Can EMU Benefit From the Norwegian Experience? Some hypotheses
This paper discusses the potential of EMU in resolving economic stagnation in Europe; more directly, it questions whether tenets of Scandinavian social democracy may have something to offer to Europe in search of a sort of progressive consensus.
ARENA Working Paper 10/1997 (html)
Popular support for further European integration will critically depend on whether the European electorates can be convinced that this is in their economic interests; in the absence of a strong European identity support for integration will have to rely on a more utilitarian type of calculus than what idealists assume. Where does the EMU project fit in with this perspective? Firstly, EMU could be supported by European security calculations. As e.g. former German Chancellor Helmut Schmidt has argued, without EMU the common market would degenerate into a free trade zone, likely to give way to a resurgence of protectionism and conflict in Europe. However, the fear of war would at present hardly seem able to lend sufficient legitimacy to projects like EMU. Secondly, however, what does preoccupy most citizens is the continuous economic crisis in Europe. Low growth and durable mass-unemployment severely disrupt public finances and welfare state arrangements. How prosperity is to be restored is an issue which at present is more controversial than probably at any moment during the history of European integration. The political viability of integration projects generally has been promoted by a shared economic orthodoxy between European policy-makers, be it the Keyensian-interventionist orthodoxy of the early decades or the neo-liberal-deregulationist view manifest in the SEA. Such shared understandings provided the basis for agreement on the general type of economic governance to which integration projects should conform. Today, defence of a European high-employment model of political economy might be promising way to extend support for European integration, thus substituting a new consensus for neo-liberal shortcomings. However, it is not obvious that lessons of Scandinavian social democracy are universally applicable.