The financial and euro crisis, the near state bankruptcy of Greece and Ireland, and the dispute about saving the euro have caused serious difficulties for Europe. On October 19 and 20, 2010, renowned experts from politics, academia, and business came together to discuss possible approaches and solutions.

Addressing the question “Is Europe in Decline?,” one debate pitted Jackson Diehl (Washington Post), a critic of Europe, against Arndt Freiherr Freytag von Loringhoven (Federal Foreign Office), a pro-European. In Diehl’s view, there is an apparent decline in classical power factors as well as in softer, cultural factors. For Freytag von Loringhoven, the talk about Europe’s decline is a “fad.” He pointed out the EU’ remarkable energy as a “transforming power,“ which has helped turn its neighborhood into a stable, peaceful, and democratic area.

George Soros (chairman of Soros Fund Management) criticized that the euro was not accompanied by a common tax and financial policy. His main criticism was directed at Europe’s rigorous austerity policy. For Soros, the stubborn adherence to the Maastricht Stability Criteria is inappropriate, even counterproductive. Instead of strict austerity, he advocated for a stimulus program such as, e.g., major energy or infrastructure projects.

For a long time, taking out new debts seemed to be the cookie-cutter answer to all economic problems; it was thought that expenses greater than income equaled happiness, and that debt maintained the social peace. Domenico Lombardi (Brookings Institution) welcomed the cooperation of the EU and the IMF to fight the debt crisis. For the monitoring systems to be effective, however, they have to be linked to sanctions, he said. According to Markus Kerber (Federal Ministry of Finance), Germany is aware of its responsibility and aims at growth-oriented consolidation. Efforts are made toward greater fiscal coordination, a permanent, resilient debt-crisis mechanism is scheduled to take effect by 2012/2013. 

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