Replete with tough truths, this article by Clemens Wergin, foreign editor of Die Welt, argues that internet-age globalization has brought quick consequences for bad governance. As Europe ages rapidly and shirks foreign policy action, the future of Europe depends on decision-makers’ ability to overcome national obsessions, such as Germany’s economically damaging turn away from nuclear energy. Appearing in the New York Times on October 14, 2013, this article is reprinted with the author’s permission.
At the center of the Italian town of Siena sits the imposing Palazzo Pubblico, or city hall. Every year hundreds of thousands of visitors from around the world descend on this 13th-century building to see one of the most important nonreligious frescos in Europe: Ambrogio Lorenzetti’s “The Allegory of Good and Bad Government.”
Lorenzetti painted it in the 14th century, intending it as a message to the Sienese on the importance to society of a stable and wise government. Some 700 years later, it still holds a critical lesson: even in our Internet-driven age of plenty, bad governance can wreck a country.
In fact, globalization acts like a magnifying glass that exposes the weak spots in a society. Economic competition between individuals and nations has never been so strong, and investors’ money has never been as elusive. That, in turn, means that a country that is governed badly will pay a higher price, and much faster, for its mistakes than in the past.
Nowhere is this message more important than in Europe, which is still reeling from the euro crisis. The European economy has been picking up, and many Europeans already believe that the worst is over.
But whoever thinks that this was the worst crisis the European project will ever encounter should think again. What Europe has gone through in recent years could be just the beginning of a long cycle of crisis. And unless it fixes its governance problems, it will do even worse in future crises.
On the campaign trail, Angela Merkel, the newly re-elected German chancellor, liked to sum up Europe’s competitiveness challenge with a simple calculation: Europe today represents a mere 7 percent of the world’s population, produces 25 percent of the world’s G.D.P. and pays for 50 percent of its combined social welfare spending. Without drastic political action, that imbalance is going to get even worse.
The underlying problem is demographic. By 2015 there will be more people dying in Europe than being born. The median age will rise from 41.2 years today to 47.6 years in 2060. Some countries will age even faster: median age in Germany will reach 50 years in 2037.
Europe will look like an old folks’ home with an ever-decreasing work force. People at or over the age of 65 — in other words, old enough to receive a pension — will account for 30 percent of the population in 2060. It is estimated that the number of working people available to finance the social-insurance programs for one retired European will decline from four today to two in 2060. Without reform, that means paying more and more for social welfare and less and less for education and infrastructure, making Europe increasingly uncompetitive.
Europe will also face external challenges. Across the Mediterranean, the Middle East is in turmoil, and is likely to stay that way for well over a decade. As we’ve seen in Egypt and Syria, an increasingly isolationist America is ever more reluctant to engage with this volatile region — a trend that will grow stronger as America becomes more energy independent. Without America on the scene, Europe may find itself having to step in diplomatically and militarily, putting strains on the Continent’s fragile political unity.
Indeed, Europe has been taking a free ride on American military spending for decades, particularly since the end of the Cold War, when many Western European countries wanted to reap the “peace dividend” and spend less on the military and more on a lavish welfare system. In 2001 the United States accounted for 65 percent of NATO spending; today it covers almost three-quarters. The only European Union countries that in past decades retained an ambitious foreign and security policy and the will to shape world affairs have been France and Britain.
But with drastic British defense cuts and a Parliament that rebuffed Prime Minister David Cameron’s request for action in Syria, Britain might become what Germany already is: a country that in matters of global security talks the talk without walking the walk. With France as last man standing, foreign-policy-wise, it is questionable whether Europe can muster the will and military might to take over America’s role in the Middle East.
All of this might sound rather gloomy. But what is true for the United States is also true for Europe: decline is a choice; it is not inevitable.
When Lorenzetti painted his fresco, Italy was home to a number of proud and rich city-states that regulated their own affairs, elected their leaders and believed that man was, while occasionally subject to the whims of “fortuna,” also able to shape his own destiny, and that of his community, by his own will.
So what does it take to lead Europe away from decline?
For Lorenzetti, the answer was rather simple: the quality and character of the rulers people chose and of the institutions they erected. In his allegory of good governance, Siena is flanked by the virtues of Peace, Fortitude, Prudence, Magnanimity, Temperance and Justice. Bad governance is embodied by Cruelty, Deceit, Fraud, Fury, Division, War, Avarice, Pride and Vainglory. Put differently, the future of Europe depends on how Europe decides to govern itself.
One option popular with political elites is: a more centralized Europe means a better Europe.
But that is the wrong answer, for two reasons. For one thing, it won’t happen; European citizens don’t want it. But more important, it won’t work.
Multilateral institutions are a wonderful place to discuss problems, pool knowledge, align positions and keep in constant contact to solve conflicts by talking instead of shooting. But they are terrible when it comes to getting things done.
In fact, they are an invitation to collective irresponsibility: politicians who have to respond to their respective constituencies back home always hope that somebody else will do the heavy lifting, foot the bill and make unpleasant decisions. We have seen this clearly during the euro crisis. Too often “Europe” or “the Germans” have been a handy scapegoat for the elites in the crisis countries to deflect the anger of their electorate over corrupt and incompetent leaders.
The talk of eurobonds, financial instruments backed by the entire euro zone, serves a similar objective. It embodies the hope that the bill for bad governance of some countries will be paid by others.
So while the European Union should maintain what it achieved so far, “more Europe” is not the way to improve the Continent’s competitiveness and its foreign policy posture. For the foreseeable future, the nation-state will remain the place of democratic decision making.
Sadly, there is no silver bullet to change Europe’s trajectory of decline. A few problems are common to most Western societies, like aging, but most are specific to each nation and necessitate individual national responses.
Europe as a whole will improve only if every single European nation improves its game in many different areas.
The Greeks have to build a lean and functioning bureaucracy.
The Spanish have to sort out the triangle of corruption that links politics, big construction firms and regional banks.
The Italians have to stop voting for populist politicians like Silvio Berlusconi and a political class that is constantly spinning around itself instead of solving the problems of the country.
The French have to stop pretending that they can keep retiring at the age of 62 and still maintain bloated public services.
And the Germans should stop fooling themselves that shutting down their nuclear power plants, and the resulting skyrocketing energy prices, are not going to hurt industry and the economy. Germany also has to realize that its allies are fed up with its reliance on the ghosts of the Nazi past as an excuse to stay out of foreign engagements.
Only when European countries start taking a hard look at themselves, when public debate gets serious about the consequences of aging societies, and when courageous politicians start making hard decisions will Europe have a chance to remain prosperous, secure and an important player in world affairs.
And only if every nation will work on its weaknesses will the European Union be able to pool its members’ strengths for greater impact on the global stage. Europe will have to reform locally in order to be able to act globally.
Europe can do it, because it still has many advantages. It has a stable political environment and cohesive societies. Europeans are well educated, and in many areas their companies, big and small, are tremendously inventive and responsive to the challenges of globalization.
The era of Italian city-states, the world of Lorenzetti’s famous fresco, was the breeding ground of the Italian and European Renaissance, which spearheaded almost 500 years of Western dominance in world affairs. Europeans will have to regain some of the can-do spirit of Lorenzetti’s time, when Europe was young and full of promise. We will have to reconfirm the will to be active shapers of our own destiny. Otherwise, we will have to endure a destiny chosen for us by others.