Saturday, March 25, 2017

The Rome Treaty: The begining of European Union

Sixty years ago, while the ashes of the war were still on the air, six countries,(Germany, Netherland, Italy, France,Belgium and Luxemburg),signed the Rome Treaty which set the begining of the current European Union. It was thought to be a reaction to years of devastating wars,as much as a path to get and sustain peace and integration among different countries. Economic development was the driven force to acomplish such a goal.Economics ties arising from financial,capital and goods markets would be strong enough to keep the integration Project alive and as a guiding light to get the promise land : prosperity and a leading role on world affairs . . Sixty years later, the outcome looks more than promising. While nationalism strugle to get through, there is still a sense of common destiny which arise from the complexity of geopolitics, the expanding boundaries for further economic growth coming out from its human capital, technology endowment and the unique strenght of its diversity .So far, the European Union still hold up to its founding spirit , very much so in a uncertain and challenging world no less so than the one it faced 60 year ago. With more than 500 million of inhabitants, USd 38000 income per capita,(2015)and the second world economy following the USA, the European Union has actually set the road for other integration experiences, if not for the global economy as a whole. An european Central Bank, political outlines based on the European council,a common currency(euro),and a shared geopolitics stands to become the bridge between east and west.- Latin america economies in particular, has always looked the European Union as its model for economic integration.In fact a few years later after the Rome treaty, it was proposed in the sixties the so called the "Andean Pact", which included all of the west coast latin american economies. Although it did not consolidate further on, it has become an starting reference case, to avoid the mistake done by its founders members. How this integration experience can be sucessful ?. Traditionally it was thought that government should has a leading role to get the economic progress as the inspired factor for staying together.The eighties external debt problem, changed that paradigm.Private firms were also a leading force for integration. The expansion of retail, insurance, transportation,banking firms and even education organizations, in the nineties made clear that employment , investment,and welfare were not only a matter of government policies, but also of wealth creation.So, there are leading Latin America economies seeking to increase its integration beyond regional trade ,(Ocean Pacific Alliance), widening its scope to financial services integration .On the east side, the "Common South Market"(Mercosur),has fostered not only capital flow, but also human capital free movement among its members.So the seeds are in place,the trend is still toward more and stronger integration. As long as the European Union goes into the path of the next ten years, there are a lot to learn.-