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EU eyes way out of crisis

April 5, 2012

The euro crisis keeps dominating the headlines. But the EU is facing problems far greater than just the current financial turmoil. And the solutions are not getting any easier.

© Nico Vincentini - Fotolia.com straßenverkehr; einordnen; abbiegen; linkspfeil; abbiegen verboten; straße; durchgestrichen; asphalt; pfeil; pfeile; verkher; autos; rechtsabbieger; fahrbahn; geradeaus; weiß; weiss; schwarz; tunnel; naß; regen; rutschgefahr; glätte; beton; reflektion; spiegelung; schrägansicht; detail; verkehrszeichen; wegweiser; zeichen; tag; fahren; halten; blinken; blinker; lenken; gelb; umleitung; stop
Symbolbild Pfeil Richtung Straße rechts gerade aus linksImage: Fotolia/Nico Vincentini

After numerous crisis summits, EU ministers' meetings and rescue funds, it seems as if the worst part of the eurozone crisis is over. Both German Finance Minister Wolfgang Schäuble and European Central Bank President Mario Draghi have expressed cautious optimism. But there's no all-clear for the EU. Many politicians and experts agree that things are far from over yet.

Behind closed doors, many an EU diplomat will admit that the euro crisis has only scratched the surface of what actually are much bigger problems. The real crisis is not merely economic or financial but rather social and political.

One reason is that the EU is a patchwork of north and south, large and small member states, richer and poorer countries. The bloc's international standing has also suffered by its failure to find a solid solution for its current problems. Some critical journalists even depict Europe as a continent in decline - with an ageing population and outdated social policies.

Clear structure in Brussels

Polish Foreign Minister Radoslaw Sikorski sees the crisis partly as an opportunity. To seize it, the existing resources and key qualities of the EU should just be put to better use. He calls for closer political cooperation in the bloc. "What we need is a clear leadership structure and elections to select political leaders. At the moment we are organized like a multilateral institution of cooperation states," Sikorski said.

Radoslav Sikorski
Sikorski says the only way forward is further political integrationImage: picture-alliance/dpa

In order to change that, he suggests uniting the positions of the chairman of the EU commission and the president of the EU parliament. That future post could be voted on directly by all EU citizens. That way, decisions could be arrived at and implemented more quickly. Sikorsky's suggestion would be a further step towards the political union already promised back in 1992 in the Maastricht treaty.

One of the strongest advocates of such a political union is Luxembourg's Prime Minister Jean-Claude Juncker, who also heads the Eurogroup - the 17 countries that use the euro single currency. Juncker says that the lack of political integration and European solidarity is at the heart of the euro problem.

Euro symbol
The euro currency is only one of several crises the EU facesImage: picture-alliance/dpa

Sikorski is convinced that closer political cooperation will also strengthen the EU's influence abroad. As an example he cites the military potential of the bloc. "If we had a working political union, the EU would have some two million soldiers and nuclear weapons," Sikorski says, adding that "the common defense budget would be bigger than that of China, India and Russia taken together."

But currently, the financial crisis is still driving a rift between the EU member states. Solidarity and the common project of a closer Europe have in the wake of the financial crisis lost some of their appeal. Even worse: The bailout for Greece has strengthened old prejudices between the north and the south of the continent. The mistrust between the richer north and less well off south has increased.

But Alexander Graf Lambsdorff, head of the Alliance of Liberals and Democrats for Europe in the EU parliament, cautions that the North-South divide is overrated. He does not see the solidarity in the EU as being in jeopardy. As example he cites Estonia, which was granted EU membership in 2004. "Estonia has a GDP that's lower than in Greece, but the government has still called on its citizens to help pay for Greece. And except for Finland, I don't see a country further north than Estonia," Lambsdorff says.

Agenda 2010 as example

Poland's Sikorski sees things similarly. The conservative politician is convinced that the differences between north and south are not some unchangeable law of nature, but can be fixed. In the end, it's a country's politics that makes the difference, not its geographical location. Sikorski points to Germany's Agenda 2010 reform program that in the early 2000s aimed at reforming the social system and labor market. "If it hadn't been for those reforms and if the German banking sector had been weaker, then we maybe would be discussing the economic troubles of Germany today," he says.

Alexander Graf Lambsdorff
Lambsdorff pleads for more skilled labor to be allowed into the EUImage: CCK/Markus Sepperer

The real cause for concern for the EU is not geography but demography. Official statistics suggests that already by the year 2050, there will be 48 million fewer people of employable age. Some 58 million more will be over 65. If this trend is to continue, experts predict a decline in growth rates. This would in turn threaten the financing of the social system, pensions and health care.

Immigration as a chance

Lambsdorff assumes that the demographic change will lead to more competition for qualified and skilled labor from outside the bloc. "We will have to look beyond the borders of Europe. Just on our doorstep there are many young people that are waiting for a chance to live their lives here," he says. The big challenge here would be to have this immigration in a way that it will be "productive for society." How to handle immigration would be a crucial key for the success of the EU, he says. Linked to migration is also the issue of the bloc's policy on refugees - for years, that policy has been at the center of debate and controversy among the member states.

A political union, a more efficient way to use resources and an improved immigration policy - all this could get Europe in shape for the future. Another key factor for both Sikorski and Lambsdorff is the accepting of new EU members. Through enlargement, the EU could maintain and increase power and influence. "Our advantage over the US is that we are not a territorially limited project, that we are open for accepting new member states," Sikorski says. "The promise of enlargement is one of our most effective tools."

Author: Ralf Bosen / ai
Editor: Simon Bone

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