On 15 November 2017, the Rafael del Pino Foundation organised the dialogue "The existential crisis of Europe", with the following speakers: Joaquín Almunia, Former Vice-President and Former Commissioner for Competition and Economic and Monetary Affairs of the European Commission; José Manuel García-Margallo Marfil, Former Minister of Foreign Affairs and Cooperation of the Government of Spain; Carles Casajuana, writer Spanish Diplomat, Former Ambassador of Spain to the United Kingdom; César Molinas, founding partner of Multa Paucis and Fernando Ramírez Mazarredo, Strategic and Financial Management Consultant, on the occasion of the publication of the work by César Molinas and Fernando Ramírez Mazarredo, of the same title, published by Deusto.
Europe's existential crisis
Joaquín Almunia, José Manuel García-Margallo, Carles Casajuana, César Molinas, César Molinas, founding partner of Multa Paucis and Fernando Ramírez Mazarredo
On 15 November 2017, the Rafael del Pino Foundation hosted the presentation of the book "The existential crisis", with the participation of Joaquín Almunia, former Vice-President and former Commissioner for Competition and Economic and Monetary Affairs of the European Commission; José Manuel García-Margallo, former Minister of Foreign Affairs and Cooperation, and the two authors of the book: César Molinas, founding partner of Multa Paucis, and Fernando Ramírez, strategic and financial management consultant. Joaquín Almunia recalled that, a year and two months ago, there was talk of an existential crisis in the European Union, given the combination of the economic crisis, the rise of populism, Brexit, Trump's victory and the refugee crisis, and those who did so were right. Today, however, the situation has changed a lot. In the meantime, Macron has been elected president of France and sentiment towards Europe has changed; no one wants to leave and attachment to the euro is at the same or higher percentage than in 2004. However, not everything is perfect, as there may be some tension in relation to the new German government. What is perceived now is that the European Union is more on the side of solutions than of being the problem. As far as the monetary union is concerned, there are design problems, but these did not prevent its first ten years from being great, with a much better track record than the most optimistic had expected. However, the crisis has exposed its shortcomings. The design of the monetary union reflected political will, but economic convergence was lacking. It was like putting the cart before the horse because the necessary measures were not taken for the economies to converge. There were also economic policy failures, but these are failures of governments, not of monetary union. Today we have more growth than the United States, above our potential, unemployment has been falling since 2012 and is already at lower levels than before the Lehman Brothers crisis, interest rates are low and there are important decisions that have been taken during the crisis, such as the creation of the Banking Union, which need to be completed to avoid the banking risk-sovereign risk relationship. Fiscal rules now need to be reformed, in the sense of making them more flexible and with more political judgement. It is also necessary to have a European finance minister. José Manuel García-Margallo, for his part, pointed out that we are moving towards the United States of Europe, towards political union, and recalled that the idea of Europe is based on three pillars: Greece, with the importance it gives to the individual; Rome, with the idea of justice; and the Judaeo-Christian civilisation, with the idea of solidarity. There are sociological reasons for the disaffection with the EU: the losers of globalisation, income inequality, the refugee crisis, the migrant crisis, the economic crisis and the democratic deficit. One of the solutions could be to involve national parliaments more in the management of the EU, but that may run counter to the real solution, which is a classical federalism. The big question today is what Europe brings us. The way out has very high costs. But the real answer is Rodrik's trilemma, which says that you cannot have globalisation, states and democracy at the same time. Of these three, you can only have two. China has opted for globalisation and state, renouncing democracy. The United States is opting for state and democracy, renouncing participation in the Pacific Free Trade Agreement and refusing to ratify the Free Trade Agreement with the EU. The EU, on the other hand, is opting for the third solution, which is to have less state in order to maintain globalisation and democracy. For the future, the goal is political union. The first thing is to solve the problem of borders, which means no more enlargements because they have been done badly, especially the enlargement to the eastern countries, which entered for a purpose other than integration. What they are in Europe for is to assert and reassert their national sovereignty. The second question is how we build Europe. We have to go to a Europe of different concentric circles. The first would be the European monetary union; the second, a federal union, and the third, one to solve the problems with the United Kingdom, Turkey and Russia. The problem, in this sense, is Germany, because of what they call the moral hazard, but this is solved by ceding more competences to make it impossible. For Fernando Ramírez, what is really important is what worries us citizens in Europe and why. A state is legitimate if it provides us with social protection and security in everything that concerns our daily lives. The feeling that it cannot be sustained in the future is what gives rise to populism. Economic issues have to come to resolve this question. The problem is how to finance the welfare state, because Europe is ageing and its population is shrinking, so there is a problem of critical mass. So we need to improve productivity. Another problem is how the next crisis is going to catch us. The welfare state has had an impact on the way out of the crisis, depending on the budgetary capacity of countries when it came to spending. Those that had room for manoeuvre have done well, and those that didn't, have suffered. That is why it is important to recover budgetary leeway. Finally, César Molina said that the time has come for politics. For the first time in a long time there is a French political initiative, and when there are French initiatives, Europe moves forward. Moreover, we have a Germany that is willing to sit down and talk and push the cart. However, we have a very serious coordination problem. Progress is being made in the right direction, such as the fund for the military industry or the agreement to build a tactical European nuclear capability. But more sovereignty must be ceded to deal with issues related to immigration, terrorism and cybersecurity: we need a kind of European FBI. And we need to encourage economic and productivity convergence among member states.
The Rafael del Pino Foundation is not responsible for the comments, opinions or statements made by the people who participate in its activities and which are expressed as a result of their inalienable right to freedom of expression and under their sole responsibility. The contents included in the summary of this conference, written for the Rafael del Pino Foundation by Professor Emilio González, are the result of the debates held at the meeting held for this purpose at the Foundation and are the responsibility of the authors.
The Rafael del Pino Foundation is not responsible for any comments, opinions or statements made by third parties. In this respect, the FRP is not obliged to monitor the views expressed by such third parties who participate in its activities and which are expressed as a result of their inalienable right to freedom of expression and under their own responsibility. The contents included in the summary of this conference, written for the Rafael del Pino Foundation by Professor Emilio J. González, are the result of the discussions that took place during the conference organised for this purpose at the Foundation and are the sole responsibility of its authors.