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Economic mayhem and the 2009 European elections

29 January 2013, 17:04 CET

At a time of financial turmoil, electing 700-odd representatives to the European Parliament in Strasbourg this June may seem somewhat of a sideshow.

The election will have no bearing on what is most on voters' minds crisis. Many of the major decisions are, in any case, made by the European Commission in Brussels and by national governments.

However, the European Parliament can significantly influence what the EU (and member governments) spends money on and how it regulates public procurements. This has major implications for economic competitiveness and the development of new industries; tomorrow's employers.

The second reason why the 2009 elections are likely to be more important than usual is the (currently stalled) Lisbon Treaty. The stated aim of the treaty is to improve decision making in the EU. Political parties from all sides of the political spectrum will argue that everything from the EU needs to be stronger to deal with the economic crisis through to Lisbon being a huge step on the road to the EU becoming an all engulfing super state run by an unelected elite, out of touch with ordinary people. However, it is the economy that will dominate.

Irrespective of the financial crisis, fast emerging technologies and emerging major new economies mean the world is in an ever speeding process of long term 'competitive destruction', the term coined by Joseph Schumpeter to describe the:

 "process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one."

How governments spend and what they spend it on will be increasingly important in determining economic success and thus the success of the EU, whatever happens with the Lisbon treaty. However, the workings of EU public procurement regulations and the ambitions of the EU Framework programmes frequently inhibit the creation of significant new businesses and the competitiveness of existing ones; in particular they are often a dead hand to entrepreneurship.

The European Parliament may not be stuffed with the best business minds. However, it could do something significant by forcing a radical overhaul of the workings of EU Framework Programmes and procurement regulations so that they focus on supporting entrepreneurial drive.

The 2009 Euro elections will be the first in Europe since the credit crunch began to hit and, of course, they come just a couple of months after the G20 meeting in April.  The economic turmoil and a growing feeling of the injustice in the way 'things are run' will be felt in votes.

With the knowledge that government spending is ballooning (and doubtless imploding when the cost comes to be counted) voters will not distinguish between the institutions of the EU. They will want to know what concrete steps the EU will take to improve the economic prospects for its citizens.

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The European Elections 2009, parties, polls and recent developments

Creative Destruction – Joseph Schumpeter.

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Michael Ter-Berg

   Michael Ter-Berg

Michael Ter-Berg is a director of and formerly Chief Executive of one of the UK's most successful University transfer technology companies, Medic-to-Medic/ Map of Medicine (University College London) and President of a leading Swiss Hotel Management School, DCT.