Opinion

An Austrian drag queen shows how Europe can work

Both the Eurovision Song Contest and the Champions League offer evidence that, for things that really matter to most of its people, Europe works. Is this because these contests are so far removed from the realities of daily life, or is there something Europe’s economic and political leaders can learn?

By: Date: May 20, 2014 Topic: Macroeconomic policy

This article was published by BloombergView.

Like hundreds of millions of others, I watched the hilarious Eurovision Song Contest Saturday, in its 59th year. For those of blissfully unaware of this “competition,” any country with vague connections to Europe offers up a rather ridiculous song, usually with some cheesy stage performance. This year’s trophy was won for Austria by a bearded drag queen.

The show has taken on the sort of compulsive viewing that I imagine regular TV game shows such as "X Factor" would love to have. Saturday’s “final” featured 26 countries, including Russia and Ukraine, along with a number of other ex-Soviet states. The voting is always heavily gamed; countries give maximum votes to their neighbors and friends, with little regard for the quality of the songs. (In fact, the word "quality" probably shouldn’t be used at all here.) This has been especially true for ex-Soviet countries. What was remarkable this year, in view of matters in Ukraine, was that Ukraine and Russia each gave the other some votes, and while there was quite a lot of booing when Russia voted or some country gave Russia a lot of votes, it was all undertaken in the jolliest of spirits.

The contest is inclusive; no country that considers itself in any way European is kept out. In this way, it is similar to the UEFA Champions League. Over the next couple of weeks, leading up to the start of the World Cup, this soccer league’s final will be contested in Lisbon between two teams from Madrid. The famous Real will attempt to win for an impressive 10th time (no other team has even come close) after a 12-year famine, against the less fashionable Atletico.

Both the Eurovision Song Contest and the Champions League offer evidence that, for things that really matter to most of its people, Europe works. Is this because these contests are so far removed from the realities of daily life, or is there something Europe’s economic and political leaders can learn?

I am in the process of writing a research paper for Bruegel, a European think tank, about the European Union and its “neighborhood policy” — that is, the official stance it takes toward its neighbors, especially those that may desire to join the EU. Unlike the Champions League and the Eurovision Song Contest, the EU is not open to all nations. It has 16 countries that it treats as “neighbors,” most of which border member countries. Neither Russia nor Turkey are in this group (although each participates in the Champions League and Song Contest, when it has entrants strong enough). But many of the EU neighbors are volatile places, with Ukraine being a perfect example. The EU currently seems to have a somewhat haphazard policy toward all of them, often letting the issue of future EU membership dominate the rules of engagement. This is a mistake.

The current combined gross domestic product of the 16 official neighbors is about $1.3 trillion. This has the potential to rise to as much as $7 trillion in current dollars by 2050. So it’s in the EU’s self-interest to take a more sophisticated — that is, open — attitude toward these countries, individually and collectively. Russia and Turkey in particular, as well as two more distant neighbors, Iran and Saudi Arabia (both countries with considerable influence over some of the 16 official EU neighbors), should be regarded in strategic economic terms. These four countries have a combined GDP of around $4 trillion (Russia accounts for more than half of it), and that has the potential to reach $18 trillion by 2050.

Taken together, the 20 broader neighborhood countries could be as big as $25 trillion by 2050, 70 percent as large as the EU itself by then. Imagine how helpful this could be to the EU’s economic performance. The neighbor countries have value far beyond their ability to write songs.


Republishing and referencing

Bruegel considers itself a public good and takes no institutional standpoint.

Due to copyright agreements we ask that you kindly email request to republish opinions that have appeared in print to [email protected].

Read article
 

External Publication

European Parliament

Tailoring prudential policy to bank size: the application of proportionality in the US and euro area

In-depth analysis prepared for the European Parliament's Committee on Economic and Monetary Affairs (ECON).

By: Alexander Lehmann and Nicolas Véron Topic: Banking and capital markets, European Parliament, Macroeconomic policy Date: October 14, 2021
Read article More by this author
 

External Publication

Global Economic Resilience: Building Forward Better

A roadmap for systemic economic reform calling for step-change in global economic governance to increase resilience and build forward better from economic shocks, prepared for the G7 Advisory Panel on Economic Resilience.

By: Thomas Wieser Topic: Global economy and trade, Macroeconomic policy Date: October 14, 2021
Read about event More on this topic
 

Upcoming Event

Nov
4
14:00

European monetary policy: lessons from the past two decades

This event will feature the presentation of “Monetary Policy in Times of Crisis – A Tale of Two Decades of the European Central Bank."

Speakers: Grégory Claeys and Wolfgang Lemke Topic: Macroeconomic policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels
Read article More on this topic More by this author
 

Opinion

Letter: Declining investment may explain why rates are low

Perhaps an analysis of the causes of the declining investment rate would bring us closer to explaining why real interest rates are so low.

By: Marek Dabrowski Topic: Macroeconomic policy Date: October 1, 2021
Read article More by this author
 

Podcast

Podcast

A green fiscal pact

How can the European Union increase green public investment while consolidating budget deficits?

By: The Sound of Economics Topic: European governance, Macroeconomic policy Date: September 29, 2021
Read article More on this topic More by this author
 

Blog Post

Monetary arithmetic and inflation risk

Between 2007 and 2020, the balance sheets of the European Central Bank, the Bank of Japan, and the Fed have all increased about sevenfold. But inflation stayed low throughout the 2010s. This was possible due to decreasing money velocity and the money multiplier. However, a continuation of asset purchasing programs by central banks involves the risk of higher inflation and fiscal dominance.

By: Marek Dabrowski Topic: Macroeconomic policy Date: September 28, 2021
Read article More on this topic More by this author
 

Opinion

The pandemic’s uncertain impact on productivity

The pandemic has certainly permanently affected our way of working. Whether this is for the better remains to be seen.

By: Maria Demertzis Topic: Macroeconomic policy Date: September 28, 2021
Read about event More on this topic
 

Past Event

Past Event

How to strike the right balance between the three pillars of the pension system?

In this event panelists will discuss the future of European pension schemes.

Speakers: Elsa Fornero, Svend E. Hougaard Jensen and Suvi-Anne Siimes Topic: Macroeconomic policy Date: September 23, 2021
Read article More on this topic More by this author
 

Blog Post

Germany’s foreign economic policy: four essential steps

Germany and the EU need to develop a strong and proactive agenda to manage foreign economic relations, which are essential for German and European prosperity.

By: Guntram B. Wolff Topic: Macroeconomic policy Date: September 23, 2021
Read article Download PDF More by this author
 

Policy Contribution

A new integrated-value assessment method for corporate investment

To contribute more to the green transition, companies should start to make investment decisions based on integrated-value assessment, weighing up the environmental and social impacts alongside the financial returns.

By: Dirk Schoenmaker Topic: Green economy, Macroeconomic policy Date: September 23, 2021
Read article More on this topic More by this author
 

Podcast

Podcast

Unboxing the State of the Union 2021

In this Sound of Economics Live episode, Bruegel experts look at the State of the Union address delivered by Ursula von der Leyen, President of the European Commission.

By: The Sound of Economics Topic: Macroeconomic policy Date: September 15, 2021
Read about event More on this topic
 

Past Event

Past Event

The Sound of Economics Live: Unboxing the State of the Union 2021

In this Sound of Economics Live episode, we look at the State of the Union address delivered by Ursula von der Leyen, President of the European Commission.

Speakers: Grégory Claeys, Maria Demertzis, Alicia García-Herrero and Giuseppe Porcaro Topic: Macroeconomic policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: September 15, 2021
Load more posts