Rockwell Schnabel, U.S. ambassador to the European Union, spoke today at the Anderson School about the growing strength of the European Union.

European Union on the rise
Rising wealth, influence could make EU into a superpower
by Josh Kahn
published October 13, 2005

With 25 countries already in the union and more expected to join, the European Union has the potential to be the world's next superpower.

Many people in the United States may not know what the European Union is or what its goals are, but they better start learning quickly, said former U.S. ambassador to the European Union Rockwell Schnabel.

"What we cannot do is put our head in the sand and hope Europe doesn't get its act together," Schnabel said.

Schnabel spoke at the Korn Convocation Hall in the Anderson School of Management on Oct. 12.

He is the first speaker in the Anderson School's Distinguished Speaker Series.

The EU was established in 1992 after the Treaty of Maastricht was signed as a way to promote economic cooperation between member states. It has grown to include 25 members states.

Given Europe's growing wealth and influence, students may find the region fresh for entrepreneurial opportunities, Schnabel said.

Still, before Europe takes the next step in the global hierarchy, Schnabel said it must first let go of "Old Europe" economic policies.

Schnabel said there is currently a battle in many European countries between open-market ideas pushed by the EU and the state-controlled policies of some governments.

He said if Europe expects to grow, it must embrace an open-market system in order to remain competitive in the global economy.

To remain competitive with nations such as China, where the average textile worker earns 50 cents an hour compared to the $20 an hour a Frenchman makes at the same job, Europeans must be willing to work longer hours and for less pay. This is something not many workers are willing to do, Schnabel said.

Although such drastic economic changes may threaten Europe's short-term social stability, these changes are necessary if Europe is to become the next superpower.

"Crisis creates opportunity," Schnabel said.

As more European nations do away with constricting labor laws and adopt a more pro-business stance in an effort to join the EU, Europe's superpower status will then become reality, Schnabel said.

Anderson student Tsuyoshi Oyabu echoed Schnabel's assertion that the EU represents an influential force in the global economy, but added that China's burgeoning economy must not be overlooked.

Experts believe China is in the process of becoming an economic juggernaut.

China's economic growth has averaged 9.5 percent over the past two decades and the nation is expected to eventually provide 70 percent of the world's clothing.

Schnabel acknowledged that China should not be overlooked, but he said at the moment, the EU is better equipped to mirror the U.S.'s superpower status.

Gail Kligman, director of the Center for European and Eurasian Studies, said the EU's spread through Europe will continue to be an important, yet complicated, issue facing Europe in the future.

Earlier this month, Turkey began the process of accession into the EU, a process that will take about 10 years before Turkey is granted full membership.

Some member-nations of the EU, namely Austria, remain skeptical of Turkey's bid to join the EU.

Critics are wary of Turkey's size, poverty and primarily Islamic population.

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