Was denkt China?

Auf einer Studienreise des European Council for Foreign Relations im September nach China, stellten wir chinesischen Experten und Praktikern aus der Wirtschaft, Politik, Medien und der Zivilgesellschaft die Frage: Was denkt das neue China. Natürlich haben wir keine einfache, eindimensionale Antwort erwartet, trotzdem waren wir überrascht von der Vielfalt der konkurrierende Strömungen innerhalb der Gesellschaft und in der Partei, die in ihrer Pluralität und Offenheit erstaunlich sind. Trotz sichtbarer gesellschaftlicher Erfolge mit einhergehendem immens gestiegenem Selbstbewusstsein gibt es eine tieferliegende Unruhe in der Führung und der Gesellschaft, eine Erwartung, dass der bevorstehende Führungswechsel im Oktober mehr als eine geradlinige Kontinuität der letzten 10 Jahre ist. Von außen betrachtet ist China eine einzigartige ökonomische Erfolgsgeschichte, die noch lange nicht zu Ende geschrieben scheint. Im Inneren toben Schlachten darum, wie die nächste Phase, Sozialismus 3.0., aussehen soll. Ökonomisch steht China sehr gut da und auch die pessimistischeren Schätzungen gehen nur von einer Abschwächung des Wirtschaftswachstums auf durchschnittlich 7% über die nächsten 10 Jahre aus. Spätestens 2025 wird China die größte Weltwirtschaft sein (aber auch der größte Green Investor). China muss sein Wachstumsmodell überdenken. Auch wenn sich die Krise in Europa und den USA schon jetzt negativ auf die Exportergebnisse Chinas auswirkt, hat China mit seinen geschätzten 3 Billionen $ Devisenreserven noch genügend Spielraum, um die eigene Wirtschaft mittelfristig über ein paar Durststrecken zu bringen. Nach 30 Jahren wirtschaftlicher Reformen und historisch einzigartigen Aufschwungs ist die nächste große Herausforderung der Umbau Chinas in einen Sozialstaat. Die Bevölkerung hat Big Expectations, aber Erwartungen steigen noch schneller als die wirtschaftliche Entwicklung. Bisher hat man sozialen Frieden mit quantitativem Wachstum und steigendem materiellem Wohlstand ‚erkauft‘. Dieser Weg scheint jetzt erschöpft, da sich die Nebeneffekte einer immer ungleicheren Gesellschaft und einer fühlbaren Umweltzerstörung zunehmend destabilisierend auf das ganze System auswirken. In fast allen Gesprächen wurde die stark wachsende Schere zwischen arm und reich angesprochen, die sich in einem Gini Koeffizient von 0,5 ausdrückt, eine ähnlich starke Polarisierung wie in den USA. Gekoppelt mit einer systemimmanenten Korruption und einer (trotz Zensur) breiten öffentlichen Debatte im Internet, ist die soziale Ungleichheit in China jetzt die größte Herausforderung an die chinesische Führung. Ob China noch sozialistisch ist, scheint eher eine Diskussion unter Intelektuellen zu sein. Zutreffend schien mir die Beschreibung der chinesischen Führung seit Deng Xiaoning als ‚Experimental Pragmatists‘. Sie experimentieren mit verschiedenen Modellen und reagieren pragmatisch auf Krisen, um diese im besten Fall in Vorteile zu verwandeln. Erst im Nachhinein wird dann (oft von außerhalb zusammengefasst) eine Strategie daraus. Ist das noch Chinesisch oder schon Merkel? In den Diskussionen zu Chinas Rolle in der Welt wird deutlich, dass Chinas Selbstverständnis und Selbstbewusstsein jetzt durchaus das einer ‚Superpower‘ ist. Bei einigen Gesprächspartnern schlug sich das in einem mehr als gesunden Nationalismus nieder. Aber China ist noch ein Lehrling in ‚How to be a Superpower‘. Als einzig relevanten Akteur in derselben Gewichtsklasse sieht man die USA. Dabei spricht man selten über G2 , da dies als gemeinsame Dominanz der Welt mit den USA interpretiert wird, was man nicht will. Bisher ist China weiter ein Verfechter einer multipolaren Welt, welche aber Chinas zunehmende Bedeutung anerkennen sollte. Europa hat in den letzten 3 Jahren spürbar an Relevanz verloren. Einen großen Anteil daran hat natürlich die Krise in Europa, aber noch entscheidender scheint mir der Wettbewerb der EU Staaten untereinander um die Gunst Chinas. Das macht es für China einfach, die EU Länder gegeneinander auszuspielen, wie gerade wieder Großbritannien in der Tibet Frage. Wenn die Rede auf Europa kommt, wird oft gleich über die Special Relationship zwischen China und Deutschland gesprochen und das deutsche Modell gepriesen. Fast wurde Europa mit Deutschland gleichgesetzt. Frau Merkel war jetzt schon 20 Mal in China, mehr als jeder andere aktive europäische Politiker und auch dadurch hat sich eine fast vertrauensvolle Beziehung entwickelt. Da fällt es umso mehr auf, dass Frau Merkel während ihres Empfangs anlässlich ihres Besuches im September Europa in ihrer Rede nicht einmal erwähnt hat. China ist sich bewusst, dass seine Position als Superpower vor allem auf seiner Hard Power –Wirtschaft, Population, Militär- beruht. Die Softpower Chinas wird trotz Olympiade und wachsendem Netzwerk von Konfuzius Instituten als gering eingeschätzt. Nach dem langen Marsch der Ökonomisierung Chinas stellt sich jetzt öfter die Frage, was außer den materiellen den die Werte der chinesischen Gesellschaft sind. Hier gesteht man vor allem den USA einen riesigen Vorsprung zu. In China selbst ist die Softpower der USA bis in die Führung hinein präsent, denn 50% der Kinder von Politbüro Mitgliedern studieren in den USA. Und bei der jungen Generation ist die USA „sexy wie Lady Gaga“. Europa hat auch noch beträchtliche Softpower, vor allem jedoch unter den Älteren und Intelektuellen. Für mich war die größte Überraschung die enorme Bedeutung des Internets und der Social Media in China, die zu einem echten Transformationsfaktor geworden sind. Es gab kaum ein Gespräch, in dem nicht der Weibo Effekt erwähnt wurde. Weibo ist die rapide wachsende chinesische Variante von Twitter mit z.Z. ca. 350 Mill. Nutzern. Weibo ist in gewisser Weise ein Abbild der chinesischen Gesellschaft mit einer überraschend freien Öffentlichkeit und Meinungsbildung. Ursprünglich von der chinesischen Führung als Gefahr gesehen, hat diese Möglichkeiten gefunden, Weibo zu zensieren und zu moderieren, es aber noch so frei zu halten, dass es eine gewisse Ventilfunktion in der Gesellschaft erfüllt. Gleichzeitig wird Weibo von der Führung genutzt, um kritische Entwicklungen rechtzeitig zu orten und dann darauf zu reagieren. In der jetzigen Form ist Weibo etwas zwischen virtueller Zivilgesellschaft und Big Brother. Kann man davon etwas lernen? Ich denke schon. Trotz der großen internen Herausforderungen und Unruhe wird China das 21. Jahrhundert maßgeblich gestalten. Wenn wir nicht nur dabei zusehen wollen, müssen wir Europäer stärker gemeinsam unsere Interessen vertreten. Deutschland hat in China ein positives Image und sollte dies noch entschiedener einsetzen, um europäische Interessen abzustimmen und gemeinsam durchzusetzen. Dann können wir Europäer neben China ganz vorne in der Welt Liga mitspielen. Als einzelne Staaten sind wir nur Oberliga. Und wir haben gar nicht so schlechte Karten- wir haben ein homogenes Wertesystem, gewachsenen Softpower und ein gut funktionierenden Sozialstaat. Jetzt wo sich China verstärkt gerade in diese Richtung entwickeln will, müssen wir in Europa aufpassen, dass wir unsere Werte, den Sozialstaat und die damit verbundenen Softpower nicht in der derzeitigen Krisendynamik selber untergraben, zurückfahren oder kaputt sparen. China hat es insbesondere seit der großen Finanzkrise des Westens erfolgreich verstanden, Krisen in neue Möglichkeiten zu verwandeln. Ohne gleich das chinesische Model des experimentellen Pragmatisten zu übernehmen, würde uns Europäern eine Prise pragmatischen Optimismus gerade jetzt sehr gut tun. Dies ist ein Beitrag im Rahmen des ECFR Projektes "What does the new China think". Den spannenden ECFR Bericht "China 3.0" kann man hier finden: http://ecfr.eu/content/entry/china_3.0

Will 2012 be a historic year, and if yes, which direction ?

2011 feels like a year where seemingly impossible things became possible. In this sense 2011 was in two senses a historic year. On the positive side, apparently stable Arab dictatorships were in a matter of months (sometimes weeks) swept away in a contagious revolutionary mass movement. Hardly any expert had predicted the volatility of the regimes and the force of the street movement. On the negative side, the very basis of European integration - which had become almost a natural law and way of being for Europeans - was shaken, to the extent that it suddenly looks that Europe is not "too big to fail". Even in early 2010 the Greek crisis looked like a local and containable event. Over two years, bad crisis-management by Europe’s leaders, with new nationalistic undertones, made a Greek crisis into an existential crisis for the whole European Union. Again, few had anticipated this turn of events. In light of these epic events, I have two thoughts on what may happen in 2012. My hope is that awareness that the disintegration of Europe is becoming a realistic option will mobilise "armchair Europeans" - i.e., those who are and feel European and have benefited from European integration - into action. I hope this will result in a new pan-European citizens' movement which acts as a pressure-group and keeps politicians on a European course. My fear is that the power of concerned European citizens will not be strong enough to stop the downward spiral of creeping disintegration. Between these options I am positive, in that I see a lot of motivated Europeans who are organising initiatives to channel their anger into a progressive force in favour of Europe. So, I am hopeful that Europe will move on. It’s in our hands. First published on Open Democracy 21.12.11

Was denkt Deutschland?

Hier ein paar Stichpunkte, die ich mir für Diskussionen in den USA vor zwei Wochen gemacht habe, unter dem Title: 'What does Germany think on Europe?' Was denkt Deutschland? Die Antwort hängt natürlich davon ab, wenn man fragt. Deshalb habe ich das mal aufgeteilt in die relevanten Akteure, geordnet nach Relevanz. Merkel Regierung: Weil einige EU Mitglieder nicht richtig und ehrlich wirtschaften können, sind diese jetzt in der Krise und reißen den rest der EU mit rein. Das Grundproblem ist Haushaltsdisziplin und fehlende Wettbewrbsfähigkeit. Während wir in Deutschland die Weidervereinigung gemeistert haben und dann auch noch den Arbeitsmarkt liberalisiert haben, haben die anderen nur auf Kosten niedriger Euro Zinsen konsumiert. Dafür gibt es jetzt die Rechnung. Gott sei Dank, haben wir alles richtig gemacht und sind gut durch die Krise gekommen. Wir haben gezeigt, wie es geht, durch Exporte und gutes Wirtschaften. Da ist es doch ganz logisch, wenn die anderen es uns einfach nachmachen. Wir werden da helfen, soweit wir können, im Prinzip durch Kredite und Bürgschaften, aber nur wenn sie das machen, was wir ihnen raten. So wird alles letzendlich gut. Und ein gutes hat die Krise auch noch: es kommt soviel Geld nach Deutschland wie nie und wir müssen kaum Zinsen dafür Zahlen. Die Krise bei den anderen hilft uns ganz praktisch unsere Verschuldung abzubauen. Die Opposition Wer weiss was SPD und Grüne machen würden, wenn sie an der Regierung wären, aber jetzt sagen sie Merkel hat den falschen Kurs und treibt Europa mit seiner Austerity Politik in die Depression a la 30iger Jahre. Und dabei spielt sie sich in Europa auf, wie Bismark oder schlimmer, jedenfalls als unverbesserlicher Besserwisser (BesserOssi in diesem Fall) und Lehrmeister mit Peitsche. So geht es nicht. SPD und Grüne sagen, dass sie mehr echte europäische Koordination wollen, Solidarität mit den Südländern, einschliesslich Eurobonds, expansive EZB Politik und neue Konjunkturprogramme. Ob sie das so in der Regierung machen würden, ist fraglich, just think of Schröder's EU Politik. Die Medien Europa hat soviel Medienpräsenz wie noch nie. Das ist doch mal eine gute Nachricht. Es gibt natürlich Medienplurarität, aber im allgemeinen unterstützen die großen Leitmedien die Merkellinie (Zeit, SZ, FAZ, Bild). Die Wirtschaftmedien FTD und Handelsblatt kritisieren die Merkel Linie als aus ökonomischer Hinsicht wenig aussichtreich bis zu total falsch. Die Kritiker werfen Merkel vor, dass sie die Schwierigkeit der Krise erst sehr spät erkannt hat, dann auch noch die falsche Grundursache identifizert hat (Staatsschulden) und jetzt mit vollem Einsatz alle in der EU auf die falsche Strategie einschwört (mit Zuckerbrot und Peitsche). Die Ökonomen Die Mehrzahl der deutschen Oekonomen unterstützt die Politik Merkels, die dem konservativen wirtschaftsliberalen Ökonomenbild in Deutschland entspricht. Insofern erfährt Merkel von den Ökonomenexperten dauernd Ansporn nach dem Motto 'Am Ende werden sie uns alle dankbar sein dafür, dass wir jetzt die harte aber richtige Medizin verabreicht haben'. Ein paar deutsche Ökonomen (Bofinger, Enderlein, Weizsäcker) argumentieren dagegen und für eine europäische Lösung mit quantitative Easing durch EZB und Eurobonds, aber diese werden als angloamerikanisch unterwandert verschrien. Umso interessanter der Vorschlag der Wirtschaftweisen, der eine deutsche Variante des Eurobonds vorgeschlagen hat. Die Wähler Diese sind nach 2 Jahren Krise abgestumpft. Die fühlbare Krise gibt es in Deutschland nicht, im Gegenteil, Deutschland geht es so gut wie selten. Und die Fußball Nationalmannschaft ist in bester Form und wird wahrscheinlich im Sommer Europameister. Was trozdem hängen bleibt ist, dass wir hart arbeiten, einschliesslich Merkel, und die anderen alle eben weniger. Jetzt haben die den Schlamassel und betteln um Hilfe. Helfen tun wir natuerlich, aber in Maßen, weil ausgenommen werden wollen wir ja nicht. Und es tut gut zu wissen, dass wir gut dastehen und jetzt in Europa die Richtung vorgeben. Angst um den Euro? Ein bisschen schon, aber dann auch nicht. Merkel wird schon dafür sorgen, dass wir keine Inflation bekommen, ob Euro oder D-Mark.

Europe in December 2011, ...., definitely may be

What do I think happened on 9 December? The Eurozone countries +9 EU members have agreed to draft a new treaty to strengthen the Euro stability pact through tougher and enforceable rules. A debt break along the German model will be introduced and all countries agree to work towards balance budgets. There will be EU monitoring of the individual budgets and deficits and semi-automatic sanctions. Britain did not join this approach as the only EU member which means that the treaty has to be agreed outside the existing EU treaty along the Schengen treaty model. This makes it all more complex and cumbersome but still a feasible 2nd best option. A game changer? Let’s see. The good news Finally, this was a more serious summit with real decisions. The agreed fiscal compact and its enforceable rules are a first important part and start of a process towards a European fiscal and economic union. The EU acted and it acted together with a strong voice, apart from the UK. The German-French engine worked again, not beautifully but delivering impact. The ECB President reacted positively to the outcome and indicated that he would support its implementation within the mandate of the ECB, of course. This can be interpreted that the ECB will continue to buy national state bonds and ease the debt reduction pain in the intermediary period. The bad news Decisive this step may be, but is it in the right direction? Many, including SPD and Grüne, think not. The summit decisions focus on long term fiscal discipline but do little in the short term. On the contrary, the agreement to jointly reduce state deficit in the middle of a crisis, will most likely exaggerate recession tendencies, increase unemployment and potential social unrest. The summit neglected the short term needs. The European South needs a growth plan and not a savings plan. This is the lesson from the 1930s. The opt-out of the UK is bad news for both the UK and the EU. The EU needs a third strong player to balance Germany and France and to present interests from the Eastern and Northern members. The UK will lose influence in Europe and potentially in the European single market. Internal separation tendencies between Scotland and England may accelerate. On balance It was important that the EU has started to act decisively, even if it was not yet the Big step ahead of the curve and may not even be in the right direction. Much depends on how the ECB will react and help fund the painful reform process in the EU. The summit decisiveness and the ECB flexibility could together recreate confidence of the market which is key indicator for whether it will work. A next step must be a European Marshall (Growth) Plan, otherwise we will slide into recession with all its unpredictable economic and social consequences. The UK is isolated now, but should be offered the possibility to join at any stage in the treaty drafting process so that it may be possible for the UK to join back later on. It’s almost Christmas, I want to be optimistic.

Today I met with the Markets

Today I met a group of German investment portfolio managers to talk about the current economic situation in Euroland and what both sides expected from each other. This is what I learnt: 1. Investors are interested in a predictable investment climate. The most predictable climate would be a stronger Eurozone, a political signal that this is going to happen and a clear timetable for how to get there. And this is exactly what is missing now, there is no clear signal, no timetable and hence no predictability for investments. Because of that investors, even conservative investors, are making speculative investments. Some speculate that Merkel&Co will get their act together and the Eurozone will survive strenghend. Others speculate that Greece and other countries will leave the Euro, so they start pulling their investments out of these countries or delay any possible investments there. Quite rational. And as most of these investment portfolios are pension funds, future pensioners are expecting that fund managers are taking rational investment decisions. After Lehmann Broth, they have enough of creative investment of pension money. 2. The political signal and timetable must consist of the right balance of short term and long term measures. Long term means full economic integration with some sort of joint borrowing mechanism. Short term means empowering the ECB to act as a credible lender of last resort. 3. Fiscal discipline is good and preferable, but it is not enough to get Europe back on track. More important is a new Marshall (Growth) Plan for Southern Europe. You can call it European solidarity or enlightened self interest. Investors know that a fiscal union will not be possible without internal transfers and that is ok. 4. To have principles is a virtue, especially fiscal principles are important for investment predictability. But when the principles contribute to a situation where the whole basis of the investment is eroded, one should at least review them, even if this is uncomfortable. 5. The market knows very well what a fiscal union means, and they know that the Merkozy plan is not it. With good will it can be interpreted as a useful step in the right direction. But the market will only consider this as such, when the other, more fundamental steps will follow suit. 6. The market will like Eurobonds, not as a quick fix now but as part of a well thought through fiscal union. Eurobonds now will overstretch Germany. 7. After two years of bad crisis management international investors have lost their basic trust in the Eurozone. They got used to the idea that the Eurozone is not too big to fail and have started to price in the possible failure of the Euro in their investment decisions. 8. Currently they estimate the chance that the Eurozone will still exist in 5 years above 50%. However, if the Eurozone survives, it will be a different Eurozone either in composition and/or in organisation. 9. Saving the Eurozone will be expensive, but it will be much cheaper than cleaning up the mess of a breakup, let alone the political cost. 10. The problem of public debt is larger than the Eurozone and concerns almost all Western democracies. It can become a systemic risk for the future of Western liberal democracy. 11. Intervention of the ECB as lender of last resort can increase the level of inflation, say up to 5%. Even this is disputed as there are also deflationary trends. But even inflation of 5% is no catastrophe and is much preferable to a messy breakup of the Euro with its unpredictable economic and political consequences. 12. German Angst of inflation is not just a historic paranoia. It has a structural reason. Germans put a much higher percentage of their money into deposits(Sparbuch, Staatsanleihen) than other Europeans and have relatively little ownership of shares and property. Deposits will be the big losers during inflation. 13. Germany is a rich country not only because people there work hard but because it draws a huge benefits from the interdependence of the European economy. If this interdependence is damaged, Germany will become poorer, however hard the Germans will work. 14. In the current volatile situation it is difficult for any investor to make money. The market is not winning in this crisis. Paradoxically the only one who seems to be winning these days is Germany because it can borrow at an interest rate (2%) which is below the inflation rate (3%). My conclusion: The markets are indeed the most active Europeans. They want a clear political signal that the EU is making a big leap forward towards a fiscal, economic and political union and a timetable for getting there. They know this is not happening tomorrow but a believable political commitment will provide a predictable investment climate. And this is exactly what is missing now, there is no clear signal, no timetable and hence no predictability for investments. That is why they hedge against a breakup of the Euro in order to protect their investment portfolios and so put more pressure on the Eurozone. It looks like the markets have not made their case strong enough.

Europe is not too big to fail: Concerned Europeans act now!

Europe is at a tipping point – either the markets will force a massive surge of integration, or things will tip into the other direction and Europe will move towards gradual disintegration. In either case, the lack of citizens’ participation has become a systemic risk which jeopardizes even a development towards further integration. On the other hand, pressure coming from concerned European citizens can be precisely what Europe’s elites need to find a sustainable way out of the crisis. The current European identity crisis started back in 2005, when French and Dutch citizens voted against the draft EU constitution. The citizens signalled: Europe has become distant, we don’t understand it anymore. The answer of the political elites was the technocratic Lisbon treaty, which regulated a number of processes much better but omitted the important issue of economic and financial governance. Instead of fresh European enthusiasm we got two new EU executive posts occupied by colourless technocrats still unknown to most people today. On the global stage the EU has increasingly manoeuvred itself into the role of an onlooker, most evidently at the failed climate summit in Copenhagen, and again recently during the Arab Spring. Within the EU, border checks were temporarily reintroduced for fear of young migrants coming from the south. This is a roll-back of one of the most tangible achievements of European integration that citizens are able to experience for themselves. The financial crisis of 2008 hit the EU harder than first expected. It revealed that the monetary union had not been properly thought through to its logical conclusion. Instead of being a factor for deeper integration the Euro has become a systemic risk for the entire European Union. For two years now, Europe has been run by events. Policy makers are reactive, short-term and defensive: decisions are not made until the only choice left is between bad and worse - and even then it is too late. A mere ten years ago, we were full of self-confidence, seriously believing that the 21st century would belong to the European Dream. Instead Europe is now a problem, and not just for itself. What was considered totally inconceivable only yesterday is now no longer impossible: Europe is not too big to fail. There are a number of reasons for the potential failure of the European Dream; the latest of these is, of course, the as yet unresolved Euro crisis. To permanently rid ourselves of the ghost of disintegration, however, we should look beyond the present moment and deal in particular with the following five challenges: I. Restoring the primacy of ends over means For at least two years now, Europe has been ruled more or less openly by the markets. Without emotions the markets have revealed the design errors of the Euro, forcing politicians to make long overdue economic and political decisions. Ironically, the markets may currently be the most active Europeans. However, Europe was not designed as an economic balance sheet. Europe was built on historical experience, for political reasons and as a result of political will. Economic integration was the primary means to achieve political ends: peace, stability and prosperity in Europe. Jean Monnet’s method was to build Europe top down, via institution building, economic integration, through a process of small steps. Politics was the driving force and the mastermind behind the development. Now things seem to have been almost turned on their heads: we are determined by the means - and no longer by our goals. The markets are the driving force behind politics, and politicians are always one or two steps behind. Paradoxically, this method has produced a lot during the last few months that would have been considered totally unrealistic only two years ago. If Merkel and Sarkozy had announced their latest proposals on European economic governance then, they would have been celebrated as visionaries in the footsteps of Monnet, Delors and Kohl. Now they are reactive being pushed by events. This lack of leadership does not inspire confidence– and that goes for markets and citizens alike. The markets are unpredictable Europeans. We cannot rely on them. But we can overcome the current crisis by going back to the original aims of the European Union and using this to shape policy actively. Especially in these turbulent times the original European vision, namely social stability and economic prosperity in Europe, is still very relevant - and large enough. Peace is also a value which we should not easily take for granted after a historically short period of peace in Europe. That is the lesson the Balkan wars should have taught us. II. Sustaining prosperity The European Dream is built on prosperity and growth. The promise of Europe is that everyone will be better off. This was also a central element of the various expansion rounds. Even if we would not admit this easily, the European community of values was only a secondary reason for most new EU members for joining. The promise of ‘prosperity through Europe’ has worked well up to now. The financial and debt crisis has undermined this promise. Even if the reasons for the crises in Greece, Portugal, Spain, Ireland and Italy differ, Europe is involved, and it cannot in the short run halt the current decline of prosperity in those and possibly other EU members. At the same time, we need to review our present growth-oriented lifestyle anyway. This lifestyle is financed on credit from our children and other parts of the world – in monetary terms and with regard to natural resources. For the future, Europe will not be able to keep the promise of linear growth. Without prosperity, Europe will not achieve legitimacy from its citizens. But what is prosperity in the 21st century, how is prosperity shared equitably, what does it actually mean to always be better off, and is it at all possible to maintain our level of prosperity in the face of global competition? These are the questions which Europe needs to find answers to. And this is the original vision of Europe which must be updated and implemented. The vision may be an old one, but it is still as relevant as ever, and it is as yet unfulfilled; it is certainly big enough. Delivering prosperity and growth in the 21st century is a system-critical challenge for Europe, but it is also an opportunity. Here Europe can show itself to be a visionary, out of self-interest but also as a global model. III. Europe must get faster Up to now Europe was a slow, heavy train becoming ever longer and stronger and passing through predictable terrain. It got a bit hilly at times. There was plenty of time to change gear. Now the terrain is getting mountainous; it is changing all the time and it is unpredictable. Europe is changing gear all the time and doing her best to somehow keep the speed up. This is a challenge for the heavy train. And lightweight, fast new trains are appearing on the horizon… In the last 10 years our pace of life has speeded up dramatically as a result of globalization, revolutionary information technologies and a hyper-creative financial industry. Also, what we already know about climate change must force us to make fundamental political and economic decisions even more speedily. However, decision-making processes in Europe were devised for slower, more predictable times. Our current European model was built for a different era. We will have to retrofit Europe here. Eurobonds und European economic harmonization are ways of buying time in the medium term. At the same time, though, Europe must get faster, and this can only be achieved by more shared sovereignty. In other words, these are not decorative changes to the train that is Europe – we need a stronger central engine and a coordinated transmission. That will make us fit for the global pace of life. IV. Defending the European model 1989 was not the end of history and the ultimate victory of the West, as Francis Fukuyama and many Europeans thought, but the beginning of a new multipolar era which has put in perspective the position of Europe too. From whatever perspective you looked at it, there was agreement that Europe would only be able to playing a meaningful global role if it were united. For this purpose, the Lisbon Treaty established a European diplomatic corps with a European foreign minister. While cleverly thought out from a theoretical and technical perspective, it has had no practical impact up to now. Lady Ashton and her team are unable to cope, and their efforts are unsuccessful. The fact that Europe’s role in the world is declining is almost palpable. The best example of this was the climate summit in Copenhagen in 2009, which saw the EU in the role of an onlooker – although the Europeans were the ones who made climate change a global issue in the first place. Of course, now in the middle of a sovereign debt crisis Europe is currently not cutting a very fine figure globally. But one has to keep in mind that the European Union model itself has been a way of solving conflicts and turning problems into opportunities. This model has found many admirers - and should continue to do so. If the European model falls apart, the development of other initiatives of shared governance such as the African Union will be set back dramatically. The future needs more of these initiatives and not less. In other words, a key thing for Europe to do as a global actor at present is to put its own house in order and continue to improve it. The world needs the European model to be successful. This is not a call for European isolationism. Europe has an important role to play globally but will only be able to do it credibly and with self-confidence if it has sorted out its economic and governance problems at home. If Europe still happens to have resources after this, it will have to concentrate on two or three main global issues on which it can really speak with one voice. Right at the top of the list should be the fight against dangerous climate change. Here Europe set the agenda itself, it continues to be the frontrunner with regard to implementation, and there is a clear link with economic interests in international competition. Also, Europe’s global commitment on climate change is a European vision for which the European citizens can be mobilized in terms of domestic and foreign policy. V. A European lobby from below Europe is ruled by national interests. That is logical in a system where the only direct political legitimacy is fought over in national and regional elections. There are elections to the European Parliament, but these are proxy elections on national policy whose outcome is not reflected in a European political executive. To date the European Parliament elections have not had anything to do with the composition of the European Commission. Politicians who rely on popular support and with a mandate not measured by European deeds mainly think in national terms. Add to this the fact that less and less politicians have a European history of their own. Their personal history was lived against a European backdrop, but strengthening Europe has not been their political aim. The nation state is closer to their hearts. This is not anti-European – it is just rational politics. Angela Merkel is a good example here. European executive posts are occupied by compliant technocrats. They are policy administrators and not policy shapers. One result of this is that the Brussels executive trio of Rompuy/Barroso/Ashton plays only a very minor role in the current crisis. Europe is more or less directly ruled from the national capitals. And national capitals make national European politics. National elites are becoming less and less able to put across a vision of Europe. The Brussels institutions can do nothing to compensate here. Since the days of Jacques Delors, they have been cut back to such an extent that they are actually nothing but an apolitical bureaucracy. And this is reflected in the language of Europe too: technical, theoretical, complicated and boring. National political is much closer to the people, even just for reasons of election tactics. The crisis has shown that politicians can react to pressure: the pressure of the markets. Those for whom the markets are too unpredictable and nebulous should remember that politicians are actually appointed and employed by citizens and should react to their pressure. In Finland, the Netherlands and the UK Eurosceptic movements demonstrate how one can effectively exert pressure on policy. But where is the political pressure of those who see the future in more Europe? The future of Europe cannot be left up to the national elites, Eurosceptic lobbies and the international financial markets. It needs an effective lobby from below which demands a proactive European policy. We can learn a lot from the Tea Party about how to emotionalize politics – although we are worlds apart on issues. What to do? European visionaries built up the European Union step by step as an elite project after World War II. This is a creative achievement of which we in Europe can be justly proud. But this method has reached its limits. To continue in the same way could destroy what has been achieved and set back Europe’s development by several decades. The disparate crisis management of the current leaderships in Europe has shown that we cannot be passive and leave Europe to them. The European Dream can continue if it is supported by a broad grass-roots movement which helps to shape it. In short, we need pressure from below. Model Europe is as relevant today as it was 65 years ago. But it has to face the challenges and the pace of the 21st century, in terms of substance and communication. What is at stake is nothing less than re-invention a Europe which will continue to creating prosperity, stability and peace. This remains a big vision for Europe’s domestic and foreign policy. From Monnet 1.0 to Monnet 2.0: the groups that have benefited most from European integration and are now seeing for the first time that European integration is not irreversible have to be given a political voice. Armchair Europeans will have to become engaged Europeans – a civil lobby, which puts pressure on political decision-makers via national and European elections. Participation in European elections has shown a consistently negative trend since the first direct election in 1979. The average voter turnout in 2009 was 43%. This trend will have to be stopped in 2014. We can handle the European debt crisis from a technical point of view, but we cannot handle a further loss of engagement of European citizens at a time when anti-European groups are getting stronger and better organised. The immediate goal of this citizen’s movement is to making the 2014 European Parliament election a real choice of direction. There are enough European issues which can be fought over politically and emotionally, for example: how can Europe safeguard prosperity and stability in future, how can the power of the financial markets be restrained, what should a social policy of redistribution look like, how do we create opportunities and potential for the young generation, what is industrial policy in the age of globalization, what is sustainable energy policy and which education policies will keep us internationally competitive. Via the elections to the European Parliament must citizens decide the composition of the European Commission. The aim must also be to make national elections more European. This new movement will be independent, open, political and emotional. Social media open many opportunities but they should not replace ‘old’ political communication. We need the best of traditional communication and campaigning: face to face discussion, posters, graffiti, TV. We need creativity. Europe must be visible online and offline with a civil lobby of its own. Only in this way will there be a sustainable way out of the European identity crisis. Concerned Europeans act now! Versions of this essay have appeared in Zeit Online, The European, Open Democracy, Dahrendorf Blog, ECFR, Stiftung Mercator 51°

United but wrong

In the appointment of the next head of the IMF, the EU has acted fast, united and decisive in pushing its own candidtate Christine Lagarde to become the new IMF Director. This sounds like good news for the struggling EU foreign policy given the experience of frequent division and ineffectiveness under Lady Ashton.

The argument of the EU to justify another grab for the IMF post was to have a competent partner in solving the Euro Debt Crisis. Is that really a sound argument? Why was that argument not made during the Asian or Latin American debt crisis? To put it more plainly, this is the equivalent of insisting that the next head of the European Central Bank must be Greek.

But the really bad news is that this time it is unity and decisivness for the wrong reason, i.e. to defend a 20th century privilege that the IMF chief should be a (West) European.

The message the EU sends to the world is this: we find it difficult to get our act together on international issues like climate change, the Arab uprising, migration, the Iraq war. But when it comes to defend our outdated privileges, united we stand.

Our unity of today will backfire tomorrow. If the future global powers in Asia and South America replicate our behavior of today in the future, we will have a tough time.

Instead we should be using our remaining influence now to set, and live by, standards of global governance which remain in the future.

If Ms. Lagarde can achive this in her tenure at the IMF, the EU's unity and decisivness today may have been worth it after all.


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A first version of this piece appeared as an ECFR blog on 25 May 2011