CIA gives grim warning on European prospects
NICHOLAS CHRISTIAN
THE CIA has predicted that the European Union will break-up within 15 years
unless it radically reforms its ailing welfare systems.
The report by the intelligence agency, which forecasts how the world will look
in 2020, warns that Europe could be dragged into economic decline by its ageing
population. It also predicts the end of Nato and post-1945 military alliances.
In a devastating indictment of EU economic prospects, the report warns: "The
current EU welfare state is unsustainable and the lack of any economic
revitalisation could lead to the splintering or, at worst, disintegration of
the EU, undermining its ambitions to play a heavyweight international role."
It adds that the EU’s economic growth rate is dragged down by Germany and its
restrictive labour laws. Reforms there - and in France and Italy to lesser
extents - remain key to whether the EU as a whole can break out of its
"slow-growth pattern".
Reflecting growing fears in the US that the pain of any proper reform would be
too much to bear, the report adds that the experts it consulted "are dubious
that the present political leadership is prepared to make even this partial
break, believing a looming budgetary crisis in the next five years would be the
more likely trigger for reform".
The EU is also set for a looming demographic crisis because of a drop in birth
rates and increased longevity, with devastating economic consequences.
The report says: "Either European countries adapt their workforces, reform
their social welfare, education and tax systems, and accommodate growing
immigrant populations [chiefly from Muslim countries] or they face a period of
protracted economic stasis."
As a result of the increased immigration needed, the report predicts that
Europe’s Muslim population is set to increase from around 13% today to
between 22% and 37% of the population by 2025, potentially triggering tensions.
The report predicts that America’s relationships with Europe will be
"dramatically altered" over the next 15 years, in a move away from post-Second
World War institutions. Nato could disappear and be replaced by increased EU
action.
"The EU, rather than Nato, will increasingly become the primary institution for
Europe, and the role Europeans shape for themselves on the world stage is most
likely to be projected through it," the report adds. "Whether the EU will
develop an army is an open question."
Defence spending by individual European countries, including the UK, France,
and Germany, is likely to fall further behind China and other countries over
the next 15 years. Collectively these countries will outspend all others except
the US and possibly China.
The expected next technological revolution will involve the convergence of
nano, bio, information and materials technology and will further bolster China
and India’s prospects, the study predicts. Both countries are investing in
basic research in these fields and are well placed to be leaders. But whereas
the US will retain its overall lead, the report warns "Europe risks slipping
behind Asia in some of these technologies".
For Europe, an increasing preference for natural gas may reinforce regional
relationships, such as those with Russia or North Africa, given the
inter-dependence of pipeline delivery, the report argues. But this means the EU
will have to deal with Russia, which the report also warns "faces a severe
demographic crisis resulting from low birth rates, poor medical care and a
potentially explosive Aids situation".
Russia also borders an "unstable region" in the Caucasus and Central Asia, "the
effects of which - Muslim extremism, terrorism and endemic conflict - are
likely to continue spilling over into Russia".
The report also largely en dorses forecasts that by 2020 China’s gross
domestic product will exceed that of individual western economic powers except
for the US. India’s GDP will have overtaken or be overtaking European
economies.
Because of the sheer size of China’s and India’s populations their standard
of living need not approach European and western levels to become important
economic powers.
The economies of other developing countries, such as Brazil, could surpass all
but the largest European countries by 2020.
.
|
