Jean-Paul Senninger, ambassador of the Grand Duchy of Luxembourg to the United States, with Philix Liu '11, Fei Lu '11, Andrew Newton '11, Samuel Shepler '11 and Richard Segal '12.
The nation of Luxembourg is small — about the size of Rhode Island — but its economy has remained robust, even while some of its European partners stagger beneath historic debt and struggle to weather the global recession.
Jean-Paul Senninger, ambassador of the Grand Duchy of Luxembourg to the United States, delivered that message of positivity at an Oct. 1 reception at Harrington House to celebrate the 25th year of the Henry J. Leir Luxembourg Program at Clark.
“We Luxembourgers believe that in the long run, it is not necessarily the strongest who survives, nor the biggest, but the one who best adapts to changing circumstances,” Senninger said.
He recalled that Luxembourg embraced the formation of the European Union because “we would gain enormously from the process of political stability and economic integration granting us access — for the first time in our history — to larger markets in a stable environment.” To that end, Luxembourg championed the creation of a common currency, the Euro, which was born out of a “commitment by European countries to deepen and strengthen the ties that bind us together.”
While many pundits assessed the Euro’s chances of success as slim, he said, the first decade of its existence was marked by “important achievements,” including the ability of countries like France, Belgium and Italy — countries with troubled histories of managing public finances — to “comfortably survive” in a currency union alongside more economically stable countries like Germany and Luxembourg.
Senninger noted that after its initial depreciation, the Euro rebounded, and it has helped — and will help — “lay the foundations for macroeconomic stability in Europe, which is essential for creating jobs and prosperity in the long term.” He said Euro-area countries created 16 million jobs in the first decade of the Euro.
But in recent years the recession brought a profound crisis to the Eurozone, where GDP had shrunk by 4 percent in 2009 and more than 6.3 million people lost their jobs. Senninger lauded the European Economic Recovery Plan for its ability to knit together a strategy for fiscal growth, while acknowledging that each country was responsible for implementing its own economic stimulus. Economic activity is beginning to percolate again, he said.
“Without the Euro, things would have been a lot worse and the recovery more uncertain and slower, because exchange-rate turbulence between the countries that are now part of the Euro area would have been highly disruptive to trade and investment flow,” Senninger said.
The crisis, however, did expose several weaknesses in countries that had built up excessive deficits and debt levels, he said. Senninger pointed to Greece as an example of an economy that has collapsed under the weight of poor market conditions, skyrocketing public debt and inadequate fiscal management. In May, Greece’s Euro partners and the International Monetary Fund stepped in to make massive loans to the troubled country, among other measures that will help in the short run, and Senninger is hopeful that with the appropriate monitoring the Greek economy will continue to grow over the longer term.
The European Financial Stability Mechanism and Facility was created to offer financial support to member countries facing financial difficulties — on the condition those countries make structural reforms to labor markets, pension systems and competition policies. Stenninger called the assistance measures an example of European solidarity that has “prevented financial chaos in Europe, which could have had potentially serious global repercussions.”
The most significant outcome of the financial crisis is the “complete overhaul of European economic governance,” the ambassador said, including such measures as broadening economic surveillance to identify and address growing problems and devoting more attention to the issue of debt sustainability.
Despite experiencing some economic decline due to the recession of 2008, Luxembourg has fared well. Stenninger said his country is the most prosperous of all industrialized democracies and has the highest per capital income in the western world. The nation boasts globally recognized financial institutions, a thriving media industry and a sturdy manufacturing sector. “We have learned to box in a higher weight category than assigned,” he quipped.
Senninger’s visit to Clark also included a lecture about European affairs delivered in Professor Michael Butler’s “Just and Unjust Wars” class, noted Clark English professor SunHee Gertz, co-director of the Henry J. Leir Luxembourg Program.
“As busy as he must be navigating all he has to do as ambassador of the Grand Duchy to the U.S., we were particularly grateful that His Excellency Jean-Paul Senninger, his wife Louise Åkerblom, and their daughter Julia came to visit Clark, especially since the Ambassador was so accessible to students, patently enjoying their company,” Gertz said. “At the end of their stay, I might add, Julia delightedly reported that some people thought of her as a Clarkie.”
~ By Jim Keogh, Director of News and Editorial Services