Wednesday, May 25, 2005

Mood, Madness and Leadership

During the past few days I have spent some time talking to people first at UN Headquarters in New York and then in the European Union institutions in Brussels.

Neither is a place in a particularly good mood these days. Morale has suffered from real and perceived political and other setbacks. And there is the fear that more will come.

As always, mood swings too fast and too far in whichever direction it swings. Neither the UN nor the European Union is in as bad a shape as some people tend to believe. Beyond the turmoils and troubles of today are signs of change that can signal strength for the future.

But - as always - it requires the right policies. And they are not always in place.

In Brussels, the politics of the European Union is driven by the politics of the different member states. And sometimes this leads things off in directions that are obviously very wrong.

In some member states there is great agitation over the rapid rise in the import of T-shirts and underwear and similar things from China in the beginning of this year. Previously there were limits, but now trade is free. It didn't come as a surprise - the decision was taken no less than ten years ago.

This has lead to the European Commission looking into whether action needs to be taken against the Chinese in this sector, and in order to avoid such action the Chinese authorities have introduced some sort of export fee.

All this would have some logic if we saw a critical part of the economic future of the European Union as being the manufacturing of T-shirts and underwear. And this would of course signal the demise of any dream of being in the top of the global league in terms of economic and social development.

The future of the European economy is to produce innovative services and innovative production solutions to an increasingle globalized world. We need to move from low-cost producing to high-clasas and high-cost services.

But the very same forces that are skreaming over T-shirts from China are often the ones screaming over the liberalisation of trade in services proposed in the so-called service directive.

There is some logic in the madness: they see Europe as continuing with T-shirts, while not developing the competitive service sector that obviously would benefit all and make Europe more competitive. As said - it's madness.

If the somewhat pessimistic mood in Brussels should be broken, it will require a political leadership that clearly takes issue with madness of this sort. It's not a European Union drifting under populist pressures we need, but a Union with the will and the ability to give leadership for the future.

Let the Chinese and whoever wants supply us with cheap and good underwear. But let us develop as global first-class service providers.