Europe is facing unregulated globalisation

The EU is the great counterweight to authoritarianism, unilateralism and the law of the strongest

Europe is made of dreams, but it works with rules and institutions, the materials with which politics support the dream. With the new European Parliament’s constitution on 2 July in Strasbourg, a legislature has begun to defend the European model. The democratic rules and agreements on which it is based will be the focus of its political activity.

A model of freedom and full individual rights based on the social market economy, competitiveness compatible with respect for social rights and the challenge of sustainability in all its dimensions. European social expenditure is equivalent to 30% of the total product of the European Union (EU) and, although we are only 6.6% of the planet’s population, it represents 50% of the world’s social expenditure. The significant challenges facing Europe are more than ever linked to the consequences of globalisation that are accelerating but mutating. A Europe that is not immune to major centripetal trends.

We might seem to be witnessing the decline of an international order with standard rules and institutions that assign rights and limits to the exercise of power, based on a once-global consensus of norms and values. But this is not the case. Multilateralism, regardless of its health, is an absolute necessity. So is an order that promotes compliance with international law and serves, and must serve, as a standard safety net and a system of solidarity in case of emergency. The same can be said of the establishment of a framework that was able to identify the real enemy and work together, as Máriam Martínez-Bascuñán recalled with evident nostalgia on the occasion of the 75th anniversary of the Normandy landing. The EU’s loneliness in the face of the United States’ drift is more than worrying.

The Brexit and the rise of populism, the shift towards the Pacific of the centre of gravity of global geopolitics and economy, and the weakening of the Atlantic area are only part of Europe’s project’s threats.

The trade and technology war between the US and China has become a global trade confrontation that is being waged based on unilateralism and hand-to-hand combat. The growing international energy dispute looks similar. And the most severe thing is that recourse to the threat serves the enemies of the system, as evidenced by the success achieved by Donald Trump in Mexico, while, for example, the fight against climate change is stagnating owing to multilateral weakness.

In the economic field, the 2008 crisis generated a deep recession that has transformed the global production system. However, the new irresponsible unilateralism has set itself to tackle the limited measures deployed in a coordinated manner since then to correct the imbalances generated by financial deregulation, the risk of new bubbles and the instability caused by the financialisation of the economy.

The most severe aspect of the trade and economic crisis and wars has been the delegitimisation of democratic institutions and the multilateral order that emerged after the Second World War. It seems incredible, but China, the US and Russia are now heading in that direction. For Europe, the destruction of the rules is doubly severe. First, Europe has only one way of understanding and relating to the world: from multilateralism and respect for and compliance with international laws and rules.

Europe runs the risk of being left alone, defending compliance with the rules when it depends on that framework. To destroy multilateralism and regulations is to conquer Europe. It is not for nothing that failure to respect the rules is the best method of eradicating any democracy. It has taken two years of the American turnaround for a new and disturbing global landscape to begin to be recognised.

Europe is the great counterweight to authoritarianism, unilateralism and the law of the strongest. Europe’s delicate balance based on rules is also the dream of equality in freedom and democracy, and an open society. That is the only identity worth fighting for.

Secondly, because Europe wants to sustain its welfare model, continue to eradicate inequality and ensure opportunities for all. To this end, with its rules and from its institutions, it aspires to continue defending international trade, regulating the activities of multinationals and combating tax evasion, for example.

In this context, while the rules are being broken, European society is not fully aware of the scale and depth of globalisation’s technological and energy implications. And not only because it can be heroic to tackle certain challenges such as climate change with such devalued tools as multilateralism. The transition towards a green economy will be challenging if Europe does not recover some of the leadership lost in digitalisation and technological transformation – artificial intelligence, quantum computing – and energy – carbon capture, batteries and accumulation innovation without any discrimination of technology. And this requires more and better European policies. Europe is lagging in innovative capacity compared to China, Asia and even the US, losing competitiveness while productivity languishes.

The depth of change and the EU’s increasingly evident lagging in some areas are not compatible with maintaining the European model. Technological disruption in the labour market will completely transform it, forcing a rethink of benefit systems and radically different policies to ensure levels of equality and welfare in line with European standards.

The destruction of multilateral rules, totalitarianism and the weakening of democracy, digitalisation and globalisation in all its dimensions – technological, energy -, the loss of competitiveness and the economic boom in Asia, and what Manuel Muñiz and José María Lassalle have described respectively as “technological autocracies” and “cyberleviaten”, as well as an increasingly unstable neighbourhood – Russia, North Africa, the Middle East – is sketching an alarming future that we can only face, and perhaps lead, if we do so jointly from the principles and values of a European Union that must react.

Source: https://elpais.com/economia/2019/08/14/actualidad/1565797452_130413.html

Author:

Juan Moscoso del Prado is responsible for public affairs at Deusto Business School.