What is Globalization? Global Europe explained

 

Daniele Carminati

The effects of globalization are felt all around the world. The increasingly interconnected global economic system is the most obvious manifestation of the worldwide compression of time and space. However, the consequences of globalization are not limited to the economy. Globalization has had an effect on political systems, religions, and societies in practically every corner of the world. What is globalization exactly? Often globalization and Westernization are used interchangeably, but this proves to be a rather one-sided perspective. Although all around us, globalization can be a tricky concept to pin down.

The Geneva Centre for Security Policy defines globalization as “a process that encompasses the causes, course, and consequences of transnational and transcultural integration of human and non-human activities”. The European Commission, on the other hand, sees globalization as “the combination of technological progress, lower transport costs and policy liberalization in the European Union and elsewhere” that “has led to increasing trade and financial flows between countries”.

Despite the different definitions, globalization is undoubtedly a global phenomenon, which means Europe is a part of it. But what are the implications of a globalizing world on Europe?

The history of global Europe

To understand what globalization means for Europe, it is important to look at the history of a globally interconnected Europe. Globalization is not a phenomenon of only the last three decades. Already in the 18^th century the world was entangled in a global economic system. That said, in the new – and more widespread- wave of globalization, Europe may be one of the most prominent actors, and can even be seen as one of the instigators.

The European single market serves as an example of the globally interconnected economy where regulations and tariffs are gradually abandoned. However, Europe did not just arrive at the single market, a long process of integration preceded it. Just after the Second World War, Europe was in need of cooperation, cohesion, and funding for reconstruction. Subsequently, European integration set off with the inception of the European Coal and Steel Community (ECSC) at the start of the 1950s. The 1960s were economically prosperous for the Community and were followed by the first expansion of the European Community in 1973, when Denmark, Ireland, and the UK joined.

The 1980s were of course marked by the fall of the Berlin Wall, which consequently ended the separation of Germany in October 1990. In the meanwhile, even more countries joined the European Community and in the last decade of the 20th century two important treaties were signed: Maastricht in 1992, followed by Amsterdam in 1997. The treaties underlined the intentions of the four freedoms in a European single market, and together with the Schengen Agreement made it easier for European citizens to travel abroad. Education, tourism, and information exchange all highly benefitted from these achievements.

The new millennium saw most EU member states adopt the common currency, and saw most former Communist satellite states of the USSR join the EU. The recent accomplishments of the EU should not be underestimated. The European Union can today boast 28 members (for at least another two years) and forms in itself an unprecedented political entity with a practically completely open market. Although the latest rounds of expansion have been especially controversial, the EU has brought together and integrated the economies of 28 nation-states that were sworn enemies not long before. The EU’s common market abetted trade liberalizations around the world, but what are the effects of globalization on Europe?

Global economy and Europe

The implications of a global economy are perceived differently by the common EU citizen, a small European business owner, or a big multinational corporation. Although political economist Matthew Watson argues that “employment has actually increased in the last 20 years and that offshoring accounts for a tiny portion of unemployment in Europe”, the European working classes see the influx of migrant workers and the migration of manufacturing jobs to mainly Asia as a threat to their livelihoods.

For small business owners, globalization is both an opportunity and a challenge. Although globalization benefited multinational companies the most and possibly threatens the existence of independent small entrepreneurs, globalization did allow the business owners to lower the price of manufacturing costs, and the influx of immigrants created a cheaper and younger workforce on the rapidly ageing European continent.

As stated above, for multinational companies, globalization has proven to be a very positive development. Most multinationals soon understood the benefits of moving factories to less developed countries where the corporations were able to influence policies and shape a favorable political climate.

Most authors writing on Europe in a globalizing world recognize that there is a need to be cautious about these developments, but that there is no need for pessimism. Often it is stated that the EU Member States have to accept the fact that there is no need to fight against, or resist, the globalization process. It is not going to slow down anytime soon. The Member States should embrace it instead, as a united coalition, and aim for a common goal.

 

Former EU Trade Commissioner Peter Mandelson also argues that caution about globalization is important, but nonetheless, “seven of the world’s ten most competitive economies are European”, and “Europe continues to dominate export markets across the entire range of manufactured goods and services”. Mandelson is confident that competition with the Asian markets will actually be profitable for Europe in the long-term.

Politics and Security in Global Europe

The EU is not only involved with other countries on an economical level, but also maintains diplomatic relations with most countries in the world.  The main goals of the European Union in diplomacy are to preserve peace and strengthen international security, promote international cooperation, and to develop and consolidate democracy all around the world.

The decisions regarding foreign and security policy are taken by the European Council, throughout the High Representative assisted by the External Action Service (EEAS). The final decision is commonly taken after a unanimous deal among all the EU members. Although the foreign policy powers of the EU are limited, every year the European Council on Foreign Relations drafts a Foreign Policy Scorecard which “provides a systematic assessment of Europe’s foreign policy performance, analyzing the performance of the 28 member states and the EU institutions on 65 policy areas”.

Overall, the EU can be seen as successful political experiment that has proven capable of maintaining diplomatic ties to different countries around the world. As T.I. Burton argues, in a globalizing world the EU has shown that it is able to promote “security building in Europe” while at the same time act as a mediator in global conflicts.

Society, culture, and religion in Global Europe

The worldwide transnational and transcultural integration that marks the globalization process has also left its marks on European societies, cultures, and religions. The Schengen agreement can in itself be seen as a typical form of globalization legislation, and the effects of free travelling within the EU have diversified the European landscape. Globalization also sparked interest from outside Europe in the arts and cultures of European countries.

A more controversial consequence of globalization is the influx of migrants into Europe, for whom it is now relatively easy to travel into the EU, when compared to the era of multiple borders. The recent refugee crisis is exacerbating a historical prejudice against Islam and Islamic communities on the European continent, and the rise of far-right European parties has been seen as linked to the religious diversification of European societies. The EU has sought to address these problems through the founding of a common border service that aids the border services of the Member States and by trying to promote integration for migrants and toleration in citizens.

The advantages and dangers of a Global Europe

It is clear that globalization has changed Europe, but it is difficult to make a value-judgment. Is globalization a good thing for Europeans? Should it be feared? The complicated nature of the globalization processes that set off in the last decades of the 20^th century have generated mixed responses in Europe. In the first years of the 2000s there was a general consensus within the EU that the European approach towards a global and inter-connected market was a favorable development. The protectionist methods that were at the same time adopted by the EU were enough to convince the majority of the population that their interests were being safeguarded. With the current refugee crisis and economic downturns this consensus seems to be under threat. Political parties that focus on nationalism and protectionism have been on the rise, and they only seem to gain momentum in the current political climate. The decision of the UK to leave the EU and the rise of Donald Trump in the US are seen by many as a result of a backlash against globalization, one that threatens the very foundations of Europe.

So where does Europe go from here? In 2011, ECB President Mario Draghi claimed that “people seek a justification for European integration, [and] they are always tempted to look backwards.” Author J.C. Trichet also states that European economies have changed significantly since the post-war decades. Contemporary times see new global actors and dynamics gathering economical and political power. Instead of relying on economic measures that proved to work in the years after World War II, but seem parochial now, Europe should therefore start looking forward, to find a “new type of institutional framework”. Globalization exacerbated the glaring socio-economic contrasts within Europe, but the wealth and opportunities that it provided show that a return to protectionism is not an option. Finding a way where globalization will be as beneficial to the average European worker as it is to the CEO of a multination, will prove vital for the future of Global Europe.

Featured picture credit: NYPL.

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