Not so long ago, the euro was considered by many the most stable currency in the world, it transformed itself from a monetary instrument to a brand backed up by 27 countries and economies that exemplified the concept of unity. Of course not all of those 27 countries fancied the euro as its own currency, UK, Denmark and Swede for instance chose to stick with their lovely pounds and fancy krona. Even after the banking crisis in Scandinavia in the early 1990’s none of those countries decided to yield for the euro, a move that seems to be wise nowadays but back a few years was not considered to savvy by many in Brussels.
A report issued last Saturday by the Reflection Group, headed by the Spaniard Felipe González, showed us that the future of Europe might not be as bright as it once looked, at least not if drastic changes are not made. For decades, Europe’s lifestyle has been he envy of the world, its high wages, amazing social model, early retirement age, fewer working hours, wonderful allowances, all translated in some sort of paradise were social security and development has been on the center of public policy.
The creation and growth of the EU helped to expand free market and social security policies to countries beyond the original eurogroup, thus entering developing countries like Greece, Spain and Portugal. The fall of the Berlin Wall opened a whole new world to the East that materialized its EU accession as soon as 2007, Europe kept growing and its economy kept moving forward… or so it seemed.
Several treaties later and EU Constitution on the line and still the EU institutions are not as strong as they should be, countries still guard their economic policies as watchdogs and as countries like Germany and Holland exercise fiscal responsibility, others like Spain, Ireland and Greece managed to spend in the name of development, playing casino economics Wall Street style in the process. Now the responsible ones have to pay, and pay big.
However, besides all the economic turmoil, Gonzalez’s report showed us the importance of thinking even further and see how the European model is at risk for other reasons. Certainly, economic responsibility is a cornerstone for Europe’s future but so are comprehensive social policies, where immigration lies within.
With an aging population, Europe cannot hold for much longer its fantastic social allowances, not so early retirements, less vacation weeks, higher quotas for pension funds, all to keep an Union that has showed little institutional capability to respond to crisis this big. The burden of the workforce is way too small for Europe, therefore immigration reforms are needed and fast, Turkey, with 3% of its territory in Europe, should be viewed with better, brighter eyes by Brussels, working permits and visas must be issued fast. Smart policies to attract people from all over the world to come and work, to expand the workforce beyond its traditional Germany, France, Britain, Netherlands core.
The Eurodream is fantastic, but also an expensive and tough one, Europe must transform now, must rethink itself, must allow fresh young workforce, must sacrifice now before it can’t anymore, must live up to the dream with more realistic eyes.