Completing Europe‘s Economic and Monetary Union, the lack of convergence in the EU, and the risk of facing next financial crisis without necessary tools were among the top concerns mentioned during the discussions on Europe’s economic future at GLOBSEC Tatra Summit 2018. While participants were more optimistic than last year, the EU’s East-West divide remained apparent, particularly in discussions within the DIFF GOV project. Activities included two focus groups – “Eurozone: Resilient, Attractive and Beneficial for All?” and “Building a Vision for Europe Through the Lenses of a Constructive Central European Perspective”. Participants were also present at the main panel session “Balancing Action and Reaction: EU’s Economic Future”.
Participants in the first focus group emphasised that the European Union is currently fragmented and memeber states have different perspectives on the euro. While opinion polling suggests that 61% of Europeans support European economic and monetary union, the euro is often shown in a negative way, hence it is often misused for explaining the political, economic and social challenges that Member States face. Participants agreed that the completion of banking union is crucial regardless of the high levels of mistrust that exist among Member States to the idea.
This group also aknowleged that economic imbalances in the EU persist and it’s hard to correct them. Finally, participants could not agree whether the Euro keeps the group together or is laying the foundation for further crises. What was clear for all is that the cost of leaving the eurozone is very high and a potential source of instability and collapse. All eurozone countries are aware of the potential costs.
A eurozone budget is unlikely to emerge from the upcoming Multinannual Financial Framework. And while such a budget is a potential source of economic stabilisation of the eurozone, it might also have significant political costs.
Regarding the future enlargement of the eurozone, participants were rather sceptical. Croatia and Bulgaria, which are already knocking on the eurozone door, might have to wait longer for their time to come. That said, the former’s entry might be easier to facilitate given that the Croation kuna has been pegged to the euro for quite some time.
In a session „Building a Vision for Europe Through the Lenses of a Constructive Central European Perspective“, participants warned that the EU‘s East-West divide (now also associated with a liberal-illiberal divide) is real and growing. They were also adamant that Central and Eastern should not reinforce divides and work on destroying stereotypes. The region must instead show that it has the same committment to the eurozone as the rest of the common currency area.
Participants also talked about the development of multispeed Europe. As they saw it, today‘s EU cannot go forward in a one-size-fits-all format. There‘s nothing wrong with orbits.
What to do? Divides in Europe exist and Member States need to be more responsible for their actions. They should also participate at a greater rate in European processes and start bridging gaps by working on issues where common understandings can be reached. Discussions about the origins of the last financial crisis and Franco-German differences on the euro should be be changed to focus instead on how to target imbalances in the eurozone and wider EU. From there, EU institutions and Member states should work together to improve the profile of the euro among citizens. After all, fixing the eurozone is relatively easy compared to the increasingly divisive subject of immigration. Finally, the EU should not be convincing reluctant countires such as Poland, Czech Republic, Hungary or Sweden to join the eurozone.