Europe at the crossroads: unity or fragmentation?

The Forum:Blog has prepared a special series on “Resilient Dynamism, the main theme of 2013’s Annual Meeting in Davos, Switzerland. Guillaume Amigues, Community Manager for Europe at the World Economic Forum, offers a positive and realistic view on the future potential of Europe.

Future generations may see this period in Europe’s history as transformational for the continent. Monetary union and the very survival of the euro were under imminent threat thanks to the debt crisis.

But as Standard & Poor’s raises its credit rating for Greece, and European bailout funds start flowing again for the debt-stricken country, there are tentative signs that the eurozone may be climbing out of the trough it has been stuck in for the last four years.

But is economic and political union the only way to stop this happening again? Can its leaders hammer out an agreement that will make the European Union strong enough to withstand future crises?

Europe truly stands at a crossroads, and the path it chooses could lead to a flourishing, dynamic future, or ignominious collapse.

There are optimistic signs. Appointing the European Central Bank as regulator and funder of last resort for the region’s banks would have been almost unthinkable before the crisis. Now it is seen as absolutely necessary by all but a few. The ECB’s government bond-buying programme for debt-laden countries seeking a bail-out was also greeted with sighs of relief by most, particularly the markets.

Read more: The Re-emergence of Europe by Professor Klaus Schwab

Inaction and disagreement has finally morphed into action and agreement, with the real threat of financial collapse acting as the catalyst.

But huge risks remain. Will citizens of proud nation states really be willing to cede even more power and sovereignty to increasingly centralised European institutions, which many already believe to be democratically and financially unaccountable?

At the recent World Economic Forum meeting in Rome in October 2012, Italian prime minister Mario Monti urged Europe to become like “a machine for economic convergence” – a phrase likely to prove a red rag to the Eurosceptic bulls.

Nevertheless, the European Council has ploughed ahead with building a resilient governance framework for economic and monetary union. Next steps include the complex business of creating a central bank regulator and the extension of European Stability Mechanism.

The World Economic Forum aims to facilitate this process, assembling the most promising and ambitious proposals and engaging all stakeholders in the debate.

But all this technocracy may seem irrelevant to many Europeans desperate for growth and jobs, particularly those in the South East of the continent. The Forum’s Global Competitiveness Index has revealed a sharp disparity between Finland (3^rd in the global rankings) say, and Greece (96^th). This growing wealth gap is in itself a major threat to economic convergence.

The European competitive gap

All European economies need to move towards innovation-driven growth and greater competitiveness in the global market. This is easier said than done, of course.

The Forum can help by explaining how we can nurture globally important technology start-ups in Europe, for example. We can also examine how companies can make the best use of the scientific, technological and human resources Europe has to offer and then provide inspiration to others.

The Forum’s Global Agenda Council on Europe, led by Javier Solana, identified pessimistic rhetoric as a key challenge for the EU. The “doom and gloom” narrative threatens to turn into a self-fulfilling prophecy and focus attention on the cost of European integration rather than its benefits.

Our mission is to offer a positive, but realistic, view on the future potential of Europe. We want to instil again some enthusiasm and dynamism to the region.

The theme of our 2013 Davos Annual Meeting, “Resilient Dynamism”, reflects this mission. We feel confident that Europe can emerge as a stronger, closer and more dynamic Union than ever before.

About Resilient Dynamism
To be resilient is to be able to adapt, withstand shocks and recover from them. Future growth in this new context requires dynamism – bold vision and even bolder action. As the theme of 2013′s World Economic Forum’s Annual Meeting in Davos, Resilient Dynamism refers to these combined attributes as fundamental concepts for leadership in coming years.

Author: Guillaume Amigues is Community Manager for Europe at the World Economic Forum

Image: E.U. flag flutters in front of the Parthenon in Athens REUTERS/John Kolesidis