21.12.14

RETROSPECTIVE PROSPECTIVE.

More housecleaning, this time an Economist feature, from 2007, on the first fifty years of the European Union, "The European Union at 100."
The EU is celebrating its 100th birthday with quiet satisfaction. Predictions when it turned 50 that it was doomed to irrelevance in a world dominated by America, China and India proved wide of the mark. A turning-point was the bursting of America's housing bubble and the collapse of the dollar early in the presidency of Barack Obama in 2010. But even more crucial were Germany's and France's efforts later in that decade, under Angela Merkel and Nicolas Sarkozy respectively, to push through economic reforms.
Right on the housing crash, incorrect or incomplete otherwise, although there's still half the decade to go.
These reforms produced a sharp fall in unemployment just as Europe began to enjoy a productivity spurt from the spread of information technology. The eventual result was a growing labour shortage, which was not resolved until the arrival of Turkey and Ukraine as full members in 2025. The accession soon afterwards of the first north African country, Morocco, helped to prolong Europe's boom.
Wishful thinking? Tsar Vladimir would likely view Ukrainian membership as an encirclement too close. Asia Minor and North Africa: first the Moslem fundies have to be tamped down.
Of course it was not all plain sailing. The great Italian crisis of 2015, when the government of Gianfranco Fini quit the single currency just as David Miliband's Britain was about to join, cast a long shadow. Yet although Italian bondholders took a hit from the subsequent default and Italy's economy was soon overtaken by Spain's, financial markets proved forgiving, and the government of Walter Veltroni managed to rejoin the euro fairly quickly. Since then no country has been tempted to repeat Italy's painful experiment.
Promises to be an interesting year, if there's any basis for this forecast.
The other cause for quiet satisfaction has been the EU's foreign policy. In the dangerous second decade of the century, when Vladimir Putin returned for a third term as Russian president and stood poised to invade Ukraine, it was the EU that pushed the Obama administration to threaten massive nuclear retaliation. The Ukraine crisis became a triumph for the EU foreign minister, Carl Bildt, prompting the decision to go for a further big round of enlargement. It was ironic that, less than a decade later, Russia itself lodged its first formal application for membership.
It gets more fanciful from there.

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