the role of Santa Claus

I believe the next few years will be a period of severe stress for the European Union. I am not sure it will survive, except in name. There was a great political goal when the Common Market was set up in 1956 and its name was peace. I am not sure that people still remember that. For the other twenty one countries which are today part of the EU it had a rather different meaning. For them, the name of the game was money. Portugal is a case in point.

It won't be easy for the EU to maintain the Common Agricultural Policy in the face of skyrocketing World commodity prices. This policy was the economic cement of the early EU. It basically pays farmers all around the EU not to produce in order to grant higher agricultural prices for other farmers, specially the French.

It won't be easy for the EU to maintain the euro when several countries, due to a different cultural tradition, will soon feel, or are already feeling, that they would be doing much better without it. Spain, Italy and Portugal are cases in point and I have been myself an interpreter of this argument in Portugal.

It won't be easy for the EU to maintain its liberal policy involving free trade in goods, capital and labour. When times are difficult countries will invariably resort to protectionism, and I am not confident this time it will be different.

Finally, it won't be easy for the EU to maintain past levels of financing and aid to its poorest members. Let's face it: Germany has been the great financier of the EU in the past. Given the severity of the present recession and the increase in the number of EU countries, I am not sure that Germany will be in a position to play the role of Santa Claus much longer.