European integration(1): The six stages of reform

I have previously discussed the evolutionary character of International integration. On that occasion I mentioned adaptation, but failed to describe it. Here I attempt to address that shortcoming by describing the 6 stages of adaptation to economic or political economy shocks: Shock, Denial, Acceptance, Debate, Reform and Gloating.

First a problem, endogenous or exogenous, arises. Then we fail to recognise it as such; we believe it is either temporary or that it only affects others; after all “we” are always better. Eventually facts catch up with our delusion and we belatedly concede that this crisis is serious and that we need to do something about it, though no one really knows what. So proposals are advanced, ideas are briefly discussed and horse trading goes on until a compromise is reached at the last minute. Obviously this is rarely enough because, weary of change, our efforts are always conservative. So we gloat about our success, failing to recognise that our hesitation just planted the seeds of the next crisis. Then, when it finally hits, it all starts all over again, until it happens enough times and often enough that we end up learning.

The obvious problem with this is the that if we take too long to learn, we might learn so late it is too late. This means that Jean Monnet’s comment needs qualifying. Notwithstanding the fact that Europe is indeed forged in crises, and will be the sum of the solutions adopted for those crises, it is also true that its success will depend on the speed with which such solutions are adopted.

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