At the beginning of the 2000s, around 25% of world GDP was divided into each of the four large continents. Even then, however, it could be understood that in 2030 50% of GDP would be produced in Asia, while Europe would be reduced to 12%, the United States to 15% and the other countries to 23%. The USA, China and India would therefore constitute three dominant poles. It was also already clear that globalization could not be governed with the rearview mirror, that is, with that old G7 which reproduced the economic weight of the past world but which, in the space of two or three decades, would have changed significantly. To govern globalization it was therefore necessary to adapt governance.
The Brics boom and the European economic collapse
Alongside the G7, in recent years, we have witnessed the emergence of the G20 which, however, has not yet demonstrated a concrete decision-making capacity. Today, the risk is that of moving towards a world with two governances: the old Western one and the one that is now emerging from the Brics, expanding through the G20. For now, the only advantage is that in that part of the world there is not yet a common reference currency: in fact, the Chinese renminbi cannot act as the international currency for India or other countries.
Projecting the growth trends underway at the beginning of the century to 2030, it could already be observed that the leading economy in the world (in absolute GDP value) would be China, followed in order by the United States, India, Japan and Russia. The 27 EU countries, individually, would have seen their relative weight dissolve. The statistical sum of their GDPs would certainly have placed the European economy in third place, but Eurostat could not and cannot fill the absence of a politically and institutionally united Europe. Europe must therefore proceed with a concentric circle integration strategy.
A federal sovereignty to save the Union’s economy
For more than twenty years, individual nation states, including powerful Germany, have no longer been able to provide the five fundamental collective public goods: defence, security and immigration, foreign policy, large infrastructure networks led by energy, high research and technological innovation. In recent decades, Europe has derived prosperity and well-being from the fact that its defense is paid for by the Americans, its energy supply is provided cheaply by Russia and the development of markets is supported by China. Today, these three conditions no longer exist. Since individual national states have long since lost their sovereignty, the first concentric circle can only be a federation of states, through which to recover it. Federal sovereignty would be limited to the five fundamental collective public goods, while the rest would remain under the control of nation states. Therefore, it is not so much a question of giving up sovereignty, but of regaining it: national sovereignty, in fact, is lost forever. The natural starting point would be the Europe of the euro. However, this way you risk never leaving. We could then start with who is there: since France, Germany, Italy and Spain together make up 70% of Europe – in terms of population, GDP, employment – we could start with them, and then leave the doors open to all the others.
To do this, there would also be an example and an opportunity: in the face of the Covid pandemic, in fact, Europe managed to launch the NextGenerationEU (NGEU) which, from being transitory and expiring in 2026, today can and must become permanent. The ordinary EU budget is worth 1.5% of GDP which, added to the provisional NGEU and divided over six years, comes to less than 3%: this could be the embryo of a European federal budget. In the USA the federal budget is equal to 25% of GDP: therefore there is a big difference in percentage. However, by inserting those five public goods into the federal budget of the Union, we are not proposing a revolution, but rather a necessary and inevitable adjustment reaching 7-8%. Obviously the federal budget must have its own revenue and common debt: to seriously start the environmental and energy transitions and for common defense and security, trillions of euros are needed. Without a federal budget, the objectives that Europe has set itself remain without instruments, therefore little more than hopes.
Between enlargement to the East and cooperation with Africa
The second circle is the EU with 27 states or more, but the enlargement process becomes viable only if the first circle is achieved. In fact, enlargement cannot be achieved without institutional deepening: with only the first one an increasingly numerous condominium is built, but where decisions become increasingly impossible, especially if national veto rights multiply. The institutional deepening towards the federal budget and the common debt is the cornerstone for seriously implementing a necessary enlargement towards the south-eastern Balkans and, possibly, up to Ukraine.
Finally, there is a third circle that twenty years ago I called the Europe-Africa Free Trade and Development Cooperation Treaty, that is, the Europe and Africa Free Trade and Development Treaty. This is the largest and equally urgent to build between Europe and Africa, according to Enrico Mattei’s futuristic approach and not according to too many stories of colonial conquests, past and recent.
Is this three-circle Europe nonsense, a utopia, a somewhat phantasmagorical vision or is it an urgent urgency? To answer, you just need to understand what the only alternative to this… utopia is. The United States and Europe together have a billion people, but there are another seven billion outside the world we call the West. The alternative is, therefore, a decadent Europe in the twenty-first century, with the USA trying to go it alone in the face of the rest of the world. This century will then become the century of Asia, with China, India and Russia in tow. Just do nothing and this will happen. If we want this to be a century of world balance, also governed by the United States and Europe as protagonists, we need to be present together: neither one nor the other can do it alone. This is especially true for Europe, which lacks a foreign and defense policy, champions of new technologies and much more.