State of the Union

Long long ago the state of the European Union was strong and prosperous!

By John Narayan Parajuli

French President Jacques Chirac was in the news again last month, but for the wrong reason. He walked out of a European Union meeting after a French Businessman addressed the meeting in English. Parochialism, protectionism and jingoism are staging a comeback in Europe.

Chirac’s stance may seem ludicrous but it is symptomatic of Europe’s burgeoning problem that is undermining the vision of unified Europe and may be pushing Europe down the path of gradual decline.

The Organization for Economic Co-operation and Development, based in Paris, in a report released early this year confirms that assertion in disturbing details. This thesis was accentuated by a series of protests and riots that made headlines all over the world—which led many to wonder: what’s wrong with Europe?

Not surprisingly France has been a focal point for these outbursts. First, France’s recent Muslim riots—which highlighted the divide in the French society—between natives and immigrants. Even the French admit that the discrimination against the immigrants is serious. They live in very poor conditions, in what has been described as a French ghetto, and often experience discrimination from police.

Second, Europe’s bigotry and insensitivity was underscored by the Dutch Cartoons, at least to the Muslim world. Although one can and argue that the cartoons were an exercise in free speech, it nonetheless tantamount to imposing Europe’s liberal values on the Islamic psyche. It’s a fair argument that Europeans should not be cowed by the decree of some Islamic extremists, but that argument cut both ways. By publishing such cartoons, didn’t Europe succumb to its own right-wing extremists? Europe cannot expect the Muslim world to understand its cultural moorings, when it has failed to respect Islamic cultural nuances. It’s a civilization issue, you won’t understand.

Third, the French students protest over the changes in the labor laws show, despite being among the torchbearers of capitalism and market economy, Europe itself is unwilling to change. In the last 50 years of relative peace and prosperity Europeans have mythologized the continent’s exceptional well-being as everlasting. Behind the veneer of its prosperity and integration, Europe has structural problems that have been left unaddressed.

Ageing, population decline, lower productivity and a generation that has taken Europe’s standing for granted; all are indicators that the center cannot hold for Europe.

It’s predicted that in next 25 years, the number of working-age Europeans will decline by 7 percent, while those over 65 will increase by 50 percent. Europe's birthrates have fallen beyond the replacement rate of 2.1. The average rate is 1.5 in Europe.
The problem gets worse: Europeans prefer early retirement, whopping unemployment benefits and long vacations—all at the expense of national coffers. Such a welfare state requires robust economy. And here is where the real trouble begins.
The European Union has a combined gross domestic product that is approximately the same as that of the United States with an additional 170 million more people. Its per capita GDP is only 75 percent than that of the U.S and has continued to widen. Should the trend continue, economists predict that in 20 years Europe’s prosperity will be half that of the U.S. The blame falls on European attitude: Less work, more fun and leisure. Changing old habits is proving difficult: Europeans are unlikely to give away their social benefits that they have enjoyed for so many years. They live in delusion; a delusion that Europe is still a center-stage in the world. The forces of globalization have come and swept Europe’s power and prestige aside long ago, yet the slumbering Europeans haven’t roused themselves. It’s very likely that they will have to face a rude awakening should they fail to feel the pulse of historical development in time.

It would be fair to say that Europeans still live in the exaggerated heydays of the past. Europe needs to adopt a flexible policy on immigration to make-up for the declining population, encourage Europeans towards higher fertility rate, and cut down on its leisure extravaganza. But it may be too late by then. Europe’s power and prosperity could well become a bygone affair.