Report

Nov 28th, 2013 | Category: European Seminar Nafplio 2013, Report
  • Head of Kathimerini Foreign Desk Ms Xenia Kounalaki wrote the article ‘In search for a New Deal for Europe’ with reference to Halki  European Seminar 2014.  This piece was published on 13 July 2014 and is available here (in Greek).
  • Journalist of To Vima Mr Angelos Athanasopoulos
    wrote the article ‘Europe is desperately looking for a new course’ with reference to Halki European Seminar 2014. This piece was published on 21 July 2014 and is available here (in Greek).
  • Professor Peter Hall [Krupp Foundation Professor of European Studies, Harvard University; Centennial Professor, London School of Economics and Political Science (LSE)] gave an interview to ELIAMEP WEB TV on the occasion of the 11th European Seminar. The interview is available here.
  • Professor François Heisbourg [Special Advisor, Fondation pour la Recherche Stratégique (FRC), Paris] gave an interview to ELIAMEP WEB TV on the occasion of the 11th European Seminar. The interview is available here

 

Following a welcome address and introduction by ELIAMEP’s President, Professor Loukas Tsoukalis, the Seminar was launched with a presentation of the “Brusselsview” of the crisis. The aim was to present and assess the overall European response to the crisis. The European response can be seen as consisting of three pillars. The first was mainly driven by the realisation of the key role that financial integration plays in creating convergence. It involved the creation of mechanisms aiming to secure and stabilise financial markets. Among those, significant steps have been made towards the creation of a banking union inEuropewith a single supervisory mechanism operated by the ECB. The second pillar intended to address the public and private debt problem.Europe’s medicine to this consisted of rapid economic adjustments of the fiscal, current and external accounts of creditor countries. Those adjustments inevitably provoked short term economic hardship and are likely to lead to long term economic problems.  This was also the main source of social problems which -at least in words- have also been the target of the European response. At the same time, the realisation that there is a fundamental problem with the architecture of the EMU has paved the way towards a third pillar of response. The need to strengthen the economic governance of the monetaryUnionhas emerged as stronger as ever in order to safeguard the viability of the Eurozone. We have indeed seen some proposals towards this direction such as President’s Van Rompuy’s report ‘‘The roadmap towards a genuine economic and monetary union” published in December. However, this stage remains incomplete.

In this context, it seems that the view of fiscal policy as the root cause of the crisis was inaccurate and has contributed to serious policy mistakes. Most importantly, it leads us today to have a very inadequate policy mix. The European response seems to have created – especially in the South- a very tight fiscal policy that prevents any hope for economic recovery. The problem with competiveness was not properly addressed leading to further policy mistakes and the importance of monetary policy as a factor contributing to the crisis was severely overlooked. The ECB could and most probably should have played a different role in dealing with the crisis. Last but not least, the risk of disregarding the politics of economic adjustments is high.  Ignoring the social impact and the politics of the economic adjustment is a major threat and might potentially be one of the biggest mistakes thatBrusselsmight be committing. In the end, the European response has been less a fight for the economy and more a struggle to gain the ability to implement policies to fight the economic crisis. However, apart from dealing with the economic pain,Europeneeds to deal also with the fundamental political challenges ahead. The years before the crisis the European project received a kind of tacit consent from European citizens. However, it seems that this assumption can no longer be made. This implicit agreement is no longer there and that probably makes all the difference.

The presentation was followed by comments from other participants. Overall there was a general consensus that though a lot has been achieved so far, there are still a lot more that needs to be done. The session concluded with a question opening further discussions for the following parts of the Seminar. Regardless of whether the strategy is right or whether the correct medicine was given to the patient, the key issue is whether the European system is able to deal with the crisis. Why did it take us so long to respond? In fact, there is an important reason for that and it has to do with political capacity. Can we create a much closer union? In other words, are European citizens ready to believe that this is the system that will deliver the ‘goods’? The next sessions tried to give satisfying answers to these questions.

Report of Session I

Report of Session II

Report of Session III

Report of Session IV

Report of Session IV