CIAO DATE: 11/04

Will the 21st Century Be European?

Edmond Israel
Honorary Chairman
Cedel International
Vice Chairman Asia-Europe Foundation (ASEF)

Occasional Paper Series No. 29

Before the European Union Studies Center
City University of New York

February 25, 1999

European Union Studies Center

Mr. Chairman, Ladies and Gentlemen,

The approach I have chosen to deal with this topic is unconventional, perhaps just as unconventional as I consider myself to be. What I shall not do is to apply the academic or scientific methodology outlining a number of scenarios based on political and economic indicators in order to extrapolate and select one or two scenarios to be considered the most plausible ones for Europe’s role in the 21st century.

On the preceding 19 centuries, Europe undoubtedly has put a distinct mark positively through the Hellenistic as well as Jewish Christian cultural heritage and negatively through ethnic, religious and imperialistic wars, colonial conquests and genocides.

In a brief retrospect I shall now first spell out the events which marked the 20th century coming now to an end, positioning particularly Europe in its tragic and dramatic dimension in this period of time. Secondly I shall briefly evoke Europe’s position today in a fast changing environment. Finally I shall attempt to assess the regions in their economic, political and cultural framework which presumably will play a leading role in the 21st century, distinguishing between the first half and the second half of that century.

Europe’s position in the 20th century has indeed been a tragic one. Millions and millions of people lost their lives in senseless, absurd military confrontations. First in the war 1914 to 1918 confronting mainly France and Germany and then in the Second World War initiated by an irrational and criminal political gang under the leadership of Adolf Hitler and in its following Benito Mussolini as well as the Japanese group of brutal conquerors and War Lords, an alliance better known as the Berlin-Rome-Tokyo Axis.

In the dark years of the thirties and forties of the 20th century countless Europeans were killed. Nazism preached the return of the so-called ancient values of the Germanic tribes and hordes by eliminating physically all those who did not fit into the mould of the so-called pure white Aryans. In this line of murderous thinking, millions and millions of Jews as well as many Gypsies were killed in one of the most ferocious genocides of all times.

Today it is difficult to imagine even to fathom that such theories were elaborated, accepted and applied in the mid 20th century in Germany, a country having produced beacons of enlightenment, culture and creative thinking such as Kant, Goethe, Max Planck and many many others of the same intellectual stature.

Among the intellectual German elite, quite a number did not want to stay in Germany, thus crossing the Atlantic to settle in the U.S.A. This considerable brain-flow out of Europe to America weakened significantly the creativity, and from an economic point of view, the productivity of Europe. This brain-drain also had as a consequence to crystallize and to immobilize academic structures, blocking as well as paralyzing creative thinking, because quite obviously, as the intellectual elite had left Europe, those who stayed behind did not rank among the best or the brightest, indeed they had a tendency to indulge in past thinking conserving what should not be conserved and rejecting what should be preserved.

This is a striking example of misunderstood and misapplied conservatism. Even in our time we can witness the extent to which misapplied conservatism can create havoc bringing nations to the brink of perdition. Such was the situation and environment of Europe in 1945, at the end of the Second World War, in which the United States played a decisive role not as a conqueror but as a liberator saving Europe and the world from the scourge of ruthless and murderous dictatorship which, if it had prevailed, would have led in the last resort to the disappearance of life on our planet.

After V.E. Day, the American troops were welcomed with enthusiasm by the liberated European countries. Yet, very soon, Europeans felt a certain sense of frustration, as their national pride had been hurt, viewing the U.S. with critical eyes. This was particularly prevailing and continues to prevail in some countries. Isn’t it strange that even when the brutal Soviet regime was still in place, France sent a cosmonaut on a mission in a Soviet and not in a U.S. spaceship. Fortunately, later in time, such an irrational policy has been corrected.

An important milestone on the winding path towards the restoration of Europe’s position on the worldwide political and economic chessboard has undoubtedly been the European Community’s or, in its present definition, the European Union’s integrating process. Major phases in this process were first of all the creation of the European Coal and Steel Community, called in abbreviation CECA, then the Treaty of Rome establishing the European Single Market as well as the study conducted under the presidency of Pierre Werner for a European Monetary Union and in the last decade of the 20th century, the Treaty of Maastricht of 1992 leading to a single European currency, the Euro, embedded in the European Monetary Union.

Ladies and Gentlemen, if the first half of the 20th century was dramatic and tragic for Europe, the second half of the 20th century experiences a number of positive developments underpinning the foundation for a strong Europe in the next century.

Let me now try to assess Europe’s position today, at the turn of the century. Lester Thurow in his book Head to Head states that, "future historians will see the 20th century as the century of nice competition and the 21st century as the century of head to head competition." He continues, "Leadership can now be found in Germany, Japan and the United States." The United States no longer leads according to Thurow in everything. He says further that, "the eighties opened with Euro-pessimism and the nineties open with Euro-optimism."

It is true that a greater sense of confidence prevails today throughout Europe. And if there are still to be found detractors of the Maastricht Treaty and the introduction of a single European currency, the benefits economically, politically and psychologically deriving from this evolution are recognized increasingly. It can even be stated that, at least as far as the implementation of the Maastricht Treaty in its three successive phases is concerned, the soothsayers of gloom and doom are proven to be wrong.

In the United States, until the very recent past, very few really believed in a European single currency. Such judgements are based on the past and do not take into account the evolutionary process of change, which is a law of nature.

Europe has changed even dramatically and the European Union is a fact and this fact, as it stands now and probably will evolve in the future, is irreversible in its integrating process. However let me spell out a "Caveat". The use of a single instrument of payment, the Euro, across a certain number of nations, in the eleven countries of the Eurozone, is only partly an integrating factor. Otherwise the world, having used for the last fifty years in the flow of international payments primarily and up to ninety percent the U.S. dollar, would have led to a global America, or the United States of the Globe. No, it is not the use of the Euro, but the fact that economic and monetary policies are coordinated and will more and more converge in these countries, which constitutes the major integrating factor. Added to that is also the fact that from the year 2002 on, national currencies will not exist anymore in the countries of Euroland where the citizens will only and can only utilize Euros for their payments and their savings. This will definitely have a psychological impact. Yet, Europe has to grapple with important problems, the most difficult one to solve, the unemployment rate, which still represents across the European Union countries in average 10% of the active population. This problem cannot be solved alone through monetary policies or through such devices as the reduction of the working hours as planned in France. I consider the reduction of working hours and early retirement for instance from 55 or 60 years on, as contrary to the evolution in our time when the average life span of human beings continues to increase through the progress of science, preventive measures against diseases, as well as a greater awareness of health maintenance factors. I think that options such as early retirement and the reduction of working hours through legalized means, are wrong. What is required, are measures having a lasting impact on the thinking and lifestyles of Europeans in the next century.

In my view Europe has to undertake a fundamental revision of the educational system, particularly on the university level. This is a matter to be addressed not only by governments who have under their authority the educational systems in the respective countries or even by the European Commission. Permanent education should be a fundamental feature of the future civilization throughout all strata of Europe’s society and here the private sector, in particular multinational companies, should take a leading role in what I would call the "management of knowledge."

Ladies and Gentlemen,

In this context let me just briefly mention a concrete example:

Cedel International, a company comprised of about 900 employees operating out of Luxembourg worldwide as a securities clearing and settlement institution has recently introduced an innovation called "management of knowledge" or "shared knowledge." This constitutes a variety of information, which is constantly updated and relates to the structure, to the management as well as to the operational field of the company, and is made accessible to the staff, which makes it as knowledgeable, professional and productive as possible in a rapidly changing global environment. Beyond the corporation’s structure and operation, a further set of data covering the advancement of knowledge, science and technology, will be progressively introduced and also made available to the entire staff of Cedel International. This is precisely the road to be followed in the next century and this is also the role to be assumed by the private sector alongside the reforms undertaken by the public authorities in the ever so important area of education. Here the United States is more advanced than the rest of the world, including Europe, and this is probably one of the main reasons the problem of unemployment is practically non-existent in the United States.

Furthermore, in order to occupy the role of one of the leading blocks of nations on the world scene, Europe will have to institutionalize a common foreign policy as well as a common defense policy, speaking in these areas with one voice. It is true that at present there is already coordination in these fields. However, a number of crises which have arisen over the last decades in Europe and other parts of the world could only be addressed and in some cases a solution found through the active intervention and leadership of the United States, such as in the former Yugoslavia, particularly Bosnia, the Middle East, Haiti, Kosovo and Northern Ireland. A step in the direction of an institutionalized common foreign policy would enhance Europe’s position and influence on a worldwide scale considerably and it would add to its credibility and prestige as one of the world’s great leading blocks of nations.

Let me now turn to the last part of this development and try to give an answer to the question which is title of my presentation: "Will the next century be European?"

First I shall assess what will probably be the development over the first ten to twenty years of the coming century. It is reasonable to foresee a consistently rising increase in scientific discoveries and, in their wake, technological innovations. I also think that the progress of fundamental science, particularly in the field of physics, will have a philosophical impact on the way people will think in the next century. Thus, a number of conceptions will have to be revised, calling for the re-education and the re-training of educators, particularly on the university level. The school of tomorrow will be permanent as education will become available on screen through electronic communication at home. The active day of tomorrow will probably comprise the exercise of professional tasks as well as the updating of knowledge. Regarding permanent education, the question arises whether Europe is prepared to address in a concrete manner this fundamental evolution, an evolution which has also a social dimension, as work, education, and leisure will interpenetrate, will be narrowly interwoven constituting the lifestyle, in a first stage of advanced societies and then later all over the world, in the 21st century. Will Europe engage itself on this path? It will definitely need strong leadership, taking courageous measures, which, if the message is clear and inspired, will find acceptance by the populations. The European institutions, such as the European Commission, should here take initiatives in order to convince the citizens of Europe that this is the most important challenge of the 21st century.

Europe, from a strictly economic point of view, is already quite well positioned to attract capital for investment, to have a growing flow of trade in and beyond the boundaries of Europe and also to attract back to Europe brains which are of the essence, more than ever before in history. In the flow of trade and economic growth in general, the single currency, the Euro, will play a positive role. I dare to predict that the four countries, which are not yet members of the Eurozone, will join before the year 2005 has elapsed. Preparing for the challenges of the next century, a number of large corporations in Europe are merging into mega-entities. This is also happening on a worldwide scale, in particular in the United States. Are such mega-mergers the only answer? I think that size is important for certain types of activities. But innovation, creativity, specialization will be the prime factors in economic and social development in the next century.

Let me exemplify this by pointing to the international financial center in Luxembourg. We in Luxembourg engage in specialized activities where professionalism and intellectual capacities as well as specific skills are essential. That is why in our financial center sophisticated asset management is conducted and developed on a worldwide scale. This is the direction we are taking in Luxembourg, and alliances between banks and joint ventures for specialized activities appear to be more promising than mega-entities.

Europe has been the birthplace of the great discoveries during its more than two thousand years of history, having led to a continuous increase in knowledge and awareness of humanity. The varieties of cultures in Europe add a significant value through cross-fertilization. Thus, multicultures appear to be more creative than monocultures. Europe, in its new integrated structure, will most probably play a greater and even vastly enhanced role in the next century than ever before in the past.

Will historians at the turn of the 21st and 22nd centuries thus call the 21st century "European"? I believe that during the first half of the next century our world will be economically and scientifically dominated by two or by three regions. The two, which appear obvious to me, are the United States and Europe, and the third one, probably a bit later, will be Asia under the leadership of China and Japan. A process of integration of the Asian nations will take more time but will also prove to be indispensable. In Asia, Japan, which has a definite head start in technology, but also China and India, with their vast pool of consumers, but also intellectual potential, will be the pillars of economic growth on our planet in the 21st century. I think that in the smaller countries of Southeast Asia, specialization will prevail and will be a significant feature of economic development. This is certainly already true as far as Singapore is concerned, but the other countries will follow. Asia, experiencing at present a crisis, which, in my view, will be faster overcome than many economists predict, is engaged in an important effort to review its structures and its governance based on ancient traditions. This is probably the most difficult and most compelling exercise to bring new vigor and revitalization to the functioning of Asian societies.

In a tri-polar world, the growing cooperation culturally, scientifically, and economically between Europe and Asia adds both strength and vigor to these two regions and is complementary to the cooperation between the Asian countries and the United States which has taken place since the last World War.

The ASEM conference, initiated in 1994 and taking place every two years with the gathering of heads of States and chiefs of governments of ten Asian and the fifteen European Union member countries as well as the European Commission, is a most encouraging development in the direction of closer and effective cooperation between Europe and Asia during the next century. ASEF, the Asia-Europe Foundation, based in Singapore and the first structured entity in the context of Asian-European linkage, is successful in cultural and people-to-people exchange, and will be also increasingly so in the scientific and technological areas.

With regard to Africa, Europe, under the leadership of France and the U.K., has historically occupied a position of influence outweighing that of the United States because of the traditional ties and links between Europe and Africa. Here again in a more distant future, a constantly increasing cooperation, economically but also in other sectors, between Europe and a number of African countries, will significantly enhance Europe’s position.

Parallel to close ties in Asia, the Transatlantic Alliance has to be strengthened in the future and this particularly, because the U.S.-European partnership is essential in science and technology for the mutual economic benefit of the two continents and also as both Europe and America share the same values rooted in a common ethical heritage.

So much for the first half of the 21st century.

Beyond that, it would be unwise and even foolish to speak of a European or American or Asian century. I think that perhaps even before the year 2050, the 21st century will be planetary because of environmental problems, and of demographic evolution, if not explosion, which will have to be addressed globally. These are basic and fundamental factors for the future of mankind in this already at present global village of ours. The coming century, in particular the last half, will be known as the century of a network of satellites communications as well as interplanetary explorations by either unmanned or manned spacecraft. Further planets in our solar system will be explored and in the centuries ahead man will pursue his eternal quest in the exploration of the universe, probing worlds beyond our solar system.

Ladies and Gentlemen, this definitely calls for a new, future-oriented thinking. Today the Hubble telescope, one of the great scientific and technological achievements in the field of cosmological exploration, opens up new horizons for us and makes us aware of the splendor of the universe and of nature, but also of the mystery of creation.

Whatever the name will be given to the 21st century will be, I am convinced that Europe’s role and position will be considerably stronger than in the past for the reasons I have outlined. It will derive its strength from the creativity of its people, the diversity of its cultures and the effectiveness of its institutions. Europe will neither be capitalist nor socialist, and this will also be true for the U.S.A. and the rest of the world. While competing we also will have to cooperate to share our knowledge and insight which will not be based on destructive military weapons but on intellectual power and creativity. In order to survive, mankind must definitely throw narrow and ill-conceived thinking as well as ideologies heading nowhere except to cataclysmic catastrophes into the trash pan of history. Mankind will also have to throw boundless greed leading to social injustice and upheavals into the same trash pan. On the contrary, mankind will have to conserve, uphold, and apply the eternal values of ethics parallel to its constant endeavor to increase its knowledge and to gain new insights. In the next century, individuals and nations will derive their influence and power not through the accumulation of wealth but through increased knowledge. This is what Alvin Toffler calls "powershift." As I am an optimist by nature, I believe that this will be the course followed by mankind in the future. Therefore, my vision and definition of the 21st century is, "the century of planetary thinking."