European Integration: Back into the Future

Abstract

The EU is losing its glamour and it is in danger of losing its appeal as the promise of perpetual prosperity is fading away. It is not anymore the EU that would attract people to defend it on barricades. The first decade of the 21st century may be a ‘lost decade’ for reforms in the EU, while the second decade may be the time of weakened and diminished role and importance of the EU. Europe has a long and rich history of failed currency unions and the eurozone is on the way of becoming one more unless there is a move towards stronger federal structures. EU member countries can agree on very few things, while the list of disagreement grows. The EU elite disregards the will of the voters hence this is the fertile political soil for the brewing extremes on both left and right, especially when there a few hopes of any significant growth and employment for years to come. If the eurozone falls apart, that may not be the end of the world. The EU may return to where it was in 1992 (free internal trade together with free factor mobility) which may not be a bad deal at all if the alternative is a general disaster.

Keywords: Germany, France, Greece, eurozone, growth, unemployment, elite, referendum

JEL Classification: F15, F53, F55