Friday, 15 March 2013

A summit with sense

The choice is between
a German Europe
and a
 European Germany
The EU summit just ended in Brussels, the first one attended by freshly elected Prime Minister Muscat, has been smooth and positive unlike many recent summits where strong disagreements led to disharmony or dirty compromises.   

The last summit which involved agreement on the EU Budget 2014 - 2020 was acrimonious and the Budget deal agreed does nothing to push EU competitiveness in the world forward, nor does it contribute to more social cohesiveness.  It is with good reason that the European Parliament is refusing to endorse such Budget.

It would be an exaggeration to suggest that the positiveness had anything to do with Muscat's presence.  But it is refreshing that finally European leaders seem to be moving along the trend started since President Hollande was elected to the French Presidency last May, that austerity alone is counter-productive.

Rather then austerity I would rather term the needed sacrifices as restructuring of sectors which have lost competitiveness coupled with investment in areas targeted to produce economic growth and employment.

It is refreshing as well that the EU leaders have agreed to a  summit next May focusing on Europe's energy policy.  Declaration that all Europe should be connected to the European grid and gas network by 2016 would indicate a possibility to accelerate the gas pipeline linkage with the continent with EU aid and this would solve transportation problems or reduce its cost.   It might even be possible to reduce the gas storage requirements.

Allowing more fiscal flexibility to countries that are successfully restructuring makes sense as long as these countries continue working towards recovery of fiscal sanity by the joint effect of economic growth and economic restructuring.   Rigid applications of fiscal calendars are often  counter-productive as they only lead to higher unemployment and waste of resources needed to generate growth.

What I still need to be convinced of is whether the German block countries ( Germany, Austria, Netherlands, Finland and others) are finally accepting that they have a social and moral obligation to speed up the restructuring process by taking steps to reduce their surpluses and generate higher internal demand which would translate in imports of goods and services from restructuring countries.

In the end the healing process for Europe's economic problems cannot be based on the Germanisation of the whole continent.  It is much more productive, effective and in line with the objective of an 'ever closer Europe' to have Germany ( and its allies in the German economic block) properly Europeanised.

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