|
 |
 |
|||||||||||||||||
|
|
|
International Economics Committee INTERNATIONAL ECONOMICS The Committee has prepared a booklet, "Globalization: A Christian Perspective on International Economics," as a parish resource guide. World Economy Highlights -May/early June 2005 The most important news on the economic/political front was the French and Dutch (and effectively, English) rejection of the European Union (EU) draft constitution. The EU had been working on a new constitution to take account of the increase in membership from the original six countries to the current 25 - and to prepare for even more countries entrance in coming years. Other countries, most importantly Germany , had approved the constitution. The new members of the EU like the constitution because it would give them somewhat more influence in the organization dominated by the large, original members. The most important proposed changes were to eliminate the need for total consensus among the members to set rules, and to streamline the work of the European Commission. Another important element of the draft was to create the office of an EU Foreign Minister to encourage a more uniform European approach to foreign affairs issues. The rules of the EU require all 25 members to agree on the new document. The situation became unraveled when both the French and Dutch voted against the new document in referendums last week. The British announced on June 6 that they would not put the constitution to a vote, effectively also saying "no". As one member of the Commission put it "the voters were asked to vote on the icing on the cake and turned out not to like the cake." This series of events is important because it signals a move away from the concepts of globalization. The French were afraid that an influx of "Polish plumbers" would threaten their generous social benefits. Both the French and the Dutch were worried that the possible inclusion of Turkey in the EU would flood their countries with Muslims - and there already is much concern about this in both places. The votes demonstrate that the old-fashioned concept of nationalism is not dead. This could mean that the goal of the EU founders to establish a United Europe, something like the United States , is not possible. The more likely scenario is a continuation of the current more loosely federated group of countries. A side effect has been the weakening of the Euro which had been increasing in value against the dollar. Some countries, notably Italy , are hearing calls to return to a national currency. This development is important in many ways; most particularly that it shows that the people of Europe , at least the two affected countries, want to step back from all that globalization implies. Most particularly, they fear that endorsing the new constitution would threaten their benefits - short work weeks, high unemployment benefits, etc. because they would have to compete with lower wage countries. This is true even though it appears that the constitution would not have resulted in such changes. On the positive side, the work of the EU will continue; the borders between members (and most recently Switzerland ) will be completely open; and the Euro will continue to be the currency of many of the members. The European glass definitely still is half full. For the United States, the rejection of the constitution many mean that Europe will be a more complicated partner in achieving our political and economic goals as we will have to continue to negotiate with each country separately. It probably suggests that we will have less support for our promotion of democracy around the world. One commentator noted that Europe emphasizes the social contract with its peoples over the dynamism of the marketplace; and the U.S. does the opposite, emphasizing opportunity over the safety net characteristic of the European nations. Europe has been suffering from economic stagnation and high unemployment as a result - this may get worse before it gets better. 2. Paul Wolfowitz assumed his new position as President of the World Bank. It was reported that many of the international staff worried that he would use his position to make the Bank more supportive of U.S. political goals. The initial reports, however, are that he has recognized this concern and pledged not to change Bank policies in that direction. 3. The Central American Free Trade Area (CAFTA), a key element in the administration's foreign policy appeared to be in trouble. Democrats are strongly against it on the grounds that it would cause more loss of jobs here and even some Republicans oppose it. Most commentators believe that the countries involved are so small that CAFTA would not have a large impact on employment in the U.S. but the opposition illustrates the concern of workers and some businessmen about the possible effects of further moves toward free trade. Submitted by Ed Dillery, Member of the International Economics Committee of the Commission on Peace. Comments: C Edward Dillery cedillery@juno.com Archived World Economy Highlights:
|
|
||||||||||||||
