A double reality check for the EU

By Admin Aspenia On Jan 19, 2010

For the European Union, the year 2009 was characterized by a double reality check. On the one hand, in fact, the long-awaited entry into force of a new Treaty that had been in the making for almost a decade prompted a sigh of relief among policymakers across the continent: as a consequence, new institutional arrangements and new teams are now in place and waiting to be tested. An entire era of European integration based on recurrent rounds of negotiations among governments, difficult ratification processes and repeated treaty adjustments may indeed have come to a conclusion. The end result is not perfect, of course, and it looks more like a response to past challenges (those of the late 1990s and early 2000s, or “Noughties”) than to the new ones looming large on Europe’s horizon. Still, the architecture designed by the Lisbon Treaty is one the EU will probably live with for a long time, although minor adaptations may be agreed upon in the coming years when new members join the Union (the forthcoming Accession Treaty with Croatia being the first such opportunity).

The EU institutions and their leaders, in other words, will have to make do with what Lisbon offers and make the most of it, while perhaps exploiting its grey areas and bridging norms – such as the so-called passerelles, the various provisions on enhanced cooperation as well as all that is not explicitly forbidden by the treaty – to advance integration and equip the Union with new tools and policies.

For the time being, the main priority is to implement Lisbon effectively and creatively in order to have the new structures fully up and running by the end of 2010: the office of the new President of the European Council (Herman van Rompuy), the European External Action Service supporting the new High Representative for CFSP and Vice-President of the Commission (Cathy Ashton), and the new inter-institutional balance that includes a European Parliament with increased legislative powers.

This transition will then be followed by a period of consolidation and adjustment that may come to a conclusion sometime between 2012 and 2013, when the new Financial Perspectives for next EU budgetary cycle will also have to be agreed upon by the 27 member states. Meanwhile, the focus on internal transformation and adaptation should not distract the EU from its external challenges, which are growing at an exponential rate.

The Copenhagen fiasco

On the other hand, in fact, the end of 2009 was also marked by the setback suffered at the Copenhagen conference – in itself a revealing and sobering experience for the EU, well beyond the specifics of climate change policy.

In terms of outcome, its conclusion was modest and precarious, especially if measured against the Union’s ambitions, expectations and benchmarks: neither did the Union play the leadership role it aimed at, nor were its approaches and proposals taken into adequate consideration. In the end, they were not even mentioned in the final communiqué.

In terms of process, all European participants were visibly marginalized and had to grudgingly subscribe to a final text that had been agreed separately between the United States and the other so-called BASIC countries (Brazil, South Africa, India and especially China). For its part, the Danish presidency was sharply criticized by some participants and contributed to the confusion that marred the entire conference.

The Copenhagen fiasco was bad not only for the EU, of course, as it represented a spectacular case of “ineffective multilateralism”. There was too little technical preparation upstream (as opposed to the 1997 Kyoto conference) and too much political posturing before and during the conference itself (unanimity at 193 proving once again an insurmountable hurdle). There are lessons to be learned for the UN, which risks becoming a talking shop incapable of delivering on policy. But there are also important lessons for the EU: too much time and political energy were spent (as many as three summits were held under the Swedish presidency) trying to agree on a detailed common negotiating position, which was eventually ignored by most participants, and trying to claim leadership “by example”. Arguably, too little time was spent discussing with other key players the possible terms of a more realistic deal and ensuing implementation.

This is a pattern of behavior that is all too familiar to those who have analyzed the EU’s conduct in multilateral fora and bodies. With the exception of trade, where the EU-27 speaks with one voice and concentrates on common interests, Europe often ends up being overrepresented while underperforming. More often than not, too many Europeans sit at the table (and this is not only a charge made by others, it is also an objective assessment in light of the realities of the early 21st century); conversely, there is too little EU, as Europe as a whole struggles to make an impact. At the same time Europeans are too inward-looking and focused on separate national agendas, and too concerned about the US. In today’s world, however, only “l’Union fait la force”, and even the West is not enough if it does not consider (and engage) the Rest.

The challenges ahead

This is where the internal agenda for the forthcoming decade dovetails with the external one.

Take the economy: in the “Teenies”, the EU will not be taken seriously by other global players unless it is capable of modernizing itself and delivering growth rates capable of matching those of at least some of the emerging powers. Herman van Rompuy’s recent remark whereby a Union stuck at a meager 1% risks being confronted with intractable fiscal and social problems domestically, and rapid industrial decline and political irrelevance worldwide.

This is why Europe must add much more substance to the new strategy for growth and jobs to be discussed in the forthcoming months as a follow-up to the (failed) 2000 Lisbon Agenda. Indeed, “Europe 2020” – as it is likely to be branded – may have to strike a much more effective balance between this policy area (where the Commission has virtually no powers) and that of the single market (where instead its competences are considerable). Mario Monti is preparing a report on the latter, which appears increasingly under siege from national governments keen on protecting employment and firms at home.

Yet the agenda for the next decade should be much less defensive – after all, the construction of the single market is incomplete by nature, is a work in progress and a permanent challenge – and combine the preservation of a level-playing field across the EU with targeted incentives for those sectors that struggle to thrive without public investments and trans-national guarantees. This applies for example to cross-border networks (transport, communication, energy transmission grids) as well as green industries – which all lie at the core of possible new growth areas in and around Europe and cannot rely on market forces alone.

Or take the euro itself: the eurozone has withstood the financial crisis surprisingly well, thanks also to the flexible and pragmatic behavior of the European Central Bank. But the rules that govern it are 20 years old and hardly adequate to tackle the new challenges. They are unlikely to be changed formally, of course, not only because they are treaty-based (and anchored also in the ECB statute) but also because, when dealing with international markets, some things are better done than said. Still, along with a higher degree of economic governance and better regulation of financial markets, the rules for joining the eurozone could well be adapted to the new context in order to also strengthen financial and fiscal stability on the continent without hampering growth. After all, there is no shortage of countries willing to join the monetary union – and this speaks for a policy that has successfully outlived its original raison d’etre.

By the same token, enlargement may not be very popular inside the EU these days but is definitely so among its current neighbors. With the exception of Turkey, all actual or potential applicants would be easily manageable by the current Union, but its reluctance and hesitation to commit to their rapid integration weakens the Union’s transformative power abroad and slows down their Europeanization. Even beyond the Balkans, however, the EU must reflect on how to use its economic and political magnetism more effectively even when the integration prospect is either too distant or utterly inconceivable.

Beyond multi-level (in)decision-making

When confronted with virtually all these challenges, however, the EU still suffers from a congenital difficulty that has grown worse over the past decade: in fact, the policy arenas we operate in are increasingly transnational, transatlantic and, above all, global, requiring long-term approaches. By contrast, the political arenas we still operate in are predominantly national or even local, and impose short-term approaches.

When we call for adequate political leadership and lament its lack, we often forget this crude reality. The problem is certainly not unknown to other players, starting with the US (Tip O’Neill used to say that “all politics is local”). But it is particularly constraining on an EU made of 27-plus member states, each with its own political system, electoral cycle and vocal constituencies – plus the tangled web of EU-level decision-making bodies and rules, and minus the commanding authority and legitimacy of an elected leader of the executive.

If the Union wants to effectively address the combined risks of internal gridlock, external irrelevance and overall relative decline, it will have to start tackling this structural problem: for instance, by conferring to old and new Brussels-based bodies and leaders the task of formulating innovative approaches and articulating common interests.

To this end, the Lisbon Treaty represents a necessary but not a sufficient condition: it may help establish a common switchboard (rather than a single telephone number) for Europe, but it does not automatically generate political will or strategic vision. In the forthcoming decade, however, these will be a necessity not just a choice.