Should Europe Stay a Union?
Continuing weakness in the European economy, plus squabbling between Germany and France over the direction of Europe, has sparked new concerns about the future of the Eurozone. But José Manuel Barroso, president of the European Commission, argues that reforms made since the last financial crisis should help keep Europe afloat.
A run of bad economic news in Europe has spurred talk of a “triple-dip” recession— a slide into prolonged negative growth would mark the third contraction since the financial crisis of 2008. The combined EU economy is the largest economy in the world, larger than both the U.S. and China, and so what happens on the continent has implications for the whole world. A global selloff in stock markets in the first half of this week was partly attributed to fears over the European economy. One commentator calls the recent weakness in Europe “the dark cloud over the global economy.”
One obvious difference between the EU and the other giant economies is that the EU is a federation of sovereign nations, with a shared market but much variation in political systems and cultures. As has been clear since the crisis of 2008, financial stress exposes the fault lines in the political and monetary union. Recently, for example, divisions between the Eurozone’s two largest economies—France and Germany—threatened a showdown over the future of economic union on the continent.
José Manuel Barroso, president of the European Commission, is not one of the Euro pessimists. As head of the European Union’s executive arm since 2004, Barroso has been in the middle of the fight to first keep EU members from defaulting and then to enact reforms that will better enable the EU to fight future financial crises. In an interview with Yale Insights, he argued that the Eurozone is in much improved shape. “We are much more integrated than before,” he said. “We created a banking union. There are now more powers and competencies for the European Central Bank and for the European Commission than before, precisely to avoid negative spillover effects that we have seen in the past between our economies.”
Barroso remains convinced that the Europe will be strongest as a union. “We have a lot of challenges but one thing I am sure is that we can face them much better if we do it collectively as a union than if our member states try to solve them on their own.”