The EU needs to hire a shrink

By Darren Jones / @darrenpjones

It’s often said that one must confront their problems if they are to solve them. I can only assume, therefore, that the European Union needs to hire a shrink.

Yesterday saw President Sarkozy of France and Chancellor Merkel of Germany meet to discuss the future of the European ‘debt problem’.

This very meeting shines with irony against the backdrop of a political opposition in Europe to further European integration. If two leaders coming together to set the tone for the Eurozone isn’t federalist enough – in all but name – then I don’t know what is.

I do sometimes wonder how the other member state leaders must feel about not being included in the continued Sarkozy/Merkel sideshow; the cynic in me still blames them for not appointing a real EU President in order to keep their influence. The continued “I’m more important than you” argument between Von Rompuy and Barosso continues to get my goat too, especially when they end up flying in different planes to get to the same meeting because they can’t stand each other.

The real concern, of course, is the economy (stupid?) and it pains me to see a complete lack of real decision making. As any good shrink would opine, one must get to the core of the problem and not just focus on the behavioural outcomes.

Let’s face it, sovereign debt is a real problem for the Eurozone member states, and they can’t just keep taking on more debt in order to furnish previous debt forever. As Christine Legarde so rightly said in her FT article yesterday, countries must consolidate spending but not forsake economic growth in the process. By increasing debt levels at the same time as consolidating public spending surely there isn’t enough money left to invest in growth strategies, especially when public spending reductions are done too quickly (take note, Mr Osborne).

These are, however, only the outcomes of the core problem – the self-conscious lack of confidence the EU has over integrated governance. It must face up to who it really is and be proud of it.

You can not have a single currency without co-ordinated fiscal policy making. It’s really that simple and we now have the real time evidence to prove it. Could you imagine a business where the Chief Executive had no influence over, or even co-ordinated agreement with, their department heads? It would be complete strategic chaos.

The EU must either have Eurozone wide fiscal governance or it should get rid of the Euro. Removing the single currency would be like shooting yourself in the foot, so the only conclusion is the former.

The likes of Sarkozy and Merkel (and perhaps even Barosso) need to realise the EU isn’t about them or their countries or institutions; it’s about the European community (to use a redundant term).

We need a true President of the European Union (preferably an elected one that is) who has the ability to form a commission based executive answerable to the European Parliament and who – together – set a coherent Eurozone fiscal and monetary policy. The European Council can continue to act as a Board of Governors to prevent pure federalism to keep everyone happy if need be – acting much like an Upper House.

Anti-EU types might faint at the very proposal but they must recognise that without integrative progress we face future insignificance. The Russians are quite happy developing their Eurasian economic ‘space’ with former USSR countries; the Chinese and other BRIC nations continue to grow at phenomenal speeds and the former Western heavyweights have aged and become arthritic with debt.

I’m proud to be a part of a European Union with values of democracy and human rights (to name but two) at its heart but unless we confront our core problems and keep up the pace of reform we face insignificance and perhaps even the lose of our values in our globalised World.