Strategic Panorama 2009 - 2010 - IEEE

Federico Steinberg Whesler
puts an end to several years of institutional uncertainty. It will enable it to
speed up the decision-making process and raise the Union’s international
profile through the figure of the President of the Council. In addition, the
Eurogroup will begin to have a role of its own, which will enhance the visibility
of the euro area.
But the challenges the Union faces are huge. Even after enlargement
it will continue to lose relative weight in the global economy owing to the
rise of the emerging powers. According to projections made by Goldman
Sachs in 2003, in which the concept of the BRIC countries was coined
(Brazil, Russia, India and China), by 2036 these four emerging economies
(to which Mexico should be added) will have overtaken all the European
countries in terms of GDP, though not income per capita. This will mean
that not even Germany will be among the six largest economies in the
world. The United States will head the list, followed by China, India, Japan,
Brazil and Russia (Goldman Sachs 2003) (10). If on top of this we consider
the European countries’ heavy dependence on gas and oil imports and the
fact that less than 6% of the world’s population will live in the European
Union in 2050, the European Union already had major challenges on the
horizon even before the crisis.
Since the crisis will merely speed up this process as it will probably
hamper potential growth more in the developed countries than in the
emerging economies, the European Union will need to seek ways of
increasing its power and influence beyond its shrinking objective weight in
the global economy. And it is here that the crisis offers fresh opportunities.
On the one hand, it has marked a turning point in economic globalisation,
putting an end to the period of liberalisation ushered in by Ronald Reagan
and Margaret Thatcher in the 80s. Although this turning point will not
mean the downfall of capitalism, the state will win back legitimacy and
power from the market and the Anglo-Saxon liberal model will lose part of
its appeal and influence to the European-inspired models, which involve
greater regulation and public intervention and are admired by most Asian
and Latin American countries. This will boost the European Union’s soft
power and its legitimacy to propose international initiatives.
On the other hand, the leadership shown by the European authorities
in the early stages of the crisis, the soundness and effectiveness of the
(10) For a detailed analysis of the impact of the rise of the emerging powers on the world
economy and the role of the European Union, see chapter VI of the Strategic Panorama
2007-2008, in which Emilio Lamo and Michels de Champourcin conduct an exhaustive
study.
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