ABSTRACT
The European Union is at a major crossroad in its history. The ongoing intense debate on the future shape of the Union goes beyond the foreseen and unforeseen implications of Germany's reunification and the collapse of communism in Europe. Eurocentrism is not of much help for coming to grips with the problems facing Europe; one has to embed the European problematique into a worldwide context. For what is at stake in Europe now and, in the years to come, needs to be judged against the background of fundamental tendencies in the world economy, which have been under way for almost two decades now. The redistribution of economic power, the emergence of multi polarity in international affairs, the globalisation of financial markets, and the 'new information age' (cyberspace) pose tremendous challenges to the Old Continent. Some even speak of a certain fatigue which may have engulfed Western European countries, and which, allegedly, would cause a 'competitiveness problem'. The extremely high structural unemployment in the EU (from an average of about 4% in the seventies to above 11 % currently), the crisis of the welfare state, and the burgeoning budget deficits in many countries are symptoms of the problems facing them. While Western Europe attempts to regain economic vigour, the post-communist countries are still struggling to achieve viable market-based economies and democratic polities; the resultant interlinkages form a compounded economic and political challenge for Europe.
