On the scene in Europe – dramatic changes taking place
AND THE FIRE ANTS ARE COMING
By Rick Morren – Europe House 

November/December 2003

From the moment we landed in Europe, even though it was good to be back home, it felt somewhat surreal. Horrific events were following each other at an accelerated pace.

Turkey was ravaged by four deadly terrorist attacks against Israeli and British targets in Istanbul, killing numerous innocent Turkish civilians instead. Adding to these tragedies was the increasingly deadly and chaotic situation in Iraq, despite reassuring statements from the President in Baghdad on Thanksgiving.

At the same time George Bush was visiting England, where he was not really welcomed with open arms, driving around in a motorcade of armored limousines through a London that was turned into a fortress for the occasion. After all was said and done, the four day Bush event cost the British taxpayer about 8 million euros (10 million US dollars). Fortunately from an educational standpoint, President Bush could see for himself how his administration is disliked by the average “Joe Bloke” in Europe.

OBJECTIVE PRESS

More than 100.000 people marched to10 Downing Street. It was the largest midweek demonstration in the history of London. It must be said that whatever else might be wrong in Europe, most of the press corps there still understands the value of investigative reporting, rather than just reading press releases they get handed down from the government or corporate pr managers. It was also refreshing to see that TV stations in Europe do not shun away from showing flag draped coffins coming back from Iraq, or large-scale public demonstrations. But, change could be on the horizon, with some French, British and Dutch journalists complaining they have run into uncooperative government agencies throughout Europe, who are not willing to provide information to what they call “unreasonable” journalists.

But we found that overall press coverage of major world-wide issues in Europe is more objective than in America today. Following the aftermath of the explosions in Istanbul, US TV Networks broadcasting in Europe and the US, were focusing mainly on Michael Jackson’s “sleeping habits”. Coffins don’t sell well on TV, Michael Jackson does.

EUROPEANS DON’T HATE AMERICANS 

But if all this sounds anti-American, let us be clear: Everyone we came into contact with acknowledged that Europeans do not hate Americans. To the contrary, they not only admire America, but also copy many of the US trends and customs. Also at rallies and in editorials, the point is often made that Europeans oppose Bush and his administration, not America. But day-to-day encounters are less subtle, and often collapse into a kind of guilt by association. 
Americans interviewed in Europe say that the verbal offensives -- sometimes hostile, sometimes polite but derogatory -- come regardless of their politics, and that the situation often prompts a recalibration of where they themselves stand politically. As a result, even some left-leaning Americans say they find themselves defending the system that elected Bush and the ideals for which they say he stands.

A local newspaper wrote: “Christine Buckley, 24, from New York, who arrived in London six months ago after spending two years in the Peace Corps in a small village in Western Morocco. She was there on Sept. 11 and remembered how the Muslim villagers hugged her and implored her to understand, "The people who did that were not Muslim."

Since then, in Morocco, in travels across Europe, and now in London, she said, she has felt that sympathy for America dissipate into anger against America. "It wasn't until Iraq that things got really ugly. That is when people saw America as unilateral, as defying the UN and the world opinion," she said.

THE FIRE ANTS ARE COMING 

Personally, and looking back when I was a kid living in the South American Republic of Suriname, my Dad always told me never to stir in a fire ants nest, because the ants would spread all over the yard and become a real menace to everyone. On the world scene, the George Bush team certainly has stirred up the “fire ants” of this world. All one has to do is look at his new global pre-emptive - you are with me or against me- doctrine. So far this policy, with the fear factor as its major component to manipulate public opinion, has polarized opposing forces to the point where dialog is nearly impossible. What has happened to bringing our western strengths of democracy and economics to the bargaining table as the cornerstone of global policy?

Unfortunately, and no one can deny it, innocent people are dying in record numbers as a result of the new unilateral US policy, and not only in Iraq or Afghanistan.

DISASTER IN TURKEY – COULD ALSO SPELL HOPE FOR THE FUTURE 

Case in point Turkey. When you cross the bridge over the Bosphorus, dividing the Asian part of Istanbul from that of the European side, you see a sign that says “welcome to Europe.”  
Well, the fire ants have now also found that crossing into Europe. The opinion is divided if this happened as a result of the new Bush doctrine, or if it was bound to happen. So far the result has been devastating, with four suicide bombings in Istanbul killing 57 and wounding more than 700, and spreading untold fear in this city of 12 million.

Until this terror began, the governing Justice and Development Party, the first Islamic-supported party to win a majority in parliament in the modern Turkish republic, was riding high. Its leaders' refusal to bow to US pressure to support the war in Iraq was enormously popular, the economy was showing signs of reviving, and religious and social tensions were being managed. The government also showed, and gained respect that Turkey was going through a historic compromise, trying to show that the country could be Muslim and conservative, but also democratic, secular, and Europe-oriented.

The fact that these terrorist attacks took place on Turkish (European) soil should probably more than ever indicates to those who might have doubted Turkish loyalty towards Europe, that Turks are not only European, but that Turkey is part of Europe’s first line of defense against Muslim radicalism. These bombings have also proven that Turkey will defend Europe, and let us be honest; we must embrace them for it.

Prior to the bombings, the outlook for Turkey's bid to secure EU membership was definitely clouded.

The Commission, in its most recent assessment of Turkey's progress towards meeting EU standards of democracy and human rights, said that Turkey still has much to do. The EU wants Turkey to back down over its military occupation and claim of sovereignty over northern Cyprus, to pave the way for a political settlement there before Cyprus formally enters the EU in May next year. The Turkish army and strong political forces seem unwilling to make this huge concession without major gestures by the EU in return.

Vatican statements and Christian-based political parties in several EU member-states have also openly been hostile towards Turkey, a Muslim nation, to becoming "part of the Europe Union".

As to the Vatican’s objections to Turkey joining the EU? Have we forgotten that back in 1492 the manipulative Catholic Church hierarchy was instrumental in expulsing the Jews from Spain. One of the few countries, which welcomed these Jewish refugees, was the Ottoman Empire, today’s Turkey.

However, from some of our own observations this past week, it now seems there is a groundswell of support for Turkey’s induction into the European Union, following the murderous attacks in Istanbul. “ Turkey certainly qualifies more than any of the states in Eastern Europe to become a member of the European Union, they have shown us what solidarity means”, said a Jan Volkerts a gas station cashier in Brussels. Pierre Dumont, a devout Catholic, who works in a travel agency in Paris noted: “ if the new European Union constitution doesn’t clearly show a Europe which is secular, I will be against it. God belongs to us all, and is not just reserved for Christians, Jews or Muslims.”

POLITICAL FORECAST - CONSTITUTION CRUCIAL 

EU foreign ministers went to Naples this weekend for critical talks before their heads of government are due to finalize the draft constitution, which will be finalized at a summit starting in Brussels on 12 December.

The task is enormous. Most of the constitution was agreed on by a convention chaired by the former French president Valery Giscard d'Estaing, but national governments have the final say. Any of the 15 member states or the 10 countries due to join the EU in May can veto an agreement, and already a host of objections have been raised.

These include proposals, opposed by Spain and Poland, to change the voting system from the one agreed in Nice three years ago. Catholic nations want a reference to Christianity in the constitution's pre-amble and smaller states are resisting moves to slim the European Commission, removing countries' automatic right to send a European commissioner to Brussels. A proposed EU mutual defense guarantee, to which the UK objects, would be strengthened by being made a general obligation rather than something into which nations could opt. But to soften the implications there is also a pledge that it would "not prejudice existing commitments to NATO". On majority voting, Britain wants to keep the veto on all tax and social security policy, on the harmonization of judicial criminal law and on energy policy.

The bottom line will probably be a water downed constitution or no constitution at all. We believe there will be a constitution, because without one an expanded Europe is doomed to collapse.

THE EUROPEAN ECONOMY 

European economies are under stress. We saw and heard it everywhere. Measures to correct it are not popular, and some of the new experiments with privatization are not working. British rail and Dutch rail, which were privatized, are in deep trouble. In the area of competitiveness the picture is not all that bad. Finland is number one on the list of the world's most competitive economies. Five other European countries (Sweden, Denmark, Switzerland, Iceland and Norway) all finished in the top ten of the world. Despite macroeconomics difficulties, especially in terms of their budgetary deficits, Germany (13) and France (26) slightly improved their positions largely due to improvements in public institutions and in technology. The UK dropped from the 11th to the 15th place due to a perceived decline in the quality of its public institutions.

Between the current EU Member States Greece (35) and Italy (41) fare worst, all down from the 2002 report. While Malta (19) and Estonia (22) are at the forefront of competitiveness among the new Member States, Slovakia (43) and Poland (45) still have some catching up to do. Bulgaria (64), Turkey (65) and Romania (75) all lag far behind EU levels.

Internally, the so called Stability Pact, which calls on all 12 members, who presently use the euro as their common currency, to keep government expenditures at a level not exceeding three percent, has become a note of contention. Specifically because France and Germany are presently not keeping their end of the bargain, even though they were the ones who insisted on this pact when the euro came onto being. It shows again that anything Europe’s big governments have stitched together, Europe’s big governments can unpick. But this bothers not everyone. As economists such as Willem Buiter of the European Bank of Reconstruction and Development point out, in all markets, whether for apples or for capital, a big enough spender will push up the price for everyone else. That is the way markets work.

The Netherlands economy, once the showcase for Europe, now has one of the worst performing economies. To combat this slump, the new center-right Balkenende government is dismantling Holland’s social welfare program at an accelerated pace, causing considerable hardship for the less fortunate and older generation in the country. The Dutch Government once again also applied the successful Dutch “polder-model” concept, whereby government and organized labor work together to combat economic difficulties, by signing a salary freeze pact with the labor unions. Reports for the first half-year in 2003 show an increase of Dutch exports of 0.6%, mainly as a result of an increase of flower and plant exports by 10%. Germany is the most important buyer of Dutch goods. On the down side, the Netherlands have 1000 troops in Iraq, costing the taxpayer approximately 1 million euros per week.

By next May ten countries will join the European Union: Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, Slovenia. Eight of these were former Soviet block countries. Many of these countries will soon realize, that joining the EU will not bring instant wealth. Calculations show that if the new members manage to grow their economies by the optimistic figure of 3% per year it will take them 90 years to catch up with the wealthy northern European countries in the Union. Next year’s enlargement will take the EU from 15 to 25 members, with a population of 450 million and an economy slightly larger than America’s.

On the international economic scene new problems are threatening relations between the US and the European Union. The US is saying that the EU's new takeover directive, which was originally intended to make takeovers easier in Europe, was changed extensively because of German objections and now makes takeovers far more difficult.

This new development comes on top of conflicts between the EU and the US over US government subsidies for its steel industry.

The current version of the takeover directive- is expected to receive the backing of most EU governments and the European Parliament this week.

ECONOMIC FORECAST 

Looking at the big picture, we believe the forecast for the European economies is one of optimism, mainly because we found that there is not one country in the European Union, whether with a conservative or more liberal government, that is not looking at improving its performance by cutting costs in the social sector. Europe will probably always have a social safety net for its citizens, but the diameter of the mesh is becoming larger. A lot of people are starting to fall through the cracks.

The enlargement of Europe will also give a boost to the economy in the EU, as most of the countries joining the Union will have to totally reconstruct their infrastructure from pre-Soviet days in order to compete with the other states in the Union.

On the international scene Europe’s trade with America, which has long been the primary engine of the global economy, is slowly also shifting to Asia, and China specifically. China presently accounts for a slightly bigger slice of global growth than America. In the past 12 months, China’s imports have risen by 40% in comparison to America’s imports of 2%. Japan’s exports to China are now more than those of the US. The EU will benefit from this trend. At present, growth figures in the euro area are also picking up. All by all, all indications seem to point to increased economic growth in Europe.

THE FUTURE OF EUROPE IS IN THE HANDS OF ITS CITIZENS 

Politically the EU stands at a crossroads today. The Economic Union will not survive in Europe if it is not tied to Political Integration. So far it seems to be a price no government wants to pay.

Europe can’t just be a market, a place of economic interaction; it must also be a place for social and political interaction. Europe is very much more than a market place. It's always been a social model - a model at whose heart lies the idea that all citizens, or as many as possible, can share in the wealth that is created and also share in the decision-making.

The European Union did not happen overnight. It has been a combination of hard work, equal distribution of wealth, respect for the environment, social justice, and investment in the infrastructure, and a lot of give and take between 15 equal European Government partners, who together represent some 350 million people. The road has been and still is full of obstacles, as the expansion with new member nations starts to materialize. But to quote German Philosopher G. W.Friedrich Hegel: “Out of the crooked timber of humanity, nothing straight was ever constructed,” he said, adding: “Can we not learn that Europe is not architecture but something living and changing all the time?” To succeed the EU leadership will have to do a better job at directly informing the citizens of the EU, by seeking their opinion, as to which course they want to take with the Union. 

To do our part in deciding on the future of Europe, we at Europe House request all Europeans who have read this report to send us three suggestions at info@europehouse.com as to what form of Union they want the EU to be.