Europe in the new global order
Europe has never been so prosperous. And yet the recent European elections have again revealed a wave of discontent sweeping across Europe. What has caused this breakdown in the public trust and the rising disenchantment with globalisation and the political establishment? And how should Europe respond?
“There are no easy answers to these complex issues and those who think they have the silver bullet are usually wrong,” said Marco Buti, Economics and Finance Director-General at the European Commission.
One common thread between the success of populists in issues such as Brexit and in countries such as France, Italy and the US, was the urban rural divide, he argued.
People living in urban centres tend to view globalisation in largely positive terms, while those in the rural peripheries tend to feel left out in the cold, explained Buti.
“No university town in the UK was in favour of Brexit just as the large centres in the US were not in favour of Trump,” he said.
“We need to address this spatial divide in a forceful way to achieve inclusive growth,” said Buti, adding that it would be a challenge for the next Commission to “rethink structural funds and equip the periphery with social services and physical infrastructure.”
Underestimating social change
Although agreeing that the urban-rural divide was a concern, Arancha González, Executive Director of the International Trade Centre, also felt that rapid social change was a significant factor.
“International trade is like a lightning rod – where all the thunder collides,” she said. “There is a lot of analysis on the economic causes of the loss of trust but we have underestimated another dimension – social change.”
According to González: “A shift in power from men towards women, more secular societies, more diverse societies, more migrants, all these changes have not been properly discussed and managed.”
Blind to the contours of the global economy
Helena Norberg-Hodge, Founder and Director of Local Futures an NGO that promotes the ‘new economy’ movement and producer and co-director of the award-winning documentary The Economics of Happiness, lays the blame squarely at the doors of globalisation.
Globalisation is a systemic direction towards urbanisation and a “type of growth that is delivering more and more insecure livelihoods.” And the biggest losers in globalisation are “the majority of humanity as they are forced to participate in the rat race to produce every bigger, ever faster outputs.”
Everyone is suffering and the high rates of anxiety, depression and addiction, especially among young people adds testimony to that. “We have been blind to the contours of the direction of the global economy,” she stated.
We need to take a good “step back. Look at the big picture and see what’s happening to people and the natural world,” she said.
The glass half full
Although trade has not benefited everyone equally “the glass is half full” and we need to take a look at the facts before writing off trade policy and globalisation as the cause, said Gonzalez.
“More children pass the age of five, fewer women die because of maternal health, more children go to school and more women are economically empowered than ever before,” she argued.
Hanneke Faber, President Food & Refreshment at Unilever, said that she was encouraged by the European elections. “I am actually very encouraged by the vote, by the big turnout. I am encouraged by how well the greens did and I think this will push sustainability up the agenda.”
Europe: get your house in order!
If Europe wants to influence the evolution of the international order then it needs to strengthen itself internally first. “Europe: get your house in order!” said González.
While the US is now undermining the international system in which we have lived since the WWII and they would have us believe it is a choice between them or China, it’s more a question of choosing between “order or chaos” she said.
“The European model, properly rethought and revitalised, actually offers to the world a model that is much more appealing than the state capitalism of China or the cuthroat capitalism of the US,” said Buti.
“For me, Europe is the big hope,” said Norberg-Hodge. “We are the ones that can demonstrate responsibility to our citizens and the environment and we need to be playing this role globally.”