The European Union must build on past successes

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The European Union faces huge challenges. These include accelerating innovation, deepening financial integration, protecting its security and preserving the values ​​of freedom, democracy and social well-being on which its society has been built since World War II. None of this will be easy given the negative changes the bloc is now facing, especially the political chaos in France and Germany. However, facing its future, it can build on great historical successes. The European Union, after all, has been able to enlarge and broaden its union over nearly seven decades (and even longer if we go back to the European Coal and Steel Community, created in 1951).

EU enlargement has increased the number of initial members from just six (Belgium, France, Germany, Italy, Luxembourg and the Netherlands) to 27 today (down from 28, unfortunately, after Brexit). It was not only the expansion that was striking, but the extent of the economic rapprochement between the members. As noted by Annette Bongardt et al 2013We can broadly distinguish three phases in EU convergence at the country level: 1) 1950-1973 – Western European convergence with US living standards; 2) 1974-1993 – Convergence of Northern and Southern Europe with Continental Europe; 3) 1994-2010 – Eastern Europe converges with Western Europe. This process of convergence has been widespread and strong, with Italy only beginning to diverge in the third period due to lower GDP growth. Then, after 2013, the shock of the eurozone financial crisis occurred, which created significant divergence, for a while. There has also been faster productivity growth in the US recently, which I consider It started last week.

Of the nine countries that joined the EU between 1973 and 2000, all but one (Greece, unfortunately) succeeded in increasing their GDP per capita (at purchasing power parity) relative to the average of the original six countries by 2023. Ireland, by far Big, winner. But due to the role of FDI there, GDP would have been 30 percent higher than GNI in 2023. Again, all 13 countries that joined between 2004 and 2013, most of them from Central and Eastern Europe, increased Its GDP per capita is relatively high. Compared to the original six EU countries, some by huge proportions. For example, Poland’s real GDP per capita rose from 40 percent of the EU6 level in 2004 to 73 percent in 2023. (See charts).

To draw a comparison with a country of similar size, but outside the EU, Ukraine’s real GDP per capita rose from 28 percent of the EU6 average in 2003 to just 31 percent in 2021 and fell to 28 percent in 2023. After Vladimir Putin’s attack. As for Türkiye, although it is abroad, it has done well. However, the reason for this was the (fading) hope of membership, which drove politics until the mid-2000s.

What happened to America’s neighbors is nothing like what happened within the enlarged European Union. As for Mexico, the most important country of all, it has fallen backwards: its real GDP per capita fell from 35% to 29% of levels in the United States between 2004 and 2023, despite the opportunities that trade agreements are supposed to provide. Free.

The fundamental difference between EU enlargement and Mexico’s agreements with the United States is that the former is institutional and normative: it offers the path to Europeanization. The United States cannot provide that. on the contrary, American social ills that I recently discussed It flows on its borders as it is Arms export He imports drugs. this It fuels gangs and destroys the rule of law. Given the concern about migrants coming across the border, why aren’t Americans doing everything they can to make the fragile countries in this region more prosperous? However, similarly, the European Union has done little for the Middle East and North Africa.

The EU’s success has been largely internal. Even the eurozone crisis of the 2000s was successfully overcome, despite the mistakes made in establishing and subsequently managing the currency union. Since 2020, all countries affected by the crisis have performed better than Germany, including Greece and Spain.

Neither the economic integration of Europe nor the rapprochement between its member states was inevitable. This has been a product of governance, some of which, ironically, goes back to Margaret Thatcher’s promotion of the single market in the 1980s. However, now come new and greater challenges. The security provided by the United States will at best become more expensive, and at worst will disappear altogether. Russia, with the support of China, poses a threat to Europe in the East. Ukraine, so desperate to enjoy the blessings of being within the European Union and NATO, is now at risk of being abandoned by those who should know better. EU societies with aging populations are increasing financial burdens. Hostility to immigration is rising While the need for it increases. Not least, As Draghi’s report explainsIncreasing productivity growth – through building the digital economy, deregulation, and deepening integration – is essential.

There must also be some way to form and implement a common foreign and security policy. There is also a need to agree on a significant increase in the European Union Financial resourcesthrough its own taxes and borrowing capacity. This, in turn, would return the EU to the discussions of political union that took place in the early 1990s. It will also be necessary to limit the ability of recalcitrant members, such as Hungary’s Viktor Orbán, to obstruct basic common policies. Many will say that all this is impossible. But there must be some benefit that could flow from the removal of the British rebellion.

Europe should not embrace this Social model It threatens to deliver America’s ills of premature death, mass murder, and high incarceration rates. However, radical changes are necessary. Whether Europe remains united, free and fragile depends on whether Europeans have the courage and wisdom to rise to the challenges of today’s era.

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