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The (Economic) State of the Union

Posted in Social Butterfly » Politics » by :: March 24, 2009

The very principles that the European Union was founded on, are under threat. The storm-cloud of protectionism rolling in from the North Atlantic threatens to derail an institution.

In much the same way that America heralded in the current economic crisis, its protectionist rhetoric and ‘Buy-American’ stimulus packages have prompted similar discussions across the pond.

For those European states that are already part of the single market, this has become a very serious consideration. There have been moves across the mainland to subsidise domestic industries and increase tariffs on foreign imports. France was loudest in its plans to offer billions in aid to its car industry, on the proviso that production remained in France. By denying organisations the chance to compete for state contracts, European governments are operating against the very principles on which the Union was founded.

Fortunately, thus far, such moves have failed to come to fruition. What they do point to however, is that there are underlying feelings of nationalism across Europe that are surfacing in various forms, due to the strain that the global recession is putting on state relations.

This was worryingly evident at the turn of the year, when widespread demonstrations and strikes at the cheap price of foreign labour sparked a debate in parliament. Workers and trade unions claimed that employers were adopting strict policies of not employing British workers, because of the higher price of labour. Migrant workers were taking these positions and charging less for their time. In a state of panic, Prime Minister Gordon Brown made a pact to ensure that foreign workers would not ‘undercut’ domestic workers. Since making the statement, Mr. Brown has had to do something of a u-turn on the topic. Attacks from the opposition have pointed to a founding principle of the borderless supra-state; that we should draw on the resources of every state, in order to maximise profitability and efficiency.

Such public disenchantment must provide relative satisfaction to the original perpetrators. The Bush administration could not hide its apathy towards the EU. Barack Obama has, unsurprisingly, been far more conciliatory with his European public relations. Rather than break away from the EU, America under Obama plans to work alongside Europe, as a partner. Although this is a show of integrity, it strikes one that America may prefer to offer a hand of friendship to a Europe weakened by economic instability and increasing self-interest amongst member states.

It must certainly have worried the big EU exporters – most significantly Germany – when the newly-formed American government’s foreign policy trail kicked off in Asia. This was an unprecedented move, and one that suggests that America will be increasing trade links with China and the Tiger economies, possibly at the expense of European links.

Britain has also retained its position as America’s ‘special friend.’ Gordon Brown has just returned from a trip to meet with Mr. Obama to consolidate the unique allegiance that the two nations have forged. It would appear to be a move away from increased European integration, and an attempt to be immersed in the slipstream that is America’s venture into Asia. It is also a show of solidarity between the two countries before the G20 summit, itself taking place in London under the direction of Mr. Brown.

The summit itself is due to be far more significant and newsworthy than those that have come before it. It is the first chance Europe’s leaders will have had to meet with their counterparts from around the world, since the enormity of the global downturn became apparent. It offers pro-Europeans, such as France’s premier Nicolas Sarkozy, the opportunity the opportunity to re-assert the primacy of the European cause, and to emphasise the importance of continued unity. Worryingly for him and his allies, it also offers countries from North America, South America, and Asia, the opportunity to throw a spanner in their works.

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    About the Author

    William is a young freelance journalist. Based in West London, he is a keen sports fan and competitor. William also enjoys dance music and, contrastingly, the fine arts. He tries to remain abreast of what’s going on in and around the world as much as possible. For more about Will see www.williammathieson.co.uk

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