European economic models compared

On October 15, 2014, the budgets of each of the states that make up the euro zone were delivered. The economic data presented were (in part) the cause of a hit in the main stock exchanges around the world. On the other hand, they are a symptom of economic stagnation and a lack of important political consensus andn Europe (GDP for the third quarter of 2014 of the euro area and the European Union are respectively + 1% and + 1.4% [1]). These data (focused on the deficit and public debt) are ways (better or worse) to consider the good direction or not of the budgetary policies of a member state. The stability and growth pact [2], ratified by the European council in 1997 [3], it imposed a roadmap on the accounts of the EU member states. This pattern is not an objective way of interpreting reality, but a subjective interpretation of it.

The configuration of the European treaties largely benefits the interests of the German staten - especially with regard to monetary policy [4]. The imposition of a policy of rigor, "a la German", does not necessarily imply that it will work in another territory with different realities. However, the German model, almost perfect in the imaginary of the institutions and member states (and citizens), seems to waver lately or, at least, their growth prospects economic [5]. This deflation - of around 0.7% of GDP - inexorably leads to the revitalization of infra-European geopolitics [6].

This is explained because the economic models of each state are seen as an alternative to the criteria of a discouraged German economy. France is the highest ranked state to question the policies of rigorAlthough the European Union has a vote in this contest - the Commission can sanction governments that fail to comply with the pact established in 1997 [7]. After all, the Germany of Merkel it forges the toughness - especially in the budgetary field - of the EU, which gives it an important responsibility. The imposition of its economic model or another reconfigures territorial realities with serious consequences.

A conceptual approach to Economic Models and hierarchies in the European framework

What are then the economic models? On geopolitics, economic models are a territorial strategy of an economic order where certain actors try to convince - or impose - on other states a certain vision about the economy and, therefore, society. Economic strategies are established in a will to impose by economic force (and not so much by military force) control over other states within a framework of globalization. This rivalry resembles - as we said on another occasion in the article on: The disastrous effects of the Transatlantic Treaty - to what Joseph S. Nye, it was calling SoftPower or soft power [8].

From this point of view, states become "economic predators" in order to perpetuate their comparative advantages in the economy. Since, as we have been saying, a model does not adapt the same growing in your territory ("endogenous") as imposed by the other ("exogenous"). The "aggressor" state benefits from a significant economic income if it manages to attribute its way of seeing the world to other states, guaranteeing, on the rise, his ability to act as a kingpin. Thus, under a somewhat reductionist explanation, we move towards the creation of central and peripheral (or semi-peripheral) states. State actors agree on how to make the state pivot whose hegemony is sustained by the ability to obtain more capital gains in the circulation of capital. What Immanuel Wallerstein [9] called world-economy [10], in this case what would come to be the capitalist world-economy, resembles the materialization of one economic model above others.

Globalization would be - gross mode - the crystallization of one or more visions: the hegemonic vision America and its subordinate European states - Germany, France and the United Kingdom would be the great banners. The latter, but with greater notoriety the Franco-German couple, are competing for the future of the European model, each one wants to leave their signature. Germany is seen as the epicenter of Europe with a strong underling (France). On the contrary, France sees a Europe led by the Franco-German couple and tries to use its political power for it [11], but perhaps it does not weigh in the same way (for the moment [12]).

A rivalry around the Franco-German couple

The German economic model comes from a trend that appeared in the 1930s called Ordoliberalism or social market economy. This would consist of a space where the state would set a specific order of general rules to apply, then, the principle of competition and free market for companies. To a greater or lesser extent, most European states apply this economic model, although it rivals the French one. This economic framework seems to work very well in Germany. So much so that the German state, with a policy based on the export of industrial products with high added value, reinforces its status of domination to the detriment of the other states [13]. It has endeavored to become the factory of Europe (and part of the world). The other European states have found themselves renegade to explore other avenues seen German success (The relocation of European industry has caused numerous damage, especially in southern countries). However, Germany's weight lies in its influence on the statutes and policy of the European monetary system.

On the other side of the street, we find ourselves confronted with the French model. This would consist of a much more controlled (politicized) social market economy. In other words, it would be a liberal model where state intervention - greater than in Germany - has guaranteed the country's growth. The state is much more supportive, protectionist and therefore more sensitive to social needs. However, the weight of Germany in the economy is dragging, directly or indirectly, to France and all other countries, to carry out policies of budgetary rigor and restructuring of the market.

What are the consequences of the lack of European solidarity?

As we have already mentioned, economic models are economic strategies that, in the end, represent the livelihood of society. The forced German (and European) austerity has forced to break the welfare states, economic models that were deeply rooted in some of the European countries. The loss of a social model is in force throughout the Europe of Solidarity. ANDn Spain this process is very prevalent and, even more, with the conservative government of Mariano Rajoy who has plunged headlong into the dictates of austerity. The problem, in our opinion, is not seeking GDP growth but adjusting to the needs (health, housing, decent employment ...) of the people, the true sovereign.

Nevertheless, If Germany has succeeded in imposing her model on the other European states, her hegemony remains less clear in view of the political pressure exerted by France. (with the support of Italy, which hosts the biannual presidency of the Council of the EU). So much so that the ECB, the IMF and the EU seem to swing towards positions halfway between the two actors. Still, the monolithic German vision subtracts one of the great burdens to re-launch the EU economy.

Bibliographic references:

• [1] Data from September 5 in Eurostat
• [2] On June 17, 1997, the stability and growth pact of the member states was ratified in Amsterdam. focused on controlling the excessive public deficit (no more than 3% of GDP) and a public debt (no more than 60% on the GDP). The European Council publishes on March 22 and 23, 2005 an improvement of the resolution of 1997.
• [3] During the European Council on March 22-23, 2005, Finance Ministers found a political agreement to improve the management of the stability and growth pact ratified in the 1997.
• [4] "Économie et Géopolitique", Hérodote. Revue de géographie et géopolitique, La découverte, nº151, 2013, Paris.
• [5] German industrial production has fallen by 4% this August. Likewise, forecasts for the German economy - either by the German government or by the IMF - have dropped considerably (from an approximate forecast of 2% to 1.2% of GDP in 2015). The conjunctural factors as well as the geopolitical factors have slowed down the German, European and world economies.
• [6] Geopolitics understood as the "designation of a conflict, a power rivalry in a territory, which implies at least two protagonists" (Yves Lacoste).
• [7] “Brussels asks France for the accounts” (“Bruxelles demande des comptes à la France”), Les Echos, 10/23/14, Paris.
• [8] "The ability to influence the representations that leaders and populations make of certain norms of behavior or certain political orientations."
• [9] Immanuel Wallerstein is a world renowned sociologist. He is a researcher at Yale University, directs the Fernand-Braudel Center in the study of economies, historical systems and civilizations at Binghamton University (NY). He is also a researcher linked to the Maison des sciences de l’homme a Paris and, likewise, he has chaired the International Association of Sociology.
• [10] "The world-economy is an expression used by most economists to describe, not an integrated system of production, but the commercial relations between states." I. Wallerstein.
• [11] "Économie et Géopolitique", Hérodote. Revue de géographie et géopolitique, La Découverte, nº151, 2013, Paris.
• [12] Various studies suggest that the German economic weight will decline as its population, already very old, begins to lose numbers. On the contrary, the high level of health in terms of demographic change suggests an increase in the French weight in the European economy.
• [13] "Économie et Géopolitique", Hérodote. Revue de géographie et géopolitique, La découverte, nº151, 2013, Paris.
• [14] http://europa.eu/legislation_summaries/glossary/ex...