Eurocrats and politicians offer different recipes for Europe’s growth

The Irish Presidency has presented its proposal for the European Union budget, characterised by ‘business as usual’. Whilst it is true that it brings the multiannual financial framework to €1,622 billion – 30 per cent more than for the 2021–2027 period – it nevertheless reduces the Commission’s requests by 8 per cent, a cut of €141 billion. At last week’s European Council, the usual dance began: Germany, the Netherlands, Austria, Sweden and Denmark are calling for far more substantial savings. Meanwhile, the European Parliament has rejected the proposal, taking the opposite stance. Ants versus grasshoppers – the same old story.

Worse still: the cuts affect competitiveness, research and security, whilst funding for agriculture – to which 30 per cent of the budget is allocated – is essentially spared, even though the primary sector accounts for only 1.2 per cent of the Union’s gross domestic product. Are competitiveness, research and security not the priorities also highlighted in the Draghi report? It is all predictable, everything as before, whilst nothing is the same as before now that Donald Trump is opening the doors to Vladimir Putin and abandoning not only Ukraine but the EU as well. “We will defend Kyiv for two years,” proclaims Ursula von der Leyen: fine, but then that budget needs to be redrafted, at the very least. And not just the budget. It is time to return to the fundamentals and re-examine them. But how?

The Napolitano Foundation, in collaboration with Luiss, has brought together academics and key figures from Europe’s decades-long journey for two days of debate, opened by President Walter Veltroni. Some of the speakers included: Paolo Gentiloni, Sylvie Goulard, Giorgio Mulè, Stefano Bonaccini, Raffaele Fitto, Giuliano Amato, Mario Monti, Gaetano Quagliariello, Giovanni Orsina, Sergio Fabbrini and Guido Crosetto. Anyone wishing to listen to the full recording can do so on Radio Radicale; we have picked out the highlights, starting with the most significant development of recent years, when the primacy of politics burst onto the scene with all its disruptive force and upended the ‘functionalist approach’ that had characterised the growth and expansion of the EU – an approach in which the economy took precedence and the Eurocrats had been in the driving seat.

A method that had proved an unquestionable success: the euro, which very few truly doubted. The paradox is that the march towards the euro began immediately after the fall of the Berlin Wall, and the Maastricht Treaty was approved just as the Soviet Union was imploding (the greatest geopolitical tragedy of the 20th century, according to Putin). In short, the balances that had held post-war Europe together were crumbling, and Brussels responded with the single currency. Too little, too late? This is a somewhat unfair accusation, because support for German unification was a political decision of the highest order.

The same can be said of the (misguided) decision to accept the forcible break-up of Yugoslavia (and the unilateral secession of Slovenia and Croatia), which triggered the first wars on European soil – brutal conflicts involving ethnic cleansing, if not genocide. An attempt was made to assume a political role through the European Constitution, but, after it was rejected in referendums by France and the Netherlands, the EU was forced to fall back on less binding rules and regulations.

The response to the pandemic fared better; in that instance, the EU made a bold federalist choice by resorting to joint debt to finance NextGenerationEU. It was a high point from which it then fell rapidly – perhaps too rapidly – reverting to the old intergovernmental practice with which the Commission led by Ursula von der Leyen felt most comfortable. This practice risks causing maximum fragmentation between individual countries – and even within them – as national-populism sweeps through.

The EU is therefore facing a crucial turning point, hit by the collapse of the transatlantic pact that had allowed it to follow its own path under the protection of the American umbrella, whilst at the same time being undermined at its very foundations by the wave of sovereignty movements. During the two days of debate at the Napolitano Foundation, there was consensus on the diagnosis, but not so much on the prognosis. A consensus emerged on the need to move beyond the requirement for unanimous voting, which grants a veto even to the smallest of the Member States. But here one immediately falls into a vicious circle (to overcome unanimity, unanimity is required) which triggers others.

It is the government of a founding member state such as Italy that is defending the old system of governance at the very moment it wishes to thoroughly review key energy policy decisions, knowing full well that it will never achieve unanimity on this matter. And why not ‘variable geometries’ or ‘à la carte Europe’, as it is called, without revising the treaties, by using the system of reinforced majorities (Draghi’s proposal)? Here too, there is no shortage of obstacles and contradictions. On defence, we could press ahead with those who are on board, as we did with the currency. But what happens if the country best prepared of all refuses to go along with it (nuclear France, for example, perhaps governed by Marine Le Pen)? Is there a leader in Europe like Helmut Kohl, who was able to make his fellow countrymen accept giving up the mark and the unification tax? In this case too, the ball is back in the politicians’ court from the Eurocrats. And that’s a whole different story.