EU won’t break up, U.S. intelligence report says

BRUSSELS The EU will not disintegrate and will remain a great power in 2030, says a recent U.S. intelligence report. The report draws three possible scenarios for the Union – decline, collapse or renaissance. EU won’t break up, U.S. intelligence report says The report by the U.S. National Intelligence Council dubbed “Global trends 2030: Alternative worlds” says that the stakes are high both politically and economically for Europe and the EU’s future is “very uncertain”, EurActiv.com has reported. “Although there is no consensus on the region’s future shape or role, our experts agree that it will not resemble today’s Europe,” reads the report of the NIC, which provides long-term strategic planning for the U.S. intelligence community. The U.S. intelligence experts stressed in the 160-page report published on 7 December that on top of the current eurozone crisis, the European economy is suffering from “enormous structural woes”. “The productivity has been declining compared to other developed economies in the last 15 years, spending on R&D remained low, European governments have grown very large relative to their economies and there has been a trend towards an increased age imbalance between working and non-working citizens,” it is added in the report. More integration probably will be required to overcome the debt crisis and address structural problems, the authors write. According to them, a genuine “leap forward” in integration would imply massive transfers of sovereignty to central authorities, with the accompanying loss of autonomy which is increasingly unpopular with European publics. The report stresses that a collapse scenario has a low probability of occurring, but would prompt international risks. “In this scenario, domestic firms and households respond to indications of an imminent currency regime change by rapidly accelerating withdrawal of euro deposits from domestic financial institutions. Following contagion to other member states and economic damage to the core countries, the euro would be the first casualty," authors point out. “If the collapse were sudden and unexpected, it would very likely trigger a global recession or another Great Depression,” the report says. In a slow decline scenario, Europe manages to escape from the worst aspects of the current crisis, but fails to undertake the necessary structural reforms, the reports' authors argue. "As member states endure years of low economic growth, they stick together in order to avoid major political and economic disruptions. EU institutions hang on, but public discontent remains high. The euro survives, but it does not rival the dollar or the yen," reads the report. Given years of low economic growth, Europe’s international presence is diminished and countries would re-nationalize their foreign policies. According to the third scenario, European leaders agree to a “federalist leap.” People support such a step, given the imminent risks involved maintaining the status quo. A more federal Europe is seen as taking shape with only a core group of eurozone countries with some choosing to opt out or adopt a wait-and-see policy. “Over time, despite the existence of a multi-speed Europe, the single market would still be completed and a more united foreign and security policy agreed upon with enhanced elements of European democracy. European influence would increase, strengthening Europe’s role and that of multilateral institutions on the world stage,” the U.S. authors write. Regarding the rest of the world, the report says there will not be any hegemonic power. Power will shift to networks and coalitions in a multipolar world.By 2030, Asia will have surpassed North America and Europe combined in terms of global power, based upon GDP, population size, military spending and technological investment. China alone is seen as the country with probably the largest economy, surpassing that of the United States a few years before 2030. In addition to China, India and Brazil, regional players such as Colombia, Indonesia, Nigeria, South Africa and Turkey will become especially important to the global economy. Meanwhile, the economies of Europe, Japan, and Russia are likely to continue their slow relative declines. Demand for food will rise at least 35 percent by 2030 while demand for water will soar 40 percent. Nearly half of the world’s population will live in areas experiencing severe water stress, according to the report. (Beta/AP, file) Beta

EU won’t break up, U.S. intelligence report says

The report by the U.S. National Intelligence Council dubbed “Global trends 2030: Alternative worlds” says that the stakes are high both politically and economically for Europe and the EU’s future is “very uncertain”, EurActiv.com has reported.

“Although there is no consensus on the region’s future shape or role, our experts agree that it will not resemble today’s Europe,” reads the report of the NIC, which provides long-term strategic planning for the U.S. intelligence community.

The U.S. intelligence experts stressed in the 160-page report published on 7 December that on top of the current eurozone crisis, the European economy is suffering from “enormous structural woes”.

“The productivity has been declining compared to other developed economies in the last 15 years, spending on R&D remained low, European governments have grown very large relative to their economies and there has been a trend towards an increased age imbalance between working and non-working citizens,” it is added in the report.

More integration probably will be required to overcome the debt crisis and address structural problems, the authors write.

According to them, a genuine “leap forward” in integration would imply massive transfers of sovereignty to central authorities, with the accompanying loss of autonomy which is increasingly unpopular with European publics.

The report stresses that a collapse scenario has a low probability of occurring, but would prompt international risks.

“In this scenario, domestic firms and households respond to indications of an imminent currency regime change by rapidly accelerating withdrawal of euro deposits from domestic financial institutions. Following contagion to other member states and economic damage to the core countries, the euro would be the first casualty," authors point out.

“If the collapse were sudden and unexpected, it would very likely trigger a global recession or another Great Depression,” the report says.

In a slow decline scenario, Europe manages to escape from the worst aspects of the current crisis, but fails to undertake the necessary structural reforms, the reports' authors argue.

"As member states endure years of low economic growth, they stick together in order to avoid major political and economic disruptions. EU institutions hang on, but public discontent remains high. The euro survives, but it does not rival the dollar or the yen," reads the report.

Given years of low economic growth, Europe’s international presence is diminished and countries would re-nationalize their foreign policies.

According to the third scenario, European leaders agree to a “federalist leap.” People support such a step, given the imminent risks involved maintaining the status quo. A more federal Europe is seen as taking shape with only a core group of eurozone countries with some choosing to opt out or adopt a wait-and-see policy.

“Over time, despite the existence of a multi-speed Europe, the single market would still be completed and a more united foreign and security policy agreed upon with enhanced elements of European democracy. European influence would increase, strengthening Europe’s role and that of multilateral institutions on the world stage,” the U.S. authors write.

Regarding the rest of the world, the report says there will not be any hegemonic power. Power will shift to networks and coalitions in a multipolar world.By 2030, Asia will have surpassed North America and Europe combined in terms of global power, based upon GDP, population size, military spending and technological investment.

China alone is seen as the country with probably the largest economy, surpassing that of the United States a few years before 2030. In addition to China, India and Brazil, regional players such as Colombia, Indonesia, Nigeria, South Africa and Turkey will become especially important to the global economy.

Meanwhile, the economies of Europe, Japan, and Russia are likely to continue their slow relative declines.

Demand for food will rise at least 35 percent by 2030 while demand for water will soar 40 percent. Nearly half of the world’s population will live in areas experiencing severe water stress, according to the report.