Signs of alarm

Despite the distance, snow-covered Davos in the Swiss Alps and EU institutional seats in Brussels share the same concerns over the situation of European and global economy. The World Economic Forum marks out market unbalances, worrisome national debts, which curb the development of Western societies, along with the sudden – albeit profligate and unhomogeneous – growth of perennially “developing” countries. Social inequalities and poverty rates are surging at global level, triggering serious concerns. Too many states – as shown with the recent developments in Tunisia and Egypt – are at risk of “explosion”. The European Union conveys -for the moment only with words – its cries of alarm.The same refrain. As customary for the annual meeting, entrepreneurship personages, along with political and economic leaders convened in Davos. Global unbalances are growing worse while new competitors (namely, Mozambique, Uganda, Vietnam, Uzbekistan, Latin America…), are witnessing the consolidation of their GDPs but the distribution of wealth is not spreading to include the population as a whole. Speakers addressed the entire picture: finance, energy resources and oil prices, systematic reforms aimed at modernizing labour, welfare, and pensions with lectures by major European leaders. Angela Merkel from Germany (the political lead of Germany, marked by a robust, broadened recovery), French premier Nicolas Sarkozy, and British David Cameron, each have their own prescription, but they all converge on the importance of financial stability, of preventing further economic crises, on the urgent need of servicing growth-hampering public debt, whilst stepping up domestic markets and the partnership with the United States. In Brussels the refrain is the same: the thorny questions of energy, raw goods, research; strengthening the financial stability fund (renamed the EU “rescue fund”), activating the European Systemic Risk Board, the new “European semester” designed to promote the coordination of finance and budget policies. The afore-mentioned items were on the agenda of the 4 February summit, initially meant to address energy and innovation, and eventually extended to encompass urgent topical issues, with special emphasis on the popular upheavals in North Africa. Joint action. Energy, the economy and innovation – along with foreign affairs – remain three fundamental realms addressed by the European Council, whose special session is scheduled to take place in the first week of February. In his invitation letter to EU27 heads of Government or State, president Herman Van Rompuy, signals that “as relates to the future direction of our energy policy”, major “preparatory work” has already been done, although some crucial aspects still need to be expounded. For Van Rompuy these include “energy security.” “On the one hand, energy security requires the rapid completion of an interconnected internal market. We should discuss the implications of this objective both in terms of regulation and physical infrastructure. On the other hand, energy security is also determined by our relations with key partners”, he wrote in the letter. To this regard, European Council President calls for “a particular emphasis on Russia”. The Council will also discuss efforts to counter the effects of the economic and financial crisis. The subject will be broached with the President of the European Central Bank Jean-Claude Trichet. The discussion will focus on the forthcoming March European Council, entirely devoted to the economy. Investing and innovating. “Energy and innovation are key elements for the revival of the economy and of EU markets” that were severely affected by the crisis. On the eve of the European Council José Manuel Barroso underlined the situation of surging unemployment and of debt-ridden EU countries. Barroso thus urged to “move forward” and identify “an exit strategy”, as he has been reiterating for months. “Energy and innovation are also two fields where the Community approach and European dimension can offer a lot of value-added”. It is thus important to coordinate action “at EU level”. “Clear, concrete deliverables” should be “identified”, he said. For example, as relates to energy supply “we must deepen existing co-operation, as provided by the Lisbon Treaty” and “focus on the external dimension of European energy policy” for a “stronger” presence on world markets. The Portuguese politician equally mentioned energy efficiency and saving, and announced an “action plan” to this regard. As relates to innovation he said: “Urgent action is needed. The EU is lagging behind in the area of research and technological progress. Investments must be increased despite the difficult financial situation”.