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BIG POWERS ARE BACK

April 16, 2018

The role of Europe in the context of resurrecting political power force

 

Big powers are back: no better name could be chosen for the conference of last 10th of April, jointly chaired by Professor Carlo Altomonte, the ISPI (Institute for International Political Studies) Director Paolo Magri and the Former Ambassador Armando Sanguini.  Each of the words in the title is essential to puzzle the current geopolitical landscape of the World, with emerging economies from the Middle and Far East taking over the timeworn West.

 

Beginning with the ending, the resurgence of Eastern political forces represents a comeback of ancient empires. It comes after two centuries of bipolar (US and Russia) and unipolar (US) World dominance, with Europe being always part of one of the dominant groups. As highlighted by the Director Magri in the presentation of the ISPI Report for 2018, countries like China, India, Russia, Saudi Arabia, Turkey and Qatar caught up with advanced economies. Consequently, as far as economic power is a good proxy for political power, they replaced the political role of the West. The reason, for once, is not Trump - or at least not only. The trade war with China, the threat of boycotting NATO and Paris agreement are certainly valid but not self-explanatory arguments to justify the rise of Eastern powers. What instead was fundamental were the 15/20 years of growth differentials between developed and emerging economies. However, according to Paolo Magri, while ISPI’s studies succeeded in predicting the convergence in GDP, current evidence does not reflect the hoped convergence towards democracy.

 

New economic leaders often display centralized powers: the strongest (paraphrasing Vice Minister Katainen’s words during last week Citizens' Dialogues) has replaced the rule of law. It is easy to see that most of the new actors are not even democracies, or at least not liberal democracies.

 

Finally, the big entity of the new economic players has a proper empirical evidence. It is enough to look at the distribution of GDP among the G7 countries. While, in past years, developed countries’ GDP used to represent the 80% of the G7 countries, now the distribution is far more equal (fifty-fifty, let’s say); just to make an example, US share shifted from 40% to 22%. Given this tendency, Professor Carlo Altomonte claims that the shape of 2030 G7 is clear: China, US, Russia, India - all nuclear powers competing for the Asian Pacific area – taking all the seats and none of the European countries sitting around the table. 

 

Big powers are back, and then one question inevitably arise: what about Europe?

 

While nationalism and sovereignty reinforced traditional states leading to the renaissance of Eastern big powers, the run on nationalism and populism made Europe intrinsically weak. Stuck in the middle, there is little hope (and almost entirely in German hands) for a remerging Europe, in Ambassador Sanguini’s view. The ‘European bet’ (Prof. Altomonte) would have been indeed probably successful in a stable rule-based world, but this is not more the case when political powers change and move towards autocracies. In a power-based world, EU’s policy founded on specialisation and trust of trade partners suddenly breaks down. Its main strength turns out to be its limit, pushing Europe in an uncomfortable dependent position.  Relying on NATO for defence, on Russia for energy and on the US for absorbing its current account surplus, the EU was therefore silently cornered. According to Professor Altomonte, there is only one way left to counterbalance European marginalisation. Starting from the reduction of the excess of saving in order to reduce its dependence on the US, Europe should developed internal consumption and investments. This could be done, for example, through an increase in public spending on defence, which would allow accomplishing two goals at once.

 

However, the former strategy has a deeper and challenging requirement: a Europe willing to stay united. The choice has to be made soon. June 2019 EU elections will indeed show up as a vote for or against Europe, rather than left or right. And if the “against” wins we know what the result will be. “Good luck Europe”.

 

 

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