On November 17th, 2014, the PDU invited speakers to discuss developments in the Eurozone.
The debate, chaired by Lord Anthony Giddens, took place in the House of Lords in London in front of an audience of around 45. The panel was made up of businessman and political activist Declan Ganley, Spyros Economides of the LSE, and Philip Coggan, Buttonwood columnist for The Economist. The discussion began by looking at whether the Eurozone could still be considered in crisis and each speaker was able to bring a different expert perspective to the issue of whether developments in the Eurozone countries represented progress or otherwise.
The first speaker on the panel, Spyros Economides, spoke initially on the Greek situation, highlighting that the highjacking of the political sphere by extremist parties such as Golden Dawn was something echoed across the Eurozone at large. Political debates in struggling countries such as Greece are often divided along economic lines – they are pro-bailout or not, and these cleavages will continue to shape the political landscape in the Eurozone in the future unless real reform is made.
The discussion then moved on to the subject of growth, with Philip Coggan speaking on how growth rates have fallen in the Eurozone, which has led to feelings of a betrayal of trust in politicians amongst voters, who, in the past 7 years, were promised improvement. It was highlighted that the problems in demography in the Eurozone countries, and in Europe in general, which includes an ageing population and low birth rates, goes some way towards explaining this stagnation, and it was proposed that it is in increased productivity that hopes for future growth should lie.
The issue of low inflation was also discussed, and it was proposed that, despite its efforts, the European Central Bank has not done enough to prevent a shortage in money supply in the Eurozone. It was suggested that politicians too, in this age of distrust and animosity among voters, are unable to provide meaningful reform, hampered by low voter turnout, ambivalence, and scepticism.
It was agreed on the panel that, if Europe and the Eurozone hope to be considered global players in the future, more must be done to move towards full political union, which will enable coherent economic and business policies to be created. The example of digital markets was given by Declan Ganley to highlight that in some sectors the European Union remains fragmented. It was proposed that potential investors, faced with the prospect of dealing with 28 regulatory bodies, will simply choose to invest in less complex markets, such as that of the United States.
The solution to this problem was, for some on the panel, a full federal European state, and it was agreed in the conclusion of the discussion that ever closer union would ensure that the Eurozone and the European Union can compete with world economies in the future. Therefore, instead of pessimism on the state of the Eurozone, the lasting sentiment to be taken from the event was one of hope – if the correct political and economic steps are taken, the Eurozone can overcome its difficulties to take its place on the world economic stage.