European Union
Can the European Union hold? Should it? Europe expert Roy Ginsberg says yes, and explains some of the whys and hows: Predictions of the EU’s demise are exaggerated by pundits and naysayers alike. Instead the EU and the Eurozone are like- ly to morph into a more integrated “hard core” of members surrounded by concentric circles of associated and partner countries. There could be a British exit from the EU and/or a Greek exit from the Eurozone. Neither is desirable. If Greece defaults and leaves the Eurozone, a devalued drachma would be introduced that could revive growth, but with huge and painful adjustments across Europe. However, a smaller and tighter union would emerge to constitute a more optimal size, yet still operate in close concert with affiliated neighbors. Threats to European stability from within and without are not new: the Cold War, the Arab oil embargo, and recent transnational terrorism are examples of security threats to which Europeans were forced to respond as a group. The EU is still a strategic asset for members to respond collectively to Russian expansionism in Eastern Europe, illegal immigration, and cross-border crime and terrorism.
A momentous challenge for the EU is to jump-start the European economy. Addressing the sovereign debt and bank- ing crises, anemic growth, high unemployment, and income inequality is crucial to staving off political extremism born of longstanding intolerances and economic hardship. Such hard ship fuels popular opposition to government austerity policies designed to reduce debt by cutting public spending.
Austerity that is too severe erodes social cohesion. Moreover, the bifurcation of the body politic into far left and far right political parties hollows out the political center and middle class. The devil is in the details when striking the right bal- ance between austerity and social cohesion. Already Europe has seen a surge of anti-immigration rhetoric and violence, the rise of anti-Islamic sentiment, and a resurgence of anti- Israeli/anti-Semitic sentiment. Few in Europe want to return to the period of the 1930s, when economic depression gave rise to Fascism.
Deflation and high unemployment are not unique to Eu- rope, but what is unique is that the EU has set up a monetary union, the Eurozone, without fiscal and political union. The members have a common currency but without concomitant political oversight and legitimacy. Member states cannot de- value their currencies to gain competitiveness, because all members replaced their own currencies with the euro. At the same time, the Eurozone places caps on all members’ deficit spending, even for governments seeking to increase fiscal sup- port for depressed areas.
No one knows with certainty what the future holds for the EU, but for 60 years it has earned a proven record of unprece- dented interstate regional cooperation. I maintain that it will remain a zone of peace and security in a far less secure and sta- ble neighborhood, but will need to adapt to a changing world. • Roy H. Ginsberg is a Skidmore government professor who also holds the Jean Monnet Chair in European Studies. His latest of nine books is The European Union in Global Security: The Politics of Impact.
SPRING 2015 SCOPE 19
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