May 03, 2005

UCLA Anderson Hosts Euro Conference

Speakers describe challenges facing the European Union

By Charlotte Hsu
DAILY BRUIN Senior Staff

Rockwell SchnabelDiplomats and economists from both sides of the Atlantic met Monday at UCLA Anderson School of Management to discuss the state of the European Union one year after the organization accepted 10 new members.

Several speakers at the conference supported by the Delegation of the European Commission and sponsored by Anderson's Center for International Business Education and Research addressed looming challenges the EU faces in the coming months, emphasizing a May 29 referendum in which French citizens will decide whether to ratify the European Constitution.

The document lays the framework for foreign policy and other continental institutions, defining the relationship between member states and laws by which they all would have to abide.

"What happens if the constitution fails is a question every pundit in Europe is talking about today," said Geoffrey Garrett, vice provost of the UCLA International Institute.

Recent polls show 53 percent of French voters would say no to the constitution. And though public support in Europe for the union climbed in the 1980s, it peaked around 1992 when nations signed the Maastricht Treaty, granting European citizenship to the club's 12 members, Garrett said.

"It's bounced around a little bit since, but it's really quite low," he said.

Europe is also wondering whether the success of the so-called EU-15, the union before it was enlarged to 25 members on May 1, 2004, will continue now that the group includes many former communist states such as the Czech Republic and Poland.

Francesco Papadia, the European Central Bank's director of general operations, pointed to population and economic distinctions between old and new member states as contributing to the complexity of governing the European bank and the euro, the common currency used by 12 countries.

According to Papadia's presentation, the EU-15 has a population of 380 million and a gross domestic product of 9.166 trillion euros, with the 10 new member states contributing 75 million people and a 438 billion euro GDP.

Still, despite these differences, Europe must embrace its expansion as the only way it can grow as a world power in both politics and trade, said Komal Sri-Kumar, chief global strategist for Trust Company of the West.

"Even if the European Constitution were to be defeated, I don't think the EU has any other option than to accept the EU-25," he said.

Support for the EU is strongest among new entrants, Garrett said.

In a lunchtime address, U.S. Ambassador to the European Union Rockwell Schnabel described the scene in Sofia, the capitol of Bulgaria, an EU candidate that signed the union's Treaty of Accession on April 25.

Buildings constructed by local companies are going up, real estate prices are booming and new roads are snaking around the city, Schnabel said.

Looking further into the future, Papadia addressed Europe's decision to begin membership talks with Turkey this year, which could mark the beginning of the end of that country's decades-long effort to join.

For the EU to consider admitting Turkey, a large Islamic state whose demographics diverge from those of the rest of Europe, is exciting, Papadia said.

"Turkey's much poorer than the rest of the EU. Turkey has a checkered history on human rights," he said. "I don't know if we'll be able to achieve it. But I hope we will."

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