Consultor de Marketing Digital y Comunicación en Pamplona

Etiqueta: Recession

Will the EU model survive?

Every country is very busy triying to cope with its economic and financial difficulties. For this reason, there are issues that have lost their prominent position in the political agenda. It seems to be the case of the European Union project, which is living in a nightmare from the last three years, when some countries rejected the Constitution.

europaeuropaBut despite big problems, before the crisis everybody agreed that the EU was an outstanding model of economic development and transnational cooperation. In fact, with the exception except those countries that wanted to live isolated, the waiting list to become a member of the Big Europe was very long. Even we can remember the discussions over the integration of Turkey. What happened? That Europe only exists for the Eurocrats. The European project is not leading any great economic transformation and does not play any role as a superpower. And in the middle of the crisis, several countries think seriously on the utility of being a member of the EU.

This happens to a majority of the new members of the European countries, the Central and East nations which have been integrated recently. A brief from the Centre for European Reform has analysed the question and offers worrying conclusions. “The EU’s new member-states have been hit hard by the credit crunch and collapsing export markets. The Central and East Europeans sense that their post-Cold War growth model – consisting of liberalisation and EU integration – is broken”.

In New Europe and the Economic crisis this think tank considers that the integration has left those countries in a poor situation and that the EU authorities do not have credibility to helping in the recovery.  The revival of the State economy is contrary to the principles proposed by the Lisbon Agenda. This strategy is oriented to “liberalise and modernize economies”, but now governments are struggling to maintain their statu quo. “The legal framework for the single market is under threat of being weakened”. According to the report, Eastern countries need more support from the big Western European nations and feel “they do not pay sufficient attention to their concerns, for example about Russian bullying of neighbouring states or the costs of meeting EU climate change targets in poorer countries”.

What does it mean? Disenchantment on the European dream is extending. Several political leaders in East and Central Europe are returning to isolation and reject the growth model they have followed sin the 1990’s. This situation adds more argument to euroskeptics who defend that the EU is only an artificial entity created by enlightened politicians who were afraid of a third World War. As political stability is grounding in the old continent, may be we will not need the EU anymore.

If recession is not the problem…

One of the most outstanding advocates of the free market during the last ten years has been the Swedish Johan Norberg. Since he published In Defense of Global Capitalism, a best-seller of the new liberalism, Mr Norberg argues in every forum about the need to free and free the market forces. As liberalisation does not work and manages to a big financial and economic crisis, this prophet tries to give an explanation which does not deny the liberal creed. According to him

«As the Austrian economic school taught us, the recession is not the problem, the boom was the problem and all the mistaken investments that happened then because of cheap money. We won´t be able to start again and see new companies start expanding and hiring until bad investments are terminated and capital is transferred from the unsustainable to the sustainable».

Johan does not want to recognize that the real problem is the illusion of thinking that the liberal focus would warrant an eternal prosperity thanks to the free and intelligent decisions of the economic man. The free and intelligent decisions of the economic man have been responsible of the boom and the subsequent crisis. I do not understand why the market forces are going now to make sage decisions when in the last decade they have been making a lot of mistakes. The difference was that before the crisis, people won disgusting amounts of no decent money. The best for them, but no for everybody. Now they have caused the worst for all, including them. And who is rescuing? The dammed public sector.

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