Across Europe, people are being hit by increased food, fuel and electricity bills. Even before the war in Ukraine started, the price of energy was rising. European leaders insist they will not waver in their support to Ukraine. They admit that helping Kyiv will come at a cost to European consumers. But what sort of cost, and potentially for how long? Arancha Gonzalez Laya has had top jobs in the field of international trade at the European Commission, the World Trade Organization, and at the United Nations. She also served as Spain's foreign minister from 2020 to 2021, a period marked by a diplomatic crisis with Morocco. She is now the Dean of the school of politics and international studies at Sciences Po university in Paris – and the first woman to lead that school. She spoke to FRANCE 24 about the economic challenges facing Europe.
From post-Covid economic recovery plans to dealing with the fallout of the conflagration caused by Russia’s invasion of Ukraine, European leaders face considerable challenges. For this week’s guest, Arancha González Laya, that means Europe and the world are now confronted with a triple economic threat: inflation, slowing growth, and rising national debt: “We have to act on all three and to act on all three, you need to find a good balance. Inflation cannot be dealt with in a vacuum, you have to deal with inflation in a context and the context is one of keeping growth – because that is what will keep helping us add jobs to the job market.”
But for Ms Gonzalez Laya, those economic threats must not distract from another crucial axis of Europe's future: investing to stay one step ahead in a changing world. "We have to invest in the climate transition, we have to invest in a digital transition, and we now have to be better at investing in security and defence. Now we in Europe have understood that there is a more intelligent way of doing this, which is doing it as the European Union – that is the Next Generation EU.”
The Ukraine crisis has also heightened fears over the EU’s lack of energy independence. Ms Gonzalez Laya said the solution is to increase cooperation between EU member states. “For us Europeans the priority should be building the European energy union. With the idea that we diversify sources of supply, and we invest more in a more determined manner on renewable sources of energy that will ultimately help us decarbonise faster.”
Ms Gonzalez Laya, the former Spanish foreign minister, highlighted the progress accomplished by both Spain and its neighbour Portugal in energy independence, which has lessons for the rest of the EU. “We have more than 40% of our sources of energy are already renewable sources of energy, we have got regasification plans that can help us with importing LNG that can be inputted into the market and we have inputs of gas also from Algeria, mostly. Now, Spain and Portugal are in an interesting position for this resilience that Europe needs.”
The instability caused by Russia’s invasion of Ukraine could yet spill over into broader volatility, given concerns over global food supplies impacting heavily emerging economies – which could contribute to an increased flow of people trying to reach Europe via informal migrant routes, raising fears of a repeat of the 2015 influx of migrants to the EU. “We are surrounded by neighbourhoods that are fragile and war in Ukraine thanks to Vladimir Putin will make the fragility even greater. One more reason why we have to work with the United Nations, sending a very clear signal to Vladimir Putin – he has got to help in not aggravating the crisis for many emerging economies and developing countries."
Produced by Georgina Robertson, Isabelle Romero, Perrine Desplats and Luke Brown
