WEEKLY COMMENT 30-06-2016
By Barry Edwards
A Vision for Europe
The chaos that has occurred since the ‘Brexit’ saga is still being reflected upon and there is some time to go before we will see any real structure and planning to discuss meaningfully. While reading many of the comments about this world changing event, I came across a paper from the Austrian Institute of Economic Research entitled ‘New Dynamics for Europe; reaping the benefits of socio-ecological transition.’ It was published in March this year and did not seem to be publicised until now. It is basically a strategy for the EU to re-invent itself and it sets out how to achieve this in great detail. The paper is 150 pages with a very good executive summary of 17 pages which I recommend you read. If you click on the link below you can read or download the paper;
The extracts below give you an idea of the plan;
“The long-run success story of the European Union faces major internal and external challenges, some of them intensified by the financial crisis. Heterogeneity (different ambitions and ideals) is increasing and imbalances between Member States exist. The goal of an “ever closer Union” is no longer accepted and a shared vision of the future is lacking. Misperceptions about policy goals are blocking deep reforms. Europe has the strength and the ability to build a socio-economic model with distinct advantages, but seems reluctant to do so. Profound and coherent long-term strategy for Europe – based on a vision and guiding reform principles – is required.”
“The plan is to achieve the simultaneous accomplishment of three strategic goals;
- Economic dynamics include what is usually called income dynamics. It implies that an ever-increasing number of people benefit from the attainment of a broad set of economic achievements. An equally important component of dynamics is structural change and mobility (as opposed to the petrifaction of existing or inherited structures).
- Social inclusiveness implies that unemployment as well as income differences are low. Social, religious and ethnic conflicts are addressed. Life chances, education and capabilities are distributed more equitably; spreads in income and wealth are based on merit, limited to levels determined by democratically-based political decisions.
- Environmental sustainability demands that the planetary boundaries be respected. Technological, behavioural and institutional changes lead to an absolute reduction of emissions and resource use, to a level of safeguarding the resilience of key economic systems. This gives poorer countries scope for economic development and poverty reduction and allows the next generation to make choices.”
The detail describing how all this is achieved makes interesting reading and is not by any means purely a socialistic exhortation. The main theme is to redirect strategy towards reducing taxation on labour, increasing taxes on carbon emissions, removing fossil fuel subsidies and encouraging research and development and infrastructure investment. The reforms would substantially reduce unemployment, improve the economy of the EU and create a sustainable environment in 25 years. You will have to read the executive summary to follow how that is done but in my view the theory is very plausible.
The contributors to this plan believe that this new approach will stimulate business activity in the right direction, improve living standards throughout the EU and create a fairer society. Good economic management and concentration on education and new skills are also a key part of the strategy. It is definitely not proposing that a federal united states of Europe is established.
Whether it is possible to get all the countries in the EU to agree to a plan such as this or something similar is questionable but if they do not it is likely the union will disintegrate. It is not sustainable in its current form and the politicians and the people are very aware of the problems. It must be in the interests of the leaders of the EU to encourage discussions on this subject and gradually formulate a strategy that is acceptable to the majority.
There are moves to start the process of discussing the future of the EU coming from the current President of the Council of the EU which is the Slovak Prime Minister Robert Fico. He has already arranged a meeting of all EU members in Bratislava in mid-September and I am sure this Austrian paper will get an airing. Those with most influence in the EU are making it clear that there must be a concerted effort to engage the public in the EU debate to decide the future of the union. There is strong support as well for this approach from central Europe and the most northern members.
This may well be the beginning of the change of direction for the EU to make it more responsive to the wishes of the people and retain the original concept of the union of independent countries with a common purpose. If discussions like this had happened prior to the referendum, it could well have changed opinions and given some hope that real change was possible. One thing is certain; it would have been a big improvement on the debate that did actually take place.
That’s all for this week, more observations next week.