towards a new paradigm of political economy in Europe?

towards a new paradigm of political economy in Europe?
Written by on100dayloans

Since the Second World War in Europe, two main paradigms have succeeded each other: the paradigm sometimes called the “Keynesian consensus” which supported reconstruction and development efforts after the war during the “Trente Glorieuses” (1945-1975). This paradigm found its limits in the episodes of stagflation in the 1970s. In France, it was abandoned with the rigor shift of 1983.

It was succeeded by the neo-liberal paradigm which accompanied the creation of the single market in the European Union and the process of economic globalization. This paradigm is based on the search for efficiency in the allocation of economic resources as a source of economic dynamism, and has accompanied the deepening of economic interdependencies on a global scale. An intended political consequence of this deepening was to cement peace in the post-Cold War world. Economist Thomas Friedman noted in the mid-1990s that two countries with McDonald’s franchises had never gone to war.

This paradigm has been wavering for several years. It finds its structural limits in financial instability (2008 crisis), the widening of economic inequalities, and in its inability to contain the global ecological crisis. But to date, no alternative paradigm has yet imposed itself.

The crises that a society goes through sometimes have the quality of accelerating the political crystallization around a new political paradigm that was in the making until then. The question is therefore whether the health crisis and the Ukrainian crisis are likely to bring about the emergence in Europe of a new paradigm of political economy.

Our conviction is that these two crises provide a unique opportunity to create this new paradigm. The health crisis caused by the Covid has made people aware that the principle of efficiency could not apply to all sectors of activity, Europe having to ensure its autonomy in a key strategic sector such as health.

The Ukrainian crisis will lead us to the same conclusion on the energy front. It shows Europeans, for the first time since 1973 and the first oil crisis, the fact that energy is a rare resource, produced in countries with unsavory regimes, and which can, depending on the evolution of international balance of power, becoming hostile. This crisis will accelerate the production of renewable energies and even allow the relaunch of nuclear energy. But it will also undoubtedly lend credibility to the debate on the significant reduction of energy consumption in France and in Europe. It will give considerable credit to all those who consider that energy sobriety is not a return to the past; it is a necessity of any reflection on a desirable future. And this necessarily involves questioning the way we use this energy.

Thus, the Green Pact for Europe, which targets both carbon neutrality for the continent by 2050 and the transformation of the economy towards a fairer model, seems to us to be able to become a unifying project which, beyond beyond technocratic agendas for the adoption of new regulations, will mobilize citizens, politicians and economic players.