Although we think that EU-Russian relationship, and I share this opinion, should instead follow the attitude France has had with 1945 Germany, (i.e. to create an unwavering economic union with the former enemy); although we should realize the irony of a situation in which the United States is acknowledging the futile 50 year US embargo on its direct neighbor Cuba, whilst also triggering a new one, this time against a country on the borders of the European Union, Russia, Latvia’s accession to the eurozone reminds us that everything in Europe is political in nature: It is in fact not for the virtues, which is much under discussion today, of the single currency that this small Baltic country is joining the heart of the European Union. But it is to distance itself even further from Russia, not wanting to forget the centuries-old Russian attacks.
And today, more than ever, it must be remembered that European integration is the result of a deliberate political decision, and that everything must arise from this political determination. If, however, only economic criteria are taken into account, while refusing to change the rules governing them, the peoples will rise up in rebellion, the eurozone will explode, Europe’s political project will collapse, for the greatest misfortune of all.
The eurozone cannot remain stuck in the Treaties and Pacts that currently defines it; moreover, they are inapplicable and not implemented and nothing is worse than a political Union based on texts trampled underfoot every day.
In a world whose economic health is only apparent, (because the resurgence in US economic growth might prove to be an illusion, especially for the poorer half of Americans, and because the Chinese miracle might smash against a wall of debt and production overcapacities), Europe is the only continent explicitly in depression, and the eurozone even more.
Indeed, it is clear that the way to save Europe’s political project (who knows what « output gap, » or « bottom up » means?) and decrease public debt, out of control in several European countries and threatening France with the same outcome, is not to impose the impossible compliance to absurd criteria relating to deficit. But it is in stimulating growth.
And this growth will be achieved only through the bold alliance of national reforms and Community’s investment driven programs.
In a perfect world, the European Union would have already ordered the implementation of major investment projects on energy and the digital economy; even the most obtuse technocrats would have recognized the need to treat separately the part of the public debt which finances infrastructure useful to future generations; and we would have secured a long time ago from the EIB to organize such a program, by funding it through large amounts of bonds, about 3000 billion euros at least.
In a nearly perfect world, faced with stubborn British opposition in accepting such a plan, the eurozone, would have decided voluntarily on its own; it would have used all its resources in order to revive growth: A large program to purchase sovereign bonds by the ECB, major public investments in the area funded by Euro bonds, all the easier to invest knowing that as a legal entity the eurozone has no debt. It would have pushed aside, for a time, the Stability Pact; Germany would have renounced for a few years (the time to modernize its own public facilities), to stick to zero deficit target. In this nearly perfect world, all eurozone countries would have continued and accelerated their own programs of economic reforms and social justice, to better share the necessary steps to improve competitiveness, and train those who are excluded into the job market. However, in the real world, all this is impossible. France and Germany do not yet see that the actual chain of events will lead to the explosion of the eurozone, because one after another the peoples will refuse austerity with no perspective.
Therefore there is an urgent need for these two countries to realize, while there is still time, that the whole European integration is in danger, and the need to return to its core principles, that are political in nature. And to propose, together, to other countries in the eurozone who will want to involve themselves in this, a major program of investments in digital and energy networks, funded through common borrowings of these countries.
Renouncing austerity measures without reneging on reform commitments. Getting investment going again without increasing the public debts of national governments. It is possible; it is still possible. For a short time.
j@attali.com