Synopsis:
Robin Niblett, Director of Chatham House, delivered the following talk in The Europe Center series “The European and Global Economic Crisis”.
With measured optimism about the prospect for a way out of the current Eurozone crisis, Dr. Niblett argues that the introduction of the common Euro, seen by many in past years as a vanguard tool for European integration, is now potentially a functional wedge between ‘debtor’ and strongly capitalized nations.
Dr. Niblett, arriving directly from participating in the World Economic Forum in Dubai, and based on Chatham House research, described the “perfect storm” of the past two decades of credit-driven growth, divergence within the EU, rising debt-to GDP ratios of member nations especially in the cases of Italy and Greece. His analysis combines these economic details with the following:
- Demographics – high levels of unassimilated immigrants
- European welfare economies still distributing resources at twentieth-century levels now in the twenty-first century
- The rise of anti-immigrant and anti-free-trade populist parties
- The weakening of Europe’s center parties
- The “Russification” of Europe’s East – especially in recent events in Ukraine
- The stalled integration of Turkey into the EU
The totality of the above paints a grim portrait of Europe under the weight of nearly impossible conditions. And yet, Dr. Niblett underlines evidence for measured optimism:
- Ireland is making strides to reform its economy
- Ireland’s educated and yet unemployed workforce does have the possibility to immigrate to Europe
- The UK is finally rebalancing its state budget and market liberalization
- France is facing, albeit with massive labor protest, its state budget levels
- Spain will likely turn over its government in the face of its massive youth protest
- Italy is evaluating in its political process a series of budget reforms
These are the structural side of what Dr. Niblett sees as Europe’s tools for recovery.
On the side of European practice, the Franco-German proposals for European Central Bank “bailout funds” include new rules for transparency of internal government operations. This promises innovation to make the EU into an area of political and financial transparency, and to enable the EU to engage in direct investment, as evidence is beginning to show, in the world’s emerging economies. In this sense, Dr. Niblett sees for Europe a competitive edge over the US in engaging in world markets.
Perhaps most sanguine of Dr. Niblett’s analysis is his reading of the Eurozone crisis as a force to push the member nations of Europe further towards supra-national economic strategies. In order to participate in the investment in emerging markets, the Benelux countries, not to mention France, Germany, and neighboring European states, are responding to the crisis by considering policy that promotes investment and outsourcing for service-sector employment, instead of export commodities which have been undercut in recent years.
There is a risk, in Dr. Niblett’s view, that Europe will respond to the Eurozone crisis by fracturing into rival “clubs” of small and large or debt-restructuring and creditor nation-states. But the European nations, especially those currently participating in the Eurozone, have untapped capacities for growth:
- Educated youth
- Underemployed female laborers
- Outstanding higher educational institutions
- Pent-up small- and medium-enterprise markets
- Potential for growth in the service sector labor market
- Room for more tightly integrating and rationalizing the region’s energy market.
Those interested in further detail and analysis are invited to visit the work and productivity at:
The Europe Center, at Stanford’s Freeman Spogli Institute for International Studies: http://tec.fsi.stanford.edu
Chatham House, at the Royal Institute for International Studies: http://www.chathamhouse.org/
Speaker bio:
Robin Niblett became the Director of Chatham House (the Royal Institute of International
Affairs) in January 2007. Before joining Chatham House, from 2001 to 2006, Dr. Niblett
was the Executive Vice President and Chief Operating Officer of Washington based
Center for Strategic & International Studies (CSIS). During his last two years at CSIS, he
also served as Director of the CSIS Europe Program and its Initiative for a Renewed
Transatlantic Partnership.
Most recently Dr. Niblett is the author of the Chatham House Report Playing to its
Strengths: Rethinking the UK’s Role in a Changing World (Chatham House, 2010) and
Ready to Lead? Rethinking America’s Role in a Changed World (Chatham House,
2009), and editor and contributing author to America and a Changed World: A Question
of Leadership (Chatham House/Wiley-Blackwell, 2010). He is also the author or
contributor to a number of CSIS reports on transatlantic relations and is contributing
author and co-editor with William Wallace of the book Rethinking European Order
(Palgrave, 2001). Dr Niblett is a frequent panellist at conferences on transatlantic
relations. He has testified on a number of occasions to the House of Commons Defence
Select Committee and Foreign Affairs Committee as well as US Senate and House
Committees on European Affairs.
Dr Niblett is a Non-Executive Director of Fidelity European Values Investment Trust. He
is a Council member of the Overseas Development Institute, a member of the World
Economic Forum’s Global Agenda Council on Global Institutional Governance and the
Chairman of the World Economic Forum's Global Agenda Council on Europe.
He received his BA in Modern Languages and MPhil and DPhil from New College,
Oxford.
