Solidarity used to be a European core value but the pressure it has come under is so great it has ceased to have any meaning, writes Neelie Kroes.

What could be more European than wine? Wine stands for tradition, beautiful landscapes, friendship.

The makers of superior wines don’t like their product to be associated with the plonk produced elsewhere. And yet every Grand Cru Classé comes with a layer of sludge at the bottom and we don’t mind one bit. It’s how it should be.

As far as the euro is concerned, it’s the beer-drinking countries which pour the purest wine. Germany and the Netherlands hate to see ‘their’ euro clouded by the high interest rates from the south. We want a sludge-free euro but it’s becoming increasingly unlikely.

In the always pragmatic United States some wine is sold in cartons. It’s vastly inferior to the average European stuff but you can’t see the sludge. The United States has one currency, one integrated economy and a political union which keeps speculation against weaker states at bay even if the country’s deficit is many times higher than the eurozone’s.

Confidence

As I’m writing this column, the European summit meeting is still in full flow. There is a lot at stake. It’s about more than the future of the euro. It’s about winning back confidence: the confidence of citizens in the politicians, of markets in the euro, of governments in each other and of European institutions in the member states.

Europe has all the tools to hand but is not using them. Decisions that have been made are only partly implemented or not at all. The time has come to take a good hard look at the account book and make some tough, long overdue decisions. 

I am not a fan of more regulation if it can be avoided. I believe governments, like adults, should be able to work together to reach common goals. Unfortunately, that phase is now past. It’s clear that some countries can’t solve their own problems and therefore cooperation will have to come with a number of clear conditions.

Solidarity – at one time a core value in Europe – has come under such pressure that it has ceased to mean anything. We need iron-clad guarantees. The European emergency fund can only support banks if it is clear what state these banks are really in. Closer supervision of  European financial institutions is inevitable.

But we need to do much more. Saving the banks doesn’t create economic growth, or jobs. Youth unemployment is increasing and a lost generation looms.

Scale

Europe has always had a leading position and the best product when it comes to wine but innovation is coming from elsewhere. We live in a global market. Europe still has some wonderful things to offer, such as a nano and microelectronics sector which is the most advanced in the world. But it needs a scale and expertise which is beyond individual countries.

Instead of behaving like rabbits caught in the headlights we should think ahead. The Netherlands and Europe should use the crisis to implement structural reform and invest in growth and innovation.

When the poisoned chalice of the crisis has been emptied, Europe should be ready to present the world with Grand Crus once again.

Neelie Kroes is Euro commissioner in charge of the Digital Agenda

This article was published earlier in the Financieele Dagblad