Europe – in 5 years

Hardy HanappiUniversity of Technology of Vienna (Austria)www.econ.tuwien.ac.at/hanappi/hanappi@tuwien.ac.at

Overview

• Major Challenges for Europe

• An Utopian Solution in a Global Context

• How to get from here to there

• Some Open Questions

2

Europe‘s Problems

• Unemployment• Capital Accumulation (“growth“)• War• Immigration• Environmental Limits

Unemployment

Two lines of attack:

Extend employment in the public sector

Reduce weekly working hours

From 40h/week to 30h/week in 2020: plus 34 million jobsfor 43 million unemployed

Restore the long-run trend to more infrastructure: plus 9 million jobs necessary

With average EU wage (38K €) approximately 2.4% of the current EU GDP (14000 bill €) are necessary.

diagrams

Capital Accumulation (“growth“)

Growth in capitalism is based on labour productivity increase:

-6.00%

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

Growth of Labour Productivity

EU 5 Countries

Logarithmic (EU 5 Countries)

perc

ent

Reproductive innovation stimulated by the state replaces old style.

Falling Euro re-orients European TNCs to innovate for the 3rd world.

crisis

War

Strong increases in military expenditure, renewed escalating conflict between NATO and Russia.

Two-country solution for the Ukraine.

Attractive economic policy for Eastern EU members to prevent authoritarian nationalism (Russian style).

Necessity to develop an economic European policy stance that secures peace on Europe‘s Eastern border.

Recommendations:

*Nato Expansion - Territory

*Nato Expansion - Money

1951

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1971

1975

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1987

1991

1995

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0

200000

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600000

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1200000

Military Expenditure

North Atlantic Treaty Organi-zation

USA

China

Soviet Union + Allies

Russia + Allies

Mil .U

S $

, co

nst

ant

2011

Rea

gan

Geo

rge

W. B

ush

*Trade with Russia

2000

2001

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0

50000000000

100000000000

150000000000

200000000000

250000000000

300000000000

Trade between EU28 and Russian Federation

Exports

Imports

US $

*Foreign Direct Investment Russia and

EU

1993

1995

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0.0

10000.0

20000.0

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0

100000

200000

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Foreign Direct Investment

Inflows

Outflows

INWARD STOCKS

OUTWARD STOCKS

Mil. U

S $

Immigration

Strict, unified and humanitarian procedures at Europe‘sSouthern borderline.

Support for anti-religious, enlightenment-oriented elites – student exchange programs (training in social innovation).

Immediate stop of exports of the European weapons industries.

Additionally a positively oriented co-operation programwith African populations to help European TNCs to produce for African consumers (pilote project Europe).

Recommendations:

Environmental LimitsResearch in new energy producing and preserving technologies (excluding nuclear energy) to enable Europe‘s energy independence.

Reassessment of transport systems, communication systems (information pollution) and real estate allocation mechanisms.

No reversal of the German „Energiewende“.

Active and conscious new culture development thatreduces alienation (e.g. excessive food or info-trash consumption): a pivotal part of a pilote project Europe.

Recommendations:

An Utopian Solution in a Global Context

• Europe has a constant population of 500 million people

• Europe has found its place in the global division of labour (a knowledge breeder)

• Europe‘s civilizing example allows to solve global conflicts without a global war.

How to get from here to there• From growth of population via growth of capital to growth

of aggregate utility (welfare): Exploring new utility dimensions.

• Clear priority for Europe‘s research and higher education sector. European research profile instead of weak copies of US approaches. Wake-up call for EU researchers.

• Strong and central continental authority controlled by strong and federally structured democratic control of bureaucracy. Institutionalized civil conflict solution

Some Open Questions

How can a social group enforcing this utopia emerge?

Can Europe‘s second enlightenment be fast enough to prevent escalating coercive (military) forces?

Which scientific and didactic methods will be needed to be successful – internal and external communication?

Hope is to be found at the bottom of Pandora‘s Box

Thank you for your attention