Both the EU and, in a broader context, the financial institutions that have shaped economic policy during the latter part of the 20th century as well as into the 21st, were based on the idea that prosperity for all will promote peace and stability. If there were no trade wars and unjust treatments of any country, there would be no need or incentive to engage in war.
The best way to achieve this, it was thought, was by the introduction of free trade and open markets. These were thought of as being self-regulating, or possibly requiring some limited government intervention, and were in the end going to give economic prosperity to all.
In this way, the free markets supposed to achieve this reality were built into the very foundation of the EU, to make the entire Europe into one common free market. Internationally, the same free trade agenda were be established through the WTO, the World Bank, the IMF and various bilateral trade agreements.
The premise that widespread prosperity among all people will lead to peace is, at least in theory, probably undeniable. The weak link in this argument is whether free and open markets actually lead to prosperity for all, or rather to a concentration of wealth, making some areas rich and other areas poor.
There is increasing evidence that free markets benefit those who are already rich, and lead to increasing economic disparities, the very condition that free markets were supposed to remove. Given the fundamental free market rules that formed the basis of the European Union, the current polarization of wealth and the financial crisis was probably inevitable. The assumption that the capitalist market, the environment and people’s interests are compatible lies at the heart of the EU experiment, and also embodies the Union’s inherent limitation and inherent failure. Therefore, the continued economic integration of Europe will not lead to peace and prosperity, but to inequality, increased environmental degradation, fragmentation, protest, and, perhaps even, war.
New economic policies are needed for empowering each region and each country to develop its industrial and technological potential, to sustainably utilize and maintain local resources, in order to compete on equal terms in a regulated market. We cannot put economic toddlers in a boxing ring with heavyweight, corporate champions and expect fair trade and fair wages to be the result.
As the very foundation of the EU is built on free markets, and these very free markets are creating conditions that destroy the prosperity and unity of Europe, a new union, a con-federation of states based on new ideals and policies will need to be created. Economies are complex, and simple solutions often go wrong. The idea that free markets will solve all economic and social problems is as false as to say that centralised planning will solve these same problems. We need to accept the inherent complexities of human and economic interaction, and carefully build new systems and institutions not based on dogma, but on a careful study of what the consequences of our policies actually have been so far and will be in the future. We must learn from history and be prepared to rebuild the world from the bottom-up.