UNITED WE STAND: a strong EU for a better (economic) future
by Alberto Zaffaroni, 13th August 2011
The world’s largest professional services firm, PriceWaterhouseCoopers (Pwc) has recently published a paper, suggestively named “The world in 2050”, in which they forecast the paths that major world economies will follow in the next 40 years , in terms of GDP.
Largely expected, we’ll have to get used soon to the idea that US will no longer be on the edge of world economy, giving way to new industrial “monsters” as China and India. According to GDP data forecasts, China will overtake US approximately in 2018 and no later than 2045 it’ll be the turn of India to do the same. These historic over takings raise some first interesting questions about, for example, what changes they’ll bring in our lives and ways of looking at the world or, still, how US will interpret its new role in the world economic sphere.
But the research by Pwc goes further, showing the projections for other major economies’ performances. We can easily notice that China and India do not represent the only rollovers of the economic world as we know it. Brazil, Japan, Russia, Mexico and Indonesia will take the place of most European countries in the “top-10 GDP chart” by 2050. Brazil will overtake France and Great Britain in the next few years, following it will come the turn of Russia on Germany, then it’ll be up to Mexico on Italy and so on and so forth.
Clearly we must be prepared to this massive reversal of the “order of things” we’re now used to and somehow accept the new, marginal role that each European country, considered individually, will play on the stage of world economy.
But here’s the point. Naturally, if we consider each European country as an entity on its own, it will look like a gnome in front of giants as US, China, India or the other emerging economies. However, this is not the case if we apply the old adage “united we stand” to the European contest. In other words, if we take the GDP levels of the major European economies, as calculated by Pwc, and add them all up, the final data will lead to totally different conclusions.
Have a look at the following chart for a deeper persuasion:
As we can see, the last may not be the first this time, but surely they’ll still have something to say in the economic panorama. How to get this, then?
GDP LEVELS in 2050 (in billions of Dollars, according to Pwc’s research)
Main EU Countries: 20.477
The answer’s to be found in something already existing, but maybe undervalued or culpably denied and its name is European Union. “United we stand”: the main European countries, a long long time ago, have already laid the foundations for this ambitious project of union, a marvelous machine, except refusing to give it the necessary fuel for an effective existence, i.e. sovereignty.
This is the time for strong and brave decisions, for the present, and most important, for the future. The chronicle of these black days for world and, especially, European economy is giving somehow a great chance and stimulus to European countries. It’s clear that nobody, at least in Europe, can stand alone the pressure of the moment on public finances and sovereign debt. Then, I personally welcome the strong intervention of the ECB in the last days with special reference to Italy and Spain, as an involuntary thrust in the direction that European country should take, based on two main pillars:
1) “Do what we didn’t want to some decades ago”, i.e. it’s time for European national governments to bravely but gradually give away more and more of their power so to pave the way for a true, unified, effective EU’s government, in charge of making homogeneous decisions for all the members.
2) “A EU ministry for economy and finance”. It seems that having a unique monetary policy but several fiscal policies leads to costs and obstacles higher than expected. Then, the only way to get out of this “impasse” may be to definitely give the power of decisions on European policies (both monetary and fiscal) to a superior, independent organism, responsible for the good health of all EU economy.
If we want to survive in the ocean of world economy, populated by fishes much bigger than us, than we have to make ourselves bigger and stronger too.
“United we stand” be our motto, politically and, above all, economically.
Alberto Zaffaroni 13/08/2011 Sources: Il Sole 24Ore and “The world in 2050” by Pwc