Blog Barroso Confident About Europe’s Unity
Although he acknowledged that there are “serious social and political problems to resolve”, he is impressed with Europe’s “extraordinary resilience” so far and is confident about its future.
Despite media headlines that suggest that the EU and the Euro zone are in disarray, fraught with internal conflict and threatened with break-up, recent crises have brought them both closer together.
There are now 28 member states of the EU compared with 15 in 2004 when Barroso, a former Portuguese Prime Minister, started his decade-long tenure. During that time the global financial crisis, a sovereign debt crunch and widespread hostility to austerity measures have caused internal ructions, but the EU has emerged “larger and stronger,” he insisted.
“So don’t just look at the news of the day, look at the medium-term trend,” he said at his keynote address hosted by former UK Prime Minister, Sir John Major.
Barroso argued that paradoxically, as economic prospects look better, the political situation appears more fragile. As a result of several years of fiscal rigor imposed by many European countries and now the European Central Bank’s implementation of quantitative easing, GDP growth in the EU should be between 1.5% and 2% this year and higher in 2016.
However, as unemployment levels have remained high in some countries, anti-EU political parties proposing big-spending plans or debt default have gained support, notably in Greece.
Barroso insisted that fiscal stimulus is the wrong response, and pointed to the success of troubled countries such as Ireland that have reaped benefits by imposing fiscal discipline.
He also noted that welfare systems encouraged unemployed non-Europeans to remain rather than return to their home countries to seek work. Barroso is sympathetic to the UK on this issue, but advises Prime Minister David Cameron not to make “unreasonable demands” on fellow EU members, such as restrictions on freedom of movement.
Instead, Europe needs to introduce structural reforms, especially to the labor market, to ensure sustainable economic growth, improve productivity and build on the sectors of increased trade competitiveness that it has already achieved.
“I have confidence in Europe,” said Barroso, “but I’m not optimistic in an uncritical way.”