10 EU European Union

Ehnts

Ein Gruppe von ÖkonomInnen hat ein europäisches Manifesto publiziert. Ein Blick darauf zeigt, dass die EU und insbesondere die EU aktuell makroökonomisch dysfunktional sind und es neuer Regeln bedarf. Wie sind diese Regeländerungen einzuschätzen?

Ehnts (2023) Ein Blick auf das europäische Manifesto (Blanchard et al.)

VoxEU

Seven key elements that could form the basis for a new political contract capable of re-establishing trust, strengthening solidarity, boosting the Union’s ability to act in the interests of all its citizens, and enhancing the global role of the EU.

The long-lasting war in Ukraine and the deepening of the conflict between the US and China are the defining moments of our time. A new world order is in the making and, if the EU remains a half-baked construction, it will not play a role in shaping it. The US and China are economic and political areas, the EU is not. A third global actor would make the international system more stable. The EU should strive to give multilateralism a new chance and avoid a pure logic of power in international relations which would make everyone worse off.

EU’s current socioeconomic, institutional, and, ultimately, political model is not sustainable.

Dependence on external demand, the gradual drift away from the technological frontier, the risk of losing the leadership in the fight against climate change, a stagnant demography, and the progressive undermining of social cohesion are calling into question the main tenets of the European economic and social model.

Institutionally, a decision-making process that only produces notable advances during major crises – and is subject to decision-reversal when the pressure abates – is inconsistent with the need to project a coherent stance domestically and globally.

Two persistent conflicts are stretching the political fabric of the EU to the limit: (1) the traditional ‘North-South’ conflict of interest along the solidarity/responsibility dimension; and, compounding this, (2) an ‘East-West’ conflict of values along the integration/national sovereignty dimension.

A useful starting point is identifying the avenues not to be pursued. The denial of the climate challenge, the short-sightedness of a rear-guard mercantilism, the temptations of technological protectionism and withdrawal from international value chains, the sirens of demographic autarchy, and the outsourcing of defence and security would be tantamount to the demise of the EU and its irrelevance in global governance.

Nationalism is contrary to the national interest, that member states’ national sovereignty is ineffective unless it is redefined in terms of European sovereignty, and that the supply of European public goods is crucial to satisfy national demands for economic, social, and political security.

Reaching the technological frontier will require mobilising private and public resources that no member state can do alone. To effectively pursue the green, digital, and artificial intelligence transitions, we need to complete the Banking Union and to operationalise the Capital Markets Union to allocate public and private resources to projects that are ‘long in ideas and short in collaterals’.

A new relationship between the EU and Africa will have to be established.

A new articulation between national policies (horizontal coordination) and between the national and the EU level (vertical coordination). We could label this evolution a ‘gradual and pragmatic federalism’.

With the centralisation of the supply of vaccines, the setting up of the NextGenerationEU recovery plan, the coordination of national energy policies, the ‘Fit for 55’ climate measures, and the joint programmes to support Ukraine, a new EU multilevel governance system has come to the fore. What has emerged is a complex web of relationships between the member states and the Union -[with] strengthening of uncertainty and instability due to reliance on one-off resources - [and] attempt to build ad hoc processes to replace the lack of legal and institutional competences.

EU will need to equip itself with a combination of a stable regulatory framework and adequate budgetary powers. Long- lasting open work streams such as Banking Union and Capital Markets Union should be brought to a positive conclusion, overcoming the sterile debate on risk sharing versus risk reduction. Over two decades after the launch of the euro, the goal of achieving Fiscal Union has to be put on the table.

Flexible ways to allow isolated dissent not to become a veto, whilst at the same time protecting the dissenting member from the effects of the decision.

VoxEU (2023) The European Union at the time of the New Cold War: A Manifesto