Thursday, April 26, 2012
The main topic and reason for the forum was of course economic. Ways to deal with the current economic crisis, what reforms are necessary and in what best way to implement them. With a lot of the things I have heard I agree and I have embraced. It is no lie that Europe needs to reform, it needs to sort the mess that it got itself and its citizens into, with decades of going in circles on the name of protectionism, the interests of the markets and the banks and the so called "national interests".
Well how national are some of those interests is another matter; but once you create something like what we have created in Europe, a sort of a political and economic block, you are going to have to continuously reform it and modernize it, to keep up with the new challenges that the changes in the world are bringing. And in our case, the case of the EU , the more states join, the more ties we develop with each other, the more we harmonize our economies and policies, then the more we are exposed to each other.
And now that a crisis is engulfing all our continent the solution must be found collectively. So I totally agree with Mr Tajani that Europe needs a new industrial revolution. We have outsourced a lot of our industries in China and other countries, so we left Europe exposed in many ways and our citizens with less opportunities. I also agree about the full fiscal union, since we have launched the euro and we have one currency and one market, we only have two choices; either go back or forward. Now we are somewhere in the middle of things and the weaknesses of the eurozone are easy to expose and be exploited by the Markets.
Besides we really need to be prepared for the future; as this forum concluded, the world is changing and in the future Europe will not be one of the two major players on this planet. We are entering a multi-polar world and that is good. But it also comes with many challenges. The best way to deal with it is to keep reforming and modernizing; the problem is how!!
In my opinion austerity and salary reductions are not the way. At some point during the discussion the Baltic states were praised for taking this road during the '90s, in order to reform and join the EU. They brought them as an example for the countries that are forced to go down this road now days, like Greece, Portugal, Ireland, Spain and Italy. Well I have to strongly disagree. I have visited Estonia recently and while the economic growth and development are obvious, the nation's salaries are very low.
A reason to invest in the country one would think, but talking with the locals they told me that "every one who can leave Estonia, leaves." Because of such low salaries, the Estonians are preferring to leave the country and go and work to Finland, Sweden, Germany, Denmark, Ireland and the UK. So while the ship is plain sailing according to the economists, the sailors are abandoning the ship. Is that what they want to achieve in other countries as well? Mass emigration? There are already talks in Greece that their salaries will be reduced to the level of Bulgaria (of course that is just theories at the moment, but people are afraid indeed).
And how about the idea of of tax and salary harmonization that were also mentioned? How are they going to harmonize the salaries? Will they bring half of Europe's salaries down to the level of Bulgaria while keeping the high salaries of the rich countries, creating an unequal Europe? Or perhaps are they going to bring all countries' salaries down, because I would love to see how are they going to convince a German, Dutch, Luxembourgian or Swedish to accept similar salary cuts that the Greeks had to endure recently. But maybe they mean that eventually the salaries of the rich countries will go down a bit and the ones of the poorer countries up a bit so they can come to the same levels eventually. That would be the fairest option but how will the citizens of the rich countries be prepared for some changes in their pockets?
As for the taxation harmonization, though it maybe the right thing to do to complete the process of the fiscal union, some countries are heavily relying on their lower taxes; like Ireland. In order to persuade it to get rid of its lower taxes and harmonize them with the rest of Europe, then what kind of compensation will the other countries give Ireland for example for doing so? Because once Ireland accept the suggestions by France and Germany, it will willingly lose a lot of revenue and jobs for their people; will the Germans and French then come and create jobs, build factories in Ireland to compensate them for the jobs lost from American multinationals that will definitely move out from Ireland? If yes, then I am all for it.
There were many other good ideas though suggested, notably by Mr. John Bruton; for example the common banking market, more control of the banks, a stronger ECB and EU Commission, pan-European elections for an EU President, more democracy and transparency in EU, the importance of education and its reforms, the reforms on the banking system and investments in new technologies. All these sounded like music to my ears, as long as they are implemented and do not stay on paper only.
Then of course the subject moved to the Social Europe issue and its policies; policies that most of them agreed that need to be reformed or discarded, as Europe will not afford in the future to give generous pensions to its citizens and that Europeans must learn to live with less social welfare benefits. And lose security in their jobs, in order to make Europe more competitive. Here is an issue I totally disagree, or I am sceptical of how it is going to be implemented.
They spoke about not being able to pay our pensions in the future. But how can we pay our pensions since there is high youth unemployment in our countries; youth unemployment equals in inability of young people to start families and have kids. Which in result means less future workers, less tax payers in the future, thus less people contributing for the pensions of the elderly. What they want to do is either make us all pay for our own pensions, or we get no pensions at all. And of course increase immigration into Europe, to replenish the European population. But wouldn't it be better to give initiatives to young people to find labor stability early enough, start families and have children? They have admitted it themselves that is scandalous the high levels of youth unemployment in some countries, so why don't we create more jobs now, instead of talking about it?
And if we have to pay in the future for our pensions, then why contribute taxes for it out of our salaries all our working lives? Perhaps we should stop paying them, get higher salaries and invest these extra money in private pension schemes. But paying for social security for decades and then not getting any? That's absurd! Mr. Richard Bruton even said that those reforms must happen in a humane way; well I should hope so, because from what we have seen in Greece, the reforms took place in the most inhumane way thanx to the inability of the Greek political elite to reform when they should have.
Then other issues were discussed like Europe's relations with the USA. Here I did not participated much because I did not want to offend some of the speakers with my rhetoric. They did admit that the USA has delegates in Brussels that influence EU's policies by lobbying, but there were no European delegates in Washington to do the same. Well if we are talking about closer ties then this is essential for sure. Otherwise we will have an unequal partnership, or rather a "master and servant" situation. I am all for free trade between USA and EU, but only if it equal and it flows both ways. Will the Americans be happy to have goods from Eastern Europe flowing into their markets? Because I should hope that they did not mean that only American goods will enter European markets, or only Western European goods will be promoted in USA.
And how about movies, music and other cultural "goods?" Why do we have thousands of American artists, songs, movies, celebrities and actors dominating our cinemas, charts, and social life while we see hardly any European movies entering America? Why must American actors, directors and movie producers find always a job, have more success and earn more money than their European counterparts? And why must only American culture dominate the West?
Or how about the issue of free travel, with no hassle. Recently the European Parliament approved to hand out EU citizen's data that are visiting the USA, over to the US authorities. If I am being treated like a potential threat before I even set foot on their land, then why bother? Why not visit Budapest, Paris, Prague, London or Madrid instead of New York and Washington and spend my hard earned euros over this side of the Atlantic. And do it without the hassle, with the same currency in most cases and without the need to pass any personal information to anyone. If we are talking about free trade and strengthening European and American relations, then they better have a look at those issues too.
Otherwise I am all for more European integration, if it is done for the benefit of the people and with their best interests in mind; and of course their support, opinion and permission. When I questioned the panel how are they going to win back European support and trust in the EU and the eurozone that have been shaken with the recent crisis, I received the usual waffle from the panelists. They either did not understand my question or they avoided to answer directly. Or perhaps they have nothing included in the upcoming policies to show to the people why they must keep supporting the European project and what do they gain out of it. I think it would be crucial to do so, don't you think? It was even discussed why what is being discussed in the Council of the European Union meetings, is not being announced to the citizens so they know what is happening and why it must happen! But why aren't they?
I would love to see a lot of what they talked about implemented, others definitely not and some I am waiting to see the manner of their implementation. What I really want the result of all this to be, is to see Europe more united and wealthy in all corners again. But if that means a Europe of unequal salaries and prosperity, a Europe of the few and safeguarding the monopolies of the elites, then I won't go into the trouble to write pages of protest speeches; because they need to be careful of the rise of the far right that happens all over Europe. They are going to be their nemesis, the citizens are watching and punishing with their votes. I wish them the best of luck with their work.
I would like to thank CES (Center for European Studies) for their invitation and the opportunity to be part of that great event. The information, ideas and brain power was flowing and the privilege to be able to listen to those important men and women discussing the future of Europe was certainly my honor and in some cases inspiring. I thoroughly enjoyed it and I am looking forward to the next similar event.
Tuesday, April 24, 2012
Mr. Brok in his speech made references in the EU-USA relations of the past few years and said that their relations are of utmost importance during those historic changes in our world. He also noted the similar values, culture and historic links of the two regions while reminding us that the USA is still by far the most important partner that Europe has.
"Yet" he continued, "the EU and the USA have not a free trade agreement!" He said that he hoped in the EU-US Summit in June, in Chicago USA, those two regions to establish one between them; because "we must exploit the full economic potential of our relationship with America."
Mr. Brok continued his speech by comparing the economic situation that engulfs both Europe and America recently and mentioning the importance of setting up rules to avoid similar situation of happening again. He concluded his speech by stating that Europe's cooperation with USA is more important now than ever since WW2!
Mr. Brok's speech opened the fourth panel that took place right after and focused on the shared economic challenges that the EU and USA are facing together. Part of this panel were Mr. Brok himself, Mr. Sean Kay (Professor of International Relations at Ohio Wesleyan University), Mr. James Elles MEP (Member of the Delegation for the relations with the US of the E.P.), Mr. Fredrik Erixon (Director and Co-Founder of the European Center for International Political Economy, Brussels), Mr Thomas Spiller (Vice President, Global Public Policy Europe, Middle East and Africa, The Walt Disney Company) and of course Mr John Bruton, former Taoiseach of Ireland and former Ambassador of the EU to the USA. The panel was moderated by Mr. Tomi Huhtanen, CES Director.
The conversation was initiated by Mr Elles that made a short account on the European-American relationship over the past few decades; from the '90s that was dominated by the economic and political agenda due to the changes in Europe (fall of the Berlin wall), the '00s that was dominated by security after the 09/11 attacks and now, that our common focus must be on growth, jobs and trade.
Mr Erixon answering a question by Mr. Huhtanen about the Doha round of negotiations, he admitted that it is "dead;" but not the WTO (World Trade Organization). He suggested that we got to recover various negotiations taking place there and through bilateral, multilateral and unilateral relations, "use the trans-Atlantic Axis to lead the world, with capacity to create growth both in USA and the EU."
Mr. Kay reminded us that there is no real change in the EU-USA relationship, apart from small "structural" ones, like the US Presidential election and the inauguration of President Obama. He also mentioned the inability of Europe to take action in incidents like the one in Libya; "so the USA feels overstretched." He suggested that Europe should be able to "operate" without the military help from the USA.
Mr. Kay noted that there is no advocate in Washington for the EU, for trade or other issues; while of course there are US advocates in Brussels, giving EU's policy officials their opinion on future EU policies. He also admitted that there is a negative opinion in America about the euro-zone and its crisis, the recent President Obama social policies (that many have accused him that was inspired by Europe) and a lot that happen in the EU in general. "Europe is being used as a political punching bag in the USA," admitted Mr Kay.
Mr Spiller agreed with the idea that the EU-US relations stand in a historic moment right now and that their cooperation "is crucial for companies and growth." So he encouraged for more EU-US cooperation, with focus on transparency, stability and the rule of law, for both these two blocks and the rest of the world.
The conversation moved into the US-EU competition with China and the new challenges they both face from the rise of the BRICS, they called for more European presence and a stronger voice in Washington and they mentioned Ireland's economic success and failure; Mr. Kay blamed Ireland's recent economic woes to two factors that do not get on well together: US taxation system, with European social state laws!
They debated and concluded in many things like: Europe and the USA must remove the remaining trade barriers, a move that China and other competitors fear. That if Europe proceeds with the structural changes, it will be strong again within two or three years and the need to sharpen many strategic relationships between the EU and the US, that will include agriculture. Here there was a mention of the CAP and how it was changed recently and the fear of Europeans of GMO crops.
The panel then praised Ireland for its diversity, its success in multiculturalism its education system and many more, with others agreeing that the creativity that exists in Ireland attracts a lot of American companies. They also concluded that Europe has done more than the US to reform and deal with the current crisis. The only way to deal with China according to this panel was to establish free trade between USA and the EU. Otherwise China, that has so many European and American customers and companies investing there, is not afraid any threats coming from the EU-US.
The panel concluded its discussions agreeing that if all the above are not implemented during the next 2-3 years, our economies will collapse. Then Mrs Creighton, Ireland's Minister of European affairs took to the stage and announced Ireland's Taoiseach, Mr Enda Kenny TD joining the forum, right after she told us that the Dail Eireann (Irish Parliament) has passed the ratification of the EU Fiscal Treaty.
Mr Kenny started his speech in reaffirming his belief and support for Ireland, the euro and the Fiscal Treaty. He called the Treaty as "important for the future of Ireland and the eurozone." He said that the current crisis shed a light on how we've been progressing all those years and it gives us an opportunity to find out what we did wrong and gain a better understanding of the crisis.
He stated that the eurozone is in the epicenter of the crisis, simply because there are more concerns about European integration and solidarity, that exposed its weaknesses. Therefore we need new economic tools of substance and credibility to deal with the crisis. He also noted that there is no support for the creation of USE (United States of Europe) just yet.
Mr. Kenny blamed also previous "incompetent" Governments and their mistakes for the current situation in Ireland and express his hopes that this will never happen again. "The eurozone is a key element for Ireland attractiveness for investment," he added and he urged for a "yes" vote on the referendum on the approaching EU Fiscal Treaty.
Mr. Kenny mentioned the damaging role of the banking sector on the Irish economy but he expressed his confidence that the country will "bring its public finances on a sustainable path." He also added that the crisis "is not a problem of the peripheral EU economies only" and that 23 of the EU's states have been borrowing excessively; "Europe must face up to what it's really meant to be."
Mr Kenny concluded his speech by saying the Ireland and Europe must focus on the digital and Single Market development, but also continue our drive for research and innovation. In that way, "by 2016 we are going to demonstrate that Ireland is the best small country to invest in! We should give a message to Europe and the world with a yes vote, that Ireland is showing that Europe is the way."
With the conclusion of Mr Kenny's speech, the fifth and final panel of guest speakers took stage. It was moderated by Mrs Creighton herself and its speakers included Mr Kenny, Mr. Inigo Mendez De Vigo (State Secretary for the EU in Spain), Miguel Morais Leitao (State Secretary for Europe, Portugal) and Mr David Lidington (Minister for Europe, United Kingdom).
The panel's discussion was focusing on the question of a political union and if it is needed in Europe right now. Mr Lidington started the debate by stating that Europe has got to become more competitive by focusing on the Single Market; but we should not discuss about structures, rather about outcomes. We should focus on institutional reforms for prosperity rather pushing forward for institutional changes. "We must ensure that politics remain democratic in Europe," he said.
Mr. Leitao gave us an insight on how the Portuguese citizens feel about Europe and their country's EU membership. He explained that they have a great interest on how Europe will evolve, but "the lack of knowledge and transparency is worrying for the Portuguese." So Mr Leitao reminded us about the importance of EU becoming more transparent and democratic. Mr. De Vigo also added that when Europe started with the creation of the Maastricht Treaty, it focused mainly on the monetary side not the financial one. We need structural reforms, first back home in our own countries and then in a pan-European level.
"We need economic and political integration, to think, act and reflect together," concluded Mr De Vigo. Taoiseach Mr Kenny agreed with Mr De Vigo and added that we need adjustment of our public services, education and public spending. He said that "we got to pass to the people that we are all a member of a club of countries and we need to compromise and abide to certain decisions, but we must also continue to draft our own budgets."
Then Mr Lidington re-entered the discussion and focused a bit on why the UK failed to be part of the Fiscal Treaty and that a British referendum on EU membership that so many in his country desire, "will depend on the outcome of future referendums in other European states that will require further handing over of power to the EU." He reminded though the audience about his country's committed involvement in major events that transformed Europe, from WW2 right until the fall of the Berlin wall. He described China's rise as a huge opportunity, as 10% of its population for the first time are getting European spending power, resulting in a huge market. Mr Leitao focused of European affairs and described the Fiscal Treaty as a step forward for Europe, as it will boost the Market's trust in EU.
The panel continued their discussion and concluded that being European is an added value, complimentary to your nationality and that there is no EU without the eurozone; their fate is entwined. They reminded the audience about the importance and relevance of EU in our everyday lives; either we realize it or not it affects us daily, but sometimes we take for granted the benefits it offers us.
Then the debate turned its focus on how can we make a more democratic Europe and the integration process continue. The panelists brought the example of the falling percentage of the global GDP that will be attributed to Europe in the future, just 7% down from 28% that it is now! "Will Europe become a museum for the rest of the world to come and visit," the panel questioned, if the current changes and shift of the balance of power continues in the world.
The conclusion of the panel was that we need a greater transparency in Europe, while the EU should focus on things that matter for its citizens: increasing prosperity and enhancing security. "A Europe of results," as Mr Lidington put it!
Well I hope they stick to this. The forum offered a lot of food for thought, with some negative and some positive signs of what is about to come. My personal overview of this forum will be a blog-post on its own, which I will publish later this week.
Friday, April 20, 2012
It has various high ranked Irish and European officials and politicians from many European countries participating in its panels, notably from Ireland, Spain, Holland, Finland, Germany, Italy and Britain. Its main focus is to discuss, debate and analyze the issues that created the current eurozone crisis, reach to conclusions and offer solutions for the future. Also, to address the challenges that Europe is facing now and during the next few decades, and the best potential ways to deal with them.
The Forum begun with the welcome speech by Mrs Creighton, during which she pointed out that Europe has many times dealt with other financial crisis in the past, but always emerged stronger. She mentioned that Europe is like a family and like every family it has its problems and disputes, but "we must work together, collectively, putting our best forward."
Then the President of EPP (European People's Party) and CES, Mr. Wilfried Martens addressed the audience and he encouraged the European leaders to take stock of the impact of their decisions and think of ways to deal with them. Mr. Martens also stressed that the European Community must show its solidarity, that is time to take responsibility and focus in fiscal discipline, job creation and that the origins of the crisis are the high levels of debt. He also mentioned that Europe's monetary union needs to be implemented with economic union and that the completion of the single market is essential to promote recovery. Mr Martens closed his speech by quoting Germany's Chancellor Mrs Angela Merkel's statement that "my vision is a European political union," and that he hoped that the Irish citizens will make a European choice in the up-coming EU Fiscal Treaty Referendum.
Mr Martens was followed by Mr Antonio Tajani, Vice-President of the European Commission. He stressed that Europe must put real economy in the center of its agenda and that "we need to be strong on political choices, we need a new industrial revolution." He added that Europe must invest in research, innovation and education and with a pan-European infrastructure we should be able to deal with similar crisis in the future. He compared Europe with China and America and how it lacks in investment when compared with its competitors, but also noted that those investments must be focused in enhancing technological leadership and devote more resources in research; a research that must be industry oriented. Mr Tajani also said that "trade should be free but also fair," and he closed his address by noting that Europe must have an economic governance with a stronger E.C.B. (European Central Bank).
Followed Mr Tajani's speech we had the first panel of discussion which was moderated by Mr Roland Freudenstein, (CES Deputy Director) and comprised by Mr Brian Hayes (Ireland's Minister of State in the Department of Finance), Mr Joachim Pfeiffer (CDU/CSU Speaker on Economic Policy of Germany), Mr Peter Nyberg (Commission of Investigation into the banking system of Ireland), Mr Colm McCarthy from the School of Economics in UCD (University College Dublin) and Mr Dan O'Brien economics editor in The Irish Times.
This panel focused in discussing the position of Europe in the world economy and how to win opportunities through stronger economic governance. Mr Pfeiffer addressed the issue from a German perspective and he added that consumption in his country was one of the pillars of growth. Mr Nyberg said that European authorities were not powerless in dealing with certain problems but some supervisors in the ECB did not see that anything bad was going to happen. Only a handful of people had an idea of what was coming "but they could do nothing about it."
Mr Nyberg suggested that to avoid future crisis, we need to educate a new generation of bankers, that will allow and prepare the banks in similar situations in the future to take the losses. Mr McCarthy agreed with the fact that Europe has just a currency but not a monetary union and that the eurozone design is "flawed." He suggested that the Maastricht Treaty must be revisited, that we need market discipline and better supervision as complimentary measures to a currency union.
Mr O'Brien stressed that "we do not know the magic formula for growth and what mix of policies with generate growth," bringing examples from the north and south Italy, as well the east and west Germany regions and the economic differences between them. The panel concluded that the Fiscal Treaty is not enough to deal with the crisis, that we need to revisit the ECB and its roles, we need a stronger EU Commission and above all that European politicians should not dismiss people and ignore them. The issue of a European Finance Minister was also discussed and if such move is a threat to European economic diversity.
A lunch break followed, before entering the room for the second panel of discussions that was opened by a key note speech by John Bruton, former Taoiseach of Ireland and Ambassador of the EU to the USA. Mr Bruton started his speech by reminding the audience about "the many discouraging moments" that Europe faced in the beginning of the Single Market. But as it took a period of time to create a relative functioning Single Market, "we should look back at our experiences from that and apply them in our problems with the single currency." He suggested that Europe needs also a single market for Banking and that we rely too much on the banks for credit, while there is no European bond market; the banks are far too big. "We need a Europe wide investor protection, but be careful not to drive business out of our continent," he said.
Mr Bruton also mentioned the case of certain groups of people that will lose out from the development of the Single Market and they know who they are, that is why they are quick to take action and stop any development; on the contrary people who will benefit from the Market, do not know or realize it until it is too late.
Then he joined the rest of the panel, the moderator Mr Peter Ehrlich (Financial Times Germany), Mr Raymond Gradus (Director of CDA Research Institute, the Netherlands), Mr Eric Loeb (Vice President, International External Affairs at AT&T), Mr Maurice Thompson (Vice Chairman CITI Europe, Middle East and Africa) and Anthony Foley (Senior Lecturer, Dublin City University Business School). This panel debated on the options of Europe to bounce back from the crisis and the role of the Single Market as a key to growth.
Mr Ehrlich started the discussion by stating that recovery can happen only if the Single Market is used in every EU state, but the problem is that member states do not really abide into what they agree. Mr Foley agreed but he added that this is a problem not only in Europe but international, bringing as example the Doha round negotiations. He also mentioned that another problem is protectionism, meaning that EU member states keep certain sectors out of the Market on purpose. Mr Gradus added to the debate the issue of taxation rules on European level, while Mr Bruton noted that if we create a single bond market, we will need a single deposit scheme across Europe.
Later Mr Foley argued that in 2012 we have yet a Europe wide solution and Mr Bruton noted that certain conflicts of interests are presented as conflicts between countries. Mr Ehrlich following that statement, questioned why things that are discussed during the EU Council meetings are not explained to the people. Mr Loeb said that Europe does not need any more policy statements by its leaders, "we have already so many on the self!" But Mr Bruton appeared more harsh with the ECB officials than Mr Nyberg earlier and suggested that people in the central bank did not read certain protocols,"they were given a task by EU policy officials, but they did not do their job!"
The panel also addressed issues like the inability of Governments to borrow in the current climate contrary to the multinational corporations. They discussed the taxation harmonization across Europe issue that is sensitive to Ireland; Mr Bruton and Foley stated that this will be bad for Ireland and that competition among states is good, while Mr Gradus that supported this suggestion clarified that he supports the harmonization of the basis of the taxes, not the tax rates. Other conclusions by the panel were that we need an integrated Europe to deal with the multinationals, European citizens must start voting as Europeans and make EU more democratic and that because of this crisis there has been far more European integration in the last two years than in the past fifteen!
After a short coffee break we returned to the debate and the third panel of discussions, moderated by Mr Christophe Leclercq (EurActiv founder and publisher) and its members; Mr Richard Bruton TD (Minister for Jobs, Enterprise and Innovation of Ireland), Mr Danny McCoy (Irish Business and Employers Confederation) Mr Ciaran O'Hagan ( Bond Strategist at Societe Generale) and Mr Kimmo Sasi ( Chairman of the Finance Committee in the Eduskunta, Finland).
The panel's discussion focus was on the dilemma of boosting competitiveness while enhancing social Europe. Mr McCoy noted the importance of the native multinational companies, but also the issue of Europe blocking accession to any potential; a situation that is visible by the scandal of high youth unemployment! Then Mr O'Hagan stressed the issue of rating agencies and how they rate countries; he suggested that new criteria for ratings must be introduced like social cohesion and demographics. Mr Sasi commented on the Finnish system of income and high value tax and how it resulted in good social services.
Then the debate moved into the labor flexibility issue and the permanence that leads to security of jobs and social security in general. Mr Bruton stressed that the diversity of the European economic models is actually Europe's strength. "With a few more billions of people entering the capitalist system from China, India and eastern Europe," he continued "innovation and labor flexibility is essential." He also pointed the need to encourage people in funding their own pensions, due to Europe's decreasing demographics. Mr McCoy supported that Europe's social model is unsustainable and "the younger generation will realize that we have to deal with it; labor flexibility is going to arrive!"
The panel also questioned the age of retirement limit while all speakers agreed that there can be no more luxurious social security, with only "effective but not excessive benefits" as Mr Sasi said. They discussed about the need to be daring in reforming social policies, as they holding back growth. The role of the unions was also taken into consideration while Mr Bruton stated that "European welfare state is doomed," but the reforms must be done gradually and in a humane way. The panel concluded that we need different types of social contract, we need to develop new models and to promote creativity and entrepreneurship within the education system.
The third panel closed the first day of the Economic Ideas Forum, with the much anticipated second day that includes a speech by the Taoiseach of Ireland Mr Enda Kenny, already being in the participants' minds.
Monday, April 16, 2012
One would think why so far China was not already a global superpower; well there are many reasons for that, mainly internal. But now the Chinese are embracing capitalism, they are playing the westerners' game, and they are good at that. So inevitably America and Europe are afraid of China challenging their hegemony.
China has larger population than Europe and America combined and a massive landmass with lots of resources. It is a serious contestant in foreign policy in Asia, but they also infiltrating Africa, a region that was traditionally under European control. Is this going to bring Europe and China in a headlock? Well potentially yes, but it does not have to be as dramatic as the media appear it to be. We are supposed to be allies with America but we are also their competitors. Does that stop us from closely cooperate with them?
Europeans have invested heavily in China all those years, and recently the Chinese are doing the same in Europe. They bought the Piraeus port in Greece, they are building car factories in Bulgaria and they are investing in Ireland too, as well as in many other EU countries.
I support foreign investments, but I am also wary of them. Our leaders tend to rely solely on them and they are becoming lazy. Yes it is great to attract foreign investments from other countries and multinational companies, but you must use the income of funds to invest and create a sustainable growth and economy; for when the time comes for those companies to relocate elsewhere, somewhere more profitable. Because that is what those companies do; they are searching for the best and most profitable destination and as competition out there is fierce, investments can flow for some years and then relocate in another country with cheaper workforce.
So what do you do? Once you better the living conditions of your population and their salaries go higher, those investors will possibly leave your country. But if you have used their money wisely all those years that they have been investing in your state, then you can establish home grown industries and technologies. And in some cases you maybe become investor in other poorer countries; the trouble is that some leader's are so corrupt that instead of doing this, they are absorbing those funds for personal use, or to perpetuate their rule in their countries.
The other side-effect I fear, is that once you allow others to invest in your country then inevitably you are allowing them to influence your internal and external affairs and policies. In order for someone to invest huge amount of money in you, you got in return to play by their rules in some key areas that interests them. So if the Chinese are investing in many EU countries, and with no real unity in most policy areas among them (as we have seen many times) can the Chinese "play one against each other" later on? In other words, can China, as America was doing all those years, influence European politics indirectly?
Of course they can, and they will. We have been doing it in Europe and other regions of the world for our benefit. The key issue though here is, that if Europe is truly united, there is little we have to fear from this development and we can use it for our benefit. Besides, China has a great interest in Europe, and we have asked their assistance to deal with the eurozone crisis recently: so we are already close partners in a way. We need them as much as they need us and they know it.
I personally welcome China’s rise, but of course we in Europe need to stand united when dealing with them. They are after all (still) the most populous country in the world, and individual European countries of around 10 or 20 million each-never mind the smaller ones, have a clear disadvantage. With a Europe of half a billion though, things are different. Besides, isn't that the main reason of European integration; to counterpart the rising challenges from the continuous changes that are taking place, with the emergence of new markets and economic powerhouses on the planet.
We are seeing countries like China, Brazil, Russia, India and South Africa, the so called BRICS entering the economic landscape of our world. I welcome the rise of these new economies, to break the monopoly of the West notably America. Europe has been their lap dog since WW2, and we barely have foreign policies of our own, if America says otherwise. Their influence over Europe is economic, cultural, political and social. They have influenced our lives and public opinion through their movies, products, press, TV channels and programs, but also dragged us in many wars for their benefit only. The wars in Iraq and Afghanistan are mainly based on America's foreign policy and interests with almost all of Europe involved, with exchange of money, investments from America and other "favors" which I dread to imagine what they are!
Europe is in a way obliged to support America in almost everything and in the case of China, America fears their potential challenge on military supremacy. Their interests in the Pacific that they had monopoly since WW2 are important to them, as well as supporting their vessel states of Japan, South Korea and Taiwan. Especially over the last one, there is a real concern for a future conflict. So Europe weakens China's military development, or at least is postponing in with its arms embargo. I personally do not see why Europe must get at odds with other countries or regions to safeguard America's favoritism and influence. Why do we have to get in odds with China, in order to favor America? We have been doing the same with Russia and our relations are on a roller-coaster. It could have been different if we had a more independent foreign policy.
Allegedly America is "protecting" us from the threat of Russia, China, Iran and the Islamic one. But if Europe was allowed to develop its own military defense that would not be necessary. Besides there are many in America that do not want to "protect" Europe at "their expense" and as for Russia I do not think they are a real threat anymore, as long as we do not get in their nostrils and side always with America. Like China they have a great interest in us as we are their primary oil and gas consumer. Why destroy us? We could still be allies with USA but that should not mean being their lap dog.
I wish to see a multi-polar world and break the monopoly of the Americans and the three main European powers (Germany-France-Britain). Then the world will be more equal and fair in my opinion. But only if Europe unites in some sort. If not, then we are going to be just a play-field and chess-mat for the big players of the future, like China, Russia, America. We are going to be a profitable market for them so they can trade, sell their goods and become richer. But we will have no real influence in the world or towards those superpowers! How can you safeguard your interests like that?
If we have more countries, or block of countries competing with America and Europe, not in an ideological field like we used to have with the USSR and communism, but rather in innovation, development, finances, military and politics, we will have more voices in this world. America and the rich European elite countries won't have the monopoly in this world and its resources, thus we will have more democracy and equality in our planet. If Brazil in South America, China and India in Asia, South Africa in Africa, together with other economic blocks like ASEAN, MERCOSUR, AU and so on get more say, then the established western powers can not behave irresponsibly, arrogantly or like bullies as they have been doing for some time now. They will have strong opposition and this can be for our benefit too. Because small European countries also suffer from the monopolies of America, Britain, France and Germany.
The emergence of China, might be good for the smaller European states; because if the big powers of Europe wish to compete with them, they might be forced to form an ever closer union between us, and speak with one voice to the world. In other words, include all the smaller states in the effort to start being more competitive, taking initiatives and having a voice in the world scene. That could mean that Europe can become like America, a kind of federation that living standards can be of the same level everywhere with the same opportunities for prosperity all over the continent.
Or it could be for the worse, if the European elites wish to replace the cheap production of the Chinese workforce by creating a two tier Europe; the rich north and the poor south, with lower wages and weaker economies. The poorer states will do what the Chinese were doing until now, work to produce cheap goods for the rich states. There are many that fear this, especially in the hardest hit by the current crisis states in EU like Greece and Spain and other southern European countries. Is that what the current economic crisis will lead to? Not necessarily, not if the smaller states start taking a united stand against the three European powers and take initiatives within EU.
There are those who claim that salaries will be cut all over Europe, so that Europe can start producing again and attract investors with lower salaries for its citizens, to compete with China. What started in Greece they say, will spread all over Europe; Greece is just the "guinea pig" and the beginning. All European countries will follow sooner or later. Nevertheless it is obvious that these are certainly indications that life for a worker in Europe will be very different in the future because of the competition rising from China. Perhaps it was about time for us to get a kick up the back-side and stop relying on bubble economies and the markets and re-industrialize our countries.
There is of course the threat and possibility of war between all of the current and emerging powers. But haven't we been in a constant war anyway? Especially America and its European allies. Over a decade in Iraq and Afghanistan, and a brewing conflict with Iran just to safeguard America's interests. Perhaps if there were more military powers to threaten America, they would not go to war as easily in the first place.
To conclude, the rise of China certainly brings many challenges for Europe in the future, but one thing is certain: we can not keep blocking other regions from prospering and developing. We can not afford the effort and we can not keep dragging the development of the human kind all on our own; we need to bring others on board. Besides, it is only ethical to do so. There will be certain challenges that will come with this, but we can definitely get over them if we accept the fact that we have to face the future in some form of union or federation. Europe must start speaking with one voice in the world. Keep holding on to old imperial and nationalist complexes, is not the way forward; learn to still be a national of an ethnic group while belonging in a international political entity I believe is the way forward. We do not want to lose our identity, nobody wishes so. But democracy can exist in a European or international level if only you allow it, believe it, support it and work for it.