Why governments, industries and society should mobilize on EU construction and fight populism with energy

In early September I had the chance to participate to "The European House - Ambrosetti Forum" at Villa d'Este on Lake Como in Italy and reflect on what is happening from a political standpoint in Europe. The event is a great opportunity to listen to leading economists and policy makers from around the world giving their expert views on the economic, political, and social context we live in. It was very insightful to better understand some of the political tensions of these last years, and I felt, together with a significant number other attendees, that now more than ever there is a strong need for a common mobilization to revitalize a project for the European Union.

Collective action is the key against populisms in Europe

The first thing I understood is that the economic expansion we are experiencing right now is extremely fragile. Somehow it is still backed by the policies that were put in place in the US and in Europe to fight the last deep financial crisis ten years ago; the global GDP growth is actually expected to slow down to what we can consider a "real economy structural growth rate," which is 1 to 2 points lower than what we have today. Some economists are even talking now about a potential second large crisis, so all businesses are being called on to cope with an uncertain future in which opportunities and threats are increasingly larger and faster.

The second element of reflection was on wealth distribution. Most economies around the world, whether developed or developing, have not been able to create the conditions for a reasonable and "fair distribution" of what the national economies are producing. Often attempts to do so (i.e. the "universal salary" pushed by the current government in Italy) are irrational and populist attempts that seek voter consensus rather than structural mechanisms aimed at enabling real economic value creation.

These two elements, on the one hand uncertain economic growth and speed of change and on the other hand uneven wealth distribution, are converging in a growing tension among citizens worldwide. In most countries we see increasing criticism of governments, anxiety throughout the population, higher uncertainty when it comes to expectations of well-being, and therefore a lack of trust in the future. Economists have been highlighting the rise of inequality for decades now all around the world. The social implication is that when you introduce a faster pace of change into a society that already suffers from inequalities, this produces polarization and fear. This is the most fertile situation for populism to gain mind share and produce political earthquakes. We have seen the results of this trend with what happened with the Brexit vote in the UK, then in the presidential elections in the USA, and recently with the surprising (or not) new "compromise" government in Italy. There is certainly a growing risk of seeing this broadening further in the near future with the EU elections next year.

We need to work together – governments, industries and civil society – to share and understand as best as we can the world as it will be in the foreseeable future. This will help us build a compelling vision and act to transform and modernize the structure that must be adapted to a digital world while building the new social and economic models that can encourage appropriate and sustainable growth within the 4th Industrial revolution. I am lucky enough to live in France, where we can see the action of a government which is actually working in this direction, and I can still observe to what extent criticism and protectionism of the "status quo" can be a significant obstacle to a successful national transformation.

I have to say I was very surprised when, during the Ambrosetti Forum, I saw Italian entrepreneurs, asked to express themselves during the event, voting at 60% in favor of the position of the Italian government on migration policies. In fact, although I agree we absolutely need to have the European Union act decisively to support Italy on the migration situation, I consider the attitude and the words used by the Italian government totally disrespectful of the basic principles of tolerance and humanitarian aid.

This is not true only for Italy, of course, as the same is happening in many European countries, and also in Brazil this fall. Focusing on nationalism, identity and migration will not help bringing any country into the future. We urgently need to create a vision together, mobilize toward a project and act quickly to adapt the social and economic structure of Europe while creating opportunities for all. In the case of Europe, I strongly believe that government elites should create projects to transcend nationalistic policies and finally build a strong European perspective. Populisms are just going to divide Europe and weaken our entire economy: in the global context we see, I am convinced that European countries will be able to compete only if they build a true economic and political union. In fact, the reality of today's economy is that the Capital markets are too national and do not support the right level of innovation expansion.

While listening to some of the populists’ political argument I also could see more than ever why digital economy is a real opportunity in terms of economic growth and to solve some of the existing challenges we are facing. A strong Digital Single Market would help to develop a stronger economic and social construct, and EU would finally be perceived as more productive as well as more protective of its citizens. This can be built upon smart regulations that promote innovation to protect citizens’ essential rights in a world of AI technology, to create jobs, develop skills, and remove obstacles while building new services in a trusted environment.

To fight populism we need to contribute all our positive energy in the next few months, and in each country, alongside all who want to advocate for a stronger common future within the legacy of a common ground for EU construction that can mobilize citizens.

 I look forward to partnering with all those who want to build new growth opportunities for citizens and organizations around Europe.