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.


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