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Analysis and opinion 05 May 2016

BBVA Chairman calls for structural changes to reinvigorate Europe’s economy

BBVA Chairman Francisco González presented the book The Search for Europe: Contrasting Approaches, a work that collects the insights of twenty-three prestigious authors from different fields of knowledge into the present and the future of Europe and its integration project, a process with far reaching consequences, for not only the lives of the Europeans, but for all the citizens of the world.  

The Search For Europe. Contrasting Approaches is the eighth volume in BBVA’s annual series dedicated to analyzing the major issues of our time. This collection forms part of the OpenMind project, a digital knowledge community that facilitates free access to the books, as well as other articles, interviews, videos and infographics aimed at an ever wider audience. The Search for Europe is available as a free download in Spanish and English and in different electronic formats.

Christopher Bickerton (University of Cambridge); BBVA Chairman Francisco González; Vivien Ann Schmidt (Boston University) and Bichara Khader (Catholic University of Louvain)

Left to right: Christopher Bickerton (University of Cambridge); BBVA Chairman Francisco González; Vivien Ann Schmidt (Boston University) and Bichara Khader (Catholic University of Louvain)

During the presentation, BBVA Chairman highlighted that more than 150 authors throughout the world already participate in this collaborative platform launched by BBVA to “help people understand the major forces that are shaping our world.”

Francisco González, focused his address on the economic challenges facing the European Union, underscoring that, to bolster growth “we need to promote structural reforms that improve market flexibility, simplify processes for setting-up companies, combat monopolies and stimulate research, development and innovation.” In education-related matters, “we don’t just need to spend more, but spend better.”

Also, BBVA Chairman stated his conviction that, regardless of the negative short-term impact on productivity that the technological revolution may be bringing as a result of a drop in investments, in the medium and long term the “information revolution will ultimately yield a very positive impact on productivity, growth and people’s well-being.”

Technological change is an opportunity for those that succeed at adapting

And, in the case of the banking sector, Francisco González emphasized that technological change is, indeed, going to be the financial system’s most powerful efficiency and productivity driver. An improvement that “today is especially relevant, as mechanism to improve the transmission of monetary policies, reducing the cost of capital for the economy as a whole and increasing the resources available for agents,” he stated.

BBVA’s Chairman acknowledged that currently banks are facing an enormous challenge. However, something that may now be seen as a threat “is, in fact, an opportunity for those that succeed at adapting to the requirements of the digital world.”

During the presentation, Francisco González was joined by Christopher Bickerton, professor of the University of Cambridge; Vivien Ann Schmidt, Jean Monnet Professor of European Integration and Director of the Center for the Study of Europe of Boston University, and Bichara Khader, professor Emeritus at the Catholic University of Louvain and Founder of the Study and Research Centre on the Contemporary Arab World.

Khader’s address revolved around the integration of Muslims in Europe and the rise of islamophobia as a result of Islamic terrorism. According to Khader, it has to do with “identity-centric politics, which allows its advocates to build their identity in contrast with a negative image of Muslims, their culture and their religion.” Also, according to Khader, radical Islam is the expression of a “violent political rage”, and the “voice of protest” against Western and Eastern States that “have failed to live up to their pledges” and which also rises “against the prevailing acquiescence and anomie of Muslim societies and against the ruling elites who harnessed religion in the service of political power.”

Khader asserts that the policies that the EU and its member states have been adopting “move in the right direction.” But, on the other hands, warns that: “fighting radicalization by security means only, or by bombing the Islamic State into surrender and submission, is a sure path to failure.”

The European Integration challenges

On European Integration, Christopher Bickerton considers that it must be understood as a “transformation process from Nation-States to Member-States” and adds that “the EU remains the work of states and is not itself a supranational European state.” In fact, “there is a closer identification between national elites at the European level than between those elites and their own domestic societies.”

Bickerton pointed out that the EU is built on the “horizontal principle of elite identification” and concluded that Member statehood generates “a kind of political life that is unable to combine representation with responsibility.”

In this same line, Vivien Ann Schmidt argues that “strategies are decided at the EU level, in general, in apolitical or technocratic manners, but politics still remain at a national level.” According to Schmidt, this situation has generated unhappiness among the public and has caught member-state Governments between “the rock of national populism and the hard place of European technocracy.”

In her opinion, the loss of representativeness of citizens in EU institutions has resulted in a precipitous loss of trust in the EU and the rise of extremist parties. Also, the requirements that European bodies have imposed on national Governments have caused politics to remain “primarily at the national level while policy has increasingly gone to the EU level.” And this has given rise to the “politics without policies” model at a national level and the “policies without politics” model at European level.

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