LETTERS TO THE EDITOR

Summer 2009

by Miroslav Beblavý

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Sir,
Leif Pagrotsky’s diagnosis of Europe’s economic ills, and his prescriptions for their cure, contain valuable if uncomfortable nuggets of truth. But I would dispute some of his assertions, including the all-too-familiar alarmism over competition from non-EU countries. The problem for the European Union is not that other countries are catching up with our high living standards. Good for them, I say. What is truly troubling is that on average European economies are not keeping pace with people’s expectations. The EU’s performance is too weak to allow people to maintain their customary way of life.

Pagrotsky is spot on when he says that the solution to our economic problems is to be found within Europe. Our economic and social problems are largely home grown, so there’s no point blaming the rest of the world. Yet there is very little reason to think that either the root causes – or the right solutions – will be found at European level. All available research suggests these problems are still largely internal to member states. Even the supposedly neoliberal interventions from Brussels usually cut both ways. For each “liberal” decision at the European Court of Justice, such as the Laval case, there is a countervailing decision, like the Simap and Jaeger rulings.

Pagrotsky’s own policy prescriptions look suspiciously like a Swedish export, combining liberal product markets plus private innovation with rigid labour markets and extensive welfare systems. While this certainly is preferable to the protectionist and interventionist recipes of the French variety, I doubt the Swedish model applies either to the new EU member states or the Anglo-Saxon countries. I think we should spend less time figuring out how to homogenize Europe and more time creating national reform strategies. Slovakia is not Sweden. Our combined success in the EU depends on finding policies that fit our individual strengths, not an abstract European ideal.