APRIL 2014 / NO. 1

TAGS: INTEGRATION, FRAGMENTATION, EU, NOBEL PEACE PRIZE, POLITICIANS, EUROPE, UNEMPLOYMENT

From integration to fragmentation

“Integration in the EU will become fragmentation. Integration of divided regions in a country is the maximum in democracy. Don’t do this with countries!”, John N. Gray, Professor European Thinking at the London School of Economics, December 2012

Do you remember the ‘three wise men’ of the EU, Van Rompuy, Barroso and Schulz, celebrating their receipt of the Nobel Peace Prize in Oslo in December 2013? This looks like an example of toxic politics! Have they thought of new challenges to solve the European problem of high unemployment? Do they and European government leaders know what is really behind Europe’s stagnation? The answer is a crisis of private investment which has decreased by some € 350 billion/year since 2007, equivalent to € 1,750 billion since the start of the financial/euro crisis. How does this compare to private and government consumption over the same period of 2007-2011? Private consumption is down by -0.2%, private investment is down by -14.5%, and government investment is down by -4.2%. But government consumption is up +5%, and net exports are up by +170.5%. Thank heaven for exports! The crucial challenge for the EU-27 is thus to stimulate/facilitate private investment!

“The politicians in the EU keep throwing money to support the weaker nations’ debt problems and they never talk about restoring growth”, Roger Bootle in Fortune Magazine, October 2012

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