together yet.
Inherent differences, unique talents, cultures are not a problem, in a mutual interconnected system they beautifully complement each other as soon as the main intention, attitude is toward the well being of the system.
The differences give the system its colors, flavors, the capability to cope with any forthcoming stage.
A truly mutual, complementing, natural system can never fail, it is "perfect".
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Marco Cattaneo Mar 6, 2013

"Fiscal responsibility should be returned to member states" sure, but monetary responsibility as well. Without monetary autonomy the whole system is never going to work. It can be done without breaking the euro up. http://bastaconleurocrisi.blogspot.it/2013/02/tax-credit-certificates-to-start-up.html
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António Correia Mar 6, 2013

I agree that "Giving Europeans the time and space to choose more Europe would reinforce the core values upon which integration has rested for more than six decades. Continuing to stumble FORWARD, however, would inevitably lead to a debilitating, if not fatal, fall."

In these days, an increasingly wider consensus on the major flaws of the EU construction, over the last two decades, has emerged and can no longer be ignored: just remember the sinking of Titanic - a huge, record-breaking construction - one century ago...

The Maastricht Treaty was announced as a "great leap FORWARD". Since then, only "FORWARD moves" have been allowed in the Maastricht-born "European Union" - mainly the creation of the "single currency" and the birth of a Eurozone with more and more states involved, according to their will and their capability of meeting the doubtful set of "Maastricht criteria" when joining the "single" currency area. Any move which may be seen as a "backward move" has been strictly forbidden, even if nobody can take for granted that this disunited "European Union" is moving forward to something that looks like the promised land. In fact, it is increasingly clear that this road is a "road to nowhere", besides being increasingly painful for more and more member states to go ahead, under the approach which has been adopted to "keep the markets calm" and "save the Euro" - while avoiding the appropriate fiscal transfers and resorting to lending under AUSTERITY constraints. In these days, the European Union has been repeatedly following the recommendation: "Keep moving FORWARD, either slowly or rapidly, either jointly or at several speeds!".

Yes, as Paul Krugman recently said, "The Euro is a shaky construction". Besides ignoring the macroeconomic imbalances within the EU, in the "Maastricht criteria" for Eurozone membership as well as in the subsequent "stability" pacts, the Euro has been designed and confirmed – by Delors et al and followers – as a "single currency" instead of a (much more realistic) "common currency". Now, it is very clear that this was an IRRATIONAL choice, namely because other components of Delors's dream are missing - such as a European budget amounting, at least, to some "3% [!] of the European GDP".

Two decades after the Maastricht Treaty, a COMPLETELY NOVEL EU TREATY is mandatory - not a mere set of "positive" , incremental amendments -, so as to avoid a sad situation, in the near future, where the foreseen "European common home" becomes replaced by a true "European house of correction", not compatible with essential democratic principles. We need to build a true, democratic European Union through a cooperative European disunion, where the Euro survives as a "common", parallel currency - INCLUDING FOR THE UNITED KINGDOM and the other "non-Euro states" - but no longer as the "single currency" for a fraction of the EU (currently 17 out of 27 member states)

[ http://building-a-true-european-union.blogspot.com ]:

” – The Euro should be a COMMON currency within the future EU – including the EU27 members outside the current ‘Euro Area’ – but not necessarily the SINGLE currency.
- In this context, the coexistence of TWO parallel currencies should be allowed in each EU member state (under certain conditions, established in a novel European Treaty), within the framework of an appropriate “Cooperative European Disunion” .
- Besides the “Common Euro”, the complementary currency in each member state could be either a “national currency” (…) or a completely new currency, shared by that member state and some other “compatible” EU member states, taking into account both the relevant macroeconomic issues and appropriate geographic, historic and cultural issues."

We believe that this concise proposal can be a good basis for the required, flexible and realistic, "Plan B" - jointly saving the Euro and the European people.
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Joshua Ioji Konov Mar 6, 2013

Dear Mr.Mody, you are very much correct about the needed decentralization and maybe dismembering of the European Union as a better prospective for national economies, particularly for the less developed members, however, you suggested strict fiscal and leave the banks on their own approach has been totally ignored by the US, Japan and China, because it it could have brought possible economic brakeup, therefor to consider such for saving the EU countries economies is at the least not realistic, The diversity of more than the Euro currencies and less centralized policies would allow national policies more freedom and flexabilities, the getting rid of the VAT and constand dependence on centrally subsidized EU programs would bring better destribution of wealth, however it may also bring far-right or far-left governments so wellknown from the mid 20th Century.
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Frank O'Callaghan Mar 5, 2013

Comparing the EU to the US in terms of the component states debt ratios is invalid. There is a Federal entity in the US for which there is no comparison in the EU. The US govt spends twice the States amount. This acts as internal transfer.
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