By , July 4, 2014 9:51 AM

By: Kimon Valaskakis
May 30 2014


MONTREAL — In the elections for the new European Parliament that concluded last Sunday, a Euroskeptic tsunami swept over the continent. Parties heavily critical of the European Union made major electoral advances, particularly in France, Britain and Denmark. Important protest votes were also registered in Austria, Hungary, Sweden and Greece.
Why is this important for Europe?
European integration was initiated after the Second World War by the likes of Robert Schuman, Jean Monnet and Konrad Adenauer, with a view to preventing more bloodshed and betting on shared values. It started with a six-nation economic community, and developed to its present 28-member alliance representing the largest economic entity in the world.

Within that grouping, 18 countries have unified their currency in the so-called euro zone. The latter has been plagued by mismanagement and wrong-headed policies. The larger European Union has been challenged by a return to nationalism, a revolt against immigration and general complaints about poor governance.

The potential collapse of the European Union could lead to the same kind of fragmentation that contributed to the Second World War and subsequent violent conflicts in Europe — and must be considered very dangerous.
Why is this important for the world?

The European experiment is the first example of a pooling of sovereignties to create a larger political union with a common flag, passport and Europe-wide standards. As such, it is a prototype of a possible world federalism, ardently wished for by those who believe that globalization must be tempered by some form of world governance.

If the experiment were to fail, then the larger objective of a better-managed world could be set back decades. Europe is too big, and too important, to fail.
So what needs to happen now?
There are two options.

First, rein in the process of unification, put it in reverse and return some powers back to the national countries.

Second, intelligently expand and reorganize the shared powers, develop the common institutions, strengthen European democracy and harmonize fiscal and monetary policies. In a slogan, more and better Europe, or no Europe at all. This is the motto of the Euro-optimists.

In my opinion, the first option is doomed to failure. A return to 28 nation states, each with their own currencies, taxation policies and widely different social safety nets, would exacerbate tensions and is completely incompatible with a globalized world where interdependence — wished or unwanted — is the new reality.
With giants like the United States, China and India, a “Little Europe” would be completely marginalized and would lose any hope of retaining world influence.

The second option, the reinvention of a better, more organized, reinvented Europe, is the preferred path — possibly the only path. Part of this would require giving the European Central Bank a much wider mandate, similar to the one of other central banks that have a responsibility to promote growth and employment. The ECB’s current mission is almost entirely focused on controlling inflation — a non-issue at the present time, since the continent is threatened more by deflation. Reinvention would also require giving up the completely counterproductive austerity policies that have wreaked havoc in countries like Greece and Spain. With over 50 per cent youth unemployment, the remedy has proved to be much worse than the disease.

European reinvention should be a global imperative. With one-quarter of world production and with rumblings of wars of the past (Ukraine, etc.), Europe must, once again, be a high priority for the world as a whole. A sustainable, democratic Europe is good for the global system. A balkanized, nationalistic Europe conjures up nightmarish visions of a shameful 20th century, with its two world wars.

Kimon Valaskakis is president of the New School of Athens, a Montreal-based think tank on international affairs. He is a former Canadian ambassador to the OECD. He is the author of a new book, entitled : BUFFETS AND BREADLINES : Is the World Really Broke of Just Grossly Mismanaged ? (Amazon.Com)

Kimon Valaskakis Ph.D
Ambassador of Canada RET
President New School of Athens
Professeur Honoraire Université de Montréal

[Article was also published in The Montreal Gazette]

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