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Mapping Wild Cards

Inspired by: workshops/meetings » "Happy Ending" twist in EuroLand

version: 4 / updated: 2011-01-08
id: #1378 / version id: #1295
mode: VIEW

Originally submitted by: Rafael Popper
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Last changed by: Rafael Popper
WI-WE status:
submitted unpublished archived

Source of inspiration

Workshops/Meetings

iKnow workshop country name

United Kingdom

Workshop date

February 2010

The source of the Wild Card is

iKNOW Workshop in Manchester

Headline

(max. 9 words)

"Happy Ending" twist in EuroLand

Description

(approx. 150 words)
Please describe the Wild Card (approx. 150 words)
The "Happy Ending" twist to Euro concerns involves the survival of the European political project and the emergence of a new “Euro Deal”, which dramatically transforms the economic and political landscape of Europe. On the one hand, debt-crisis countries are “allowed” to leave the Euro but at a high political cost (massive reduction in the number of administrative officials in European Union institutions) and a moderate yet acceptable economic and fiscal cost (e.g. a new “Euro Deal” tax or new agreements in total contributions to the EU and total receipts from the EU). On the other hand, richer countries rapidly benefit from the new Euro Deal’s reception by global financial markets and investors. Thus resulting in a steady recovery of economic and socio-political stability.

Keywords

Euro, Europe, economy, financial, currency, deal, fiscal

Mini-description

(max. 250 characters)

The growth of debts, austerity packages and spending cuts in Europe lead to critical economic instability and the abrupt transformation of the Euro Zone. A few countries leave the Euro at huge political price while others enjoy the new "Euro Deal".

Likelihood

Closest timeframe for at least 50% likelihood
Please use one of the following options:
now-2025

Type of event

Unplanned consequence of events/trends/situations (e.g. financial crisis, accidental breakthrough)

Type of emergence

please select (if any) describe related trend or situation
An extreme extension of a trend/development/situation
(e.g. Increased global warming leads to a total ban on fossil fuels)

Type of systems affected

Human-built Systems - E.g. organisations, processes, technologies, etc.

Classification

Undesirable

Importance

please specify:
please select
Level 3: important for the European Union
Level 4: important for the whole world

Early indicators

(including weak signals)

There are several signals warning us about the probability of occurrence of such a wild card. Most recently the global financial crisis brought financial trouble to several European states, most notably Greece and Iceland, although different brought in its wake governmental crises and civil unrest. The collapse of the Greek economy has worried stakeholders and governments throughout the Eurozone as it has the possibility to drag other economies down with it due to investment and financial ties with Greece in the form of exports and imports. Other European states are currently struggling to bring their deficits under control and face governmental crises as a result, such as Spain and Portugal. It is feared that these troubles may start to spread across Europe. Investors are also starting to refrain from any investment in European financial markets, which further exacerbates the crises. Governments in financially trouble countries also have to face fierce resistance to their plans of cutbacks in public spending. This has in some instances resulted in protests and civil unrest causing injuries and loss of life as well as damage to infrastructure. These financial crises touch the lives of ordinary citizens and many face bankruptcy and extreme financial difficulties. Individual bankruptcy and unemployment is on the rise and families face loosing their homes and livelihood. As well as this putting the strain on families it is also a heavy burden to bear for already straining public services systems. These are all weak signals for rising public disillusion with politics and the financial systems, which potentially puts at risk the social treaty people have with their governments. Governments and banks are no longer trusted and widespread lack of trust could potentially lead to further civil unrest as the aforementioned have lost their legitimacy in the eyes of the people.

Latent phase

Obstacles for early indentification

information/communicational filters (media/editorial interests, language, reasoning)
economic filters (business/market interests)
political filters (party or ideological interests)

Manifestation phase

Type of manifestation

In a probably pervasive way (contagious or transmittable)

Aftermath phase

Important implications
Collapse of a system

Comments

Collapse of the European financial system.

Potential impacts (risks & opportunities)

Timeframe options
Risks Opportunities
immediate
(within 1 year after the Wild Card manifests) 		Resurgence of nationalism in individual European countries
short term
(1 to 5 years after the Wild Card manifests) 		Deterioration of European position in the world.

Potential stakeholders' actions

before
it occurs 		after
it occurs
Policy actors (at the international, European and national levels) Implement stability policies; regulate financial markets; EU policy formed on how best to assist countries in dire financial condition. Regulate and monitor the situation to avoid it spiralling out of control; Keep tight reins on policy response, avoid panic and make sure that response is evidence based.
Business actors (incl. SMEs) Invest in European markets, goods and services; Support national and European policymakers in the implementation of economic measures. Avoid price speculation or drastic decisions; Try to continue “business as usual” for a few months until new economic situation becomes much clearer.
Academic/Research sector To promote research on the Euro zone and its strengths and limitations; Research should aim to pinpoint areas of weaknesses and suggest solutions; Research in economics and economic models will be necessary to better respond to a sudden disintegration. Continued research focus on the issues named above; Research community would need to continue presenting research findings that would promote understanding of markets, currency, economics, businesses and also social sciences should focus on keeping track of quality of life of EU residents and report any drastic changes so they may be tackled without delay.

Relevance for Grand Challenges

where? please justify:
particularly relevant Europe world
Social exclusion & poverty
Economic prosperity/dynamics

Relevance for thematic research areas

please justify:
particularly relevant
Social Sciences and Humanities

Relevance for future R&D and STI policies

Note: RTD = research and technology development; STI = science, technology and innovation
Need to promote research on future changes in Europe’s monetary landscape. Recent shifts in the monetary landscape in the Europe indicate that stability is a key issue that needs to be carefully monitored. Recent events in Greece and Iceland, and worries over the state of affairs in Spain and Portugal, demonstrate how quickly financial problems can escalate and bring down a nation state’s entire economy. This has brought on civil unrest and governmental crises. Research in the field of European monetary policy is needed in order to provide an informed policy response in the face of financial crises.