21
Dec

Wobbly BRICs

Written on December 21, 2011 by Ángeles Figueroa-Alcorta in Americas, Europe, Globalization & International Trade

By José Ignacio Torreblanca, Associate Professor at IE School of Arts & Humanities

One consequence of the crisis in Europe is a return to the tendency for introspection. The past decade was wasted on institutional debates such as picking up the pieces of the failed European Constitution after the debacle of the referendums in France and the Netherlands, and rebuilding the consensus necessary to get the unity plans going again, consuming a lot of time and energy along the way. This is why, when the Treaty of Lisbon came into effect two years ago, a firm resolution was made to leave institutional debate behind, renouncing new reforms of the treaties. Lisbon, it was said, would be the last treaty for a long time. In future the Europeans would practice politics, not institutional engineering. But now, two years later, that Europe capable of united action in defence of its interests and values has yet to gel, and there is talk of yet another treaty. 

 Meanwhile, the economic crisis is tending to fragment the EU’s external focus as its members pressed by the crisis compete with one another. There has been a rush toward the BRICs (Brazil, Russia, India and China) in search  of investment and at the same time markets for national goods and services aimed at stimulating Europe’s deteriorating economies. This competition not only projects weakness and deteriorates the EU’s image, it also affects Europe’s negotiating capacity on key questions such as security, human rights, climate change and world economic governance. The EU, which is the world’s largest trading bloc, and which to prosper needs an open, well-regulated international  commercial and financial system, is sacrificing its long-term interests by taking a short-term approach based on fomenting a new mercantilism in which governments swap trade and investment for political favours.

Likewise, Europeans underestimate the damage done to their image when, being still far more prosperous than the BRICs, they call on the latter to help finance their debts, either by a reinforcement of the capacities of the IMF, which they consider unfair and disproportionate, or by asking that they invest in funds, such as the European bailout fund, in which the Europeans themselves are investing only meanly and insufficiently. All this, while they refuse to call on the ECB to help out, preferring to safeguard its purity and integrity as a guardian against non-existent inflation. The result is that, in the G-20, the IMF and the WTO, the Europeans increasingly appear as actors concerned more with what they can get out of these organisations than with helping to strengthen their rules and capacity for global action. Read more…

As published in www.ecfr.eu on December 21, 2011.

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