Europe is at a crossroads. The Old World today is facing crucial challenges for its very survival as a political and economic unit. The task is not simple. It is a matter of defining a new economic, political and institutional architecture capable of ensuring its ability to compete with other economic and political systems at the global level.
To succeed in this crucial task, the first question that needs answering is also the most essential and the most obvious one: What is the purpose of having a European political and economic Union rather than a collection of small nation states? In the past, when the European construction process first got under way, the answer to that question was both simple and obvious: to guarantee peace on a continent that had seen too many wars. And sure enough, this goal has been achieved, as the Nobel peace prize shows. Yet that goal no longer appears to be sufficient today. Europe’s younger generations have other concerns: economic growth and employment, social inclusion and solidarity, maintaining and improving their standard of living, and the ability to compete with other economies at the global level. Putting it in a nutshell, Europe today needs to be capable of guaranteeing its citizens widespread prosperity and welfare.
Until not so long ago the European economic model had proven to be an effective tool for generating wealth, offering an unprecedented phase of prosperity for some sixty years and allowing a growing number of Europeans to converge toward welfare levels akin to those customary in the countries that had first experienced the industrial revolution. Yet that model today is being called into question. Changed global balances, with economic and financial power shifting from west to east, have profoundly altered the international competition scenario. The appearance on the scene of a financial crisis in 2008, which overflowed into the real economy and moved from private accounting to public accounts, has accelerated that process of change in the world’s balances which has sparked such a deep crisis in the European economic model.
The challenges that we need to address are huge: excessively slow growth; youth unemployment approaching the 50% mark in certain countries, with a devastating impact in terms of wasted skills and a loss of potential for growth; putting public accounts back on track; the difficulty in getting the effects of monetary policy to translate into stimuli at the peripheral economic level, thus triggering a credit crunch situation and a liquidity crisis in certain EU member states; the fragmentation of the financial system along national lines; the balkanization of the banking system; and the danger that the single market may implode.
In the face of such dramatic challenges, the answer can only be both national and European at the same time.
While the task at the national level is not only to set the public account books straight but also to set structural economic reform in motion, the most important goal at the European level is to redefine an economic and institutional governance capable of providing a response to today’s challenges, of resolving the dilemma between austerity and growth, and of making any risk of the Union imploding or breaking up totally unthinkable. To achieve this, it is necessary to distinguish between action that needs to be taken urgently and in the short term, and action that requires a longer time frame. Defining the most appropriate time frame is crucial to ensuring that the timing of politics is compatible with the far more rapid timing of the economy and of the money markets. Only a clear and well-defined road map in which the long-term strategic blueprint is accompanied by the identification of concrete short-term action will make it possible to influence market expectations, thus achieving compatibility between the timing of politics and the timing of the financial and economic worlds.
While it is going to be necessary in the short term to stabilize interest rates through the pursuit of austerity-based policies and through intervention on the ECB’s part, to get the European Stability Mechanism up and running, to forge a banking union, and to impart a fresh boost to structural and political reforms capable of fostering economic growth, in the longer term we are going to have to move down the path of greater integration that is at once fiscal (euro bonds, anti-cyclical stabilizers, and a strengthening of the European budget), economic (the consolidation of the single market and long-term industrial policies) and political. The structure of the architecture that we need to define will of necessity comprise several different levels, in order to allow those countries that decide to move ahead down the path of greater integration to do so, and those that do not choose that option to still be members of a Union capable of safeguarding the integrity of its single market.
This is no mean task either in the short or in the longer term. Success will require leadership (in terms of the ability to offer a vision, to devise solutions and to build a consensus) on the one hand, and democratic legitimacy on the other. Democratic legitimacy is closely bound to the concept of citizenship. Only European citizens aware of the stakes involved can endorse a process of greater integration inevitably involving the transfer of certain aspects of sovereignty from the periphery to the center. Citizenship, in its turn, rests on the concept of identity. The overlapping of economic areas at the European level has forged also social and cultural areas. A European political area has emerged precisely in the wake of this current crisis. These are factors which are already beginning to forge a European identity today.
Yet we are still a long way from the target of having citizens who feel European, as shown both by Eurobarometer’s opinion polls and by the rise of anti-European political parties. Building citizenship is also a matter of economic and well as of civil rights. Issues such as the genuine integration of national labor markets, the facilitation of worker mobility within the Union, the transferability of social and welfare rights and the integration of immigration are crucial to ensuring that the process of building a sense of citizenship acquires a concrete as well as an ideal value. Having said that, however, both national politicians and the media have to help present a positive image of the European Union, an image highlighting opportunities rather than constraints, capable of allowing the man in the street to detect unity in a context of respect for difference, under the banner of the European motto “in varietate concordia“. Only thus will it be possible for a community of ideas and of values laying the groundwork for a European demos and for political action on a continent-wide basis to see the light of day.