04 Europe


Europe at a crossroads

Mercè Roca

With the eruption of the financial crisis the European integration project has been called into question. Founding members of the Union have taken up Eurosceptic positions, and adopted protectionist measures at the national level. At the same time, countries that are not part of the EU, such as Turkey and the former Yugoslav republics have expressed their intention to join, despite the fact that the European model has shown its weaknesses.
European integration marked a turning point in a long history characterised by war and rivalry. The 1992 Treaty on European Union was on the leading edge global integration, going beyond the Common Market created in 1957 with the Treaty of Rome and the adoption of a common currency, created at the beginning of the new century. The economic problems that have arisen have made it clear that in reality the European project does not extend past national interests and egoism, and seem to have obstructed the logical next steps to true economic, legislative and political integration. Both debtor countries (the so-called PIGS), and creditors have tried to save their own skin at the expense of the rest. And so, the weakness of the European model has been the cause of the overwhelming predominance of procyclical anti-crisis measures which have served to exacerbate social differences and fragmentation and to dilute democratic values and the defence of the welfare state in front of the eyes of European citizens.

With Eurosceptic voices sounding from the very heart of old Europe, the proliferation of protectionist measures – such as limitations on work permits for European citizens -, and the upcoming Parliamentary elections on May the 25th, there is a need for deep reflection, for clear proposals aimed at the citizens, for a strengthening of the virtues of the European Project and for determined support for its desired progress.

On the level of business development, it seems that reinforcing integration is is at all lights strategically vital. Intra-European trade accounts for the greatest interchange of goods, representing 24.4% of global exports according to the most recent WTO report. However, in comparative terms, intra-European trade has been undermined in the face of the commercial strength of emerging countries and as a consequence of the economic crisis which has been particularly acute within the European Union. Intra-Union trade suffered a 7% reduction in 2012. In view of this situation, not forgetting the globalized market that European companies now compete in, the revival of protectionism with respect to movement of goods and services can be deemed seriously short-sighted. The advances that have been made in integration up until now have been indispensable in strengthening trade and developing businesses in Europe. The creation of the Euro, reducing foreign exchange risks, the circulation of goods without customs barriers, the free movement of HR and talent are just some of the clearest illustrations of this and should lead to convergence at a higher level in legal, fiscal and loan systems, all of which are fundamental for business activity and for guaranteeing fair competition within the EU and also in the global market.

Now the question is whether the 28 countries that make up the EU will be able to move forward in solidarity and harmony, and achieve true integration, probably in the form of confederation, or if the difficulties that come with a project as ambitious as this will end up proving the Eurosceptics right. From a global perspective this would be an outright political disaster, and would be one added more problem for transnational European companies. The upcoming elections for the eighth legislature of the European Parliament, the first since the Treaty of Lisbon which granted it more power, will define the near future trend.

Mercè Roca

Mercè Roca

Director of Master of Science in International Business, UPF Barcelona School of Management Academic coordinator of ESCI-UPF

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