Michael BORSHCHEVSKY WORLD Victor YAROSHENKO ECONOMIC CRISIS and the Destiny of EU

In recent months there has been a controversy of opinions regarding the next stage of the fi nancial and economic crisis — has the recovery began, what is the colour of the light at the end of the tunnel — or is the recession still continuing and the next stage of the crisis — at least for the countries of the “golden billion” will be defl ation and further decline in production. herald of europe 7 2010 43 Conspicuously, those, who earn their living as UK — have lost their traditional industries — with pessimistic forecasts about the future of Eu- shipbuilding, aircraft and car industry, metallurgy, rope and euro (gladly published by magazines and coal-mining, petrochemistry. They have mastered publishing houses) not without delight denounce new industries non-existent until now — infor- if not disintegration, but a profound crisis of the mation technologies (also sent for realization to European Union. Asia), innovation, high-tech healthcare, fi nan- Is the crisis capable of breaking up the EU — cial services, fashion, fi lm and showbiz industry, if yes — under what circumstances? Anyway, what sports, tourism along with education, culture and does it mean “to break up the EU”? science. It seemed that in the new world of glo- Will the “domino” principle be at work if the balization this will secure a decent place for Eu- default threat moves from Greece to other European rope for many years to come. The crisis, having countries and further to the North to Ireland and destroyed the established way of life, proves this England? to be a wrong assumption. Economic, fi nancial, so- First of all, are the fi nancial measures under- cial, demographic disequilibrium, intercultural and taken going to be effi cient enough especially for interreligious confrontations — all of this leads the “new” EU-members? Will the barrier redoubts to dire consequences, however, a united Europe is trillion Euros wide withstand? capable of overcoming them, but a disintegrated In our view the stabilization funds of the EU one is not. have to be effi cient enough because otherwise it The new evolving inter-country and trans- would mean a closure of the common market of regional labour division leads to a shift in business goods, information, services, labour, migration, success rates in advanced and developing coun- the re-establishment of customs on the European tries. roads; there would be a lot of local closed markets, The countries that cannot become leaders of which as a result could render countries vulnerable technological, information or cultural innovations and uncompetitive. at best turn into “service” countries, and the ones We anticipate confrontations: cheap products that fall outside these lists become outcasts. from South-East Asia, migration from Asian, African In the course of any crisis, i.e. persistent dis- and Latin America countries will anyway override ruption of the established exchange procedures everybody. However, a strong, economically, organ- - controversies and phobias inevitably emerge izationally, politically and technologically united from the depths of the public conscience that are Europe is much harder to beat. dormant there during the periods of stability and Obviously, the robustness of big ultra-bureau- growth. Crisis is like the Thames during low tide — cratic, clumsy organizations with very slow reac- so much comes to the surface that we would prefer tions works not only in favour of the United Europe. to turn away. But on the other hand, it is diffi cult for 27 countries At the present we are witnessing such a devel- to come to a unilateral decision; united European opment. governments are having a hard time; however it Financial and political problems in Greece of is still quicker and in the end more sensible than the recent months gave rise to a wave of dissat- working separately and in spite to the neighbours. isfaction and emergence of new critics of the EU, The intra European division of labour has been inert and almost marginal until now. (Timothy Gar- brewing for centuries. Scandinavian fi shermen, Ital- ton Ash) ian weavers, Spanish shepherds, German mechanic We would like to remind that the creation, long engineers, French winemakers… In today’s circum- and scrupulous construction of the European Union stances everything is a subject to a rapid change became possible only after the horrendous World dashed by Asian producers, successfully adopting Wars that unfolded in Europe in 1914, 1939 and European and American technologies. Starting which swept off tens of millions of Europeans. The from the 1970-s many European countries — such price of European unity turned out to be very high. WORLD ECONOMIC CRISIS 44 After the First World War one of the economic sovereignty with all consequent aspirations for po- policies involved in recovery was opening of un- litical dominance and economic protectionism. If precedented credit facilities for general popula- the European countries make their choice in favour tion. Later that was one of the factors that led to of isolation and confrontation, it will be necessary 1929 fi nancial crash and Second World War followed to recreate armies. Following the peace conditions partially brought on by the aftershock of that crisis. some countries will be allowed to do so and others Now there are less and less people who have not. We have the experience of 1919 at our disposal; witnessed the tragedy of Europe of the fi rst half of we know the consequences it may lead to. There will the ХХ century, therefore there areless andless peo- be intro-European alliances — we are aware of their ple today who remember the reasons why the EU was cost. Social reforms will be stopped or signifi cantly founded, what was driving the people, who were es- slowed down by military expenses, and Europe will tablishing it in tough post-war times (W.Churchill, again live in fear”. J.Mone, L.Erhard, K. Adenauer etc.). And further: “The European countries are too A large part of the contemporary EU popula- limited by the size of their territories to secure for tion has no memories of the fact that this Union their peoples maximal and therefore essential pros- has been established not only in order to tackle the perity. They need vaster markets… Prosperity and post-war economic problems of Europe, but fi rst of appropriate progress in the social sphere re quire all to prevent new continent confl icts from happen- the unifi cation of European states into a certain ing, to close the door for any types of totalitarian- federation or “European whole” that would secure ism in Europe. Hence, to avert the reappearance of their economic unity…However, this plan implies extermination camps, walls similar to the Berlin a united Europe and not only in a sense of coop- wall on the territory of the modern Europe, sup- eration, but also upon consent of the involved par- pressed the opposition of military pacts like NATO ties a partial transfer of sovereignty to some-kind and the Warsaw Pact. of Central Council that would have the authority to Jean le Goff writes: lower custom’s barriers, create a vast European mar- “It took ten centuries for the medieval West to ket, prevent the revival of nationalism”. Mone knew make the choice between two alternatives: closed that “perhaps, it will take longer than an instant to economy or open economy, rural life or urbaniza- establish the united Europe, but the revival of na- tion, in one communal citadel or in separate inde- tionalism won’t take long to arrive”. pendent houses”. (p. 13) On the 19th of September 1946 in Zurich, Win- Coming back to the fundamental ideas of the tson Churchill pronounced a speech, in the course EU’s Founding Fathers (Mone, Churchill etc.), we see of which he called for establishing of the United that they arose not out of naïve idealistic longings, States of Europe: but rather were dictated by the vital imperative of “The Europeans have to rebuild the institute survival of the European nations and the European of Europe as much as possible in order to build it civilisation. into the international structure capable of securing The war was coming to an end. Many people peace…The fi rst step will be the partnership be- in various countries more and more often began tween France and Germany…Time is short. We have thinking of the future of Europe. to use this quiet time to create the United States of Jean Mone — an economist, expert, brilliant Europe, maybe with a different name. It does not initiator of military supplies lines during the war, matter — most importantly is to start today. I beg the creator and commissioner of the post-war plan you: let’s start moving forward in this direction!” of reconstruction and modernization of the French economy, a person with an immensely broad vision * * * of the future — wrote in 1945: The reasons for globalization are not so much “There will be no peace in Europe, if the states political, as they are economic and demographic. will be reconstructed on the basis of national The population growth deteriorated the opposition

herald of europe 7 2010 45 between the “rich” North and “poor” South — con- This process has evoked such topical political sequently — the increase of population migration. notions as tolerance and political correctness. The phenomenon of globalization is also the In spite of the fact that many people speculate result of the overlap of demographical, techno- on these concepts adding negative connotations to logical and political consequences of the World War them, these notions are far from being comic. They Two and the foundation of the Great Powers alli- are the main code words of the fragile structure of ance and the UN (the including of China into thelist the modern world. It is important to always remem- of Great Powers was the fi rst acknowledgement of ber that all these establishments constitute a wall its demographical and political infl uence). that stems the tide of animosity and blood. One has to view the development of the EU fi rst of all within the context of globalization and also ON SEPARATISTS AND SECURITY as its model. * * * Today all of those who predict the disintegra- Under these circumstances the idea of nation- tion of Europe, separatists who call for secession al identity suffers a lot of changes affected by the from it wish to preserve the EU advantages and get

WORLD ECONOMIC CRISIS complex process of cultures’ reciprocal infl uence. rid of the intrusive Euro-bureaucrats. 46 Who will be responsible for the preservation of of the European regions including the most pro- the indispensable European institutions and com- vincial ones with their social, religious and ethnic mon infrastructure — united transportation system, groups. standards and compatibility of technical solutions, The EU is one of the most complex and sophis- broad and free trade zone, and defence of the small- ticated institutions — the main acquisition not er countries? Interethnic war unfolds only if there only of the post-war Europe, but also the outcome are local ethnic military units. For now Europe does of its long-suffering history. not have united armed forces, the armies are nation- All nations of the EU without exception had to al; in principal, one may easily picture some prob- pay a very high price for what we call today the Eu- lems here. ropean Union, which secures prosperity and hopes The main political failure of EU in the course of its elements. of its entire history is the Civil War in Yugoslavia, Moreover, the European Union is one of the which could have been prevented by timely eco- most important factors of hope for the entire hu- nomic measures and political intervention of the manity, which is still divided into nations, religions, EU into the confl ict at its early stage in the begin- races, social classes and castes. ning of 90-s. Will the EU develop towards a greater centrali- Small and weak EU countries feel secure how- zation of decision making (mainly in the fi nancial ever, exactly for the reason that there exists a com- sphere)? mon European defence concept and NATO. Most likely — yes; European countries will It is possible (and even easy) to destroy the have no other choice other than exercising a more existing state of affairs; World War One has dis- responsible and coordinated social and fi nancial rupted the European balance and it took a whole policy. The main threat of the EU today is a sig- century to establish a new equilibrium in Europe. nifi cant diversifi cation of the level of economic Former Yugoslavia in terms of relations be- development and social expectations of the mem- tween the ethnic groups populating it has made ber states. One can imagine that some countries a step back to pre-World War One level of develop- would split off from the Union; perhaps, cer- ment. Countries that have emerged on the basis of tain countries would be in a way limited in rights the former USSR also fi nd themselves in a state of or even excluded (though no such procedure is mutual offences and mistrust; it is with effort that stipulated); one may picture a double-stage un- they look for and sometimes fail to fi nd grounds or ion with membership at different levels. However, even common language for interaction. the fi nancial and economic alliance of Germany, Looking at all of these examples, Euro-bu- France, Belgium, the Netherlands and the acced- reaucrats, lawmakers and all the managers of the ed Switzerland will remain valid. And still, even most complex pan-European institutions have the possible downfall of the European currency, to lose a bit of their smug and become more con- largely discussed today, is an important but insuf- cerned; there is a need to set up and get run- fi cient factor to disintegrate the Union. Its struc- ning the system of feed-back aimed at urban ture is stronger than one might assume. It is built and rural population; the civil society of these not only out of high hopes, but also out of fears countries must have an adequate representa- of the worst and memories of the past European tion of their interests in the European structures. wars. It is comprised not of mere words, but of a One of the factors opposing the centripetal really effi cient legislation that was developed in forces of decay must be the effi cient and up-to-date great pain, operating institutions and also, perhaps feed-back systems, taking into consideration the most importantly — coordinated interests of the standpoints of various groups in the civil societies European market.

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