Patient doing better than expected

Fears for the future of Europe continue to be heightened by the litany of bad news from the EU, and in view of the increasingly protracted crisis, it is natural to presume that the situation is getting worse.

The alarm was once again sounded on March 23, when the Portuguese government resigned in the wake of the Lisbon parliament’s rejection of package of austerity measures recommended by the European Union. Faced with a political and economic crisis, Portugal became the third Eurozone country in the last 12 months to demand financial assistance from the EU and the IMF: following in the footsteps of Greece, which has received 110 billion euros, and Ireland which was bailed out to the tune of 85 billion euros. Other countries are waiting in the wings and experts are worried about the possibility of a domino effect.

Catastrophe scenarios tend to reach a wider audience than rational explanations, which is why I should be writing an obituary for the EU rather than a hopeful analysis of the current situation — all the more so because I am not an optimist by nature. But the fact is that there are several reasons why I continue to believe in the future of the EU.

Perfected over the years, and welded together by the single market and — for most member states — by a single currency, the EU is still an effective mechanism. More often than not without realising it, the citizens of Europe, as well as its companies, banks, institutions — and let’s not forget the EU’s neighbours — derive considerable benefits from the progress made by the European Union. A bit like the air we breathe, we are only really conscious of European integration when it appears to be lacking, and although we can hold our breath for a moment or two, we cannot live without Europe as it is today.

Buoyed by decades of European consensus, the EU and the Eurozone benefit from a strong political base that continues to prevail in spite of the weakness of chancellor Merkel and president Sarkozy. Regardless of the political hue of governments in Paris, Berlin, Rome and Madrid, the construction of Europe is set to continue. And although populist views espoused by European leaders and the prioritising of national interests are clearly harmful to the health of the union, they are not a real threat to its survival.

The level of interdependance between countries, markets, political parties, and people within the union is such that the scale of the cost of European disintegration will encourage political and economic elites as well as private citizens to make serious efforts to keep it together. And in this context, the strikes, blockades, and demonstrations organised in Brussels by unions from throughout Europe have remained a sort of theatre, offering a form of Greek catharsis, which has been short-lived.

The anger behind these protests was caused by a deteriorating situation in which European funding was no longer flowing freely at a time when young people were being called on to work harder and pay for the laziness of their parents’ generation which ignored the necessity of saving for a better future. The union, or at least the pre-2004 union, had grown fat while it sank into lethargy.

However, the 2004 enlargement to the east brought the union a wealth of new experience which should prove to be particularly valuable in the current period of austerity. I recently came face to face this reality when I listened to Estonian President Toomas Hendrik Ilves’ explanation of the remarkable stoicism displayed by Estonians and Latvians in response to economic reforms, including wages and retirement pension cuts, which would have brought their counterparts in Western Europe out onto the streets: "After mass deportations and repression that we experienced under the Soviet system, it is unthinkable that as Eastern Europeans we should rest on our laurels". The Poles, Latvians and Estonians are well aware that they hit the jackpot when they joined the EU, but they also know that they cannot expect to always be on the receiving end of European largess and that there is no such thing as a free lunch.

Europe is continuing to adapt to new conditions, although these adjustments are not as rapid as we might like them to be. We will still have to wait a few years [until 2013] for the European Stability Mechanism to come on stream, and we cannot expect to feel the positive effects of the "Euro-plus pact," which is designed to encourage competitivenss and better budgetary discipline, in the immediate future.

In the past, the EU’s flexibility has always enabled it to overcome the various crises it has encountered. And this time around, the level of dissent is far from what you might expect given the scale of change within the union, remarks an expert on European issues and the president of the Polish think tank DemosEuropa, Paweł Świeboda. Europe is gaining an increasing influence over the governance of member states, and that is a major innovation.

Greater coordination of economic policy in the fields of taxation, pensions and public spending, will no doubt prove to be the price we have to pay to emerge from the ongoing crisis. Thereafter, we will have to shelve the idea of the welfare state, work harder for longer, and continue to make savings…

However, we can be confident about the survival of the union, even if this will result in a certain amount of pain. The EU, which in the future will certainly be more circumspect about the process of enlargement, will also be marked by greater disparities in terms of integration — growing integration in the Eurozone will inevitably constitute a challenge for the UK, which has been eager to preserve the scope of its influence within the EU while refusing to adopt the single currency.

The crisis will give Brussels more control over financial planning and public spending in member states, and it will also limit the availability of EU funds. The battle over the 2014-2020 EU budget is likely to be particularly hard-fought. But nonetheless, there is no question of a funeral for European Union. And I remain convinced of that fact even though I know, as a columnist, that the collapse of the euro, followed by multiple sovereign bankruptcies, riots and political chaos would make for much more spectacular copy than an attempt to convince the reader that Europe will emerge from the crisis in the same way that most of us recover from a severe bout of flu.