Abstract
Compared to the contemporary world, the European Economic Community (EEC) was founded in an international environment very different from the one that exists today. The world was divided into three parts. The first world, centred on the two shores of the North Atlantic, was economically and politically dominant.
True, the first world was challenged by the second world, which kept half of our continent trapped in poverty and oppression for decades. But in the medium term, it became obvious that the contender would lose due to the unsustainable character of its cruel system. The third world was clearly third.
Now, there is only one world, and it's flat. The modern, connected and integrated world economy that used to consist of some one billion workers now has four or five billion people involved. The lion's share of global growth takes place in what we used to call the third world.
Parts of Europe have not been up to this challenge. A lack of competitiveness has led to slow growth and unemployment. This has nothing to do with the euro. In fact, as we all know, the largest eurozone country, Germany, is in quite good shape. The reason is obvious: it has done its homework, such as the Hartz reforms for a more flexible labour market.
At the same time, unsustainable public finances have laid the ground for the budgetary crises. Blaming the euro for this is like blaming the dollar for the problems of California, an economy between Italy and Spain in size. It has run the risk of bankruptcy on several occasions during the last few years due to a mismatch between spending and revenue. The same mismatch some eurozone states are facing.
Against this background, it is obvious what we need to do. We need stable public finances and structural reforms for growth and jobs. But then there is the Juncker curse. ‘We all know what to do. We just don't know how to get re-elected afterwards.’
I don't want Europe to be a museum for rich Asians. I don't want Europe to be a second-rank region in the world. I want Europe to be first. I know we can remain a world-leading knowledge economy. This is what we politicians need to explain to our voters.
The rise of the rest does not threaten the West. At least not if we have the courage to do what we need to do.
Most of this work needs to be done at home, in the various Member States. That is where the majority of reforms for increased competiveness and growth, for entrepreneurship, structural change and jobs will have to take place.
But there are measures to be taken at the European level as well. The budget should shift from subsidies to R&D. States need to respect their financial commitments. And the internal market for services should be worthy of its name.
The current crisis is not a crisis of the euro, but a crisis in some eurozone countries. We know what to do. And we can get re-elected afterwards.