Development Office Newsletter: Issue N°3 2010
Column
Professor Jacques Pelkmans, Director of Economic Studies, College of Europe:
“The measures, not the money, must keep the euro credible”
Prof. Pelkmans began teaching at the College of Europe in 1992 and was appointed Director of Economic Studies in 2001. Before this, he held various academic and scientific posts and he is the author of many publications on European economic integration and international trade policy and investment.
Development Office Newsletter: Prof. Pelkmans, considering today’s financial and economic situation in Europe – have you seen more troubling times?
Prof. J. Pelkmans: The current crisis is very severe. Nonetheless, we have conveniently forgotten a number of previous crises, which, at the time, were maybe perceived as even more dramatic. The first years after the war, the situation in Europe was really dreadful; in 1973, oil prices quadrupled and the impact of the second oil crisis was even worse. Also the fact that Central and Eastern Europe was partly under communism was very severe for the people. So it is all very relative. It is true that today we consider this crisis as terrible, but the level of prosperity is much higher than twenty years ago. We are actually doing well in Europe.
So you see the situation more positively. But from your experience of working with the students: is there not a risk that the younger generation is loosing its confidence in the European Union and the euro?
If you put it as broad as this – no. Every young generation has gone through some of the things I described in my previous answer. And the EU is not a country. We have to work together, partly legally, partly by voluntary cooperative mechanisms. Sometimes it works well, sometimes we quarrel. Without this pressure from the financial markets one could quarrel for years. I think people will now understand much better that if you refuse to work together on the euro and its credibility, the financial markets will get out of control.
Based on this pressure from the market, at the beginning of the month, EU leaders have agreed on a rescue mechanism worth about €750 billion to protect the euro. Do you think this was a step in the right direction? It should never have come so far. But given the circumstances, I am in favour of the rescue mechanism. First, we have made the crisis worse by waiting too long – which was not necessary. And second, the mechanism cannot only be seen as a pot of money. On the contrary, it is about the measures to be taken by the relevant Member States – harsh measures that were introduced at a very high speed. The pot of money is there to increase the credibility of the rescue mechanism in case the money will be needed in the end. But it is the measures that have to keep the euro credible.
Let’s speak a bit more about your role here at the College of Europe. You not only teach students, but also participate as a lecturer in many of the Development Office’s training seminars. How much of a difference is there between teaching students and teaching professionals?
The students in my courses are all economists and the courses last for a whole year. The participants of the professional seminars have a much more heterogeneous background in terms of education, nationality and level of experience and the sessions are shorter. That’s why the academic courses go much deeper. In the professional seminars you have to leave out the technicalities and deliver results.
For this year’s ‘Intensive Seminar on the EU’, organised by the Development Office from 28 June till 16 July in Bruges, you will provide three different sessions: on the Economics of the European Integration, the Single Market today and EU networks. Could you lift the veil a little bit and explain what the latter session will be about?
There are seven EU network sectors: broadcasting, postal services, telecoms, electricity, gas, air transport and rail. These industries need a network, either a logistical one, like for postal services, or a physical one, like for the railways. You need a combination of liberalisation – away from the state regulation of the past, but also competition – away from monopoly. And as these companies have a huge amount of power, you still have to regulate them at EU level. Establishing the Internal Market for these industry services is difficult. This is, in brief, what I discuss in my session.
With 17 editions, the ‘Intensive Seminar on the EU’ is one of the most successful training courses of the Development Office. What makes this programme so popular, in your opinion?
I think the success of the Intensive Seminar is based on a mixture of the real demand and the reputation of the College of Europe. There is a very clear and permanent need of good EU training courses. The Development Office, backed up by the College of Europe’s network, is very well placed. For professionals, it is very convenient to follow this compact course over a few weeks in a splendid city. One might also find a course in other parts of Europe, but there is no guarantee about this level of quality and experience.