Current economic difficulties are fueling a growing and understandable pessimism vis-à-vis Europe. Let’s step back a little to gauge what Europe has given us in half a century and what must still be achieved today.
Based on the French-German entente—a treasure to be preserved at all costs—European construction brought us, first, something that our continent had never experienced in a lasting way: peace. We’re in the longest peacetime period since the Roman Empire. It’s enough to observe Sino-Japanese relations to understand that building a common future is not a given. Another fundamental gain: democracy. In 1990, when the Soviet empire imploded, Europe was united for the first time in history not by conflict but by the free will of the people.
This unity created a demographic and economic giant. The USSR numbered 300 million citizens; today’s Russia numbers 142 million. The six-nation European Community had less than 200 million inhabitants; the 27 nation European Union has more than 500 million, including 100 million from the East who had no experience of democracy or a market economy, and whom we managed to integrate in just a few years. Among the 21st-century giants, the EU is now the third-largest in terms population, behind China and India and far ahead of the United States (315 million). It is the leading economic power, with 23 percent of global GDP, ahead of the U.S. (21 percent) and China (12 percent).
Based on the French-German entente—a treasure to be preserved at all costs—European construction brought us, first, something that our continent had never experienced in a lasting way: peace.
Peaceful, democratic and united, Europe was built with a single market and common agricultural policy, which enabled France to undergo an unprecedented economic transformation. Because the EU is the largest global market, European standards are used everywhere, a considerable advantage for our manufacturers and farmers. Europe also signifies the free movement of people among the 26 nations of the Schengen Area, accompanied by strict controls (with improvements still to be made) along their common external border. It signifies the proliferation of European student exchanges thanks to the Erasmus program.
And finally, it’s the euro, a logical complement to the single market, born of François Mitterrand’s determination to balance Europe’s enlargement to the east by a decisive advance in its integration. As soon as it was introduced in 2002, the euro asserted itself as a remarkably stable and strong currency, the second-strongest in the world. The 17 countries that adopted it enjoyed historically low rates of inflation and interest rates, accompanied by growth that was as fast, and created as many jobs, as in the United States, until the global crisis sparked by the collapse of Lehman Brothers in 2008.
Former Brookings Expert
Without the euro, our countries would have been caught up in a currency war. But the crisis revealed the weaknesses of certain countries. While Schroeder’s Germany was undertaking courageous reforms, Greece hired bureaucrats, Italy accumulated debt, Spain created a real estate bubble and Ireland created a banking bubble. Whose fault was it? First, the governments of the countries that took advantage of the euro by ignoring its disciplinary aspects. But it was also the fault of incomplete monetary construction.
Over the past five years, the 17 euro countries have corrected those flaws in four ways: imposing greater responsibility and discipline (the “golden rule”); greater solidarity (particularly with the establishment of the European Stability Mechanism, the “IMF” of the euro zone); a greater convergence of budgets and competitiveness; and finally, more governance, with summits held at least twice a year. At the same time, the European Central Bank has assumed its responsibilities.
Are our institutions complex? Unquestionably, but look at the gridlock in Washington between the White House and the House of Representatives. The difference is that the American Constitution is engraved in marble; our European institutions are still a work in progress that can still be improved.
Having attended the summits that punctuated the crisis over the past five years, I was struck by the determination of our leaders to do everything possible to save the euro. All of them shared the same conviction: losing the euro would have sealed the fate of the European adventure; we would have stepped out of history. Did the decision-making process seem hesitant, too slow? Yes, but no more than it was in the U.S., and in the eurozone, 17 governments under parliamentary control have to decide together. Are our institutions complex? Unquestionably, but look at the gridlock in Washington between the White House and the House of Representatives. The difference is that the American Constitution is engraved in marble; our European institutions are still a work in progress that can still be improved.
What are the initiatives that could show Europeans that now more than ever, the EU remains their future? First we must complete the reforms made essential by the existence of the euro, starting with the banking union. But these reforms are meaningful only if each of the 17 states, including France, implements its commitments. Beyond debates on the balance between austerity and growth, all our countries must confront the consequences of an aging population by reforming the retirement system; improving our ability to innovate in order to increase our prospects for growth; and guaranteeing jobs and the future for young people who are today faced with the scourge of mass unemployment.
President Hollande is right to take up President Sarkozy’s proposal to create an economic government for the eurozone; that would make it possible to better coordinate national policies and would facilitate the adoption of ambitious joint programs to create jobs, particularly for young people, but also to train them through a reinforced and expanded Erasmus program. The euro is leading us toward ever-closer integration. It is our best chance to be competitive with the 21st-century giants while adapting the European “social model.”
Other areas in which progress is crucial: foreign and defense policy. The EU alone provides half of global development aid, twice as much as the U.S. Who is aware of that? Together, the 27 EU nations represent 20 percent of global military expenditures, far behind the U.S. but ahead of China (8 percent) and Russia (4 percent). But where’s the indispensable integration? The path to move forward is enhanced cooperation, whether in the weapons industry or foreign initiatives. Libya, more than Mali, showed that European “coalitions of the willing” could act effectively. Three countries are well suited, despite their differences, to spearhead such operations: France, the United Kingdom and Germany. The U.S.’s unwillingness to get involved makes summit talks between these three countries essential after the German elections in September.
A third area to work on: European elections. Citizens’ disaffection with Europe could lead to a victory by Eurosceptic parties in the May 2014 elections. To avoid that, how about placing two pro-Europe champions at the head of the two main parties, the People’s Party and the Socialist Party, who would be candidates to replace Mr. Barroso as president of the Commission and would advocate specific programs?
Couldn’t all the EU nations’ history books have two or three common chapters? They would underscore the things we have in common and which distinguish us from other civilizations: our Judeo-Christian heritage, the Renaissance and the Enlightenment, human rights.
The election campaign would then take on a new, more concrete dimension throughout Europe. There would be no need to change treaties for that. On the flip side, the two candidates should receive the preliminary (if implicit) approval of the members of the European Council.
A final area that fuels Euroscepticism: Seen as bureaucratic and distant, Europe has been unable to create the sense of sharing a common destiny that exists at the national level. Progress in the other three areas will help, of course. But we must add a bit of history and geography, in short, road markers that provide orientation. Raising questions about EU borders is delicate. But a borderless Europe is destabilizing in this globalized world. As for history, each nation is legitimately attached to its stories, its symbols and its celebrations. Still, couldn’t all the EU nations’ history books have two or three common chapters? They would underscore the things we have in common and which distinguish us from other civilizations: our Judeo-Christian heritage, the Renaissance and the Enlightenment, human rights. They would explain to schoolchildren throughout Europe the ambition we’ve shared for half a century and which has no equivalent in history or in today’s world.