Europe is a mosaic of territories, assembled by borders cut out as the solution to a complex human puzzle. Since the beginning of time, in order to exist and to become a nation on the international scene, peoples have had to be associated with a territory. The history of men has shaped countries as much as they have shaped them. This strong political link between the earth and mankind is today questioned by the nurturing function of the territory, the geographical angle, which, over the last 30 years, has been disintegrating.

The question of land use planning in France, or that of the balanced distribution of wealth among European nations, raises the same problems on a different scale. How can the link between politics and geography be reorganized, by submitting to the principle of reality, which excludes that one should take precedence over the other?

In 2018, agriculture represents 1.6% of European GDP, construction 5.4% and industry 19.6% (source: Eurostat report). The 73.4% share of services shows that the main part of economic activity is intangible, detached from the territories. The evolution of industry towards what is called industry 4.0, follows the same trend. The nurturing link between people and their territories has evolved radically.

Historically, territories have provided the energy and raw materials that humans have used to produce the goods they consume or exchange. Societies’ political and geographical links with their territories were confused. It was the confusion of these links that led to colonization. Decolonization, after the Second World War, was a symptom of the alteration of this link. The territory defined the exercise of sovereignty in the sense of the three Treaties of Wesphalia, but was detached from economic activities, which produced wealth. As immaterial wealth could be produced everywhere, this marked the beginning of globalization.

Globalization has unleashed the tendencies towards economic specialization of territories, modelled by Ricardo. Some areas have become world champions, such as Silicon Valley, others national or regional champions, while still others have not been able to find an area of specialization that would allow them to exist economically. The latter are the losers of globalization, which is the whole problem of land use planning. On the other hand, as the economy is increasingly immaterial, the distribution of champions changes over time, some are of less interest, while new ones appear.

Economic specialization creates a global hierarchy that underpins geo-economics and excludes certain regions from the circuits of wealth. A world or national champion, mobilizes subcontractors often located in other countries, precisely specialized in subcontracting. In return, it sells the goods and services it produces to the countries that subcontract to him. In addition, it drains the capital flows for which it chooses the subcontractors who should benefit from it.This creates a double dependence that is far from balanced, especially when the subcontracting country’s revenues come for the most part from the country hosting the champions. For example, for these reasons, the negotiations of the RCEP agreement established China’s economic supremacy over the Asian region. The same reasons explain the political supremacy of the United States, over businesses such as Iran, where Europe has had to bow to the American economic diktat.

Tourism is another example of economic dependence between countries or areas, if we consider this sector as a subcontracting of services for the well-being of the people living in economically rich countries or areas.

In this landscape, the states seek to collect taxes to finance their regalian activities on the one hand and on the other hand to cushion the negative effects of these phenomena on the populations of certain regions. This is obviously more difficult when it comes to intangible economic flows. The discussions about the taxation of GAFAM is a good example.
Beyond the question of tax collection, there is the question of the use of public funds. Should States use them to favor their champions and increase their economic supremacy, or to help excluded or very backward areas ?

This is a real issue if we consider that exclusion or economic backwardness is not due to a lack of financial endowment, but to the absence of an appropriate human, financial, technological context. A whole ecosystem has to be created, and that takes decades. China has taken more than 50 years to transform itself and it remains the subcontractor of Western economies. Its economic power was first built on its size and is first exerted on the Asian region.

As relations of economic dependence tend to intensify rather than fade, the economy has become a political instrument. For example, within the European Union the differences in GDP per capita have increased between the countries of the North and the countries of the South and East, and have remained stable between the countries of the South and East.

In Northern countries, asset prices are high and interest rates are low. They are flooded with cheap money that they partly invest in Southern and Eastern countries, with high returns. The European Union is divided between the need to host global champions that attract capital flows and skills, and the duty to establish a dynamic of convergence between the economies of its member countries. The Euro zone is a first attempt in this direction, except that companies in Southern countries, such as Greece, raise bond funds at more than 2%, while those in the North offer rates around 1%, so twice the same money price.

The countries of the South and East whose gap in median wealth remains constant are not strictly speaking the losers of globalization, they are not its leaders. However, with such gaps, felt as inequalities, how can we build a common political project like Europe?

In spite of the intra-European redistribution mechanisms, we see that economic convergence is not happening, and there are fears that there will always be a significant wealth gap between the countries of the European Union. Under these circumstances, how can a citizen of an Eastern or Southern country expect to have access to the same level of quality for basic services, such as Health, Culture or Education, as a citizen of Northern Europe ?

The same phenomenon occurs within countries, the wealth gaps between regions are inexorably widening: in Italy and Spain, between north and south, in France between neglected territories and rich agglomerations, etc…Tensions lead to aspirations for separatism or the overthrow of an overly northern state: Catalonia, the Northern League, the yellow jackets.

In order to truly build a Europe of the peoples, the European Union must be in charge of health, culture and education, so that every citizen of any country can integrate and be part of this formidable community of destiny. It is the next major surrender of sovereignty that must be made, not as a treaty between States that would negotiate their financing, but as an area of European competence for which Europe will have the power to raise taxes.

Without the strengthening of the bond between European citizens, wealth gaps and economic inequalities will undermine the foundations that the fathers of Europe bequeathed to a future that has become our present. Brexit is a foretaste of this phenomenon that is already at work.

Leave a Reply

Your email address will not be published. Required fields are marked *