Report
Charles Grant, Sophia Besch, Ian Bond, Agata Gostyńska-Jakubowska, Camino Mortera-Martinez, Christian Odendahl, John Springford, Simon Tilford Summary The time is ripe for EU reform. The Union has weathered the worst of its multiple crises – on the eurozone, migration and refugees, and Brexit – while economic growth has picked up.
Emmanuel Macron has emerged as a strong leader alongside a re-elected Angela Merkel. Now is the time to revamp the EU so that it improves its economic performance, provides more security and tackles some of the issues that matter to citizens.
This report looks first at the need for new policies, and then at the EU’s structures and institutions.
We examine the interlinked challenges of the neighbourhood policy, migrant flows, the Schengen border and internal security. We suggest how the EU could play a more effective role in tackling the root causes of migration, handling the refugees who arrive in Europe and thwarting terrorists. For example, the EU should work more closely with the source countries of migrants, offering bigger incentives for them to hold on to and take back their people. It should lay the groundwork for setting up reception centres outside the EU where legitimate claims for asylum can be processed, and it will need a workable scheme for distributing those granted the right to enter. The EU should also join up its main security databases so that it can better police its asylum system and keep track of potential terrorists and other criminals.
We then turn to eurozone governance. Despite the eurozone’s improving performance, problems persist, such as high levels of debt and unemployment in some countries, and divergent economic performance. The answer need not be the large-scale centralisation of economic decision-making in EU or eurozone institutions. But important incremental changes are needed, such as strengthening the banking union; amending the European Central Bank’s mandate; and building a framework to ensure stable growth of aggregate demand in the eurozone as a whole. The EU should leave most economic policies to member-states, except when their consequences adversely affect others in the currency union, as is the case for Germany’s current account surplus and the non-performing loans of Italy’s banks.
9 We argue that the EU would have a greater appeal to citizens, especially the young, if it became more involved in several specific areas: Ensuring that EU member-states respect the rule of law; Combating the corruption that plagues some member-states; Establishing rules to prevent large multinational firms avoiding tax; Making it easier for workers to move around within the EU; and Encouraging investment in renewables and the green economy.
The report then looks at the future shape of the EU. There are competing visions: Jean-Claude Juncker wants to see every member take part in every policy, while Emmanuel Macron has suggested several tiers of membership. Given the differing preferences and objectives of the 27, Macron’s more flexible model is more viable in the long term. It would also enable the EU to revive the stalled enlargement process, by offering ‘membership minus’ to suitable countries. As for the neighbourhood policy, which has so far failed to create a ‘ring of friends’ around the EU, Brussels needs to increase its offer – for exam by asking some neighbours to join particular policies. Britain could one day envisage rejoining the outer tiers of a more differentiated EU.
The EU cannot feasibly undertake a major revision of its treaties in the foreseeable future. But it should be able to fix the euro’s problems with new inter-governmental treaties, just for eurozone members. As for the EU’s institutions, the European Commission has lost the trust of some governments because of the perception that it is increasingly dependent on the European Parliament. It should return to an equidistant position between the Council of Ministers and the Parliament. National parliaments should play a greater role in EU governance. It is time to transcend the traditional battle between communautaire and inter-governmental thinking. The EU cannot succeed without both federal institutions and a major role for governments; they must work together.
Conclusion
“I am a strong believer that modern political life must rediscover a sense for symbolism. We need to develop a kind of political heroism. I don’t mean that I want to play the hero. But we need to be amenable once again to creating grand narratives. If you like, post-modernism was the worst thing that could have happened to our democracy.
The idea that you have to deconstruct and destroy all grand narratives is not a good one. Since then, trust has evaporated in everything and everyone….Why do modern democracies refuse to allow their citizens to dream? Why can’t there be such a thing as democratic heroism?” 19
These words, from Macron, are very French, not to say Napoleonic, and will not appeal to all Europeans. But he is right to argue that it should not be left to extremists, such as nativists and jihadists, to offer appealing narratives. The EU certainly needs inspiring messages and symbols.
Whatever the narratives that Macron and other leaders may be able to construct, the EU should focus on outcomes, not processes. Voters want to see that the EU can produce results in areas that they care about.
The Union therefore needs new and joined-up policies for handling the neighbourhood, refugees, borders and internal security. It needs new initiatives to improve eurozone governance and economic growth rates, as well as more effective foreign and defence policies. And it needs to take more action in certain areas that would appeal to citizens – such as boosting the green economy, encouraging labour mobility, tackling corruption in member-states, limiting corporate tax avoidance and enforcing the rule of law across the Union.
An EU that succeeded at some of those tasks, while making a better job of delivering prosperity and security, would stand a good chance of regaining the trust of European voters. To achieve better outcomes, Europe needs more integration in some areas, but not the pursuit of either federalist or inter-governmentalist dogma.
19:Emmanuel Macron, interview in Der Spiegel, October 13th2017.
Macron is right to propose more flexible institutional structures because, as he knows, not everyone will buy the grand narratives that he desires. “Europe is already moving at several speeds, so we should not be afraid to say so and want it!…Let’s embrace the differentiations, the vanguard…No state must be excluded from the process, but no country must be able to block those wanting to make faster progress or forge further ahead.”
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If Macron’s vision wins out against Juncker’s idea of a more uniform EU, there will be positive consequences. First, the EU would be more viable in the long run, since it would be better able to contain the varying and evolving policies and priorities of its members. Second, more flexibility could enable the EU to revive the enlargement process, as Macron acknowledged in his Sorbonne speech; he noted that Balkan enlargement would spread peace and stability across the continent. And third, a more flexible and differentiated EU would be more attractive to the UK, post-Brexit. “In a few years’ time the UK will be able to find its place, if it wishes, in this EU focused on uncompromising values and an effective market…In this revamped, simplified EU that I propose, I cannot imagine that the UK would be unable to find its place.”
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For the past several years, the EU has suffered from weak and insipid leadership, as it has lurched from one crisis to another. But now, against the background of a somewhat improved economic situation, the combination of Macron’s enthusiasm and intellectual creativity, and Merkel’s authority and experience, bodes well for the cause of EU reform.
The Union’s critics have often argued that it is too inflexible to adapt and flourish. Macron, Merkel and other leaders, including those running the EU institutions, must move quickly to prove the critics wrong and prepare to relaunch the Union. The initial signs are quite encouraging.
In his insightful but pessimistic new book on the state of Europe, Ivan Krastev quotes approvingly the German poet Rainer Maria Rilke: “Who speaks of victory? To endure is all.”
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But the EU should do better
than endure. It remains a unique historical experiment, even if the current geopolitical context puts it on the defensive. It must fly the flag for its values, those of the rule of law, human rights, international co-operation and global governance, as well as the combination of market economics and social justice. Although the EU is the leading champion of such values, they are not uniquely European. Europeans have discovered that these principles can deliver political, social and 20:Emmanuel Macron, Sorbonne speech, September 262017.
21: Emmanuel Macron, Sorbonne speech, September 262017.
22:Ivan Krastev, ‘After Europe’, University of Pennsylvania Press, 2017.
economic wellbeing. Many people on other continents are keen for the Union to sort out its problems so that it becomes a more outwardlooking, effective and inspirational entity, better able to take on global responsibilities. A successful relaunch of the EU matters – not only for Europe but also for the cause of liberalism worldwide.
07 November 2017
Source: Centre for European Reform, London
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The Centre for European Reform is a think-tank devoted to making the European Union work better and strengthening its role in the world. The CER is pro-European but not uncritical.
