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National identities around the world

Venice, 11/10/2019 - 13/10/2019, Aspen Seminars for Leaders

While certainly not exhaustive, this summary clearly reveals one of the principle reasons for the European crisis and the current tensions between the EU and national identities that has raised its ugly head thanks to sovereigntist and populist pressures.  Excessive focus on the rules, especially by an increasingly weaker Commission, further distances the development of a politically empowered community system; at the same time, distancing citizens from institutions and revealing how low governments’ faith in each other is. Europe has failed on issues such as immigration, employment and the reduction of inequality, and to the sole advantage, according to some, of the interests of Germany and France. Efforts to reset the process will necessarily require that European responsibilities be exercised with national interests in mind.

In point of fact, this objective calls for fewer rules and more policy. What is needed, more than anything, is a different European agenda centered on sustainable development, the fight against climate change and management of the energy transition, giving the European Parliament the power of legislative initiative. Moreover, giving Strasbourg new centrality means fiscal power – after all, it is no accident that the United States became an institutional reality when Congress was given the ability to levy taxes.

For some, more than a sign of good things to come, this shifting of gears becomes urgent to confronting a predictable shift in attitude in community balances. Indeed, it is not necessarily a given that today’s creditors – the countries of the North – will be those of tomorrow. Germany, in the first place, cannot manage to produce inflation despite the ECB’s injections of quantitative easing, and sales of German debt bonds offered at negative interest rates are still falling. Many defined the ECB’s recent decision on QE a fiscal policy, with structural effects on the financial system and with an important impact on pension systems. The sharp criticism of this decision from German institutional and economic spheres reveals a deep crisis in that country’s financial system. Moreover, given that the middle class is enduring the situation with increasing anger and social discontent, it is foreseeable that to avoid an increase in tensions the Berlin government will request a loosening of European budgetary rigor.

Certainly, it is to the advantage neither of debtors nor of creditors to rock the boat right at the start of a problematic period for the EU owed not least to weakening transatlantic relations and the economic and military growth of China. On the military front, Europe is still highly divided and has little spending capacity; indeed, Wolfgang Schäuble had already pointed out that a common defense system would have saved an annual 120 billion. For this and other strategies, some participants proposed finding convergences among pioneer nations on issues of common interest, thereby overcoming the hurdle of unanimity that so often stalls the Union’s institutional progress. From that standpoint, Italy must better define its national interests and be able to defend them. With regard to financing common policies then, the suggestion of using the European federal debt resurfaced.

The crisis of multilateralism, with the addition of the WTO standstill and the recent trade wars, threatens to give China overarching power in new international balances. China is indeed playing a vigorous geostrategic game that the West is underestimating. Its particular system of governance – in China market and nation coincide in a State capitalism that is producing extremely high growth rates – allows Beijing to provide economic support to strong national champions, which is something that does not happen in a transatlantic area that, moreover, should radically rethink its notion of State Aid.

The West has not successfully weathered this phase of globalization, which has caused widespread poverty especially among the middle and working classes and upset traditional balances. Compared with other geopolitical contexts with non-democratic power structures, the West is experiencing stagnation is terms of demographic growth and GDP, has seen savings levels drop from 25 to 5 percent and delocalization increases of up to 60 per cent.  The impact of this rapid and radical transformation of democratic systems has overturned traditional political parties and called into question the principle of representation, which risks – in an increasingly leader-oriented democracy – being replaced by the “principle of similarity”. 

All this raises no small number of concerns among important bastions of the contemporary capitalist system such as the fundamental and strategic American pension funds. The West needs, first and foremost, to reflect on its political practice in order to restore an intellectual and philosophical substrate to a different democratic model struggling with hyper-connectivity and the constant and pervasive use of social media, and to redesign a new economic and social model that restores concepts such as altruism and solidarity and overcomes the social antagonism between old and young to as to offer a new political synthesis of the post-ideological era.