Europe : Taking back control of its destiny ?

What if 2017 marks the starting point for a new advance in the European project? After facing up to the revealing truths of Brexit, a few preliminary signs of a reboot in European construction can be detected

 

The successive shocks of Brexit and the election of Donald Trump, both of which “challenge” the role and legitimacy of the European Union on the international stage, are much more than just symptoms of deficiencies in the construction of Europe. These political obstacles are also unique opportunities for the (re)construction of Europe on a more social and human level and on stronger foundations. The new momentum of the Franco-German partnership following the election of Emmanuel Macron only confirms this perception.

 

 

Over the last three decades, the unification project has drifted away from its founding ambitions

The European Union has drifted away from the ambition of its founding fathers Jean Monnet, Robert Schuman and Konrad Adenauer to build a Europe of Peoples, after the catastrophe of the Second World War. The return of economic growth during the 30 years from 1945 to 1975 (“les trente glorieuses”) and the emergence of neo-liberal politics separated the European project from its original design. In 1993, the European Union concentrated its objectives on consolidation of its single internal market and on the construction of the Economic and Monetary Union, aligning itself with the principles of globalization: the free circulation of goods encouraged relocations, while the free circulation of people favoured immigration.

These trends are especially clearly reflected in the successive stages of European unification.  The “accelerated” expansion to twelve new countries between 2004 and 2007 met with the increasing hostility of public opinion, precisely on these issues of relocations and immigration: factory closures and the massive influx of people from Eastern Europe onto the Western European labour market fuelled a sense of increasing impoverishment and loss of identity of the middle classes. The amalgam in people’s minds between European construction and globalization was made possible by, among other things, the lack of credibility and of a clear image of the European Union, and this problem was doubtless neglected by European leaders.

 

A plea for a new Europe

The diagnosis is therefore painful. However, the prognosis is not entirely hopeless !

Although signs of a relaunch of European construction are perceptible, for several years they have remained concentrated on extension of the Monetary Union: we can cite the establishment of the European Semester or the creation of the Banking Union.

To truly reboot the construction of Europe, two things must be done: we must redefine a new vision for Europe and must sort out the major issues of the past. On this point, after the national elections in its leading countries, Europe will have to deal with the question of high public debts in certain countries; also, it will have to cleanse the banking sectors of some countries and resurrect the debate on the management of migratory flows.

The European project must now be tied more closely to the expectations of its populations. Economic, financial and monetary questions can no longer exclude the other essential challenges, such as security and defence, in the context of terrorism and geopolitical complexity, together with high unemployment, especially among the young, and, finally, the ecological and digital transitions.

We have recently witnessed advances that prompt us to take a more optimistic view of the future of Europe.

• The Juncker Plan, launched in 2015, is a 315-billion-euro investment programme designed to finance small and medium-sized companies and companies in the sectors of the future (renewable energies, high-speed internet and digital), and to relaunch investment in Europe, directing it towards sustainable growth.
• The European Commission’s White Paper presented in March examines the steps Europe will have to take by 2025 and proposes various scenarios to European leaders.
• The declaration marking 60 years of the Treaty of Rome highlights four aims: a safe and secure Europe, a prosperous and sustainable Europe, a social Europe and a stronger Europe on the global scene.

 

The results of the Dutch and French elections have highlighted the will of these peoples to continue the European project on new foundations.

Yes, Europe is at a watershed in its construction. Yes, Europe has its destiny in its own hands to meet the challenge of Brexit and to defend its reason for existence – its cohesion and unity.  Given that Euroscepticism has thrived on the neo-liberal dimension of European construction, it is now time to give Europe a new push with towards the genuinely European values of sustainable and responsible growth.

 

This document is for information purposes only.

Groupama Asset Management and its subsidiaries are not liable for any modification, distortion or forgery of this document.

All information contained in this document is confidential and reserved for the exclusive use of its addressees.

Any unauthorized modification, use or distribution of all or part of this document, by whatsoever means, is prohibited.

The information contained in this publication is based on sources that we consider to be reliable, but we do not guarantee its accuracy completeness, validity or relevance.

This document was drawn up on the basis of information, projections, estimates, forecasts and hypotheses that involve a degree of subjective judgement. The analyses and conclusions express an independent opinion formed on the basis of publicly available information on a specific date and by applying a methodology specific to Groupama AM. In view of the subjective and indicative nature of these analyses, they cannot be construed to constitute a legally binding commitment or guarantee of Groupama AM or as personal financial advice.

This non-contractual document does not, under any circumstances, constitute a recommendation, request for offers, an offer to buy or sell or an arbitrage offer, and may in no case be interpreted as such.

The commercial teams of Groupama Asset Management and its subsidiaries are at your service if you wish a personal financial recommendation.