EuroFinance 2015: Does Europe pass a fitness test?

Europe’s vision is one of ever-greater unity and closer integration, says Zanny Minton Beddoes, editor of The Economist magazine. However, both the euro crisis and the still developing migrant crisis have recently shown an increasing conflict between these ideals and harsh reality, she told delegates at EuroFinance 2015. Nor has there been much evidence of the politics that is needed to tackle these challenges.

However, José Manuel Durão Barroso, president of the European Commission from 2004 to 2014 and prime minister of Portugal continues to take a much more upbeat view of both Europe’s current health and future prospects, which he insists is based on “realistic analysis”.

He reminded the audience that only three years ago there was expectation that Greece would pull out of the eurozone and the region’s economic alliance would implode as a direct result. Neither event happened and despite continuing problems, such as high unemployment and the threat of deflation, the eurozone has also seen its membership double.

“The conditions are there for Europe to grow and for that growth to be healthier and more sustainable than before, helped by a favourable exchange rate and low energy prices,” Barroso insisted, who added that the continent’s prospects were rosier than in many other regions of the world. The key to securing future growth would be a more efficient internal market for services – which was still developing, greater unity between the zone’s 28 different digital markets and a better-functioning energy market.

Germany’s leadership

Barroso agrees that the influx of refugees and economic migrants poses a major challenge to Europe, although the real crisis was centred in the Middle East and Africa. The fact that Europe was the destination of choice for refugees and not somewhere like Russia, was proof of its attractions.

He praised the policy of countries such as Germany, Austria and Denmark in accepting and integrating migrants, in particular the response of German chancellor Angela Merkel, who had “shown great leadership”. By contrast, US policy towards the Middle East and Syria in particular was still far from clear.

There followed a two-way dialogue between Barroso and Minton Beddoes, who candidly admitted that the prognosis would be far less positive. She suggested that the refugee crisis threatened to overshadow the euro crisis and could even result in the fracturing of Europe.

Barroso insisted that, although it might well happen incrementally, Europe would find ways of dealing with the refugee challenge. He also expressed his “trust in the fundamental wisdom of the British people”, who, he believed, would recognise that a UK withdrawal from the European Union spelled disaster and vote against a ‘Brexit’ in next year’s referendum.

Minton Beddoes asked, given his admiration for Angela Merkel’s response to the refugee crisis, how much Europe’s future was likely to be shaped by Germany. “I have to declare an interest – Angela Merkel has been a good friend for many years and I believe she’s doing a great job,” said Barroso.

“Germany has decided that it’s future lies in being active in European leadership – and that’s become possible in part because France has become less of a force. We need a more self-confident France to once again show leadership.” Barroso is also an enthusiastic supporter of Germany’s readiness to accept Syrian refugees and assimilate them into the workforce by providing training and language skills.

When asked what the Europe of 2020 might look like, Barroso expressed hope that the refugee crisis would be long-resolved. “Additionally, the service sectors of Germany, Austria and other countries are still far too closed. We want to see the internal market fully opened up.”


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