Monday, April 6, 2009

Fareed Zakaria on the EU

[Image: Fareed Zakaria, 2007, Larry D. Moore, GNU Free Documentation License]

Last Wednesday (3 April, 2009), I went to see Fareed Zakaria, editor of the international edition of Newsweek, give a talk in Rovereto about the green economic policies of President Obama. I had this conception of Zakaria as a fairly conservative commentator, and so I was surprised at how liberal his ideas actually were.

I had already heard a lot of Zakaria's arguments made by other people, but he pulled them together into a coherent whole and presented them nicely. He spoke mostly about green technology and the pressing need to start adopting it as our oil runs out. At one point he said he would respond to those who say climate change is a hoax by saying that, if true, it would be "the most beneficial hoax in history" because it would have spurred the development of renewable energy. Of course, the problem with this point is that there is still plenty of coal in the world, and the debate is about whether or not to start exploiting it. Whether climate change is a "hoax" or not has a real impact upon this debate.

Zakaria also talked a little bit about the European Union. He criticised Europe for their initial response to the financial crisis, which he said had been to blame the US. Zakaria pointed out that European banks had, on average, three times the leverage of US banks (mostly invested in Eastern Europe). I would argue, of course, that there's a big difference between investing in the development of Eastern Europe and running a hedge-fund off the back of toxic mortgages, but he is correct in that this crisis was not purely the fault of Wall Street and the US.

My favourite soundbite from the night was this one: "Everything is globalised except the politics." Zakaria was arguing that the conflict between a country's domestic interests and its international interests produces harmful results. European banks invested heavily in Eastern Europe, convincing countries to allow them to operate in their markets by telling them "you don't need local banks, we will be your local bank." Then, when they had to be bailed out and partly or fully nationalised, the public in their home-countries objected to taxpayer money going to support these bank's Eastern European obligations. So the banks dropped their Eastern European obligations. Now, after this financial crisis is over, Eastern European countries may no longer trust Western European banks and may restrict how they can operate in their markets. Everything is globalised except the politics.

Asked about European leaders, he said that he thinks most of them are "serious people." Angela Merkel is a "serious person." Mr Sarkozy, on the other hand, is a "fascinating person." He ran for election telling the French people he would be a Reagan-style economic liberaliser, yet now he tells the press he is currently reading Marx's Das Kapital. Zakaria thinks he's just doing it for show, as Das Kapital is "an incredibly boring book."

The most "serious" person of all, however, in Zakaria's view, is British Prime Minister Gordan Brown. Zakaria said Brown is "almost an intellectual." But Brown's greatest flaw is that he does not "connect with the people" in the way that Italian Prime Minister Silvio Berlusconi does. The two of them should have a child, mused Zakaria, and it would be the perfect politician. I'm not sure how many people would agree with that.

When it comes to the great debate about the European Union, Zakaria thinks the problem is that we have never resolved the relationship between the EU and the member-state. Every time something unpopular needs to be done, national politicians cry "don't blame me, it's all the fault of evil Brussels." And then when politicians say they want to build a stronger Europe, they complain they are unable to because Brussels is too unpopular with the public.

We are constantly taking away legitimacy from Brussels by blaming it when unpopular decisions need to be taken. The EU is like the whipping boy of national politics. The problem with this argument is that it makes Europe sound like we have only one politician, who can never make up his or her mind about Europe. In truth, we have many, many politicans, all arguing from different perspectives when it comes to the EU, and hardly ever coming to agreement.

Still, it's interesting to hear an outside perspective.

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gucci66 said...

Zakaria presented himself as a very optimistic person: not only will the economic crisis be overcome sooner or later, but also we are already on our way to have a "technical revolution around energy". Concerning the latter, I am however not as optimistic as he is. Shell and BP have announced that they are going to stop their investments in alternative energies. The official explanation is that they do not expect high returns in the future. (Personally, I believe it has more to do with the present financial crisis.)

Well, maybe there is still hope that the right steps towards the use of green energy are taken by other actors, such as the EU for instance (see e.g.:

Another, rather shocking, argument by Zakaria was that in favour of nuclear energy. I agree that we will have to face an increasing demand for energy in the future; however, this does not justify the recourse to nuclear energy. Zakaria mentioned that there has not been any accident after 1985, but I guess we all know the problems related to nuclear energy (e.g. disposal, or the "non-peaceful" use of nuclear resources etc.) In sum, I do not believe that nuclear energy should be a viable alternative for the future.

Zakaria also mentioned something important (although I do not know how this can become compatible with the drives of capitalism). He said that it is important to change our thinking about the use of energy. He was merely referring to the fact that we should not waste energy to e.g. burn or recycle those objects that we produce. Nevertheless, I think that we could go even further and consume more consciously by e.g. buying only low-energy consuming machines, or by not always replacing those things that do still work fine (this reminds me a bit about goods produced the "good old GDR" which were intended to last for a lifetime just because there was a constant lack of resources).

Josef Litobarski said...

Hi, Gucci66! I see you're a student in Italy too! Are you at Trento?

Interesting to hear your thoughts on Zakaria's talk! As you say, the bulk of his talk was about green energy rather than about Europe (although I focused mainly on his comments about Europe for my post).

Zakaria did indeed open by describing himself as an optimist. He thinks that the current financial crisis will be "just the worst recession since the 1930s" rather than the end of the world.

And he thinks the basis for a new economy following the recession should be renewable energy, because it affects everybody and has a long-term future (as opposed to basing your economy on making "sneakers and toys").

I don't know enough about nuclear energy to really commit one way or the other, but I did find Zakaria's stance interesting. Nuclear technology is, he pointed out, 60 years old by now. There have been huge advances since the technology was first invented. The main drawback of nuclear technology was not, according to Zakaria, the safety issues. It was that nuclear was so expensive.

Thank you for your comments!