Jan. 5, 2014 5:20 p.m. ETThe great paradox of the euro crisis is that while political leaders agree the solution lies in “more Europe,” voters are becoming increasingly disillusioned with the European project.
Over the past four years, euro-zone governments have taken remarkable strides toward more integration, including binding new fiscal rules, greater European Union oversight of national budgets, the creation of a common bailout fund, and the creation of a banking union that will allow Irish officials to check on the health of German banks and Portuguese officials to order a French bank to be shut down. All of this would have been unthinkable precrisis.
Yet polls suggest voters are unimpressed. Only 31% of citizens have trust in the EU compared with 57% precrisis, according to last month’s Eurobarometer survey. Support for the single currency, which until now had remained surprisingly resilient in crisis countries, has dropped sharply to 56% in Spain, 53% in Italy, 50% in Portugal and just 44% in Cyprus. Even in France, support stands at just 63%.
This is reflected in voting intentions. Euro-sceptic and extremist parties are riding high in the polls in France, the U.K., the Netherlands, Italy and Greece. Voters accuse the EU of not doing enough to avert deep recessions in Southern Europe-and of even making them worse. Opposition to the EU is also being fueled by anxieties over immigration, in particular the right to free movement of labor, a sacred principle of the EU single market.
In 2014, the EU will have to confront this paradox. Now that the economy is recovering, the euro zone’s focus will shift from short-term crisis-fighting to long-term growth and its biggest challenges will become increasingly political rather than financial.
The first big test will come in May with elections to the European Parliament; on current projections, these will result in strong representation for Euro-sceptic and extremist parties opposed to further integration.
Shortly afterward, European leaders in conjunction with the new Parliament must agree the appointment of a new European Commission, including a president to succeed Jose Manuel Barroso-a crucial decision given the central role the Commission plays in setting the EU legislative agenda.
How European leaders handle these challenges could have a greater bearing on the euro zone’s long-term prosperity than any decisions taken in the economic sphere. How will President François Hollande of France or Prime Minister David Cameron of the U.K., for example, respond to a strong showing by the Front National and U.K. Independence Party? Will mainstream politicians continue to make the case for “more Europe” or respond to rising Euro-scepticism by adopting a more confrontational approach to the EU?
The temptation for some may be to take the latter course. In a world of 24-hour media, few leaders feel strong enough to challenge settled perceptions. Indeed, national governments and parliaments are even less trusted than the EU, according to Eurobarometer. Besides, mainstream politicians have played their own part in stoking anti-EU perceptions: the rules of the Brussels game dictate that governments invariably present European affairs as a battle with a foreign power rather than a collaborative enterprise.
For many, this habit may be too ingrained to change tactics now, even as it fuels extremist support.
But Europe’s longer-term prosperity may depend on leaders having sufficient courage of their convictions to confront Euro-sceptic arguments head-on. After all, many of the claims made by populist anti-EU parties don’t stand up to scrutiny.
For example, it is simply not true that member states have ceded so much power that national politicians can no longer shape national destinies. Governments have given up the power to devalue and inflate away debts. They must also abide by euro-zone budget rules-although it is arguably the market that has imposed greater discipline. But national politicians still have full control over the most important levers of long-term performance.
They can choose whether to meet their fiscal targets through spending cuts like the fast-growing U.K. or tax increases like slow-growing France. They can adjust labor laws, speed up the administration of justice, liberalize service sectors, privatize state-owned enterprises, reform welfare systems, incentivize investment, reduce bureaucracy, tackle rent-seeking vested interests and punish corruption.
Similarly, the debate over intra-European immigration needs to be seen in the context of the wider economic benefits of membership of the single market.
At the same time, mainstream politicians should acknowledge valid Euro-Sceptic concerns and commit to reforms that would make the EU work better. For example, the EU has historically tended to regulate too much, placing unnecessarily heavy burdens on business. But the Commission is now committed to reducing red tape and has repealed almost 5,590 legal acts since 2005, according to the Centre for European Reform. But the deregulatory drive could be faster, cost-benefit analyses for new regulatory proposals more rigorous and national parliaments could be given greater powers to veto unnecessary rules.
What makes this task of winning back public support for the EU so essential is that it remains as true today as at the start of the crisis that Europe’s long-term growth depends on further integration-in particular further deepening of the single market.
The most urgent priority is to complete the liberalization of the services market, which accounts for 70% of EU gross domestic product. Too many activities, including transport, business services, telecoms, information technology and construction, remain constrained by national regulations and professional codes that restrict competition, increase costs and reduce productivity, with Germany among the worst offenders.
Similarly, Europe’s energy market remains highly fragmented even after two decades of efforts to foster competition. The creation of a dynamic cross-border investment market is hamstrung by the lack of a single European bankruptcy code. And while all European governments talk of their ambitions to encourage the digital economy, there has been only limited progress toward the harmonization of sales, privacy, intellectual property and consumer protection laws needed to create a truly pan-European digital market place.
But if the solution to Europe’s problems remains “more Europe,” the question for 2014 is whether it can find leaders still willing to make the case.
Write to Simon Nixon at simon.nixon@wsj.com
Corrections & AmplificationsEuropean Parliament elections are scheduled for May. An earlier version of this article incorrectly said they were in June. In addition, European Commission President José Manuel Barroso’s name was misspelled as Jose Manuel Barosso.
More: Wanted: Crusaders for ‘More Europe’
沒有留言:
張貼留言