Conflicts in Europe- can they be addressed together? Researcher’s Insights - István Benczes

István Benczes

István Benczes is professor at the Institute of World Economy of the Faculty of Social Science and International Relations. Out of his current research projects, he selected one that focuses on the reform of European studies.

He uses a theoretical approach to analyse the „unparalleled” institutions of the EU. Studies related to this specific institutional system neglected US mainstream discussions on economics and political science. For decades, the American literature did not look upon European Studies as a separate discipline that they thought was based on a somewhat ”naive belief” in integration.

The turning point occurred when the crisis reached Europe in 2008 and called in question former achievements:
it became evident that thinking about Europe in terms of a straight-line progress as assumed by the prevailing neofunctionalist ideology and as advocated by the ”supranational elites” was unrealistic. The process of integration turned out to be at best an undertaking ridden with conflicts that Europe had attempted to survive. They preferred to keep silent on the dividing lines. The negotiations, coordination between the members were dominated by the topics of co-operation, common construction and the details thereof. The time had come for the integration theories that had so far determined our thinking on Europe to return to the mainstream discussions in which conflict and its management are both focal points.

As a matter of fact, by the 1990s the American realist school (underlining conflict) and the representatives of the neoliberal institutional theory (placing co-operation in the centre) had already merged into a rational synthesis that promoted the simultaneous management of conflict and co-operation between the states as main actors. István Benczes thinks that what happened in Europe in the past 8-10 years can paradoxically be interpreted as a trade-off among states that awakened to the sobering effects of crisis. It became clear that the deepening of integration cannot be taken for granted, i.e. states may not gradually renounce a slice of their sovereignty in order to hand it over to a supranational body. We are coming to understand why US economists held that the euro zone without political integration was condemned to fail. They predicted that the euro zone would either fall into pieces or would entail a federal structure with a larger central budget. By contrast, the European narrative argued that it was possible to build Europe from the bottom up and the jointly elaborated set of rules could safeguard the future of the euro zone.

Nevertheless, the pragmatic question to be addressed is how Europe can be made stronger without strengthening its centre,
but rather by enshrining the desired progress in intergovernmental treaties. So much so that practical issues like “who pays to who, how much and what for” arise more and more often. It is a sobering recognition that co-operation does not lack conflicts, and that the resolution of conflicts is by its nature ridden with conflicts. Conflicts result from the fact that European leaders do not deliberate on regulatory issues only, they also take a position in conflicts over distribution. This mundane approach reflects the crisis of the former views. István Benczes believes that the current situation is not only about the crisis of the euro zone, but also an outcome of mistaken policies at the level of the member states, i.e. to some extent a failure of their economic policies, exchange rate policies and decisions connected to competitiveness.

How do we see the future, Europe’s future?
István Benczes stressed that rather than seeking the origin of the problems in the institutions of the Union, we should take a closer look at the member state level. If we manage to grasp the consequences of local decisions, it will be worth thinking about the systemic shortcomings affecting Europe as a whole. Another practical question is whether sanctions can be enforced against the offenders. Thus, the tightening of rules does not offer a solution in itself.

Can the euro zone be saved?
Yes, with the following conditions: better policies at the level of member states, smarter decisions and in addition to these, a stronger central budget (corresponding to 5-6% of the GDP) in order to make central measures enforceable through transfer policies. There are doubtless many question marks, even in Germany which has been an engine of European integration from the very outset. Surveys show that at present the German public is mainly concerned with migration and the public budget, consequently Germany, as required by the pressures of domestic politics, tries to make any support to the functioning of the Union subject to certain conditions. In such a situation it is crucial that while bargaining may take on an increasingly materialistic character, both the leading powers of the Union and we ourselves stick to European values. Interestingly, whereas the core countries of the Union are prepared to move forward, domestic politics often prevents the elites from taking up highly controversial European issues.

All in all, István Benczes considers that the greatest problem
is that while the EU is undergoing a distribution crisis, we fail to react to global power shifts. For instance, no breakthrough has been achieved towards increasing the European defence budget, despite the fact that the United States under Trump is less keen to police the world than in previous decades. Will Europe in the midst of its internal disputes perceive that it is left out of global power games and may easily slide to the periphery?

As regards research cooperation opportunities,
István Benczes said that his Institute maintained good research relations with the Institute of World Economics of the Hungarian Academy of Sciences, with the international and world economy research centres of the universities of Szeged and Debrecen, as well as with the University College London and several Czech and Polish universities. Although within the Corvinus University the Faculty of Social Science and the Corvinus School of Economics are natural allies of the Institute, there is a huge potential in working together with the Corvinus Business School, too. The theme of International Business Economics at the Institute of Business Economics may be connected to the subject discussed in this interview as it is within the context of international institutions and politics that businesses are managed.

Miklós Kozma
Department of Business Studies