Chapter 17 - European Integration, Innovations and Uneven Economic Growth: Challenges and Problems of EU 2005

Summary

At the end of 2005 the process of European integration seems to have reached a serious crisis. The rejection of the European Constitution by the French and Dutch voters indicates a strong distrust of the way the integration is proceeding. A survey conducted for the Polish Rzeczpospolita newspaper found widespread admiration for the achievements of winning freedom of speech and leading the country into NATO and the EU, but 85 per cent of those polled blamed the Solidarity movement for setting in motion the liberalization that has put many Poles out of work. What went wrong? Why do workers not only in the old EU but also in the new member states (NMS) feel betrayed? The fact that this change of mood surfaces after merely a year has passed since the euphoric celebrations of the enlargement of the Union makes it even more surprising. The aim of this chapter is a preliminary exploration of factors rather than a complete analysis.

As a starting point I would argue that the EU Lisbon Strategy – the European Union economic strategy launched in 2000 – represents a healthy theoretical shift towards a dual emphasis on innovations as the basic engine of economic growth and on social cohesion in order to mitigate the uneven economic growth that necessarily follows in a dynamically innovative society. Europe left behind the neoclassically based standard textbook economics (STE) in favour of Schumpeterian evolutionary economics (Rodrigues 2003). As I see it, this shift, however, carried with it several problems; of theoretical, contextual and didactical nature.

First of all a problem of theoretical mismatch occurred. Jacques Delors's 1993 white paper on ‘Growth, Competitiveness and Employment’ envisioning an innovation-based Europe had been critically received by mainstream economists. Learning from this experience, the Lisbon process was carried through cautiously, avoiding the ministries of finance that had sunk the Delors paper, and this saved it from falling into the same trap. A victory of these tactics, however, may have backlashed, creating problems for the long-run strategy. Coupling innovation and social cohesion makes eminent sense: In an STE framework, however, both these concepts are exogenous elements, and above all, they do not belong together. In STE the market is supposed to create economic harmony, and the losers in the game are an object of concern for social workers, not for economists.