While its existential threat to the European Union has passed, it now faces the arduous political task of restoring economic growth to show citizens the coming gains are worth the current pains, the EU ambassador to the United States said in Atlanta June 27.
“The problem … is that politically we have asked our populations to make enormous sacrifices in all of the countries, but the people are not yet seeing results of them, because the growth and the job creation that comes with it is not yet visible,” ” said João Vale de Almeida, who heads up the EU mission in Washington. “People are still in the tunnel. They don’t see the light at the end of the tunnel yet, and this is politically very difficult to manage.”
The ambassador joked at the World Affairs Council of Atlanta luncheon that a year ago, the audience would’ve been justified in asking how long he would still have a job.
But discussion about the EU has shifted from whether it will disintegrate to how it will restore growth and confidence, he said.
The bloc is in the midst of negotiating agreements that would unify members’ fiscal standards and banking regulations. This week the European Council and European Parliament also agreed on a long-awaited overhaul of agricultural policy.
The ambassador rattled off other facts to show that things are turning around. The EU won a Nobel Peace Prize in 2012. It’s soon to add its 28th member, Croatia, and it’s looking to return to positive growth by the end of the year. It has passed a budget through 2020. Next week, negotiations will begin on the Transatlantic Trade and Investment Partnership, a proposed free trade area between the EU and the United States.
“The European Union is coming back. The European Union is more robust today than it was a year ago,” Mr. Vale de Almeida said.
Ireland is an example of the tough choices that have underpinned the comeback and how biting the bullet of austerity can lead to rebalancing, said Michael Collins, the country’s ambassador in the U.S. and another luncheon speaker.
After its real-estate bubble burst, solidarity with Europe allowed Ireland to weather the storm through a 85 billion-euro bailout package that it received in 2010 and should pay back in full by early next year, Mr. Collins said. The government is also shooting to cut its budget deficit to just 3 percent of gross domestic product by 2015.
The path has not been easy. Austerity was not an “ideological bent” but a temporary tool to restore balance, said Mr. Collins, who will soon take up a new post in Germany, Europe’s principal lender.
“Pain has been enormous for our country and for so many people, but we have a real sense of optimism that we have more than turned the corner,” Mr. Collins said.
For Ireland perhaps more than other EU members, the economic boost promised by the proposed EU-U.S. trade pact is significant. As exports have slumped, Ireland’s economy has dipped back into recession.
During Ireland’s term at the head of the rotating presidency of the Council of the European Union, which ended this week, the EU handed down a broad mandate giving negotiators the ability to negotiate on sectors covering 98 percent of the union’s economy, Mr. Vale de Almeida said. He was hopeful that the pact would be broad enough to make a significant impact on transatlantic growth by reducing barriers and setting the standard for global trade agreements.
The World Affairs Council audience was skeptical about the prospects for the far-reaching pact. one member brought up poultry, an always-contentious commodity. Another brought up the audiovisual sector, which has been left out of the deal at France‘s request.
Mr. Vale de Almeida said there are many potential roadblocks to the deal but that negotiators will have to keep the end goal in mind: restoring growth for both economies and setting standards that will extend the influence of the transatlantic relationship into an era increasingly impacted by the rise of emerging economies.
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