European Student Think Tank

Quint Hoek­stra takes a look at David Cameron’s speech about the future of the EU and Britain’s role in it. Whilst the Prime Min­is­ter hin­ted at what he expects the EU to be like in the future, he remained vague enough to pre­vent panic among EU lead­ers, yet clear enough about Britain’s pos­sib­il­it­ies to divert pres­sure from euro­scep­tics in his own party, writes Quint.

The European eco­nomy is in the midst of the deep­est reces­sion since the 1930s. Although its size and extent are excep­tional, the crisis has many fea­tures in com­mon with sim­ilar financial-stress driven reces­sion epis­odes in the past. Signs of improve­ment have appeared recently, but recov­ery remains uncer­tain and fra­gile. For­tu­nately, the EU’s response to the down­turn has been swift and decis­ive. At present, gov­ern­ments
and cent­ral banks are well aware of the need to avoid the policy mis­takes that were com­mon at the time of the Great Depres­sion, both in the EU and elsewhere.

Grow­ing immig­ra­tion flows from North Africa in the wake of the polit­ical revolu­tions on the con­tin­ent are becom­ing an increas­ingly big­ger prob­lem for the European Union. Mem­ber states, cur­rently hit hard by the eco­nomic crisis, are try­ing to tackle the issue, often by attempts to rein­tro­duce bor­der con­trols, thus revers­ing com­mon European achieve­ments. A Com­mon European Asylum Policy unfor­tu­nately remains unreal­ised, writes Aleksander Thomas.

The EU should be fed up with gloomy news com­ing from weak links in the chain, but still, there appears to be much to con­tend with. It seems dubi­ous to argue that the European prob­lem can be solved in a fin­an­cial way. Struc­tural prob­lems need to be treated more col­lect­ively and they require more tolerance. [...]

The Hun­garian gov­ern­ment of Viktor Orbán has been repeatedly cri­ti­cised for tak­ing the coun­try down the road of author­it­ari­an­ism. After its grab on the Hun­garian National Bank, the EU and the IMF have finally decided to pre­vent a fur­ther deteri­or­a­tion of demo­cratic stand­ards. The decision comes late, but is right, because Hun­gary is start­ing to resemble Rus­sia more than any coun­try in the EU.

Ever since the begin­ning of the fin­an­cial crisis France and Ger­many have taken on the role of lead­ers for the EU. They decide what hap­pens and how it is done; they decide who stays in power and who has to be taken out. How­ever is this really the only way the EU can be gov­erned, or are there ways to prefend the dom­in­a­tion of two nation states within the EU?

In the sin­is­ter inter­play between credit raters, banks, European polit­ics and tax­pay­ers, the first two win and the last one loses. European politi­cians should stop deny­ing agency to ‘the fin­an­cial mar­kets’ and act as though they are neut­ral act­ors guided by an invis­ible hand. Rather, they are self-interested act­ors in the global cap­it­al­ist sys­tems. European politi­cians are to blame for not recog­niz­ing this, and for let­ting tax­pay­ers clean up the mess left by fail­ing gov­ern­ments and fail­ing banks.

Great news: in anti­cip­a­tion of a more struc­tural solu­tion to the Eurozone’s debt prob­lems, the euro has been rising in com­par­ison to other world cur­ren­cies for sev­eral weeks. What the, more per­man­ent, sta­bil­iz­a­tion plan will look like has not leaked out yet. Per­haps it will include some plans to fully, or at least par­tially, start [...]

What is the best way to under­stand the cur­rent Euro-crisis? Per­haps the best per­spect­ive is the one of an out­sider: two weeks ago Amer­ican nobel-prize win­ning eco­nom­ist Paul Krug­man wrote a very insight­ful and access­ible ana­lysis of the prob­lems in the Euro-zone. Very worth­while! http://www.nytimes.com/2011/01/16/magazine/16Europe-t.html?_r=1&scp=3&sq=Krugman%20Europe&st=cse