Cause and Effect in European Politics and Law

Why is the EU necessary

Adelina Marini, October 11, 2008

The financial crisis reached higher peaks this week after it became clear that even a whole state is on the brink of a bankruptcy. My word is about Iceland because its financial problems put forward the key question WHY IS THE EU NECESSARY?

Iceland has some 320 000 inhabitants and is famous with fish, geysers and its first place on the UN contest "Best place to live" for 2007. This is the country which took maximum advantage of the credit boom. Everything started in the 90s when market reforms, the money from fishing, the income from the market and stable pension funds allowed Icelandic entrepreneurs to go out of the country. As a result of the international banking crisis the billionaires that own everything - from the football club "West Ham United" to the chain of supermarkets "Sommerfield", the toy shops "Hemleys" and the chain "House of Fraser" are in trouble and the country is falling deeply into debt. The things went so wrong that Iceland had to borrow money not from someone else but Russia. In the meantime, the appeals to join the EU became more frequent. The main idea is Iceland to join the EU through the quick way which is not that difficult because beside its current hardships Iceland has fulfilled all membership criteria so Brussels would even be happy to have Iceland on board. Of course this would lead to some obligations to which financially independent countries like Switzerland, Liechtenstein and Norway had always opposed. Because membership to the EU is not only a matter of economic survival.

The financial crisis is not just a crisis - it is one of the symptoms of a serious geopolitical shift. In this context was the publication of David Brooks, a columnist in the "International Herald Tribune" who wrote this week that this was no longer a mortgage crisis. Every couple of years the world confronts a new challenge, writes Brooks. And if before this was 9/11 now the world leaders have the very difficult task to find a way to stabilise economies in the midst of quickly vanishing global capital flows. But this new challenge, according to Brooks, is the result of the global shift of power. The rising of China, the enormous wealth of oil states and the simplified monetary policies have created an ocean of too much savings which have nowhere to be invested. That is why, writes David Brooks, a new class of global leaders is needed today that will respond to two key questions: how deep can interference be allowed and can we keep the model of development which allows some countries to accumulate gigantic reserves and then pile them in the US?

In the end of the day, deliberating over the processes of the past years and especially the last few months, I come to the conclusion that not only the balance of powers economically and politically has changed but globalisation too as a matter of direction. And if globalisation was a wanted process which actually means legitimate colonisation, now it is over. And if we assume that the same process is also called globalisation but with different direction, it is now turned from the developing countries to the developed. In other words if until now the developed countries were looking for cheap labour now the developing countries come forward seeking where to invest their money.

And in the background of serious financial troubles in the rich countries and dynamically changing world, politicians don't seem to realise exactly what is going on. If we have a look on the US we'll see that president George W. Bush has passed the stimulus plan worth $ 700 bn and thus passed the ball to the next president. The candidates - the democrat Barack Obama and the republican John McCain - do not look convinced in what they should do to save the economy while in the same time keeping their country's leading role. In fact the second debate between the candidates concentrated on mutual accusations and exchange of old views. In the same time the young candidate of the Democrats Barack Obama said that the middle class need special attention and blamed the Republican John McCain in tax cutting that serves the rich only. On his turn McCain blamed Obama that he wants to increase taxes and that he would propose the treasury secretary to buy out toxic mortgage credits to help create of new jobs. If you remember, both candidates participated in the negotiations of the stimulus plan and in one way or another they've supported it which can mean only that they do not have a long term vision for the future. During their second meeting both candidates also found out that their country is getting more and more dependant on Venezuela and Russia. In the meantime for Barack Obama the main priority for the national security was the destruction of "Al Qaeda" and McCain showed optimism that the war in Iraq would end successfully. All this against the background of loss of influence in the UN, the lack of vision about the end of the financial crisis and the problems in Afghanistan and Iraq.

To illustrate the above said by the candidates in the context of the change in global correlation, I will remind you the interview of the Iranian president Mahmoud Ahmadinejad who once again demonstrated power by saying that he won't stop uranium enrichment in return for the economic help of the West. He went even farther with more serious arguments: "This financial and economic system collapsed and soon will be replaced by another. We must be prepared from now to take part in the building of the new system. Of course, when I say that the system is totally collapsed I don't mean that it will crush tomorrow but it is definitely going to change".

As we can see there are countries that are feverishly preparing to change their place in the world contest. In this regard, this is absolutely the right time to talk about another global leader to which Bulgaria is a member- the European Union. The issue of the global influence of the Union has been put forward couple of times in the last 5-6 years. But right now this issue is not just current but it is fundamental, because if we assume that the processes that are taking place right now are the fall of the world's super power than the vacuum it will leave should be filled in the most easy and peaceful way. The best for the part is the EU.

But is it prepared for its new role? One of the main disadvantage of the project EU is the slowness of its evolution. Quite often this slowness comes out of the framework of time and space. In the years of relative global comfort after the end of the Cold war, the Union turned itself into a very introvert institution, engaged in solving mainly its own problems created on its own as well. If we take the foreign policy of the Union we'll see the following: on the one hand the EU maintains some long term relations with strategic partners but, on the other hand, it doesn't act accordingly to turn these relations into policy which could bring benefits here and now. Let's take for example the few strategic lines the EU supports. Those are the summits EU-India, EU-China and EU-Latin America which take place once a year and usually deal with a review of relations and the new projects that both sides will get involved with. The idea is very good because it lays very sound foundations to future deepening of relations. But the speed with which global challenges develop requires much more than that. They require influence which the EU at the moment cannot exercise on any particular player. Indeed, the EU in a much lesser extent than the US but still is very dependant on China, Iran and Russia.

Mentioning Russia, you should probably remember that only two months ago when the war in Georgia started, the EU thought there is no change in the balance of powers and even thought of blocking negotiations with Russia on the new partnership agreement. Even two months after the Russian invasion in Georgia, the Russian president Dmitry Medvedev announced in the French town Evian the basis on which further negotiations will take place. Otherwise he took the initiative from the EU. The 27 member block has another problem - there is no common position toward Russia. And without entering into details, the main reason for the different interests is the difference of development among member states.

Unfortunately, unless the Lisbon Treaty is ratified, the EU will continue to be that disunited and what is worse - this temporary existence might lead to disintegration of one of the most successful intercountry organisations which are not federations. That is why this week the president of the European Commission said that now was the time to rethink and continue forward: "Now it is not the time to draw what are road should be. But it is time to remember that the last few weeks showed again that Europe needs the Lisbon Treaty. More effective Europe, more democratic Europe, Europe with clear voice on the global stage".

To be fair we have to add one more thing and that is that the Lisbon Treaty is not the only problem before the consolidation of the EU. Very serious is the situation in countries like Bulgaria which is so absorbed in its own little issues, political scandals, typical for long passed centuries, that it is simply not interested in the global processes and how it could help in securing even its own future. Because just imagine Bulgaria was alone, not being a member of any organisation with such internal politics that it has now and with the same economic and financial condition, accompanied with the lack of labour force. How can Bulgaria survive in a moment when there are serious global changes. And if we still think that for us it is much more important not to lose European funds, we have to notice that only four of the biggest member states of the EU meet to draw the direction of economic development. The rest are destined to follow and if they can't - they lag behind. So maybe the old times that respected the principle of natural selection are coming back.