Thu. Jul 18th, 2019

Globalization, independence and sovereignty, according to Draghi | Economy

Globalization, independence and sovereignty, according to Draghi | Economy

Globalization understood as the incessant process of integration of the world economy is dislodging relations between economic powers and political institutions. The emergence of large technological, financial and industrial corporations has dwarfed the sovereignty of states that see their capacity to protect citizens increasingly diminished.

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This phenomenon has been analyzed by Mario Draghi, president of the ECB, in a relevant conference, Sovereignty in a globalized world, at the University of Bologna on February 22nd. The Italian economist left interest rates for a moment to go to the heart of the concerns and contradictions in which Europeans live: on the one hand they appreciate the benefits of economic and monetary integration, with 75% in favor of the euro, and another, they reduce their confidence in the European Union, which has fallen to 42%, compared to 57% in 2007.

Draghi argued that the tension between economic integration and political cooperation is fueled by the false idea that in order to achieve greater control over their lives, citizens must loosen the tight control of European political structures. In his opinion, the mistake lies in confusing independence and sovereignty.

For Draghi, true sovereignty does not lie in the power to make laws, "but in a greater control of events to respond to the fundamental needs of citizens." He went to the English thinker John Locke, to define these needs as "peace, security and the public good". The head of the ECB summarized: the ability to make decisions independently does not ensure such control. In other words, "independence does not guarantee sovereignty".

In a context of increasing intensification of capital flows, unfair competition and destruction of the environment, Draghi said that cooperation between states in the framework of the EU, establishing common standards, has been the answer "to recover sovereignty." He considered that "the fact of having a regulatory power at the EU level allows Member States to exercise true sovereignty in the fields of taxation, consumer protection and social norms".

The doubts arise because of the weakness of this cooperation. A report by Oxfam Vía Libre, shows that in 2015 the large multinationals transferred 600,000 million dollars of their profits to tax havens, 30% within the EU. The collection losses for Spain, France, Italy and Germany were 35,100 million.

Despite Trump's protectionism and the trade war with China, globalization has come to stay. Recall that 30 million jobs in Europe depend on exports and the transmission of technological advances is difficult to stop. The answer lies in advancing cooperation among states if we want to maintain democracy, the welfare state and a livable planet.


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