Legendary European Leadership

(Asset Magazine april 2012) – Recently the Dutch Centraal Planbureau (CPB) produced its economic forecast: the Dutch economy will perform moderately and the current economic recession will continue at least till the second half of this year. That news caused further suspense and fear among the consumers and citizens. Will I have my job at the end of this year, can I pay off my rent or mortgage? People experience this kind of news, especially within a period of crisis in Europe, as threatening. They want to get a grasp of their own lives, focus on their own world, and incline to feelings of nationalism. What European dream? Nevertheless, openness and flexibility is the solution for better times. Furthermore, a feeling of hope and of being part of a larger entity is needed, by which people will exceed their own interest. More than ever the Dream of Europe, combined with good leadership is the answer to the current crisis. Who can inspire us to propagate this ideal successfully?

Speaking of leadership and visionary people there is one legendary politician that is famous for his role in bringing Europe to a unity: Jacques Delors. This French politician was president of the European Commission from 1985 till 1995. Delors started in a period of extreme Euro pessimism. Under his leadership with the motto ‘one market, one money’ the one internal market was completed and the foundations for the euro were laid. He succeeded in inspiring hope and life into the European Commission and exhorted the Europeans to a further economic, monetary and political union.

With the one intern market and one currency now completed, the question is how Europe can survive in a globalized world and how we can fulfill the EMU. The first step is to realize a common fiscal compact. The second task is to create a structure for adaption which is needed because the exchange rates do not exist anymore. The structure has to be created by wage flexibility and by labor flexibility. This set of measures will create more growth and prosperity in Europe, and thereby, even more, will stimulate the quality of society too. After all, as the Harvard Professor Ben Friedman put it during his Van Lanschot Lecture some years ago at Tilburg University, the economic growth brings not only material benefits, but strengthens democratic institutions and creates political stability and tolerance in society. It is a key condition for the progress of society in a way that is since the Enlightenment considered not only as positive but as positive in moral terms.

But why does Europe not flourish? Because many politicians are no Europeans and lack a clear European vision of Europe moving forward. Of course, in these days politicians are avoiding a much worse European crisis, but, according to Delors, we do not just need firefighters; we need architects too, with an awareness of shared interests. And in Delors view, there are no architects left, and no visionaries either. The national heads of the government focus at themselves and their own interest. We need politicians that make a display of strength, sangfroid and political vision in the context of Europe, with a sense of conviction and commitment among each other.

Within Europe the Netherlands were famous for their permissive society, but nowadays they are not anymore. That is partly due to a lack of this kind of European leadership. The leading Dutch politicians should indicate the direction to keep and strengthen the sovereignty at a European level. That direction should be that the powers have to be devolved further from national to European government. A transfer of sovereignty is needed and inescapable. A further deepening of the European integration is the only answer to the debt crisis. And in that way Europe can regain its soul. Just in a world that regionalizes more and more, the maintenance and the reinforcement of the European sovereignty becomes more important. Even like a clear and strong vision of the direction Europe should define its position economically, financially and geopolitically.

Only from an inspiring perspective concrete measures could acquire significance and inspire confidence. When you neglect the value of Europe, you only see the danger of that perspective. But when you see its value, you want to protect it. That was what drove Delors and made him a passionate and ambitious representative of Europe and its dream, a legendary European leader. Who will be the new Delors?

Sylvester Eijffinger
in collaboration with Annemarie Hinten-Nooijen (Academic Forum)

Asset Magazine is the semi scientific magazine of Faculty Association Asset. The goal of Asset Magazine is to discuss important economic subjects which are interesting for the students of the Tilburg School of Economics and Management.
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