The Campaign for Sustained Leadership

Continued from previous page

Felix Oberholzer-Gee, assistant professor of public policy and management and a native of Switzerland, says economic cooperation has been much easier than political integration. “Europe has monetary integration but the political plans have fallen apart. The critical issue in the further development of the EU is whether they can foster political competition between individual member states and yet grow into something like a federation. Whether or not the union will be successful depends on how much political competition they will allow. If they don’t allow much of that, what we’ll see is a very slow, bureaucratic, top-down process.”

For some 50 years the more developed nations of Europe have been moving closer together. Today’s EU traces its origins to the European Coal and Steel Community in 1952, which later became the European Economic Community and then the European Community. The EU emerged with the signing of the 1992 Maastricht Treaty.

Europe has been integrated from the top down,” says Jamshed Ghandhi, associate professor of finance and director of Wharton’s Huntsman Program in International Studies and Business. “A few people decided they had to integrate to prevent the recurrence of World War.”

Many times in discussing the EU, people ask me why the Europeans can’t get their act together,” says Christian Schneider, associate director of Wharton’s Center for Human Resources, who as a boy in 1953 fled the former East Germany with his family. “You have to see it in a long-term context. I think it’s remarkable that in a time span from 1952 till now Europe has come together, even with all the differences they have.”

Maastricht was designed to foster a “new stage” in integration. Among other things, it created the Economic and Monetary Union (EMU), established a single currency (the euro) and set up the European Central Bank. It also enshrined the principle of “subsidiarity,” the idea that the EU would not seek legislation on issues better left to national and local governments to handle.

A Cohesive Political Framework?

EMU is unprecedented and ambitious. Indeed, the whole history of integration since the 1950s has been complex. But integration’s essential intent has been to mesh the economies of member nations, to forge a trading bloc to rival those of the United States and Asia, and to establish a cohesive political framework.

What is largely dividing today’s 15- member EU – a number that will grow as countries in eastern Europe apply for membership in years to come – is whether a cohesive political framework means an out-and-out federalist government, what some call a United States of Europe, or something less encompassing than that. But even economic integration itself is not a settled question. Britain and Denmark, for example, are deeply ambivalent over whether to join the other 11 EU countries – known as the euro-zone or euro-land – that adopted the euro as their currency on January 1, 1999.

Competing visions also abound among Wharton alums in Europe.

“I think [Europe] is heading towards a federation,” says Michel Fleuriet, PhD’73, advisor to the chairman of Credit Commercial de France, which was acquired by HSBC Holdings over the summer. In Fleuriet’s view, this would mean that each nation state must relinquish important powers – justice, defense, education and health – to a federal body, while also making the federal government more accountable to citizens. A European constitution is necessary both to transfer powers from nation states to a federal government and to ensure “that this government really represents the will of the people,” he says. “I envision a United States of Europe, absolutely. But I don’t think we will have a federation as all encompassing as the U.S. federation.”

Klaus Zumwinkel, WG’71, chief executive officer of Deutsche Post, Germany’s state-owned mail and parcel service, says integration is doomed without both strong economic and political ties. “The European economy and currency union is on its way and has already evoked positive economic effects on the EU countries. The political union is in a period of stagnation, it is true, but there is no alternative to strengthening the political bonds between EU members,” he says. But Zumwinkel cautions that integration is not synonymous with “assimilation.” He says that a “convergence of national systems is necessary, but diversity and autonomy have to be kept in some areas.” He admits it is possible that more regulatory power in the hands of the EU could stifle competition and the workings of free markets. That, he says, “has to be avoided.”