Lamy: The Route to Global Governance

"The fall of the Berlin Wall was indeed a turning point in globalization. And yet 20 years later the world is in a state of serious distress," said Pascal Lamy, opening his speech, titled "Global Governance: Lessons from Europe", which inaugurated the 2009-2010 Academic Year at Bocconi. "The reality is that the end of the cold war caught everyone by surprise. A new world order was being born. And yet there was not enough thinking and discussion about its governance structures. There was never a post-1989 Bretton Woods Conference or a San Francisco Conference. Global challenges need global solutions and these can only come with the right global governance, which today, twenty years later, remains too weak," Lamy pointed out. For Lamy, talking about global governance means introducing a system that helps human society purse sustainable economic, social and environmental development. The cardinal points of governance are leadership, legitimacy, effectiveness, and coherence. The problems lie in identifying the proper type of leadership, providing a kind of legitimacy that does not look too remote or unaccountable in eyes of citizens, and persuading nations to act together toward a common goal.

"In these troubled times for the European Union it is no easy matter to present it as a new paradigm of global governance. And yet the European construction is the most ambitious experiment to date in supranational governance. It is the story of a desired, defined and organized interdependence between its member states," explained Lamy. He then commented: "I believe European governance can fare well on leadership and I will use two examples to illustrate it. The first one is the campaign for the creation of the Single Market. The second one is the creation of the euro. But we have also seen less successful manifestations of leadership. Take the example of the Lisbon agenda where there has been a conspicuous absence of political will. I also believe that Europe scores positively on coherence. Institutionally, the European Commission acts on the principle of collegiality. Moving on to effectiveness, I also believe Europe scores rather highly. The role of the European Court of Justice in ensuring respect for the rule of law and the capacity of the European Commission to police compliance with European rules have all been drivers of European effectiveness. If there is an area where Europe would get a B-, it is probably in legitimacy. We are witnessing a growing distance between European public opinions and the European project. In spite of constantly striking institutional flints over the past 50 years, there has been no resulting democratic spark." According to Lamy, there are numerous lessons to be drawn from 50 years of European integration. The first is that you need to integrate institutions, political will and common project in a single whole. Supranational institutions require a long-term investment. Global governance must be rooted in the engagement of various stakeholders, in respect of law and executive commitments. The second lesson that the principle of subsidiarity must be respected. The international system should not be burdened with questions than can be better addressed at the national or local levels. As for coherence, it "starts at home," meaning that it must start with individual member states. Finally, international issues must be become object of domestic debate, and national governments should be made accountable for their international behavior.
Lamy remarked: "The good news is that many of these issues are already work in progress. The global economic crisis we are witnessing has accelerated the move towards a new architecture of global governance, in what I have called a 'triangle of coherence.' On one side of the triangle lies the G20, replacing the former G8, providing political leadership and policy direction. On another side lie international organizations providing expertise and policies. The third side of the triangle is the G-192, the United Nations, providing a forum for accountability. In the longer term, we should have both the G20 and the international agencies reporting to the 'parliament' of the United Nations. This would constitute a potent mix of leadership, inclusiveness and action to ensure coherent and effective global governance."

The head of the WTO went on: "A structure of this type needs to be underpinned by a set of core principles and values. And this is precisely what German Chancellor Angela Merkel has proposed with the creation of a Charter for Sustainable Economic Activity. It is a commendable effort to provide a 'new global economic contract', to anchor economic globalization on a bedrock of ethical principles and values which would renew the trust that citizens need to have that globalization can indeed work for them." Pascal Lamy concluded: "Globalization today is posing a serious challenge for our democracies, and our governance systems must respond to the challenge. If our citizens feel that the global problems are insoluble, if they feel they are out of reach, this will risk emasculating our democracies. Among the many regional integration attempts, the European Union remains the laboratory of international governance, the place where the new frontier of international governance is being tested."