May 9 Europe Day: The Cost of War and Inflation vs. Upholding Democratic Values and Human Development
“Forward: there is no other future for the people of Europe than that of the Union” Jean Monnet
The European project arose from the embers of the Second World War. In a very special historical context, marked by a growing conflict and ideological division between the Soviet Union and the United States, the European democratic nations came together in a process that can be described in general terms as successful. since then as an area of freedom, democracy and protection of fundamental human rights. And the subsequent Union has managed to coexist with its own contradictions, essentially in a project made up of several dozen states with different historical trajectories, as well as with diverse social and cultural structures.
There is a recurring idea that makes it possible to define all the countries that have joined in the different phases of the Union project: that of increases in human development indicators, increases based on the strength of the welfare state.
The lessons of the past, learned between the wars and during the Cold War, served to strengthen the role of institutions capable of developing a reform agenda. This was thanks to the consolidation of some advanced fiscal models, which were able to foster the broad social and economic consensus that characterized post-war society.
Indeed, the consolidation of the welfare state has been one of the hallmarks of the European project, to which is added the transfer of competences in various areas of macroeconomic policy. The Europe of trade and full integration of markets aimed to function as a conflict prevention mechanism between Member States.
The economic and political nationalism that had devastated Europe and given wings to fascism had to be replaced by a cooperation agenda that would promote a Europe of the peoples, united by common values and interests.
The institutional architecture of the community itself, with its system of checks and balances and voting modalities – including the veto in the Council – is designed with the aim of balancing national interests and major European projects.
The search for broad consensus in this regard has always been difficult. Much of the top-level negotiations have been resolved in closed-door marathon sessions, but over time many of the fundamental objectives have been achieved.
The Member States of the European Union are characterized by a high level of human development. After the United Nations qualifications in 2019, of the EU countries only Bulgaria and Romania (position 53 and 54) fell outside the ranking of the top 50 countries in the world on the Human Development Indicators (HDI) scale, while four were in the top ten.
Bulgaria went from 0.7 (2000) to 0.81 (2019) in said reference and Romania shows a very similar positive trend. What is relevant in this matter is to observe the positive medium-term trend that these countries have gone through.
HDIs provide the broadest possible picture of the level of social, economic, democratic and cultural development of a state or region. It is an indicator that analyzes multiple variables, including objective material conditions, health care, access to education, institutional functioning and transparency, and the protection of fundamental rights.
In short, we understand that this improvement in objective living conditions in Europe is mainly based on the aforementioned strengthening of the welfare state and on the multilateral trade agreements signed within the community. The European Union has thus been able to consolidate itself as an integrated market of more than four hundred and forty million inhabitants, in many cases endowed with a common currency.
However, in addition to the lights, the European panorama also offers some shadows. Fiscal uniformity between the Member States is an outstanding account. One of the biggest weaknesses is this lack of fiscal harmony.
The difficulties in achieving the transfer of national sovereignty in view of the articulation of community policies in agriculture, industrial policy or fisheries are also in the media. Both for its direct effect on the development of the Union and for its ability to mobilize populist political currents.
Protectionism and criticism of globalization have recently gained ground among a relevant section of European public opinion. The problems arising from the increase in migratory flows, increasing inequality, problems in international governance and disaffection with democratic institutions could seriously erode them.
In this context, the management of the health crisis caused by the coronavirus has reactivated the European project and demonstrated its ability to mobilize resources in all areas. European solidarity was reflected in the availability of public funds and in economic reactivation projects.
In addition, the reactivation was seen as an opportunity to promote processes of economic and ecological transformation. Sustainable and inclusive growth, as well as the reduction of polluting emissions, are the foundation of huge investment projects known as EU Next Generation funds.
The Russian invasion of Ukraine, on the other hand, has once again confronted the Union with its own existential weaknesses, more than a clear submission to NATO’s military interests or inability to conduct its own foreign policy.
The war has opened a new front by exposing Europe’s excessive energy dependence on authoritarian regimes or autocracies. Countries and regimes where fundamental human rights, which are the philosophical essence of the European project, are being flagrantly violated.
The Europe of democracy and freedom has been able to fortify itself for decades in the heat of fossil fuels and trade deals with partners who probably could not have been part of the Community’s institutions.
Benevolent autocrats, according to William Easterly’s idea, participated in conferences, receptions and official processions. They have been present in prominent situations in international forums for the sheer economic convenience of western countries.
It seems that in February 2022, Vladimir Putin decided it was time to activate all the political, economic and military capital that had been amassed up to that point.
Europe is at war, at least an economic and commercial war. And he is at a crossroads with a difficult exit. The economic sanctions imposed to punish the Russian economy and prevent the Kremlin from promoting the ceasefire do not appear to be having the desired effect.
The international price of gas and oil has risen and Europe’s dependence on Russian supplies is proving stronger than expected. Therefore, the main source of funding for any of the parties to the conflict has not been seriously damaged.
Without a viable short-term alternative, the European economy will necessarily remain anchored in Russian gas imports, nor will there be a consensus on the need to adopt a common policy in this area.
On the contrary, strengthening the strategic energy alliances between China and the Russian Federation further weakens Europe’s negotiating position.
While all this is happening, inflation is quietly starting to erode the real economy of European households and businesses.
Historical experience provides ample evidence for the short-term relevance of inflationary processes. Sustained inflation over time weakens consumption, discourages investment and savings, breeds mistrust in the economy, mobilizes low incomes and ultimately leads to the downfall of governments.
The response to the problems caused by globalization and external dependence can also translate into an increase in protectionist policies. Protectionism and economic nationalism as the alleged balm of Fierabrás to which cultural elements of an exclusive character are added.
In short, the big question on the table and to which European citizens must answer is whether they are willing to pay the price for defending their principles of freedom and democracy in the broadest sense of the word. To stay true to the principles and ideas set forth in these few lines.
It does not seem too smart to hide the problems that would arise, but we must not lose sight of the fact that the European project has avoided other similar, or even more complicated, moments of fear.
This article was published in ‘Het Gesprek’.
Source: La Verdad
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