THE BLOG
01/18/2013 08:10 am ET Updated Mar 20, 2013

The Re-emergence of Europe: Europe's Credibility Gap

Have Europe's citizens lost faith in the European project? If so, why, and what could we do to reignite a sense of common purpose?

For many years prior to the 1990s, European integration was embraced and supported by a large majority of citizens. A united Europe, bound by commonly-held democratic values, was perceived as an essential and effective buffer against the Soviet empire. A united Europe made a repeat of the first and second world wars almost unthinkable. It is not for nothing that the EU was recently awarded the Nobel Peace Prize.

But attitudes changed with the fall of the Berlin Wall in 1989 and the collapse of the Soviet Union. The Maastricht Treaty of 2002 was perceived by many as being driven by the elites for the elites and devoid of common values.

The idea of a "democratic deficit" began to take hold, as the founders' ideal of one person, one vote, got lost in the bureaucracy of byzantine institutions whose decision-making seemed opaque and remote. Europe, whose members had increased from six to 27 states since 1951, seemed faceless; the governance of its political economy weak.

The public voice -- Walter Bagehot's idea of democracy as "government by discussion" -- was silenced while Europe's technocrats seemed to treat it with disdain. Disillusionment set in and distrust of politicians grew.

Institutional failure has only exacerbated the problem. The European Council is collectively accountable to no one. The European Parliament does not represent its citizens equally, cannot initiate legislation, and has no control over financial and other important executive decisions. The European Commission, while accountable to the Parliament, has often been sidelined.

This lack of legitimacy and democratic accountability has left the ground open for extremists, populists and radical nationalists to exploit. In just one example, Italy's newly created Five Star Movement, led by Beppe Grillo, who rejects the euro, austerity and the political establishment, won about 10 percent of votes in participating provincial capitals in local elections in 2012 (twice as many as in the regional elections held in 2010), and received more than 18% of votes in Sicily's regional elections in October 2012. There are many other examples illustrating this trend across Europe. Narrow nationalism and a new sense of global citizenship are jointly subverting the European ideal and a sense of European identity.

Europe's credibility gap also extends to the rest of the world as well as its own citizens. Europe has never had a single or unified voice in world affairs; a common foreign policy. It has often appeared to be rudderless and unable to make quick decisions when faced with economic crises, presenting instead an image of division and hopelessness.

Only 17 of its 27 members have joined the euro, and the United Kingdom is thinking of loosening its ties even further. There are concerns that we are heading for a "two-speed Europe," and, if even one country were to leave the euro, possible disintegration. The union looks far from united.

So we need a new, shared vision for Europe, a stronger voice for its citizens, and more democratically accountable and influential institutions adopting more streamlined decision-making processes.

The European Central Bank (ECB) has already gone a long way towards saving the euro and preventing the collapse of the Eurozone's monetary union. It is also in the forefront of moves to create a banking union with the ECB as central regulator. Now we need fiscal union, convergence in competitiveness and political union too if Europe is to emerge from this crisis stronger more united and more globally competitive. But we will not achieve this unless can close the credibility gap.

National parliaments must create much stronger ties with a strengthened and more influential European parliament. Members could hold seats simultaneously in both institutions, for example. A European Commission president could be directly elected and given powers to appoint the members of a European government. There are many other ideas circulating to address the democratic deficit.

But one thing is for sure, member states will have to start putting the interests of Europe first, before their own.

This post is part of a series by Professor Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, based on his book The Re-emergence of Europe.