Comparative European economic models: a political and human vision

On October 15, 2014, the budgets of each of the states that make up the euro zone were delivered. The economic data presented was (in part) the cause of a collapse of the world’s major stock markets. On the other hand, they are a symptom of economic stagnation and a lack of significant political consensus in Europe (GDP for the third quarter of 2014 in the euro zone and the European Union is respectively + 1% and + 1.4%[1]). These data (centered on the deficit and the public debt) are means (better or worse) to consider the right direction or not of the budgetary policies of a Member State. The Stability and Growth Pact[2], Ratified by European Council in 1997[3], Imposes a roadmap on the accounts of EU Member States. This model is not an objective way of interpreting reality, but a subjective interpretation of it.

The configuration of European treaties this greatly benefits the interests of the German staten – in particular with regard to monetary policy[4]. The imposition of a policy of austerity, “in Germany”, does not necessarily imply that it must operate in another territory with different realities. However, the German model, almost perfect in the imagination of institutions and Member States (and citizens), seems to be weakening of late or, at least, their prospects for economic growth.[5]. This deflation – around 0.7% of GDP – inexorably leads to the revitalization of sub-European geopolitics[6].

This is because the economic models of each state are seen as an alternative to the criteria of a discouraged German economy. France is the best placed state challenge tough policies, Although the European Union has a vote in this dispute, the Commission can sanction governments that do not respect the 1997 pact[7]. After all, Germany Merkel it forges the toughness – in particular in the budgetary field – of the EU, which gives it an important responsibility. The imposition of one economic model or another reconfigures territorial realities with serious consequences.

A conceptual approach to economic models and hierarchies in the European framework

What then are the economic models? Fr geopolitics, Economic models are a territorial strategy of an economic nature in which certain actors try to convince – or impose – on other States a certain vision of the economy and therefore of society. Economic strategies are established in a desire to impose by economic force (and not so much by military force) the control of other states within a framework of globalization. This rivalry resembles – as we said on another occasion in the article on: The Disastrous Effects of the Transatlantic Treaty – what Joseph S. Nye said Sweet power soft power[8].

From this point of view, states become “economic predators” in order to perpetuate their comparative advantages in the economy. Since then, as we have said, a model does not adapt as well to the growth of your territory (“endogenous”) as to the imposition of the other (“exogenous”). The “aggressor” state benefits from a significant economic income if it manages to attribute its way of seeing the world to other states, guaranteeing, on the increase., Its ability to play the role of central pivot. So, under a somewhat reductionist explanation, we turn to the creation of central and peripheral (or also semi-peripheral) states. State actors are reminded how to ensure that the central hegemony of the state is supported by the ability to obtain more capital gains in the movement of capital. What Immanuel Wallerstein[9] calls economy-world[10]In this case, what would become the capitalist world-economy looks like the materialization of an economic model on others.

Globalization would be, roughly speaking, the crystallization of one or more visions: the American hegemonic vision and its subordinate European states – Germany, France and the United Kingdom – would be the great standards. The latter, but with more notoriety the Franco-German couple, dispute the future of the European model, each wanting to leave his signature. Germany is considered the epicenter of Europe with a strong subordinate (France). On the contrary, France sees a Europe ruled by the Franco-German couple and tries to use its political power to do so.[11], But it might not weigh the same (for now[12]).

A rivalry around the Franco-German couple

The German economic model stems from a trend that appeared in the 1930s called Ordoliberalism or social market economy. It would be a space where the State would set a specific order of general rules to apply, then, the principle of competition and free market for companies. To a greater or lesser extent, most European states apply this economic model although it competes with the French. This plot economic framework has worked very well in Germany. So much so that the German state, with a policy based on the export of industrial products with high added value, strengthens its status of domination to the detriment of other states.[13]. It has strived to become the factory of Europe (and part of the world). The other European states have been renounced explore other avenues given the German success (The relocation of European industry has wreaked havoc in particular in southern countries). However, Germany’s weight lies in its influence over the statutes and the policy of the European monetary system.

On the other sidewalk, we are confronted with the French model. This would consist of a much more controlled (politicized) social market economy. In other words, it would become a liberal model where state intervention – more important than in Germany – ensured the country’s growth. The State is much more united, protectionist and therefore more aware of social needs. However, the weight of Germany in the economy pushes, directly or indirectly, France and all the other countries to pursue policies of budgetary austerity and market restructuring.

What are the consequences of the lack of European solidarity?

As we have already mentioned, business models are business strategies that ultimately represent the support of society. German (and European) forced austerity has forced the breakdown of welfare states, deeply rooted economic models in some European countries. The loss of a social model is in force throughout Europe of solidarity. In In Spain, this process is very widespread and, even more, with the Conservative government of Mariano Rajoy which plunged headlong into austerity decisions. The problem, in our opinion, is not to seek GDP growth but to adjust to the needs (health, housing, decent employment …) of the city, the real sovereign.

however, if Germany has succeeded in imposing its model on other European states, its hegemony remains less clear in view of the political pressure exerted by France (With the support of Italy which hosts the six-month presidency of the Council of the EU). So much so that the ECB, the IMF and the EU seem to be oscillating towards positions halfway between the two players. However, the German monolithic vision remains one of the great burdens of the recovery of the European economy.

Bibliographical references:

  • [1] Data from September 5 on Eurostat
  • [2] On June 17, 1997, the Member States’ Stability and Growth Pact was ratified in Amsterdam. The demands concerned the control of the excessive public deficit (not more than 3% of the GDP) and a debt. Publishes (no more than 60% of GDP) is advised). The European Council published on 22 and 23 March 2005 an improvement to the 1997 resolution.
  • [3] At the European Council of 22 and 23 March 2005, the Finance ministers reached a political agreement to improve the management of the Stability and Growth Pact ratified in 1997.
  • [4] “Economy and geopolitics”, Hérodote. Review of geography and geopolitics, The discovery, nº151, 2013, Paris.
  • [5] German industrial production fell 4% in August. Likewise, forecasts for the German economy – whether by the German government or the IMF – have declined significantly (from a forecast of around 2% to 1.2% of GDP in 2015). Cyclical factors as well as geopolitical factors slowed down the German, European and global economy.
  • [6] He understood geopolitics as “the designation of a conflict, a rivalry for power in a territory which involves at least two protagonists” (Yves Lacoste).
  • [7] “Brussels demands accounts from France” (“Brussels demands accounts from France”), Les Echos, 23/10/14, Paris.
  • [8] “The ability to influence the representations that leaders and populations make of certain behavioral norms or certain political orientations.”
  • [9] Immanuel Wallerstein is a world-renowned sociologist. He is a researcher at Yale University, directs the Fernand-Braudel Center in the study of economics, historical systems and civilizations at Binghamton University (NY). He is also a researcher at the House of Human Sciences in Paris and he also chaired the International Association of Sociology.
  • [10] “The world economy is a term used by most economists to describe not an integrated system of production, but trade relations between states.” I. Wallerstein.
  • [11] “Economy and geopolitics”, Hérodote. Review of geography and geopolitics, La Découverte, nº151, 2013, Paris.
  • [12] Several studies suggest that Germany’s economic weight will decrease as its population, now very old, begins to lose money. On the contrary, the good health in terms of demographic evolution suggests an increase in the French peso in the European economy.
  • [13] “Economy and geopolitics”, Hérodote. Review of geography and geopolitics, The discovery, nº151, 2013, Paris.
  • [14] http: //europa.eu/legislation_summaries/glossary/ex …

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