By Carlo Pelanda (January 1999)

1. More than an alliance, but less than a Union

The monetary union is an irreversible choice. Though the EMU design still appears to be technically incomplete and politically premature, the cost of its failure would be much bigger than the cost of implementing it. Therefore the euronations will be forced to achieve more and more integration in the future because the single currency management requires a growing degree of political and economic harmonization. On the other side such a "convergence by necessity" does not imply that a real "European (political) Union" will be automatically born. The euronations have accepted the concept of "shared sovereignity". For this reason Europe is "more than an alliance" (where "alliance" means that a group of nations forms a selective agreement without the need of giving up relevant pieces of sovereignity). Yet the same euronations have not yet developed a common plan of political merging. Europe is still made up of nations, both formally and substantially. There are no signs that someone wants really to change such a situation. In this sense Europe is "much less than a union" and it seems that it will remain as such for a long time.

Which type of "unity by necessity" can be achieved in a "Europe of nations"? Will it be a good unity or a bad one? This paper will try to answer such questions.

2. Unity without Union

The prospect that there will be more Europe does not necessarly mean that an actual European Union will take place. Germany, by being the single power (though permanently exposed to the balancing action by France and UK and by contingent coalitions led by one of these two countries) has no interest in generating a constitutional framework. An European constitutional structure, in fact, would include principles of equality among nations which would limit the German dominance. Also the second europower, France, has the same interest. This attitude might change in case Paris perceives that it will not be able to balance the German power through informal means. But Germany has not the interest to upset the French up to the point of forcing them to take a stronger anti-German containment action. UK does not want a constitutionally established European unity because its electorate is basically against any cession of sovereignity. A European constitution, i.e. a (con)federative European Union, would force the UK to stay out. It wants to stay in and therefore it will work to keep alive the current model of Europe of nations. To sum up, the eurotriad has not the interest to build the European unity in a strong constitutional sense.

Then, what they will do? They will simply try to refine the already existing European system of government based on the consensus of nations, i. e. the European Council of national governments. The "only" problem is to transform it into a majority vote system without jeopardizing the veto power of the major nations in cases where they can find themselves in a minority position on issues considered of vital national interest.

Have the "minor" nations the power of impeeding such an organization of the European power which cleraly goes against their national interest? No. The major powers - if they agree in the abovementioned configuration of the European command and control system- have all the possible informal means to force the minor ones to follow. It would be very hard to believe that Germany does not have the informal means of pressure to force both Italy and Spain to do what Berlin wants, particularly, if France agrees on the specific issue. One might say that in this situation all the minor European countries could form a coalition against the French-German dominance. This is true only on paper.

In some sense the European system appears more stabilized than commonly believed. Germany first, France second, Italy and Spain competing for the third place, UK the external co-second. Some turbulence is left because probably France does not want to give up its dream of being the European co-first. But it is clear that it is just a second and that Germany is interested in not offending the French pride. At the end, this ranking will be accepted by everyone.

The major powers do not have any interest in changing such an order by constructing a constitutional unity. They have the interest of consolidating the hierarchy by transforming it into a stable procedure of decision making inside the Council of nations. For doing so they only need to better formalize the fact that the Council of ministers of the European nations is the command post of the European Union. A majority vote in it will be the single voice of the Union. And the "unity by necessity" will be achieved in this way, without the need of having a real Union.

From now to the implemementation of this solution there is still a gap. The nations have to agree on the mechanisms that can make the Council of nations the real governing body of the Union (majority vote, veto power, degree of obligation in following an eurodecision for a country which disagrees, etc.). Surely it will be a complex negotiation. Yet two combined factors will simplify and accelerate the process. The perceived growing need of integration generated by the monetary union will force the Europeans to use the procedures of consensus that they already know and use, i.e. a system of "democracy among nations" where the vote of the major powers will count much more than the vote of the minor ones, both in the "Euro 11" group and in the greater Council where non-euro countries are added . In this sense some "unity" can be achieved without a Union and without changing the existing configuration of the "Europe of nations". Though this scenario cannot be a prophecy, it seems to be a tendency most likely to occurr.

This type of European unity is the flat and simple continuation of the european order which developed in the past, with small changes. Since 1963 the French-German diarchy structured the European scene as a co-managed empire. Minor countries have been very gently forced to adjust their national interest to the French-German one. It is a very soft empire, France is trying to do its best for counterbalancing the German dominance, but it is an empire. When, on September 1996, France and Germany decided to make irreversible the EMU choice, they communicated this fact through a bold bilateral act. No other European country could even try to discuss the issue. The message was: this is it. This is a good example of the meaning of "unity by hierarchy".

Germany gave its first loud and clear message that it was going to act as a single power on June 1997 during the eurosummit in Amsterdam. Its interpretation of the "stability pact" means that there is no need to have a "real" supranational government in Europe. An automatic mechanism which keeps under control the national budgets is enough in order to make feasible the single currency management. All the rest will be governed through the system where Germany cannot be constrained by "European rules". Another clear message referring to the fact that Germany has a special dominance in the European affairs has been issued on the occasion of the NATO enlargement discussion. The European nations had no an objective interest in creating such a hard boundary with Russia. Germany and the United States had such an interest, though with different objectives. No real discussion has been made beyond closed doors. They did it and that is it - a perfect example of European unity.

In conclusion, the meaning of European unity is very clear: Germany, France and UK will lead and the other countries do not have the possibility of changing this situation. Probably such a description of the European order and of the type unity it produces is not intellectually elegant, but it fits reality.

3. Assessing the consistancy of a unity without Union

Can this European top down order work? The answer has to be a multilevel one.

Mostly the assesment refers to the capacity of the Council of european governments to express a single voice through a majority vote. Moreover we have to assess whether or not such a single voice can solve the "practical" problems of unity.

As mentioned above the construction of a majority vote inside the Council of national governements is a difficult step. The current evolution shows that it is possible to implement it through a gentleman's agreement system. For instance, a majority vote is very critical in security matters. If a country does not want to send troops somewhere in the world it would be very hard to involve the name of the "European Union" into the action. What solution is possible? A veto by such a country would make very ineffective the EU. To bypass the veto would be a cause of internal conflict. The practical solution is that of inventing a sort of "astension" with the effect of not stopping the EU action and of not forcing the specific country to do what it does not want to do, i.e. a sort of "active astension". Such a solution can work for minor countries. Also because if a country of this type does not want to be part of the action, then the major countries do not care because in any case they have the resources to act without it.

A bigger problem might raise if one of the major countries disagrees with the other two. In this case the "active astension", or somethnig like it, would not work because it would politically jeopardize the action and the eurocohesion. But the solution is simple thanks to the "short list" of the european order. In some way there will be an agreement among the three countries. To be a friendly part of the leading level of the instituion is a general objective which is more important of some contingent and specific issue. But what might happen if one of the large minor countries, Italy and Spain, have problems of national interest for some EU action decided by the triad? They will be softly convinced to bow their proud heads with the help of some compensation.

To sum up, it does not appear unfeasible the prospect of formalizing and consolidating the European order inside the mechanism of decisions which has the power of involving the EU as a unity. Moreover, the important security issues will always - at least for the next 10 or 15 years- be managed by the US. This will ease the pressure on the Europeans and will allow the existance of an imperfect and too much negotiated european command post. Until the European Union remains under the US umbrella for the most critical security issues it will not be necessary to have an European "clear cut" and really homogenous single voice. At this level the system of "unity without union" can work without big problems for a while.

At the economic level the story is be very different. The European nations have diverse economic models and situations. In a so differentiated context the process of building a single voice tends to be a factor of internal conflict that is not possible to solve through pragmatic compensations.

There are four economic Europes. (1) The model of "concentrated capitalism" made up of big industries (in most of Germany, France and Sweden). (2) The model of "diffused capitalism" characterized by a high density of small industries, many of them globalized (Northern and Central Italy, most of Spain, Bavaria and Baden). (3) The flexible model in UK and Ireland which is structuraly diverging (less taxes and regulations) from the social protectionist model existing in the continent. (4) The underdeveloped Europe depending upon heavy assitance programs (Southern Italy and some parts of Spain, Greece, most of Portugal and Eastern Germany). Such a diversity can generate conflicts along the following lines.

Uk cannot accept an economic europeization if it implies more taxes and rigidity;

Apparently the small and big industries have the same basic interests, but the latter can survive in a market unfriendly environment. The first ones cannot survive. For instance, big corporations can compensate their lack of global competitiveness by asking the government for support. Being unionized, they can get it by swapping employment with assistance (closure of the market to some competitor or direct and indirect financial assistance). Or they can handle the domestic inefficiency by going global and, thanks to that, cover with the non-european profits the european losses. This means that a big industry can survive, though unhappy, a bigger rate of statism, socialism and unions. A small company cannot do that and has either to delocalize its production or to reduce it or to accept less profit. There is a structural conflict between the Europes of diffused and concentrated capitalism. Furthermore, such a conflict is aggravated by the fact that France and Germany are not only characterized by an oversized and inefficient big industry system, but they are also contingently ruled by the socialists, peculiarly market unfriendly in Germany. The conflict is still potential - and not actual yet - for three reasons. The French-German dominance has not produced an economic wide impact yet. Italy is governed by socialists who are not defending the interests of its huge small industry system. Spain has not felt the impact yet. Bavaria is trying to reduce its solidarity contribution to the rest of Germany in order to keep more money to support the local industries. Though still cold, a hot war between the two Europes might start at any moment;

The underdeveloped areas of Europe are strongly penalized by a highly regulated system. In order to compete with the richer parts of Europe (and around the world) they should be allowed to have special regimes of flexibility (fiscal and at the market labour level). Also this is a structural conflict. The economic rules of the developed Europe do not fit the development requirements of the underdeveloped one. The potential conflict has been avoided until now because the poor areas in Spain and Italy (and Portugal) are getting a huge amount of money from the European and national budgets in the form of heavy assistance programs. But this type of redistributive support is becoming less because of the overall european budget shortage. Sooner or later, objectively the compensation will have to shift from assistance to deregulation in order to avoid poverty. But this fact is going to create a big conflictual problem for those european powers which are planning an economically homogeneous Europe.

There are of course many other lines of potential economic conflict. Yet those which have been mentioned above are clear enough to give a factual reason to understand why it will be very difficult to get some economic unity at the European level, particularly if it remains mostly socialist-statist. In conclusion, the "unity without union" approach can work with an acceptable consistancy at the politcal level, but it does not seem powerful enough for managing the European economic diversity through "levereged consensus" procedures.

5. The current dominance of socialism as a factor of eurocomplication

The problem of finding a common European economic policy would be much less complicated if the socialist parties were not in power in most of Europe, particularly in Germany and France. A more liberalized and market friendly Europe would very easily solve the problem of the common economic policy. Less rules, less government intervention, more average growth, more flexibility and - the point- less occasions of conflict among national interests. In the liberilization scenario also the "unity without union" system would work much better. But, unfortunately, the European (continental) political architecture is made up of unreformed and unsustainable welfare states with the complications of a contingent socialist dominance which is delaying the necessary reforms and, even, worsening the unsustainability problem. This fact has a big influence on the analysis of the "unity" scenario and meaning.

The hope, in the recent past, was that an evolution was going to occurr in the traditional leftish way of thinking and governing. The new centrism of Blair in UK and that of Clinton in the US fed such an hope with relaxing evidence. Unfortunately the real performances by Mr. Jospin in France, Mr. Prodi and Mr. D'Alema in Italy and by Mr. Lafontaine in Germany show that such an evolution is not occurring. The (continental) socialists are strenghtening the statism and not reforming it. They do understand the need of generating more growth and employment. They are desperately trying to put some more money into the pockets of the Europeans. But they are usig the wrong method.

Overall, the socialist dominance is worstening the situation of an already economically weak Europe. Since the 70s, Europe has not been able to match the economic and technological power of the United States. And it is a far second in the world economy only beacuse Japan is in recession since 1992. What is the reason? High taxes and regulations do not attract private investments. In fact data show that since the beginning of the 90s the amount of private investments all around (continental) Europe is very low. And this flatly explains why unemployment is so high and technology so low.

Let us consider just one datum which clearly shows where exactly the European and socialist problem is. After the efficiency reform in the 80s, the manufacturing sector in the US employed about the 14%, still diminshing, of the total labour force. Some years before it was around 25%. Today the manufacturing sector in Germany is still around 24%. But, in order to get global efficiency, it should downsize itself to the same level of the Americans. Yet it cannot do that for reasons of social protectionism. Furthermore, the American flexible market allowed the workers fired in the manufacturing sector to find very quickly a new job in the emerging and growing service sector. Many of them started to work for the the new computer and computer related firms. In Germany the computer firms and surrounding sectors are downsizing, while the traditional manufacturing sector is still inflated. Even though the Germans might be willing to start an American type reform, they cannot find any emerging sector. No one has invested in these new opportunities. The (public) money has been mostly spent for paying protectionist privileges rather than new technologies, i.e. the past has been financed at the expenses of the future. Private investments did not find it attractive to go to Germany. The German capital financed the development of the emerging countries where more profit was available. Germany got back from those countries a higher demand of the mechanical goods it so brilliantly produces and exports. But the overall exchange is a net loss for the German wealth. High taxes and rigidity have been the killers. But the story is not finished here. Such a damage has been caused by an economic model which is softer than the socialist one, i.e. the mixed economy. It raised the (structural) unemployment level up to 11%-12%. Now the question is: What damage can a harder (for rigidity and taxes) socialist model generate in the future?

The ironic thing is that the German private capital is reacting to the collapse of the German model by trying to buy the American efficiency and technology because there is no hope to make Germany competitive in the global arena. This might lead to a new dynamic definition of eurosocialism. The more you are red at home, the more you have to buy American (and to go abroad).

Going back to the serious line of this paper, here Germany is overenphasized because it is the major single economic system in Europe and the third of the world. If it collapses, all Europe and a relevant part of the world economy will follow (in fact the Asian crisis of 1997 and 1998 has been partially based also on the decreasing volume of the imports from Asia to Europe, given the fall of its internal consumptions). But before that, and beyond the point of a Germany which is not able to grow enough, another damage might be produced by a socialist Germany: the europeization of its problems. In this case the meaning of an European unity based on the leading role of Germany, in a situation of diffused eurosocialism, might become a nightmare.

The choice of the socialdemocrat-green government seems to be that of strenghtening the socialist-protectionist model. This means more taxes, a higher cost of labour and less global competitiveness. In this situation Germany can survive, though in a state of permanent stagnation, only if it is able to avoid any economic competition inside the European market and too much competition from outside. What does it mean for the rest of the Europeans?

Probably Germany will try to use the idea of European harmonization, which is required to keep under control the monetary union, in order to be sure that every nation will have the same high taxes, the same rigid rules. In a fully Germanized European economic environment there will be no dangerous competition for socialist Germany. Though this is bad, it is not news. Worst news might appear in the future euroscene. Mr. Lafontaine is trying not only to save the welfare model, but also to install forever a heavy socialist model. For instance, a model allowing unions to have a say in the mangement of a corporation. But such an experimental measure can be implemented only if all the Europeans are forced to share the same thing. If not, Germany will have less comparative competitiveness.

The prospect of a strict control on the circulation of capital is even more scary. The European states need to increase the fiscal entries. To tax the capital gains is one the few things left. But if this happens, and if it is perceived as a too heavy of a burden by the savers and the financial subjects, a free circulation system will allow a quick and mass exit of the capital from Europe. Therefore, if the socialists want to tax the capital gains they have to be sure that the money will remain at home. And we can predict two disasters. The first is that in any case the capital will flow away. The second is that such a move might jeopardize and depress the whole global market.

The problem of fiscal harmonization is the hottest european question. On the one hand it is understandable that some fiscal homogeneity has to be reached by the group of the 11 eurocountries. On the other hand, such an harmonization is wealthy and wise if it becomes an instrument for channelling the nations toward lower taxes. Moreover a proper (in the sense of "market friendly") harmonization should leave some space for the fiscal competition. It would be an instrument of flexibility being able to balance the monetary rigidity which damages the less developed countries. Unfortunately the eurosocialist dominance in Europe seems to favour the opposite trend, i.e. taxes up and not down (and no fiscal competition at all). This is really a scary scenario.

Another big issue is that of protectionism against the competion of low cost goods from Asia and high tech systems from the US. Most of the European nations are very vulnerable in both directions. Germany and France are even more vulnerable. In fact the European market is already highly protected. But the combined eurosocialist and German pressures might close even more the European space by creating both a conflict with the US and a shorcircuit in the global market. Fortunately the eurosocialists cannot push too much in such a direction because it would mean war with the US, i.e. to loose. Yet there are many informal ways to protect a market without touching the rules of free international commerce. For instance, the European defence industry, where most of the European high tech is concentrated, can be grouped, subsidized and allowed to have a monopoly in the internal market without violating any formal rule. And this protectionist monopoly can be extended to critical civil sectors. This is not news. The problem is that protectionism at this level will reduce the gobal competitiveness and modernization of the European industries. Furthermore such a protectionist tendency will make it more difficult for the American and Japanese capital to make investments in the European territory, in the mid and high tech areas. Exactly where fresh capital, and know-how, is desperately needed. The bad news is that protectionism is more likely to increase under the socialist governments than to decrease, with the complicity of the big industries, banks and insurance groups, all scared to be exposed to American competition in the same territory. This probably increasing closure, though informal, means a structural damage for all the European citizens.

If "unity" takes the form of high taxes, more rigidity, control of capital, killing of any flexibility (not to speak of the residual European off-shore areas), more protectionism, etc, such a "socialist unity" should be avoided because it would lead to a structural impoverishment of all the Europeans. Moreover, the underdeveloped and "diffused capitalism" areas will suffer much more than the other ones. In these territories poverty will be even more devastating beacuse systems which need more flexibility in order to survive will be compressed by more rigidity. But such a concern does not necessarly touch the hart of Germany and France because they are mostly based on a "concentrated (ex)capitalism" model. They do not care. But Italy and Spain should care and be very concerned. In fact these two potentially more damaged countries will not have a great negotiation space in the abovementioned "European order".

5. The contingent need of thinking about unity in a tactical way

It would very quixotic to discuss on the concept of unity in a different and purely abstract way given the current political situation in Europe. The main recommendation of this paper is that of trying to postpone and to delay any effort of building more "formal" economic unity while the eurosocialists are in a position of dominant and diffused power. Though not fully unbiased, this is not an ideological statement. It is simply a practical recommendation which takes into account the new requirements for the creation of wealth in a globalized economy. It means to keep, for a while, as loose as possible the European economic environment. This idea is not only based on the priority of not allowing the eurosocialists to europize their devastating and freezing model, but also on the analysis of the actual european economic structure.

Fortunately a great part of Europe has more flexibility and economic vitality than commonly believed. This fact is hidden and not captured by ordinary indicators. Italy has a black economy which accounts for about 1/4 of its formal GDP. In Bavaria and Baden the informal economy is growing. Also in southern France there are signs of this trend. Legal considerations aside, this means that a relevant part of the productive economy of the continent, mostly in areas of diffused capitalism, are strongly reacting to the poverty induced by the socialist model by trying to skip the rules and the fiscal weights it is imposing. Furthermore, Spain is growing more than reported by ordinary indicators thanks to its local flexibility. Many economic units all around Europe, which are suffering the systemic inefficiency, are trying to keep a global competitiveness in any case. To sum up, most of Europe is pragmatically and silently adjusting to a very market unfriendly environment. This is a crucial sign of vitality. It has to be preserved. A bigger amount of europized freezing socialism might kill it. The more the eurosocialist will be contained at the European level the more such a vital potential will survive. In fact flexibilty can better survive if nations and local regions keep some de facto economic flexibility, both formal and informal. This is a good practical reason to be very tactical in handling the concept of unity in the current circumstances.

Unfortunately Germany is showing a structural damage. Some projections show that only 10% of the working force will be employed in the near future in non protected economic activities. All the rest of the population will work in some very protected environment. This means that the German population (and youth) is going to loose the spirit of real work and to be diseducated in reference to the skill required for an autonomous and mobile life. In Spain and Italy this figure is much better. More than half of the population is very economically active and independent. Data on France is not available, but it seems that at least a part of it is suffering the same German sociological degeneration. This German trend, which is similar to the Swedish one, is a source of deep concern. The decadence of economic activism will jeopardize a future economic liberalization of the system. Masses will ask for assistance and not for economic freedom. In this sense Germany is becoming a dangerous object not only for the present of Europe, but also for its future.

The point is that the Mediterranean Europe is showing an evolution while the Northern-Central Europe is falling into a de-evolution. Such a phenomenon provides, for the present, an additional argument for being very tactical in handling the concept of unity, from the point of view of the still vital European countries.

7. The prospects of delaying unity and the ECB unitarian mission

It is prudent to check whether or not a possible economic-unity-delaying approach can be really implemented. Part of the assessment refers to a technical issue: how much "economic unity" will the ECB require in order to keep under control the monetary policy? The "pact of stability" seems to be enough for developing the ECB mission, i.e. to preserve the value of the common currency along time. But this is possible only because Euroland is in a paradoxical situation.

A mostly socialist Europe is helping the ECB in the delicate phase of launching the euro. A great differentiation of the national situations might create big problems. But in a socialist Euroland it will be very unlikely to have one country skyrocketing and another diving. The socialist model has the perverse benefit of creating a sort of nose down homogeneity among countries and of avoiding "asymmetric shocks". Everyone tends to stagnate. In this sense the ECB will not have for a while the problem of becoming able to manage very different national situations (which is a nightmare given the absence of a eurofederal redistribution system).

In some sense, another perverse benefit of the socialist dominance is that it helps to keep inflation low by compressing the growth potentials. In the European environment something like the 50% of the circulating capital passes trough a bureaucracy for redistribution purposes. The level of public spending is so high that it can produce inflation even though the globalization (and the low cost of oil) has killed it in the industrial system. This means that a hypothetical sudden growth in the European heavy welfare states would produce an inflationary boom. But under the socialist management there is not such a risk of "sudden growth" and the work of the ECB will be easier for a while.

A third perverse benefit of the socialist Europe is that the economic compression and lack of growth is forcing the ECB to keep the rates at a minimum level. This does not help the economy as many think. In a rigid economy the instrument of lowering the cost of money has less effects than in a flexible one. It does not change the decision of investing more. If one does not want to invest money in some economic activity beacuse taxes and rules are unfriendly, he will not change such a decision only because the cost of money goes down by O,5% or O,3%. The manouver on rates in Euroland is not a big stimulation of the economy. Yet it is very important for reducing the cost of servicing the debt and keeping a little bit more balanced the troubled budgets of the European welfare states. Furthermore the low rates help the monetary competitiveness against the dollar. This is a clear benefit.

But the other face of the coin is less reassuring. The national budgets are under stress because the welfare costs are raising and the fiscal entries are going down because of small growth. The socialist governments have promised more jobs to their constituencies. The private sector is frozen - some area with high density of small industries aside - and it is not producing new jobs. The socialists traditionally think that public spending for the creation of assisted jobs is a good solution for the unemployment problem (actually it is a counterproductive one). Moreover, for reasons of political beliefs and constraints, they are not planning a susbstantial reform of the welfare system aiming at making it sustainable. Therefore they need to use as much public money as possible for solidarity policies. But there is not enough public money. This situation is generating a growing pressure for softening the stability pact and its budget limits. If the eurosocialist governments agree to do that, the ECB will be in big troubles because such a move would seriously jeopardize the stability of the currency. The ECB can only react to this risk by threatening the governements that if they do that it will have to raise the eurorates. The governments cannot afford a raise of the rates. Their budget would collapse. So they have two alternatives: (A) to keep under political control the ECB; (B) to accept the budget discipline which has been set by the stability pact, i.e. to reduce a little bit the rate of socialism in the economy. What will happen? If the world market discovers that the ECB is influenced too much by governements the euro will collapse. Some practical compromise aside, it is more likely that the ECB will remain independent in spite of all the attacks that the socialist governments are mounting against it. Indipendence of the ECB means the impossibilty of flooding Europe with extreme socialist policies. In this sense the ECB's indipendence is a last resort.

Putting together all these considerations it seems that the work of ECB should not be so difficult in spite of all the things that are missing for achieving a sound monetary policy, e.g. a decent political counterpart. It is not possible to exclude the worst scenario (stagflation, higher rates, conflict between governments and the ECB), but it does not seem very likely to occurr. Our interest, here, is to assess wether or not the management of the single currency requires more economic integration among the euronations than it exists now. The answer is no. The homogeneous depression generated by the socialist governments is a paradoxical factor of European standardization. The indipendence of the ECB is a necessary fact that very hardly can be touched by governments, it does not matter much how upset they are. In this sense the respect of the stability pact is sufficient for managing the euro. Therefore there is no technical need of having now and urgently more unity, though in the future it will be necessary to build it. It is better to conceptualize "unity" by prioritizing its tactical and contingent meaning.

It is very sad to write such a recommendation while most of the european people are becoming poorer and poorer. But the problem of growth can be solved only by changing the political systems in the direction of liberalization and openess. For a while it will not be possible. So, waiting for better times, it seems to be rational to avoid now any more structured political-economic unity  that might produce damages.