I am writing this in the south west of France, in one of the many villages which were walled to protect from neighbours, looking out at the observation tower on the defensive walls (above). A great deal of investment for centuries was in defensive fortifications instead of productive roads, bridges and farms.
Many tiny kingdoms, baronies etc all over Europe were in constant war, for over two millennia. Then the nation states which formed from the baronies and provinces were at war too. In addition, many European states were nasty imperialist powers - which also treated many of their own citizens badly. Today they are working together effectively and the EU is the world’s biggest donor, providing more than half of all aid.
Europe is no longer divided into thousand of clans, baronies, provinces but into 28 nations which voluntarily cooperate and thus it is prosperous, it is peaceful and it is probably the best place on the world to live in. But peace and prosperity did not come easily. This year’s European election is different because some politicians want to go back to the old isolated, if not yet warring, ways.
The European Elections: This time, it is different
Voters have used previous European elections to protest against government. This time it is different because the future of the European Project is at stake. For the first time, there will be a very substantial block of MEPs who are who are anti-European, some of whom are out to destroy the Europe Project and revert to nationalism.
Irish people overwhelming (85-90%) support the European Project, despite its flaws. In this blog we examine why the European Union has been so successful in delivering peace and prosperity in its short 70 years. In the next blog we will examine how the quality of life and work for far greater numbers of the 508 million citizens could be substantially improved, with some thought and effort.
Nearly 70 Years of EU Peace and Prosperity.
The European Union, initially set up as an economic area to rationalise coal and steel production, was established this month in 1951, 68 years ago and has evolved greatly since. In 1962 it sought to guarantee food security for its citizens and to ensure that farmers had decent standards of living, in a cyclical industry, under the Common Agricultural Plan (CAP). The European Steel Community and the CAP were two of the biggest interventions in the marketplace by states, acting collectively.
The European Economic Community was set up under the Treaty of Rome in 1957 and became the European Union in 1993. Its aim was to "preserve peace and liberty and to lay the foundations of an ever closer union among the peoples of Europe". It is the biggest exporter in the world with 508 people in 28 states.
WW2 - A Bloodbath
European Union is a vast improvement over what happened in Europe over the past century, over many centuries, indeed millenia. Over 10 million died in Europe in WW1.
The biggest calamity ever was in living memory. It was WW2, when 60 million died (of which 40-50m were civilians), tens of millions were injured and tens of millions forcibly displaced from their homes. There were many, many other big European wars, for example between 3 and 7 million died in the Napoleonic wars 1803-15; a huge 16m died in Thirty Years War in Europe from 1618, on a much smaller population base, with many through disease and famines.
The Prosperous 28 State Union
So to achieve almost 70 years of peace is a great achievement in what was a war-torn Europe after so many wars. EU is today the world biggest trading bloc with a GDP per head of $38,000 for its with 500 million citizens, it is relatively open, with low tariffs. It is the no 1 trading partner for 80 countries, compared to the US for a little over 20 countries. Membership of a huge market has had a huge impact on building prosperity.
For example, in my analysis in books, The Celtic Tiger and Ireland’s Economic Success, I found many factors contributed to how Ireland went from being “the poorest of the poor” within the EU, to one of the richest, in such a short time - the Celtic Tiger era, but the biggest factor was free access to the vast European market after the Single European Act, 1992.
So why Britain is leaving this big market is beyong belief. “Taking Back Control” of its regulaitons, laws etc from the EU, where they are pooled, means they will still have to make complex laws and regulations on their own. So far, the Brexiteers have not shown that they are good self-government.
One of the first impact of EU rules on the Irish Government to was to force it to legislate for equal pay for women. The next big effect of membership of the Union, which I recall, was the deep impact of the Regional and Cohesion funds on the economy and improving life. The richer states were helping the poorer regions to catch up. The biggest area of EU spending for many years was on the CAP and it helped farmers and agribusiness immensely, if not equitably.
Europe Vs US
Europe outperforms the US on many criteria today. Its debt to GDP is lower, its fiscal balances are healthier; its productivity per hour worked exceeds that of the U.S., and its labour markets are improving. The growth in real average income for most Americans, the bottom 90%, over the period 1950-2013, - real wage income grew some 70% in the U.S., dwarfed by gains of 150% in Italy and the United Kingdom and of a whopping 250% in France and Germany. This means that belonging to the “bottom 90%” in Europe is much better than in the U.S. (Janse).
Other big successes
Europes’ citizens can now travel freely across borders, live in any country, enjoy health and social benefits and enjoy the single currency, establish businesses, buy homes and live under the protection of the same laws as locals. The EU has a deep committment to human rights, fundamental freedoms, the rule of law and democracy.
It was seen that the CAP, Structural Cohesion and Regional funding to help poorer regions have been major sucesses. The Erasmus Programme has facilitated cross-border friendships for the 4 million students who have studied in other EU countries, uniting Europeans through ideas of mutual cooperation with education reducing unemployment and in building cohesion, peace and solidarity.
The single currency, the Euro, is used by 19 states and has been a relative success. The world’s second most traded currency, it has played a central role in inegration which has raised living standards in the continent, with real GDP per head rising by 60% in two decades. It is very popular with citizens. But it is incomplete and its architecture needs urgent reform.
EU trade policy has set common tarrifs and it has missions in hundreds of countries. One small but important EU role played by the EU was highlighted by Oxford academic, Herman Goossens in despair on Brexit. He pointed out that while member states’ spend an average of only 7.5% on research, the Commission funded 33% of research into the vital area of antibiotic resistence. It has funded research into it in hospitals throughout Europe and enabled better policies by many states.
Some argue that this election is between liberal Europeans versus Anti-European autocracy. The liberal Europeans had control in most EU states but did little about inequality, facilitating its rise, with neo-liberal policies. This led to the rise of populism and xenophobia. This time, voters must pick – not just between anti-EU autocrats/populists and the liberals, but also carefully between conservative and progressive liberals.
In the next blog, I will argue European leaders need to move from their corporate focus (saving banks, competitiveness etc) to deal effectively with inequality, our citizens’ needs; climate; investment; tax coordination and unemployment.
Paul Sweeney @paulsweeneyman
Paul Sweeney is former Chief Economist of the Irish Congress of Trade Unions. He was a President of the Statistical and Social Enquiry Society of Ireland, former member of the Economic Committee of the ETUC, a member of the National Competitiveness Council of Ireland, the National Statistics Board, the ESB, TUAC, (advisor to OECD) and several other bodies. He has written three books on the Irish economy and two on public enterprise, including The Celtic Tiger; Ireland’s Economic Miracle Explained and Selling Out: Privatisation in Ireland, chapters in other books and many articles on economics.