The European Union is at a
dead end. This is not because the Germans,
Italians, and French and the failing Spanish and
Greeks are at loggerheads about how to improve
their national accounts. The EU is ending because
it is hopeless: there is no hope, no program, and
no real plan to hold the union together or to
demonstrate why countries with different
traditions, laws, and senses of identity -
countries that have been at war with one
another for most of the past
three centuries - should now merge and embrace the
future together rather than repelling it.
The cultural and political debate has not
moved to the real question about the future of the
continent and its people. It is stuck in petty
bean-counting, constantly sustained by the lack of
a thrust for common trust in the union.
Certainly, here the southern countries
didn’t live up to their part of the bargain when
they signed on for the euro 20 years ago. For two
decades, some, like Italy, made no real effort to
improve their national accounts, and others, like
Greece, went as far as falsifying their bills to
suck more support from Berlin, via Brussels.
Others again, like Spain, Ireland, or Portugal,
were innocent enough to believe that a real estate
binge was as real as the bricks they used to build
their houses.
These are certainly true and
grave faults, issues whose solution has been
delayed for almost a generation. However, there is
also a flip side to this, which doesn’t excuse the
guilty PIIGS but does put the current European
difficulties into perspective.
In the past
two decades, Germany had a yearly trade surplus
with other EU members varying from around 80
billion ($101 billion) to 120 billion euros a
year. It was over half of its total yearly trade
surplus, hovering at 200 billion euros, larger
than that of infamous China, which has been
branded a currency manipulator by some in the US
press. Over a period of 20 years, with a
simplistic calculation, this could make a tidy
little sum: some 2 trillion euros in surplus (more
than the total state debt of Italy) accumulated
with other EU fellows and well over 4 trillion
euros with the rest of the world. This money is
certainly well deserved, and it is due to German
ingenuity and hard work. It rightly financed the
German reunification and bold industrial expansion
into emerging global markets.
But this was
also possible because of the poor performance of
other European countries. If Italy had paid off
its state debts, if Spain or Greece had invested
in real industries and not in cozy seafront villas
or ill-deserved pensions, the German trade surplus
could have been cut on both ends. Germany would
not have exported that much to other EU members
and exports from other EU countries, such as
Italy, with a similar industrial structure, could
have undercut German trade worldwide.
This
doesn’t mean that Germany misbehaved or did
something wrong: you cannot fault the hardworking
person for the sloth of the guy next door. And the
sloth of the guy next door certainly should make
the hardworking person think hard about going into
business with that man or woman, as Germans are
wondering now about holding a common currency with
profligate Southerners.
Yet this poses an
important issue because that sloth at the very
least created a market for the hardworking Germans
and reduced competition, and also because Germany
and the slob southern Europeans were bound to the
same currency, money that fit the Germans (or that
the Germans made fit themselves) and was both too
tight and too slack for the others. In a way, the
Germans could be faulted for manipulating (or not
manipulating enough) the common currency to suit
just their national needs, not those of other
countries.
It could be tricky and possibly
unfair to argue along these lines against the
Germans, but after all, for decades southern
Italians have used similar arguments to fault
northerners for their lack of development.
One can easily see a trickle of
anti-German sentiment resurfacing in Europe, and
this could become a torrent if Germany were really
to leave other Europeans to their destinies. The
consequences of a torrent of these criticisms are
unfathomable, but certainly not too favorable to
Germany.
Moreover, there would be the
bigger economic question for Germany in the
medium- and long-term future. Without an almost
captive European market and with many competitors
unleashed, what would become of German exports and
the German economy? Unlike Southern cicadas,
German ants like to think long-term, provided
frantic short-term encumbrances and pressures do
not cloud their vision. Besides, Germans may also
need to cast out their fate of destroying Europe,
one way or another, every few decades.
This alone should suffice to move the
present European debate and bickering from
accounting rules to a different level. The real
issue in fact is: We Europeans, North or South,
should tighten our belts by changing our lifestyle
and systems (south) or accepting we must foot the
bill (north), but for what? Humans accept making
sacrifices. Most are willing to strive for 20
years in school for the elusive hope of getting a
nice job at the end of it, yet they need hope, a
goal, or a project. What is the hope for
Europeans? There is none, and without hope,
without a project, there is no Europe.
In
1989, West Germans and other Western Europeans
accepted the German unification with East Germans
not out of economic calculations, but because of a
lofty goal: the union of Germany, something that
was taken away from Germans for half a century. If
only narrow political and economic calculations
were put in place now, Germany would not be
united, and East German Angela Merkel would not be
chancellor.
However, the German hope and
lofty goal had been at work for centuries. Europe
conversely is vague even as a geographical
expression.
A few years ago, Turkey was
about to be admitted into the EU while Russia was
shunned. Then European leaders were willing to
forget the old history that put Muslim Turks
against Christian Europeans (something that would
have given preference to Christian Russians over
the Turks) and to focus only on post-Ataturk,
a-religious Turkey and on Russia, seen as a filial
son of the communist USSR. Was it right, or was it
wrong?
Europe didn’t go through the
complicated debate to choose conceptually between
the two, as it touched nerves in every European
country. Was, for instance, Europe to recognize
religion as part of its tradition? Or should it
toss it away, trying to build on other issues?
This debate involves cultural identity, values,
ideals, and the very sensitive issue of where to
draw a line in the sand between Europe and not
Europe. This has not started in the meantime, and
it is so complicated that even if it started, it
could easily unravel the weak cobweb of ties
binding Finland to Portugal.
In fact, the
success of the EU was in carefully skirting
sensitive ideological issues and building on
practicalities and common interests. Here,
perhaps, there is the reason why Europe should be
together. The real motive for a possible European
unification lies in the enlargement of the world.
Europe broke the world's regional boundaries when
it started venturing on the seas and colonizing
the rest of the globe. The process that brought
the whole world together was boosted by the spread
of universalistic ideologies of communism or the
free market, and it was later bolstered by the
fall of communism and the triumph of American-led
globalization, traveling on the fastest bytes of
the Internet and mobile phones.
In this
global world, single European countries are bound
to count for less than a larger, united Europe.
Only a larger Europe can confront now and in the
future emerging giants like China, India,
Indonesia, Brazil, South Africa, etc. This larger
Europe would be convenient for everybody. Then
Europe should try to link as closely as possible
to Asia, home of most of those emerging giants.
Germany knows it and has been investing much of
its trade surpluses in Asia, and in China in
particular, in recent decades. It can carry on
doing it on its own, but it would be important to
establish direct communication routes between Asia
and Europe. These routes go through Russia or the
Mediterranean from China, or if goods come from
India and Southeast Asia, only through the
Mediterranean.
The ports in Turkey and
Suez then become crucial, and so do southern
European ports, such as Piraeus in Greece or
Taranto in Italy. Land transportation to and from
Asia in these ports could be faster and cheaper
than from Northern European ports. Some Italian
experts believe that land transportation from
Taranto could be at least 15% cheaper than moving
goods from any other harbor in Europe. These
numbers could be sufficient to reorient Europe,
building on faster and cheaper routes with Asia.
This could be economic incentive enough to
convince Germany to bite the bullet and shoulder
part of the present pain while taking the
political lead in forcing scallywag Italians on
the path of economic reform and political union in
Europe. Not only would a negative consequence be
averted (dodging the split of southern Europeans,
who would be made competitive by a cheaper
currency, that would mean no drop in exports), but
a positive element would also be added: faster and
better links with emerging economies.
Europe could be restarted from Taranto,
and there is some indication that this could
indeed be the case, as Rotterdam (the main north
European harbor) has closed a cooperation deal
with the Mediterranean port.
Italian
politics has been so far unable to focus on
Taranto’s potential, but after all they have
failed for 20 years to improve public accounts and
have been dragging their feet in taking decisive
actions even after the 2008 economic crisis
exploded in their faces. In theory, a European
effort could restart Europe from Taranto, a place
with huge potential, where the largest Taiwanese
(Evergreen) and Hong Kong (Hutchison Whampoa)
companies have already invested and are full of
hope. But the city is now teetering on the verge
of doom because of an over-polluting steel
factory, a symbol of the degraded state of the
whole of Italy. It would new hope, a new plan,
just like the European Union. But a plan for
Taranto would be easier than one for the EU, and a
plan could and should easily become a plan for
Europe.
Will this happen? The plan is
there, now it is up to the Italian and European
politicians and their own fuzzy calculations, if
they see a way out of the bean counting. So for
Europe, we dare say, it is either Taranto or
death.
Francesco Sisci is a
columnist for the Italian daily Il Sole 24 Ore and
can be reached at fsisci@gmail.com
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