Is Europe an effective global player? Absolutely not, argues Jean Pisani-Ferry, Director of European think tank Bruegel. Despite having a "vast formal power", they fail to use it effectively. It is "more than time for the EU to move away from the status of an accidental player". His paper, The Accidental Player: The EU and the Global Economy (PDF), was presented in Delhi last month. Here's as sample:
The situation I have described is one of over-representation and under-effectiveness of the EU in international economic relations. I think that this combination is increasingly unsustainable and that calls for a change cannot and should not be resisted any more.
It is unsustainable, first, because the only way the EU could justify remaining the winner in the distribution of formal power is by behaving like a benevolent hegemon – that is, by providing a public good that would lead the other players to accept its dominance. As developed above, the muted role the EU plays in substantive international discussions does not justify an overrepresentation.
It is unsustainable, second, because reform of the global economic and financial institutions and the rebalancing of power it implies are not simply required for the sake of fairness. More importantly, they are necessary to ensure a sufficient degree of ownership in the multilateral system. The EU has every interest to ensure that all countries share ownership in the multilateral system. The more imbalanced this system is, the stronger the temptation will be for those who feel underrepresented to look for alternative solutions. Increasingly, East Asian countries express interest in regional rather than multilateral cooperation. They also count on self-insurance through the accumulation of reserves instead of relying on international financial institutions. This behaviour has the potential to severely undermine the multilateral system – but it is understandable as long as East Asia feels that system is unfairly dominated by others.
It is unsustainable, finally, because Europe’s interests call for a change. Pressure has begun to mount for a redistribution. The Europeans are tempted to postpone it, if only because they do not know how to redistribute power among themselves. Even from an entirely selfish viewpoint, this would be a mistake. Europe’s share in world GDP is rapidly declining as a consequence of its demography and of the accelerated development of major emerging countries. It is bound to decline further – and rather fast. The more the adjustment is delayed, the lesser the weight of Europe will be in the international institutions.
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