Studium Generale Universiteit Maastricht (inleiding en debat met studenten)
Gelegenheid: Studium Generale Universiteit Maastricht (inleiding en debat met studenten)(inleiding: artikel Gideon Rachman)
• I you want to have a debate on Europe today you will have to start with the crisis.
• Gideon Rachman wrote an interesting column in the Financial Times. He has always been extremely eurosceptical; he has always vilified everything European. He started his latest contribution explaining when he arrived in Brussels in 2001 he had these ideas about Europe. He thought that Europe was a bad idea, that Europe would fail and that Europe would fall apart. And now he says that he still believes these things, but he had to confess he’s no longer Eurosceptical. Why? Because if this crisis shows us anything it is that Europe needs to foster and to protect and to cherish it’s four freedoms: the economic areas created, the freedom of transportation, the freedom of travel, the freedom of capital movements. These are the four values of Europe. They maintain Europe in a relatively strong position in these very difficult times. And you see that all those who don’t fully participate in this are in deeper trouble than those who do. Those outside the Eurozone, even if they have the Sterling as their currency are in deeper trouble than those within the Eurozone. It is interesting to see somebody like him making this point, because it proves the point from the perspective from someone who doesn’t like the European construction sees that it is necessary.
• This brings me to my first point, perhaps one of the most difficult points. Rachman says that in practical terms European cooperation is necessary. In practical terms we need the internal markets to protect us from the outside pressures, in practical terms we need this currency, in practical terms we need to be able to travel from Amsterdam to Maastricht to Barcelona to Warsaw without being stopped at the border. But we don’t really like it. And perhaps this is one of the core issues we should be talking about in Europe. Why do we not like something that is so essential for the bearing of the construction of our society? It is a very interesting point and I don’t have an answer. Why is it so difficult to feel some enthusiasm for a project that has yielded so many good effects in the last fifty or sixty years? Why is it so difficult to have people like it and not just appreciate it for its value? People look at Europe in the same way they look at their dentist: you need to go there, it is good for you, but oh boy, we hate doing it. And somehow Europe has the same effect on many people.
• Another point Rachman made which I find interesting is that he says he don’t see the relationship between the internal markets, the currency, the free travel, etcetera on the one hand and peaceful stability and freedom on the other. We no longer intrinsically feel the relationship between the two. We believe that one can exist without the other. We believe that peace is a given, stability is a given, it has just fallen from the sky. It has been given to us by our parents and there’s no relationship with the economic realities we’ve created.
• Rachman says the market, the free market, free trade, anti-protectionism is not going into the nationalist direction. He says it’s fundamental for the way our society is structured. And I believe he is absolutely right. But the challenge to us is to make this visible to our citizens, to make it understandable to a larger portion of the population.
(Financial crisis/climate change crisis/energy crisis)
• I will try to explain why I believe the European model is the model for the future. And why I believe that if we are clever enough to organise ourselves in a clever way, that Europe is in the best starting position to be the continent were the social, economic and political successes are bigger than on other continents.
• First of all, what is the nature of this crisis? Many people compare this crisis to the 1930’s because it is something that is still in our collective memories. I agree with one journalist who wrote a couple of weeks ago in a Canadian newspaper that this crisis is more comparable to the 1870’s crisis. Why? Because this is a crisis of credit. In all aspects of the notion of credit, it is a crisis of credit. It is a crisis of credibility, of believe. We don’t believe in the system anymore. It is a crisis of credit because we have over credited our economy; we have taken to many loans. And this is not something that is done by institutions; it is done at a very personal level. Very often in a way that people don’t even know that their mortgage is a form of bad asset, is a form of bad credit in many countries. And this is coming on to haunt us now. Because the financial system, which is the bloodstream of our economies is collapsing because of too many credits. And we haven’t seen the end of it. We still don’t now the extent of the toxic assets still present in our financial system. That is the first credit problem we have. And this has a profound effect on how the economy works because if you have no idea of what your credit position is, you will be extremely reluctant to take more risks with giving credits. And this is one of the fundamental issues we’re facing today.
• The second crisis is the climate change crisis. I think this is the most daunting crisis we are facing and we face for generations. It is a direct threat to life on this earth and it will cause huge disruptions in our countries all over the world if we do not succeed in reducing our CO2 emissions. So this second crisis will ask huge structural reforms.
• The third crisis is the energy crisis. Energy prices go up and down all the time. They’re low now; they’re going to be high again in the near future. But it is clear that in some stage we will run out of energy resources and at least it will become extremely expensive, especially affecting transport.
• You could add other crises, geopolitical crises. The food crisis is another one we haven’t come to face. And the water crisis, which is perhaps one of the most challenging.
• The run for resources starting with water and fossil fuels will be one of the most challenging geopolitical problems we’ll face in the next generation.
(Effects of the crises)
• The effect of the fact that credit is no longer reliable will be that banks will try to concentrate on their home markets. They will want to know their customer, much more than in the past. So they will concentrate on markets they know. Until now you had perhaps two real financial centres in the world: New York and London. This will be diversified. You will get more financial centres in the world, and you’ll get banks concentrating more on the regions they know. This has huge effects for the way the financial world operates today.
• Secondly, when we talk about protectionism we tend to talk about the behaviour of producers and consumers within a certain market. Protectionism is ‘buy Dutch’ or ‘buy French’. But the immediate protectionist threat now is in the financial markets. Because you see banks because of their insecurity, withdrawing into national markets. There are some horrible examples of banks, RBS is one of them, getting rid of their most profitable markets because it’s not their home market. And concentrating on their most problematic markets, simply because it’s their home market. It doesn’t make any sense in economic terms. It is simply a panic reaction to these difficult circumstances. Eastern Europe does not have its own financial markets, financial systems, systematic banks. Those banks, even if the market is good, have the tendency to withdraw from these markets and go back to their home markets. This is hugely affecting Central and Eastern Europe today. So the protectionism we tend to overlook is the protectionism of the banking sector. It is an imminent threat to the global economy at this stage. I think it is inevitable that the financial system will restrict itself to its own region. I really hope that this means for Europe to Europe, and not the nations within Europe. Although I see the threat of this happening.
• What will the effect of the increased energy prices and of the climate change challenge? That transportation becomes extremely expensive. This also will increase the tendency to be in the neighbourhood or within your main markets. This is a huge challenge for the Asian economic system. How does the Asian economy work? It attacks raw materials from all over the world, contracts it to its own markets, transforms it into products and then ships it out again to the rest of the world. It will become increasingly interesting for producers to become more close to their markets.
(European model, model for the future)
• This is an opportunity for Europe. Because I do believe that we are as a society in the strongest position of the world. We have the best system, providing for those who can’t provide for themselves. We have the best system making sure people can get into education regardless of their backgrounds. We have the best system to help people take the opportunities they have been offered. Better than anywhere else. I believe this is a wonderful starting position
• We also have the best purchasing power in our markets and we also have the highest standards in our markets.
• The European market has become the most important market for consumer goods in the world. Everybody wants to be active in that market. If you then apply high standards in that market, everybody will want to produce according to those higher standards because that is the only way you can get into these markets. This is exactly what happened in Europe. Having high standards is a good thing when you’re the biggest market. The fact that we have this huge market is positioning us in the most favourable position to profit from developments.
• European integration is about the four freedoms as I mentioned before. But there’s a huge dilemma here. The tools we need to apply now in this economic crisis are national tools. The politicians addressed by populations in this crisis are national politicians. That is the focal point of the European citizens. They don’t want to talk to Europe when they want the problem tackled today. I don’t see this as a problem as long as national politicians have the sense of responsibility to coordinate these national efforts to the European level. So that what one does, does not infringe upon what somebody else is trying to do. So that they interblock whatever solutions. Whereas we need to interlock national solutions at the European level.
• I see a lot of criticism in the last couple of months, of the way Europe operates in this crisis. ‘Where is the Commission’, ‘Where is the European Parliament’, ‘Why don’t we see European institutions working the way they should?’ The answer to this is quite simple. This is not the time for making laws. This is not the time for creating new policy on European level. This is a time for coordinating national policies and for doing at the European level what needs to be done at the European level. But this is an executive operation, not a law-making operation. And that is why we see a lot of meetings of the European Council, we see a lot of coordinating at the highest level of governance and we don’t see a lot of legislative action at the European level. And this is what this crisis asks for. I do believe it would be wrong to see the executive role of Europe as a weakness of the European system.
• Another reason for believing in the strategic depth of Europe is that not only the core of Europe is strong; also the neighbourhood of Europe has huge potential. If you look at the possibilities in Eastern Europe and the Mediterranean, they are tremendous. They have a young population, increasingly educated, increasingly prepared to take part, increasingly open to change. I see huge possibilities, but I only see them if Europe is prepared to develop a policy which helps the spill over of what we have achieved to our neighbourhood. This is a huge responsibility for Europe. Under the condition that we can create a positive dynamic in that part of our neighbourhood, our future as leading region of the world is assured. At the same time I say, if we fail in that mission, we will fail also as a society to provide prosperity and economic outlook for our own population. Because our future and the future of our neighbours are interlinked. There is no way we can have permanent prosperity and peace if there is a permanent lack of perspective, unrest and anger in the world surrounding us. So I think this is a pretty hefty precondition for success.
(‘Are you Dutch or are you European?’)
• The question I’m asked more than any other today is ‘What are you now, are you Dutch or European?’ And it’s always asked in a way as if it’s a choice between one and another.
• I asked this same question to the Italian writer Claudio Magris, with whom I had a debate a couple of weeks ago. He answered: ‘What a silly question. It is like asking me are you father or are you son. I’m both.’ And this takes the wind out of the question.
• From an outside perspective we’re all Europeans. This might take the wind out of this question.
• The reason why sometimes this question is asked is because it is seen as a question of loyalty. ‘Are you loyal to us or are you loyal to Europe?’ ‘Are you a patriot or are you one of those cosmopolitans?’ It is interesting to look at this from this perspective. If you are nuances, you’re a coward. If you are pro-Europe, you’re anti-The Netherlands. I believe it is interesting to think why we need this antagonism. Why we fall into the trap of the neocons who said, in the words of George Bush, ‘when you’re not with us, you’re against us’. Why do we in human history always need this enemy image to create an image of our own? The neocon logic is not ‘when you’re not with us, you’re against us’, it is even worse. It is ‘if you’re not against them, you’re not with us’. I think this is the biggest trap for European society to fall into these days.
• Because we cannot solve our problems if we don’t do it jointly as Europeans. And we will not find a common solution if we see the other as having fundamentally different interests and thus being our opponent, and not with us in the same boat in a rocky sea.
• And this is for the first time since the Second World War people, and especially the middle classes, believe it is all down-hill from here. And as long as we don’t, as politicians and as a society, convince people that if we organise ourselves it is not necessarily down-hill from here. But we can create a new dynamic which can reposition us in an excellent starting position in what is going to be a constructivist period that we are going to be entering soon. If we don’t create the believe in this we are going to go down-hill. We will become a self-fulfilling prophecy.
Thank you