Europe in jeopardy

Gary Spaulding, Senior Gleaner Writer

Brussels, Belgium:The average European is in a state of extreme agitation, if the pulse of Brussels, the centre of the European Union (EU), can be regarded as an accurate gauge.

For them, life as they know it is in jeopardy - yesterday was Greece, today is Italy, while Spain and Portugal languish in worrying uncertainty, all brought about by poor economic management characterised by huge debt - that's the diagnosis of the economists and non-economists alike.

As debates rage over cause and effects of political expediency wrestling over the years, with uncompromising economic common sense in Europe, the troubling question that emerges among Europeans is 'Will it be my country next'?

And then it dawned that a similar experience could befall Jamaica, if warning signs continue to be ignored.

Cynicism is rife and scepticism commonplace among the diverse Brussels population of just about a million people. Even the future of the European Councils has come under question.

The words, seemingly on everyone's lips, are 'what's next?', as the financial disaster wreaked havoc on some member states (Greece, Italy and to a lesser extent Portugal and Spain) and whether its devastating tentacles will touch the place they call home.

European journalists have been in a state of frenzy as the headlines of Europe's predicament jumped from the front pages each day.

The newspapers told the story of scared euro bonds owners desperately rushing to get them off their hands last week.

The European Voice grimly reported 'Splits emerged over multi-layered EU' and before that 'Italy's woes leave Eurozone on the brink'.

"Everybody knows the problem, but they can't agree on the solution," Paul Aimes, a Brussels-based journalist told The Sunday Gleaner, in his attempt to capture the European mindset.

germany, britain at odds

That Germany and Britain seem to be at odds with aspects of the path being pursued by the European Commission is on the lips of many.

But even as the president of the European Commission, José Manuel Barrosa, tries to inject confidence as he pushes for remedial measures to be fast-tracked in 2012, he is not able to stave off much of the blame being levelled at the EU for being soft on recalcitrant European states.

It is larger, older and seems more advanced than the Caribbean region, but the problems being faced by the European Commission seem to mirror those that have beset CARICOM since it was formed in 1973.

Not unlike Caribbean citizens, Europeans also blame the insularity of politician for the skyrocketing problem, saying their national interests have always taken priority over the common good of a single economic structure.

Seventy-year-old Italian journalist Maria-Laura Franciosi, who worked with the EU for most of her adult years, characterised the European Commission (EC) as a splendid idea gone bad. She said the Economic and Monetary Unit (EMU) was established under the EC from as far back as 1992, on four pillars - the movement of people currency services and goods.

Franciosi argued that while the currency (the euro) was established, the economic framework to support it was ignored by each member state. "How can you have a monetary system without an economic framework," she asked rhetorically.

"The individual countries simply invoked their own financial independence," she added. "The EC is a great idea that is incomplete without the harmonisation of economic policies."

Lack of political will

Franciosi complained that a lack of political will on the part of the EC to invoke established sanctions is the cause of today's problems.

She said although EU economic policy stipulated that a country's debt cannot be more than three per cent of GDP, it was a largely ignored by member states until Greece's ratio stood at 145 per cent of its GDP and Italy 120 per cent.

Bill, Franciosi's British born husband agrees.

Concerns about the European Commission inevitably raise the question in the minds of Jamaicans exposed to the reaction of the European: is CARICOM and the Caribbean Single Market and Economy faring any better?

Economist, Scott Darvas, a research fellow of what is described as the most respected think tanks in EU, predicts that the end of the crisis is nowhere in sight.

He suggested that the purchase of bonds by the European Central Bank in the secondary market was temporary, limited and intended to facilitate monetary transmission.

Darvas said EU policy response to strengthen governance including surveillance; new institutions to facilitate stability and stress testing of major European banks will not go a far way in bringing a resolution to the problem.

It was clear that Darvas had his doubts. "With a lot of luck, the strategy might work," he said.

He complained that EU strategy does not address fundamental issues. One such issue is that there is no lender of last resort for sovereign states.

He said there was a lethal correlation between banking and sovereign debt crisis and nothing was contained in the plans to address interdependence across member states and possible governance crises.

"Markets may deny funding from Italy, Belgium and Spain and nobody knows what will come after that," he warned.

Social Scientist Paul Raffone, who heads another reputable Think Tank in Brussels, predicted that it would take another 10 to 20 years to get past the crisis, but warned that European countries have to stop deluding themselves that they are empires and recognise that they are genuinely dependent on each other to survive.

Like Lucas Papademos, the new prime minister of Greece, the new Italian Prime Minister Mario Monti was in Brussels last week, only days after taking office.

By his pronouncement, he app-eared to agree that areal coalition with stipulations was the way to go.

Despite the huge difference in size and perceived wealth, the paradox between Brussels, the headquarters of the European Commission and Kingston is as glaring as the similarity in the attitudes of politicians is startling.

While the residents from EU countries seem fixated on economic woes threatening their very existence as they know it, the people of Jamaica seem preoccupied with the outcome of an impending election.

There is a sense that while Jamaicans urged the prime minister to "Call it Andrew", in reference to the general election, Europeans are pleading to their representatives (politicians really) in the EU to fix it (the economy).