The Christmas season has been unusually mild for us north Europeans. However, our political leaders have seemed determined to bring a bit of chill. In fact, so gloomy have their new year’s message that I suspect Merkel, Sarkozy et al have organised a sweepstake to see which of them can come up with the gloomiest new year’s message. Merkel and Sarkozy started by warning that 2012 would be another very tough year, with the heavy rhetoric about saving and stabilising the euro and the European Union – not to mention the world economy. Europe’s getting poorer, more spending cuts are needed, economic Armageddon still needs to be averted.
Forgive me for having heard it all before. The eurozone has apparently been in the ‘last chance saloon’ for so long that I’m surprised there have been no sightings of one of the horsemen of the Apocalypse.
Of course, Europe is in the midst of a difficult economic depression. Many of our banks are still teetering on the brink of bankruptcy despite hundreds of billions of euros in taxpayer bail-outs in 2007-8 (although scandalously they still think it’s acceptable to award themselves massive bonuses); unemployment, particularly amongst young people, is dangerously high; a number of country’s have high debt and budget deficits; and a few years of economic stagnation beckon.
But while it would be daft to underestimate the perils facing Europe are things really that bad?
The simple answer is: no. Average incomes in Europe have more than doubled over the last 40 years and increasing life expectancy means that we will live longer to enjoy it. Yes, it’s true that we won’t be able to retire in our 50s or early 60s like many of our parents did, and the job market is far less secure than 30 years ago, but compared with most (arguably all) European generations, we have a pretty good lot.
The collapse of the Soviet Union and enlargement of the EU to Eastern Europe, not to mention long overdue peace in the Balkans, with Croatia set to become the next nation to join the EU, demonstrates that Europe is more peaceful and prosperous than ever before. If, as seems likely, we are set for a few years – perhaps even a decade – of slow growth and budget cutbacks, then we will need to learn how to achieve greater prosperity without growth. This shouldn’t be too difficult. The economic pie may not get much larger, but we can easily divide its rewards more fairly.
As for the next year, I would expect the EU summit count to keep rising as leaders edge towards a new governance structure that stabilises the euro’s future and resolves the crisis of banks exposed to risky sovereign debt. Meanwhile, the elections for the French Presidency and German Bundestag will be fascinating. Will the post-crisis trend of incumbent governments being beaten continue with the defeat of Sarkozy and Merkel or will the European left continue to struggle?
2012 will be challenging, difficult and painful for many. But most Europeans will enjoy a happy and prosperous 2012. So my message to Europe’s leaders is to go easy on the doom-laden rhetoric. This year should be enjoyed not endured.