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Europe Faces New Political Reality at Harvard

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Africa has one. Latin America, the Middle East, and Asia have one. But until this weekend, Europe didn't have an annual conference at Harvard University during which leaders from the region discuss the political and business future of the continent in two days of debate, keynote speeches, and hallway gossip.

Rarely Europe follows into the footsteps of its southern counterparts, but this year the region bowed to the reality of a changed geopolitical order. The euro crisis deeply scarred the financial prosperity of the region and at negative growth rates of 0.6 percent last quarter its recovery remains elusive. Unemployment rates nearing 28 percent in countries such as Spain and Greece further complicate the picture.

Political division in the absence of central leadership and the notorious inefficiency of European Union (EU) institutions hardly facilitate rapid recovery.

But the conference's student leaders chose not to sit back and watch Europe's demise. "For us, accepting the recurrent tagline of the Financial Times that the European project was doomed, without even trying to debate it, was simply not an option," Thomas Dermine, co-chair of the conference and a student of public policy at the Harvard Kennedy School, said during his speech on Saturday before welcoming EU trade commissioner Karel De Gucht.

Mr. De Gucht announced that a free-trade agreement between the U.S. and the EU, as mentioned in President Obama's State of the Union three weeks ago, would boost growth by 0.5 to 1 percent. He called it "the cheapest stimulus package" both partners could support, who account for roughly 54 percent of the world's GDP. Tariffs should disappear, thus effectively increasing the competitiveness of European and American companies with 4 percent. Liberalization efforts should create thousands of jobs, De Gucht explained.

He told me that "It's important that Europeans... take the trouble to go to international events. Take Asia for example, one of the mistakes we're making is that we're not present enough there... International politics is a people's business."

BRIC threat

The biggest win of the agreement might be the standardization of regulatory processes. A single procedure should secure IP rights in both the EU and the U.S. They ensure our competitiveness, he added, warning for China and the rise of other emerging economies. Innovation in knowledge-driven economies is the motor of future prosperity.

"How can we create the conditions so that we can secure our prosperity for the next generation? If we don't do anything, we'll lose it... One of the reasons why I think Europe and America should work together is to make sure that China for example can't impose norms and standards on us," he said. "If we want to ensure our prosperity we need to make sure we protect our IP."

One union, one identity?

But the negotiations won't be easy. Next to cultural differences between Americans and Europeans, not the mention the fierce disagreements over GMOs and pharmaceutical regulations, internal European disputes undermine Europe's global authority. There is no one European identity, no one voice that speaks for the myriad of countries that make up the EU. Before increased monetary and fiscal integration can take place, European leaders need to focus on enhancing their political union.

Guy Verhofstadt, the leader of the Liberal group in the European Parliament, called for a "United States of Europe" during his speech at the Harvard conference. Young people need to understand what Europe is about, he said to an enraptured audience amused by the same rhetoric that silenced eurosceptic Nigel Farage before. European leaders shouldn't so much stress the coming about of peace after centuries of war as the raison d'etre of the EU -- "you never lived through war anyway" -- but they should talk about decades of growth as its primary accomplishment, and the future of European jobs as a more appealing marketing strategy.

Mr. Verhofstadt compared current proceedings to the chaos that would entail when 50 American state governors would attempt to reach a decision on whether or not to invade Iraq in the absence of a president or powerful federal institutions. He recalled his early days as a European parliamentarian, when the f-word -- federalism -- was still taboo. "We don't need more coordination between member states," he said, "but convergence."

Benoît Coeuré, executive board member of the European Central Bank (ECB), suggested that Europeans directly elect their leader to increase the political legitimacy of the EU and address accusations of elitism, a problem gleefully exploited by populist parties in times of crisis. Geert Wilders, a Dutch MP and leader of the Freedom Party, earlier proposed a return to the Dutch guilder in a desperate attempt to win votes from disgruntled citizens.

But other voices, such as Kalypso Nicolaïdis, a professor of international relations and director of the European Studies Center at Oxford Univeristy called the creation of a pan-European identity "a messianic project," and warned for European nationalism as part of the "original sin of Europe." Intergovernmental negotiations between member states are to be preferred over supranational entities telling people what to do.

Final advice: Do not come back?

"Our fear for taking risks is our biggest enemy," De Gucht offered as a final word of advice to European students who crossed the ocean to try their luck in America. He fundamentally disagrees with the mantra that seems to be dominating international circles: "leave Europe," do not return to the old world.

"But it's normal that in a monetary union migration is one of the elements that stabilizes markets again," he proffered, hailing America's greater mobility and underscoring the need for it within Europe. "But there is no reason whatsoever why we should assume that Europe does not have a bright future ahead."