The European union in crisis.

• Author: Klaus, Vaclav
• Position: Worldview

A DECADE AGO, I gave a speech, "The Problems of Liberty in a Newly-Born Democracy and Market Economy." At that time, we were only 10 years after the fall of communism, and the topic was relevant. It is different now. Not only is communism over, our radical transition from communism to a free society is over, too. We face different challenges and see new dangers on the horizon. So, let me say a few words about the continent of Europe today.

You may like the old Europe--full of history, culture, decadence, and fading beauty--and I do as well, but the political, social, and economic developments here bother me. I am neither a visitor to Europe nor an uninvolved observer of it. I live here, and I do not see any reason to describe the current situation in a propagandistic way, using rosy colors or glasses. Many of us in Europe are aware of the fact that it faces a serious problem, which is not a short- or medium-term business cycle-like phenomenon, nor is it a consequence of the recent financial and economic crisis, which only made it more visible. As an economist, I would call it a structural problem, which will not, by itself, wither away. We will not simply outgrow it, as some hope or believe.

It used to look quite different here. The question is: when did things start to change? The post-World War II reconstruction of Europe was a success because the war eliminated, or at least weakened, all kinds of special-interest coalitions and pressure groups. In the following decades, Europe was growing, peaceful, stable, and relevant. Why is Europe less successful and relevant today?

I see it basically as a result of two interrelated phenomena--the European integration process on the one hand, and the evolution of the European economic and social system on the other-both of which have been undergoing a fundamental change in the context of the "brave new world" of our permissive, antimarket, redistributive society, a society that has forgotten the ideas on which the greatness of Europe was built.

I will start with the fast issue, because I repeatedly see that people on other continents do not have a proper understanding of the European integration process--of its effects and consequences. This partly is because they do not care, which is quite rational, and partly because they accept a priori the idea that a regional integration is---regardless of its form, style, methods, and ambitions---an exclusively positive, progressive, and politically correct...