Europe’s challenges and opportunities (Budapest, May 2011)

A speech from Michael Schluter, former economist for the World Bank and founder of the Jubilee Centre, at the State of Europe Forum 2011 in Budapest.

Biblical law is, as it is written in the book of Isaiah, a great and glorious law. It is about love and love is about the quality of relationships.

All the content of this speech rests on two assumptions with regard to Biblical law. The first assumption is that Biblical law is about righteousness. It is about how a relational God teaches humanity to create a relational society. The second assumption is that the key to the interpretation and application of Biblical law is found in a saying of Jesus. When he is asked which the greatest commandment is, he said: “Love God and love your neighbour. On these two laws hangs all the law and the prophets” (Matthew 22:37-40 paraphrased).

Seven key problems in Europe

I have a quick run over of what I see are the key problems in Europe, and why I think Christians can develop a strategy of hope. We have some huge challenges in Europe, and as Christians we have a unique responsibility and opportunity to address those problems. Here are the seven key problems as I see them.

Firstly, there is a huge challenge because Angela Merkel, David Cameron and other European leaders are saying ‘multiculturalism is dead’. Nevertheless, in saying that multiculturalism is dead, they are creating a dangerous vacuum and are putting nothing into its place. These are dangerous times for Europe, when we have no shared vision of where we are going.

Secondly, we are threatened by political apathy. Individualism is breeding a non-engagement, both politically and economically. Democracy can survive almost anything except non-engagement. If people won’t vote, then is the government legitimate? The last governments in Britain have been elected with a 40% turnout. Is that enough to make a government legitimate? Supposing it goes down to 30%, then down to 20%, if only 20% of people vote, is that enough to make a government legitimate?

Thirdly, there is the issue of debt. Proverbs 22:7 says: ‘The borrower is the slave of the lender’. Whether you look at the Old Testament or at the New Testament, we are warned repeatedly against debt. Yet I am afraid that as Evangelical Christians in the last 60 years we have simply failed to address the issue of debt adequately. We have just been silent and watched the debt accumulate. 

So whose slave are we becoming in Europe? Can we survive as a vibrant economic community if we sink more deeply into debt as individuals, households, families, corporations and ultimately as nations? As we go on the slow growth economic track, will we survive against nations that are not so much in debt and can grow much quicker than us?

Fourthly, we lack accountability of our corporate leaders. I could give you many examples. Take BP and what happened in the Gulf of Mexico.^[1] At the very time that the Gulf spill happened, in the two weeks following, in Washington D.C., BP got permission to do deep sea drilling in the Arctic, under the ice. Where is corporate accountability? BP is bigger than many economies of whole countries. But who can hold the leadership of BP accountable? Who could prevent it walking over our planet the way it does? 

Or think about the pay differentials: what does equality mean (which we say we believe in Europe) when one person is paid ten times more than another person? Ten times? No, a hundred times more than another person! Indeed, taking into account the share options and everything else, it goes toward a thousand times more than another person. Here is a person running one of our big supermarkets in Britain, and he is paid 500 times more for every hour he works than the girl on the checkout. Can that possibly be matched with equality? What does it mean to say “we believe in equality” and pay people those sorts of pay differentials? 

Fifthly, there is our competitive status in Europe. I have talked about some of the problems due to debt. But there is another direction of problem coming from what I call high overheads. If we allow families to break down, then how do we pay for all the care that is required for old people? We rely, of course, on the government. Who provides for the children who go adrift from the context of one parent or non-caring or engaged parents? Again we look to the state. 

We are generating a whole generation of people who are subject to depression and mental illness because of their family breakdown. One in twelve people now in Britain is on antidepressants. How are we going to pay for the support of these people? Family disintegration has huge human costs, but it also creates economic costs that make us unviable.

My sixth problem is our low birth rate. Politicians tend not to worry about the low birth rate because it doesn’t really impact in five years. But a number of European countries, such as Spain, Italy, Germany and so on, have a number of children per adult woman of 1.3 or less. It is the same problem in Singapore, Hong Kong and parts of the Far East as well. 

These European countries are losing roughly a third of their population every 30 or 35 years, depending on exactly what the ratio is. Imagine that a third of the entire German population will be gone in 35 years from now. You can import people to fill those gaps but what is left of European culture if we go on in that direction for 60 or 70 years? Why are we not having children? Why do we not want children? What is it at the heart of our European culture that is saying “we don’t want to have children”? Of course, some people tragically cannot have children.

Seventhly, across politics, business life and family life, people are declining to take responsibility. Let me just give you one example of that: probably most of us in this room have pensions. With our pension, we sit at home, we put our feet on the desk as it were, and we say to the pension fund where we put our money: “give me more” or just “give me” or “pay me’. “All I want is money from you. I don’t want to be engaged. I don’t want to be involved. I don’t want to know where you put my money. Put it in pornographic websites, put it wherever you like, just give me a good return on my capital.” 

We want reward without responsibility. We want investment without involvement. We want profit without participation. My brothers and sisters in Christ, this is an unsustainable situation! It goes straight against the parable of the talents (Matthew 25:14-30) where Jesus says to the man who puts his money in the bank to get it with interest: “this is a sign of a hard person who reaps where he doesn’t sow”. We have adopted the mind-set from the world without questioning it, that we can reap where we haven’t sown. We can sit at home, put our money into pension funds and expect to get it back with 4%, 6% or 8% growth doing nothing for it.

Opportunities for change

Where can hope be found? How can we change these things? What is feasible for us to do?

Firstly, we have got to challenge the dead-end of postmodernism, of individualism, while arguing much more cogently for what I call Relationism or relational thinking. Relationism is the idea that relationships are the key to our well-being and our identity. This is not rocket science and it chimes with what everybody knows in their hearts is true. If I ask you what the most important thing is in your life, and you answer “my car”, even if it is a Porsche, I think you’ve got a serious problem. Everybody actually finds what is most important and significant to them in their relationships. We’ve got to communicate that in the public square. It’s time to move on from postmodernism, which I think is dead.

Secondly, we need a new European charter of relational values. I would want to say to all of you assembled here, and in particular to the organisers: isn’t this time for Christians to come up with a European Charter of relational values? We have heard about the five core values of the European Union, although we haven’t traced them back to their relational roots perhaps in our own thinking enough. But can I suggest that this is something the organisers need to do before Hope III^[2], come up with a Charter of relational values?

Thirdly, because Jesus talked about practicing and teaching the law, we as Christians have got to argue for, vote for, work for a debt-free Europe in addition to having a debt-free lifestyle ourselves, in our personal lives. And I think that to achieve a debt-free Europe, we have to go for three things. 

One is a range of new financial products. In Relationships Global, which I work for in the United Kingdom, we are currently working with some friends on shared-equity arrangements for house purchase to replace bank mortgages. It is perfectly feasible but it takes the person who is using that money or lending that money out of a debt context. 

Then we’ve got to take the lead from Germany’s commitment to achieve a balanced budget. If Germany can do it, all of us should be able to do it. But I think we’ve got to go beyond Germany and we’ve got to argue with our politicians not just to balance the budget but to repay the debts that we have accumulated. 

Finally the idea of the jubilee from the Old Testament has got to be brought into economic thinking in Europe. This means a periodic, systematic point of debt write-off. We have got to be willing to write-off debts. Let us set the date of 2030 or even 2050, but let us move towards the point where we say “all the debts at this moment are going to be written off”. There has to be a moment of debt write-off if ever we are going to recover our economic freedoms. Without debt write-off we will not have freedom.

Fourthly, we need a new corporate governance code in Europe which requires companies to report annually on the state to their stakeholder relationships. Stakeholders are employees, suppliers, customers and shareholders as well. You might think that this is hopeless but let me tell you that it’s happening now in South Africa. They have a corporate governance code called King III.^[3]

We are involved with four major listed companies at the moment in South Africa, helping them learn how to report on the quality of their relationships in their annual reporting accounts. It is supported by the Institute of Directors of the Johannesburg Stock Exchange. If we can do it in South Africa, why can’t we do it in Europe? That will give a chance for employees to say what they think about the pay differentials that they have in the companies where they work.

Fifthly, we have to rebuild our extended families. The biblical term for family is not the nuclear family (i.e. mother, father and two children). It is an extended family concept. It is possible to rebuild extended families in Europe and I think we must do it if we are going to have a humanizing foundation in Europe.

Sixthly, I am suggesting that to take the relational idea into corporations, we must also take it into schools, hospitals, universities and every public body. All public agencies that deliver services to the public should be rated not just on their financial or technical performance, but on their relational performance. 

Relationality is not just about what happens in our personal relationships. I think that was the mistake of Personalism, where it just took a wrong turn in the road, although the ideas were so important and valuable. Relationships are key between organisations, between big companies and small companies for example, between university faculty and their students, between clinicians and management in hospitals. These relationships are between professional groups, between organisations. Across the board, every part of our public life is characterized by relationships. All of those relationships need to be under scrutiny, need to be reported on and become a major priority of our public thinking.

Finally, we need a redefinition of our national goals and achievement in relational terms, in terms of social sustainability rather than just economic growth. Of course, economics are important. Financial transactions are always an expression of an underlying relationship. If you study financial transactions, you will learn an enormous amount about the way relationships are happening. 

But relationships are more than money, and they need to be assessed not just at an institutional level, but at a national level, and that will include a national annual assessment of what is happening in the relationships among the nations of Europe. It seems to me extraordinary that Europe can exist as a community of nations without any formal process or annual review of what is going on in the relationships among their members. Why are we not discussing each year, as a community, what is happening in the relationships among ourselves in order to deal with the problems that we have?

Conclusion

What I am suggesting is this: if we are really serious about transforming Europe, what we need to do as a community of Christians is to decide what our agenda of priorities is on the basis of our Biblical understanding. We need to appoint working groups who are going to look at practical strategies to achieve those changes and then we need to come together again in due course and agree on a set of changes that we want to present to political leaders.

Michael Schluter 

State of Europe Forum – Budapest 2011 

Dr Michael Schluter holds a PhD in agricultural economics from Cornell University (USA). He is the founder of the Jubilee Centre and the Relationship Foundation. He also worked as an applied economist for the World Bank.

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^[1]The Deepwater Horizon oil spill is an industrial disaster that took place between April and September 2010 on a BP-operated prospect off the coast of Florida.

^[2]Hope for Europe is a network of European evangelical ministries. This speech was given during the Hope IIconference in Budapest. Hope III was organised in Tallinn in October 2018.

^[3]Also called the King Report on Corporate Governance.It is a booklet containing the guidelines for the governance structures and operation of companies in South Africa. King III was the last revision (2009) at the time of the speech. Since then, a fourth revision called King IV was issued in 2016.