Analysis & Opinions - ecfr’s blog
This is a response to Mark Leonard's recent paper, "Four Scenarios for the Reinvention of Europe."
The making of Europe has been a perplexing and often difficult undertaking. The UK and some of the Scandinavians have rejected becoming members of the inner core. Turkey has been put on the shelf. The expansion of Europe, as George Gershwin sang of women, "is a sometime thing." National parliaments have hesitated to accept and sometimes rejected new versions of the European constitution. Through it all, however, the European idea and the basic forward momentum of European integration has proceeded despite fits and starts. Europe has undergone an incremental transformation of the de facto into de jure after crisis subsides. The resolution of each crisis has led to a higher level of legal and political integration.
It is not entirely surprising that national support for European institutions is now at a low ebb. Publics assumed that integrating markets and currencies would lead to a freer flow of goods, capital, and perhaps labour, and that higher economic growth as well as trade would follow as a result. But the Great and elongated Recession of 2008-09 has been a huge check to European growth and energies and imbalances have come to the fore. Countries in surplus have had to bail out countries in deficit. The deficit beneficiaries had to cut national expenditure and welfare payments. Countries in surplus have been forced to bear the brunt of such bailouts, and they also need to act to create surpluses in trade with the erstwhile debtors. Private German capital should now be buying assets in Greece, Spain, and Italy and the government should encourage German tourists to visit and spend money in these countries. (The United States and Europe have requested Beijing to spend abroad to rebalance its surpluses. Germany needs to do the same within the Eurozone.)
No country needs to leave the inner core. In certain respects if Greece or Spain did not exist, they would have to be invented. Their participation in the euro keeps the value of the currency down from $1.80 to $1.20 or $1.30 or so, thereby ensuring the success of German exports to the rest of the world. The competition with China requires a few dilettante members to assure European and French international penetration of foreign markets.
As European growth resumes, integration will continue, and it can be of different types. The Schengen model is most tempting because it is the easiest to achieve and it does not raise permanent barriers between an inner and outer zone of EU members. An outsider can join the 27 and later be admitted to the 17 as Poland will shortly do. Iceland will want to be in the Eurozone. And there are countries in the former Soviet Union, like Ukraine, that will be wooed to join a customs arrangement with Russia if they are not put on a faster track for European admission. Turkey might agree to join the free trade arrangement, if not the Eurozone.
The world is entering a new phase as Middle Eastern conflicts and NATO operations there come to an end. In terms of Balance of Power only a united West that brings the United States and the European Union together, as proposed by Angela Merkel in 2006, can offset a rapidly developing China. A newly united West in economic terms can deal on even or superior terms with a obviously disunited East, where Japan, India, Vietnam and Korea obviously do not share China's vision of the economic and political future of the world.
When Jean Monnet proposed the first integrative steps for Europe to take, he was thinking of creating a powerful economic instrumentality that would contend on equal terms with the then superpowers, the United States and the Soviet Union. Now, if Europe and America pursue the closer economic union that Angela Merkel envisions, Europe can think of a new united West which can deal on equal terms with a rising but disunited East.
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