Is enough, enough?
As stated by Barbara Kolm, an Austrian economist “The European Union’s irony is quite humorous. As the EU is the biggest and right now the most expensive peace project, however because of how economic unions operate there will inevitably be social unrest.” Is it finally time to realise that economic union level integration is not a good idea?. The largest and most successful Economic Union, the European Union (EU) has exercised this level of economic integration for 26 years now, and it seems it seems to many that it’s time to come up with a better plan for the future of a peaceful Europe.
The current sobering truth is that, in 2019 there is precisely 48,191,000 known unemployed people in the EU who are facing truly desperate situations. For around a decade EU officials have addressed the economic downturn of the EU with consistent single-mindedness. With its implementation of severe austerity, in an attempt to combat though’s countries with the largest debts, like Portugal, Spain, and Greece. How well is this working?
After going through a six quarter long recession back in 2013, leading indicators show a possible slide into 2019 as indicated by a downturn at the end of 2018. The unemployment rate has also been an average of 3-3.5 percent higher than most top tear nations, including China and India. For some specific coutures in the EU unemployment rate are or have been greater than levels seen in the Great Depression – 20.6 percent in Greece, 16.3 present in Spain and 10.9 percent in Italy to name a few. And on average the unemployment rate on youth is around double the countries average.
These sobering truths have not been gone unnoticed. Nobel prize winning economist Paul Krugman expresses, in a New York Review of Books article that in the International Monetary Fund (IMF) a report from October, that simply apologises for the failed use of the austerity recommendations in the last few years. The October report shows that the countries that were forced by the austerity measures by the EU experienced steep downturns in their economies, going, achieving the exact opposite of the predicted/ aim goals. Even with this apology many EU officials are seemingly convicted of the infallibility of the failing theories on how to deal with these economic issues. As Mr. Krugman put it, in the EU “the beatings will continue until morale improves.”
Is the EU democratic enough?
Consider Portugal’s situation, with its unemployment rates at harmful levels. Also the economy is predicted to contract by 2.3% for the third straight year of contraction under the austerity policies. These several austerity measures that the nations Constitutional Court struck down was enacted by the government in compliance with the European Commission requirements. This provoked Commission officials to pressure Portugals government to ignore the ruling under threat of losing badly needed funding, in that causing the conditional crisis. This way, EU officials are injecting themselves into the governance of member nations. If this does not evolve, ordinary people have no real affect in the say on how the nation should operate. Peoples lives who are seriously affected lack the democrat accountability, and this also affects the system as a foundation.
Looking back at the EU’s founding purpose. The EU’s original main political objectives include: enhancement of mutual prosperity and enhance security, and to reduce political tension after centuries of animosity. And to give people of the EU the convince of one currency. Mutual prosperity is arguably coming along nicely. However for political tensions, because of the system and the officials of the system responsible for the EU’s and also specific nations faltering economies, but aren’t directly accountable to the 40 plus million unemployed people in them. This with the convoluted miscommunication of the EU’s system further exacerbates those tensions rather than alleviating them.
The convince of one currency? This objective is curious, as by giving up a nations currencies, member counties who might experience wage inflation are retracted the temporary action to deflate their currencies value to make exports cheaper and more attractive to foreign markets. Moreover, countries that experience an economic tough or worse a recession cant create safety nets for people who are unemployed or who face extreme poverty, as they have no real power in currency polities. The concern for such value manipulation may lead to runaway inflation and interest rate have been proven to be unfounded. An example in the United States, the Obama Administration enacted a sizeable stimulus, however interest rates have remained at an all time low, and deficits have gone down to half what is was at the deepest sections of the 2009 US recession.
The risks and costs in the economic union style integration is enormous. One problematic example, fiscal debt or banking problems in lower tier countries like Greece or Portugal have catalysed major crises for the EU. In a simple example, comparison in the US, if states such as Louisiana ,Rhode Island or massive California, were to go down, its would merely a ping on the radar in comparison to the US. However because of how the US system runs it requires a substantial power transfer to the centre.
The likelihood for an effective EU integration are slim to none. For the EU to succeed with the current economic union type integration it would need a sizeable political foothold at the centre of tax, control fiscal policy, and create a EU wide safety net capable of protecting people in a downturn. On top of that the centralised positions of power would require to be accountable in terms of voting and not appointed.
The prospect of a United Europe would be favourable however, It took the US the better part of 80 years and not to mention a Civil War to complete the successful Full Integration, transitioning from the loose confederation of colony and then states into a true Full Integration. And not to mention the deep cultural differences and centuries-long history of wars and animosity.