The EU Must Stop Punching Below its Weight

Jul 23, 2020

In one of the most critical moments in history, the world finds itself leaderless.

The turmoil that Covid-19 has brought us into has also shed some light on the many flaws of our current political and economical system. Amongst all of them, one of the most crucial ones is perhaps the fact there is no leader to help the world navigate the storm. And as The Economist’s cartoonist “KAL” recently drew, Covid-19 is just the training bout. The real heavyweight fight is against global warming. In one of the most critical moments in history, the world finds itself leaderless.

The incumbent is in chaos. It is a nation currently fighting its own demons. Demons bred by an unrestrained free market capitalist model that created an economical and educational cleavage that will take a generation or two to close. Even if the next president is a Democrat, the US can’t be counted on to lead the world for at least the next decade. It will take no less than that to repair. As the largest economy and military power it will certainly continue to have an important place, but it can’t play main character anymore. It is not suited for it. Needless to say, for the good of all forms of life on the planet, a democratic president will make things much easier than a second period of Trump.

China, the main challenger, is more than happy to fill whatever part it can of the void the incumbent leaves. Although there are many lessons to learn from it, especially in economic policy, it is still a middle income country and its disregard for some of the most basic human rights like “the freedom of thoughts and of opinion” disqualifies it for the job.

But there is another superpower of which no one talks about, mainly because it has been in the making. It is Europe. The European Union (post Brexit)is thesecond largest economy in the world(18% of the world’s GDP), standing in between the US (23%) and China (15%). There is no question it could now be playing a much larger role in the international stage.

The European Moment

Eighty years ago it was the Americans that saved the world from Nazism. Today, it is the Europeans turn to save the world from the monsters created by US led small state capitalism. The EU must leave its comfort zone and rise up to the challenge. Geopolitical influence is more about building consensus (no one has more experience than EU members), and about finance and trade than about fighter jets.

It has unfortunately been held back for three reasons. Firstly, the complexity of the integration process, worsened by its own utopian rules such as decisions that require unanimity (amongst 27). Secondly, the entanglement of its economic architecture with a monetary but not fiscal union. Finally, playing a secondary character has also been a conscious decision,out of complacency of being under US protection and because its economic motor, largest economy and most populated country (Germany), has avoided a larger part due to its troublesome past.

The world can not afford anymore that the only adult in the room remains in a secondary role. The stakes are too high. To grasp the magnitude of the climate change challenge, we need at least a COVID-19 effect over CO2 emissions every year from now to 2030 to avert temperature increases above 1,5C. Simultaneously, the pandemic has unleashed the prevailing economic forces making us lose ground in the fight against poverty and inequality. If these two issues are not rapidly solved, we will soon find ourselves in a planet with more extreme weather conditions together with more nationalist and/or authoritarian regimes that are less willing to cooperate in the much needed multilateral initiatives.

World Order 2.0 and the EU example

COVID-19 can have a silver lining if it accelerates the change of course and the redirection of investment towards greening the economy and alleviating poverty. The market was not going to correct itself on time to avert climate catastrophe nor tackle inequality and poverty at the speed we ought to. Despite the fact the collective consciousness is evolving in the right direction, this is also a very slow process. The mandatory changes can’t be left neither in the hands of the market nor of our better self. The world order 2.0 has to become policy.

This is exactly what the EU is already doing. With its approval of the Green Deal, it has committed to reach 55% the CO2 emissions of 1990 by 2030 and of being 100% carbon neutral by 2050. Europe, responsible today for close to 10% of total emissions has set itself the most ambitious objectives towards greening. Such a decision should trigger other major polluters like China (27% of total global emissions) or the US (15%) to follow suit.

The EU is also home to the least unequal societies and has for the most part eradicated extreme poverty. The common denominator seems to be higher government revenue as a percentage of GDP supported by systems of high taxation.

Share and Enjoy !


Receive articles straight to your Inbox

How often?

Thank you for subscribing!