EUtopia?

That the EU has a credibility problem with its own citizens is no secret. The latest figures published by Eurobarometer show that only 45 per cent of Europeans trust the EU. Incredibly, in the UK the figure is as low as 25 per cent. And, yet, it seems that little thought is being given by the EU as to why this is so and what can be done to at least diminish this mistrust. The EU Commission is perceived as becoming increasingly arrogant and bureaucratic, obsessed by a self-defined agenda, such as EU enlargement and the Constitution, which is remote from the needs and interests of its people.

The EU essentially remains a top-down project, charting trajectories masterminded by politicians and policymakers in distant offices in Strasbourg and Brussels. Many times it fails to connect with the daily worries of its citizens such as the emergence of multicultural societies, low economic growth rates and persistent unemployment. The EU desperately needs to communicate with its citizens not on special days but as an essential element of the democratic process. It should stop thinking, and behaving, as though public relations matter only until such time that citizens subscribe to its agenda.

There is hope that the German presidency of the EU, which has started with the new year, will lead to some sort of conciliation with the people's wishes. Angela Merkel, the German Chancellor, seems determined to ease transatlantic economic ties, especially investment flows. She will still try to revive the constitutional treaty, which she considers as a sine qua non in making the EU more effective and more efficient.

If the EU is to win back the trust of its people, it has to stop overselling its programmes. The EU should embrace a "teaching" mission, educating its citizens as to why change is necessary. As Frank-Walter Steinmeier, Foreign Affairs Minister of Germany, in an article carried in the local press said, "Our citizens expect us to define precisely what specific benefit European policy will bring in each individual case. We must not slacken our efforts to explain why a common European policy is necessary".

Our own experience in Malta is a clear example of the short-sightedness of selling EU membership in terms of the financial aid that can be secured or so as to avoid queuing in airports. Similarly, we are now trying to sell the introduction of the euro as a way of avoiding exchanging currencies when travelling overseas. Garnering public support should not be at the expense of providing full, and if need be technical, information.

In a year's time Malta will be within the eurozone. At least so indicate the signals coming from Brussels, and so believe many of us. Adopting the euro is an obligation that is an inevitable condition of our accession treaty with the EU. All member states are expected to eventually change over to the euro. The only exceptions are Britain and Denmark, both of which were already EU members when the euro was launched in 1999, and have managed to negotiate opt-out clauses.

How many of us Maltese really understand the implications of our country adopting the euro? Should it not be the EU and the Malta government who should take the lead to inform the people about the real economic implications of such a measure?

Going by what has been happening in the other eurozone countries can be of little comfort. A recent Eurobarometer report, The Eurozone, Five Years After The Introduction Of Euro Currencies And Banknotes - Analytical Report, sought to gauge the perceptions of citizens in these countries. One would have thought that the euro' s emergence as a top global currency would have won the confidence of these citizens. Of course, they realise that the euro symbolises a stronger Europe in the world. They also acclaim that the euro has made it easier and cheaper to travel. But an overwhelming majority (93 per cent) of the eurozone citizens blame their new currency for higher prices. And although it is now definitely simpler to make price comparisons across borders within the area, this has in no way led to a harmonisation of prices.

The end result according to the report is that there has been a steady decline in the enthusiasm for the euro. In 2002, 59 per cent of citizens perceived the introduction of the euro as being positive; in 2006 this figure has fallen to 48 per cent. Among the most disillusioned were the Italians, the Greeks, the Dutch and the Germans. The report concluded that there still is a significant lack of knowledge on the economic rationale and impact of the euro.

Spiralling prices are well understood by consumers. Inflation hurts where it matters most. The loss of monetary and exchange tools in addressing key economic issues such as the rate of growth and the balance of payments are more difficult to explain even though over the longer term they may be even more important. Also, to date no monetary union has survived without political union. Prominent Belgian economist Paul de Grauwe has repeatedly argued that political integration of the EU is fundamental to the euro's survival. This is especially so given that a number of individual member states, such as Italy, have had a poor record of pursuing the necessary economic reforms and the EU has shown itself powerless in seriously sanctioning the big culprits.

This is not about crying wolf. It is about transparency and making sure that measures are in place to combat any negative effects that may emerge from Malta's changeover to the euro. Joining the eurozone will not mark the end of our strive for fiscal discipline, but a step in that direction. Malta will be expected to continue abiding by the Maastricht criteria. It is wrong to sell the introduction of the euro as some panacea for all our economic ills. Once again, the success or otherwise of Malta joining the eurozone will depend mostly on the proper management of the economy. If we have to go through the pain, let us make sure we get some of the gain.

Fms18@maltanet.net