Ways Out of the Eurozone Crisis: Some Alternative European Scenarios

Abstract

One has to take a mid-long-term view of the challenges that the EU had to face to assess how to get out of its actual impasse. The 1970s stands as a major turning phase where two challenges emerged. The first one is directly linked with the collapse of the gold exchange standard and the necessity to restructure the international relations accordingly. The neoliberal option, giving full priority to market mechanisms, largely boosted by the US and the UK governments, became the dominant motto within the EU and strongly impacted its integration process. The second challenge came from the rising acknowledgment of the limits to growth, e.g., the fact that current processes of production and consumption were not sustainable as some resources were nonrenewable and some activities were deteriorating the environment. A report to the US president and the report of the Club of Rome (1972) were both very clear on the emergency to respond to these challenges. Still this second challenge had a limited impact on the EU integration process, beyond a leading role in the Kyoto Protocol. By and large these warnings were rather minimalized and partly considered as controversial until the last decade. In the 2000s, the deterioration of the environment started to raise the credit of these warnings, stressing increasingly the negative impact of human activities on the climate and the environment. This relative inertia to meet this second challenge was also tied to the idea that the neoliberalization of markets could have coped with it setting up a new governance of the world economy which would have faced the environmental challenge. It rapidly turned out in the 2000s that such would not be the case. The first reason for such inaction is that market liberalization benefitted in the first place to the financial sector, inducing a mobility of capital and a pressure in favor of short-term financial results for the shareholders. This short termism clearly hampered taking into account the long-term investments required by the environmental challenge.