European Union History Essay
As elections for the ratification of the European Constitution approach it is interesting to look at what direction Europe is headed in. While some scholars argue that the rallying of the euro and the possible passage of the Constitution show signs that Europe is a “superpower in the making” I fail to see this reality. The current trends and factors in Europe include problems with enlargement, the EMU, and the failed Lisbon agenda, point to the EU becoming “a ruined fortress”.The current economic performance of EU countries is horrific, with economic growth some 50% lower than the United States and unemployment hovering around 10% in France and Germany. While there are no simple answers to the question of Europe’s future it is clear that there are both advantages and disadvantages of enlargement, the EMU, and the Lisbon Agenda.
The argument for the EU being a “superpower in the making” is supported by the benefits in expansion, the creation of a single currency, and the push for economic revitalization.As Europe drives to become a superpower it has met many problems in managing its growth both internally and externally. The failed policies of the EU will lead to “a ruined fortress” in the near future, possibly even this summer with a “no” vote on the constitution. Enlargement has been a key question in Europe as the EU pushed to the east in 2004 by admitting Poland, Hungry, Estonia, Latvia, Lithuania, Czech Republic, Slovakia, Slovenia, Cyprus, and Malta.
These countries face many problems including high unemployment and weak economies, but perhaps the largest concern is security.Now the new admitted countries comprise the EU’s eastern border with Russia and the Baltic states. It is imperative for these new members to have a unified border control policy to protect the EU. Changes have been made as Poland formerly allowed Russian citizens to travel without a visa, a luxury that will now be changed. Another problem is US-EU relations in reference to these newly admitted countries.
This zone of the world was a Cold War hot spot as these countries were formerly controlled by the USSR in most cases.In terms of enlargement many of the newly admitted countries have ties to the USSR or economic relationships with the United States. The recent conflict in Iraq showed the divisions in a clearly non-unified EU. As negotiated under the Maastricht Treaty, EU countries pledged to “actively and unreservedly support” a common foreign security policy (CFSP). The Iraq conflict showed the division between new and old members and highlighted possible conflicts that could arise out of enlargement. France and Germany led the EU drive against the armed conflict in Iraq.
Shortly following the actions of France, “The leaders of Spain, Portugal, Italy, the UK, Denmark, and three accession countries – Hungary, Poland, and the Czech Republic – published an open letter in the European edition of the Wall Street Journal in which they declared their committed to solidarity with the United States”1. Following the “Letter of Eight”, and the Vilnius 10 written by central and east European accession countries, “French president Jacques Chirac was furious at these apparent breaches of intra-European solidarity and claimed that the accession countries had “missed a good opportunity to keep quiet””2.The difference between “old” and “new” Europe has been laid out, and in the coming years the problems of enlargement will have to be worked out as the integration of economies, political systems, and getting up to the standards of other EU countries is imperative. While the increased size of the EU has its advantages as new markets have opened up and the implementation of the euro in these markets is advantageous to many corporations.The new members from the former Eastern block also have lower tax rates that help corporations, tax rates that are substantially lower than the welfare states of Western Europe. I see enlargement as one of the only reasons Europe can be considered a “superpower in the making” as the EU shows in Hutton’s mind, “But above all, its ability to offer a forum in which Europe’s nation-states can broker their differences, reviewing one another’s policies and adopt common economic, social and foreign policy positions is an utterly novel development in world terms”3.
Hutton sees Europe’s size and the strength of the euro as being a serious challenger to the United States. The sheer size of the EU after this latest enlargement means that the EU now has to be taken seriously on the world stage, especially with the euro being held in reserve currencies in greater levels. The European Monetary Union (EMU) ushered in a new age in Europe with the advent of the euro in 1999.The EMU has caused problems for several countries in the EU, most notably France and Germany, as its restrictive monetary policy has coupled with the implementation of the Growth and Stability Pact to slow growth to record levels. The EMU’s achievement of implementing the euro is very significant but problems still exist in the European economies.
While the euro has rallied following its devaluation in its early stages these gains have been largely cosmetic. Like the United States has devalued the dollar recently for trade reasons the fact the euros value has increased has to be viewed in its entirety.In many ways the devaluation of currencies prior to the origination of the EMU had the same affects, “The fiscal deflation imposed by the tight criteria that had to be met in order to satisfy the Maastricht Treaty’s conditions for joining for joining the European Monetary Union, plunged the Eurozone into slow growth through much of the 1990s”4. In order to get the euro of the ground the governments of Italy, Portugal, and Spain devalued their currencies, hurting their economies in order to appease the EU.The fact that six years after the implementation of the euro the economies of Europe have lagged behind the United States shows the bankruptcy of the EMU.
There have been conflicts over the implementation and economic policies that show when pressed countries will revert to protect the nation-state, “The conflicts over the Stability and Growth Pact are the inevitable result of a monetary union bereft of strong federal institutions and social solidarity”5 .The EMU is a construction that does not have the backing of all EU members, as the pressure is not there on members to follow the spirit of these treaties. Citizens have allegiances to their countries before the EU and if the trust is there they will not pressure politicians to abide by Brussels rules. The examples of France and Germany violating the Stability and Growth Pact are the most glaring, “the stability and growth pact pledges members of the single currency not to run budget deficits of more than 3% of GDP, a commitment that is again enshrined unchanged in the constitution.Yet France and Germany are on course to violate the ceilings for four years in a row, and seem happy to continue doing so”6.
While it is hard to blame France and Germany for violating this practice because economically the policy is not working for them, it shows the stability pact is “perversely forcing countries to reduce their budget deficits at a time of economic slowdown”7. France and Germany have consistently had budget deficits of over 3% since 2001 in the interest of promoting growth.While the EMU has had its share of successes it is only a treaty and you have to question its strength when the two strongest EU members disobey the treaty to promote their own interests. It is interesting to note that during this same period the unemployment rate has gone up across the Eurozone, “In France and Germany, for example, unemployment is around 10%”8. In my mind it is difficult to claim that Europe is a “superpower in the making” with the current economic record.Europe’s regulations hinder the cross-border shift of both labor and policies hurting the expansion of it’s largely service economy.
With some 70% of the EU economy being centralized in the service sector and moving out of manufacturing this large upswing of the European economy is a fantasy. All of this being said the economies of Europe are so large that America needs to be aware of it, and as globalization continues to take hold the Atlantic zone and trade between the US and the EU is increasingly important.The problem has been mismanagement in economic policy as the EU has tried to adopt a one size fits all agenda for countries of widely varying economies. Hutton points out that the implementation of the euro, “creates a genuine continental-scale economy that, if managed well could very well become a world hot spot”9. As we move further into the 20th century the strength of Europe needs to be acknowledged, but with its loose treaty organization and its nation-state tendencies I simply do not see it being “a superpower in the making”.
Another glaring example of Europe being “a ruined fortress” is the utter failure of the Lisbon Agenda. The Lisbon Agenda was formulated in March 2000 at an EU summit with the goal of becoming “the most dynamic and competitive knowledge-based economy in the world” by 2010. 2000 was the height of economic prosperity in both the US and the EU and the aggressive plan set out to achieve 3% average economic growth while creating 20 million jobs by 2010. The Lisbon Agenda set out to accomplish these radical goals in areas such as employment, innovation, enterprise, liberalization, and the environment.While the Lisbon Agenda in theory is a very aggressive model to revive Europe from its economic slowdown, and if implemented might have the power to propel the EU to “superpower” status there is one problem. The problem with the Lisbon Agenda is that after five years the plan has failed miserably, and in many ways it was failed to be implemented in broad terms.
The goal on employment was 70% of the total population by 2010, with specific goals of increasing the number of women and older people in work.As Boltho’s article discusses the changing demographic of Europe and an increasingly older population having older people in work is very important. In recent studies the economic outlook of Europe has not supported the employment and growth goals, “Five years on Europe is hardly the beacon of economic growth and prosperity that leaders imagined. Instead of things getting better, in many European countries the economic outlook got worse.
In France and Germany, for example, unemployment is around 10%. Economic growth in the Eurozone is forecast at only 1. 6% for 2005, compared to 3. % in the United States”10.While the goals of the Lisbon Agenda had good intentions the policy really failed before it even got off the ground.
EU Commission President Jose Manuel Barroso commented that “Lisbon has been blown off course by a combination of economic conditions, international uncertainty, slow progress in the member states and a gradual loss of political focus”11. Lisbon has been re-launched by focusing on growth and unemployment, two key areas that desperately need to be addressed before the EU is even considered to be a “super power in the making”.The likelihood that the EU will be considered “a ruined fortress” is very high in my mind as it is only a matter of time before citizens become increasingly disenfranchised with the slow growth and extremely high unemployment. In the end the current controversy surrounding the ratification of the EU constitution shows the bankruptcy of the policies of the EMU and the Lisbon Agenda. The EU is set up by a series of treaties that are either followed or shunned by the desires of individual nation-states.
The EU constitution ratification difficulty shows the problems the EU faces moving forward. Hutton’s assertions of the euro solidifying a continental economy are undermined by the reality of the current economic situation, as growth and unemployment figures don’t support his claims. In theory enlargement, the EMU, and the Lisbon Agenda, all possess qualities to support a more powerful EU that could be considered a future “superpower”. The fact remains that this is all on paper as none of these initiatives have been completely proven or positive.