EU needs to rein­vent it­self

Daily Sabah (Turkey) - - Front Page - Kerem Alkin

THE EURO­PEAN Union has had great dif­fi­culty over the past 12 years since the 2008 global fi­nan­cial cri­sis, but it has largely been a suc­cess story in terms of the dif­fi­cult 70-year phase from the be­gin­ning of the Cold War to date.

It was a huge suc­cess in the sense that a ge­og­ra­phy like Europe, which has seen wars and hu­man tragedies for cen­turies, is now de­fined and ac­cepted as a cen­ter of at­trac­tion, set­ting the stan­dards in terms of per­ma­nent peace, sus­tain­able de­vel­op­ment, high-qual­ity democ­racy and fun­da­men­tal hu­man rights.

The six found­ing coun­tries of the EU, es­pe­cially Ger­many and France, how­ever, mis­cal­cu­lated the union’s strength, as they ac­cel­er­ated the union’s en­large­ment process faster than it needed to be. They thought all mech­a­nisms of the union were ready for ex­pan­sion and that the pos­i­tive re­sults would be per­ma­nent.

They rushed to trans­form their suc­cess­ful “sin­gle mar­ket” pro­ject to the “sin­gle money” phase. More pre­cisely, they in­cluded coun­tries that were not ready for such a tran­si­tion, even though they saw that they could not ful­fill the con­di­tions in the eu­ro­zone. At the same time, putting aside the trau­mas caused by World War II, they started to dis­cuss con­cepts such as a Euro­pean army.

How­ever, to­day we can see much more clearly that form­ing a com­mon mon­e­tary pol­icy with the Euro­pean Cen­tral Bank (ECB) was not enough to achieve full har­mo­niza­tion in the field of eco­nomic poli­cies. It is also nec­es­sary to es­tab­lish an ad­just­ment model on the com­mon fis­cal pol­icy. The global fi­nan­cial cri­sis in 2008 and the cur­rent coron­avirus pan­demic both saw var­i­ous de­vel­op­ments that se­verely af­fected sol­i­dar­ity within the EU and raised the ques­tion of whether the pro­ject had failed. Bri­tain’s de­ci­sion to leave the EU, called Brexit, was the big­gest blow.

Ger­many, who is still the most right­minded and there­fore the “big brother” of the union, and Merkel, who has been chan­cel­lor of Ger­many since 2005, bears the bur­den of much of the work.

This is also be­cause France has not been able to find a leader since for­mer Pres­i­dent Fran­cois Mit­ter­rand, who would bring calm­ness, re­spect and dig­nity to its in­ter­na­tional pol­i­tics.

For this rea­son, Ger­many, and es­pe­cially Merkel, has to bal­ance and level the non­sense of politi­cians like for­mer French Pres­i­dent Ni­co­las Sarkozy and in­cum­bent Pres­i­dent Em­manuel Macron.

Merkel be­lieves that it is nec­es­sary to build a new set of re­la­tion­ships with global pow­er­houses such as the U.S., Rus­sia and China. Be­ing well aware of the shift in the cen­ter of grav­ity of the global sys­tem and of the era called “the new nor­mal,” she is putting in a con­sid­er­able ef­fort for strong re­la­tion­ships with Turkey. The EU needs to rein­vent it­self and re­vive its re­sources and ca­pa­bil­i­ties. The EU is tak­ing on a pi­o­neer­ing role, in the name of the world econ­omy and global trade, on top­ics like car­bon emis­sions and zero waste. And plot­ting a new story in this field could be a per­ma­nent way out for the EU’s fu­ture.

Oth­er­wise, the fu­ture of the pro­ject will be in­creas­ingly threat­ened by the risk of right-wing ex­trem­ism and in­creas­ing dis­be­lief to­ward the cul­ture of sol­i­dar­ity.

FU­TURE OF US DOL­LAR

The United States is pre­par­ing to hold one of the most in­ter­est­ing pres­i­den­tial elec­tions in its his­tory. Of course, the strug­gle be­tween the two can­di­dates is be­ing fol­lowed with great cu­rios­ity world­wide.

In an en­vi­ron­ment adorned with the harsh­est mes­sages in his­tory, where can­di­dates di­rectly in­sult each other, strange sce­nar­ios are be­ing dis­cussed. Let alone the cit­i­zens on the street, even Face­book founder Mark Zucker­berg ex­pressed his con­cern that there might be armed clashes on the street and protests in fa­vor of the can­di­dates on the elec­tion night. He also in­di­cated that the U.S. will talk a lot about what will hap­pen un­til Elec­tion Day and af­ter.

Hav­ing said that, in­ter­na­tional eco­nomic cir­cles are se­ri­ously dis­cussing what will be the ef­fects on the global eco­nomicpo­lit­i­cal sys­tem in the sce­nar­ios where U.S. Pres­i­dent Don­ald Trump or Demo­cratic pres­i­den­tial can­di­date Joe Bi­den would be the next U.S. pres­i­dent.

It is un­der­stood that if Pres­i­dent Trump is elected, he would fur­ther es­ca­late ten­sions with China and Iran, con­tinue to change the re­gional bal­ances in fa­vor of Is­rael in the Gulf and the Mid­dle East, and a highly volatile set of re­la­tions will con­tinue with Rus­sia and the EU. Ex­perts agree that such a pic­ture will be quite tir­ing for the per­for­mance and value of the U.S. dol­lar.

On the other hand, there is a strong be­lief that if Bi­den is elected pres­i­dent, the Trump-era poli­cies on China, Iran and the Mid­dle East will not be man­aged with the same rigid­ity or in a way that will fur­ther es­ca­late the ten­sion.

At this point, it seems highly likely that fresh breath would also be brought to the U.S.-EU re­la­tions. On the other hand, the is­sue of Rus­sia is be­lieved to be a lit­tle bit more com­pli­cated un­der a Bi­den ad­min­is­tra­tion.

For this rea­son, it is be­lieved that Bi­den will cause less strain, and may in fact re­duce the ten­sion, in terms of the global po­lit­i­cal econ­omy, which would lead to a more pos­i­tive re­sult in terms of the value and per­for­mance of the U.S. dol­lar.

The most crit­i­cal is­sue that the world is won­der­ing about is, in the case Trump is re­elected, whether or not he will con­tinue to im­pose sanc­tions and em­bar­goes that are against in­ter­na­tional law and un­ap­proved due to projects that do not suit the U.S. or co­op­er­a­tion be­tween coun­tries.

More­over, an­other ques­tion is whether he will use the dol­lar-de­nom­i­nated in­ter­na­tional pay­ment and trans­fer sys­tem as a threat or a threat mech­a­nism. In fact, he points out that it is not an un­likely pos­si­bil­ity that Bi­den would re­sort to such meth­ods in his time if he wants to pres­sure oth­ers.

How­ever, whichever pres­i­dent takes of­fice, it would be the big­gest mis­take to use the dol­lar-de­nom­i­nated in­ter­na­tional pay­ments and the money trans­fer sys­tem as a threat ve­hi­cle. Be­cause it would di­rectly threaten the U.S. dol­lar’s spe­cialty as the global re­serve cur­rency, the move would be shoot­ing the U.S. in its own foot.

There­fore, if the U.S. in­sists on this at­ti­tude, it seems in­evitable that the dol­lar will lose sig­nif­i­cant share in the cen­tral banks’ re­serves against the euro, Chi­nese yuan or gold.

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