Why Scenarios can be useful for the Euro Crisis

Thus far coping with the Euro crisis mainly means running after developments that change direction in a speedy manner. Measures taken one day are obsolete the next day accelerating the crisis symptoms. Political and other decision makers often seem helpless in the face of these symptoms whose main features are growing unemployment, especially amongst youths, economic slowdown, social misery and widespread frustration with Europe and the European institutions. There is also general mistrust towards the dominant crisis management approach that so far has not been able to stop the downward spiral.

In this situation, a creative break from daily crisis management and a fresh look at alternative long term solutions seem to be useful and necessary. The scenario methodology offers such an opportunity that widens the view and avoids narrow assumptions which might lead to wrong decisions. The FES scenario project on the future of the Eurozone is an attempt to overcome such assumptions and open the eyes for different possible futures. It is indeed the essence of scenario building not to look for one solution, which might lead to wishful thinking, but to come up with different visions of how the Eurozone might look in the year 2020.

Scenarios are used for strategic planning (political, economic, military) in order to be better prepared for unpredictable events and future developments. They are not predictions because nobody can predict the future; instead they offer possible, realistic and different visions of the future. Scenarios provide a message to decision makers: if you do this, you will end up here; if you don’t act in this way, you will end up in another place etc. In the case of the FES scenario outlines elaborated so far this could be a complete falling apart of the Eurozone, the establishment of a kind of core Europe, a great push towards more integration, or simply business as usual, depending on the major driving forces, critical uncertainties and the direction these factors are pushing the decision makers. It is therefore up to the latter to draw the right conclusions; scenarios as such do not give recommendations or a blueprint for action.

Scenarios are usually the ‘product’ of a very intensive and long lasting process conducted by a scenario team that should reflect different professional, political, institutional, gender and other backgrounds, but team members are participating in their personal capacity and not as representatives of institutions, organizations etc. In the case of the FES scenarios on the Eurozone this process is complicated by the fact that it should reflect the ‘national’ views of the majority of Eurozone countries with a specific social democratic ‘touch’, but also the view from the European institutions. In contrast to country related scenario exercises where one team is meeting several times, this means that different workshops with different people have to be conducted in several countries. This multilayered approach needs much more cooperation (with partner institutions), coordination and incentives from the organizers than ‘classical’ scenario exercises.

The FES scenario project is mainly following the scenario method developed by Shell and used by most NGOs when it comes to political, social, ecological and other issues. The scenario building according to Shell is done in three phases: orientation, building and affirmation.

Orientation means defining the subject, taking stock of the present situation as a point of departure and defining the major driving forces (factors that shape the future) and critical uncertainties (events that are unlikely but could happen).

Building means collecting ideas, stories and ‘newspaper headlines’ in the future, using the ‘Metaplan’ method (writing cards instead of classical seminar discussion), clustering the cards and defining rough scenario outlines, which will be further elaborated either in working groups or by the core team.

Affirmation means testing the draft scenarios written by the core team, especially concerning plausibility (can such a scenario happen?), consistency (does it give a convincing picture without contradicting itself or parts of it?) and logical structure (do the developments described in the scenario logically lead to the picture in the year 2020?).

Such carefully elaborated and commonly agreed upon scenarios can influence national and international agendas. An early and striking example were the FES-supported ‘Mont-Fleur scenarios’ for South Africa in 1992, which contributed to changing the economical view of the ANC leadership and consequently lead to a new economic policy of the ANC government. Another example is the FES-conducted ‘Geneva scenarios on global economic government’ in 2008/09, where one scenario included the falling apart of the European Union. At that time, this was considered a very unlikely critical uncertainty; today we are close to such a situation.

This column is part of the European Scenarios Project of the Friedrich-Ebert-Stiftung and Social Europe Journal. The long version of the scenarios paper can be downloaded here.