OPTIONS FOR A RE-ORIENTATION OF EUROPE

The outcome of the elections has underlined the need for change and reforming the EU to make it more competitive and flexible.

There are basically five main options:

1. Stick with the status quo:  The main underlying source of disenchantment is the recession still gripping some parts of the EU. Given the high level of unemployment, particularly among the young, and the likely slow pace of economic recovery, maintaining the status quo is an option that can be quickly ruled out.

2. Push for further European integration: Some leaders hanker over deeper economic integration within the euro zone . But it is hard to see how ideas like pooling debts and appointing a euro zone finance minister will create jobs and growth. It is even harder to see how governments could secure democratic legitimacy for further centralisation of power  given both the rise of euroscepticism and the hardship caused by the euro crisis.

3. Unravel some of the integration that has already been achieved:  Decentralising power would speak directly to a prime concern of some eurosceptics, that the EU is meddling in things best left to nation states. But what exactly should be decentralised? A popular demand from some sections of the electorate is to roll back the free movement of people within the EU. But this would be a terrible mistake, as well as being far from universally popular.

 4. Reform the EU to boost competitiveness: The priority should be to boost the EU’s competitiveness. The main things to focus on include completing the single market, especially in services where it is currently patchy; signing free trade deals with the United States, Japan and China; and building a modern financial system based more on capital markets than banks  because banks are deleveraging and won’t be able to finance jobs and growth on their own. Reaching consensus on such an agenda will be hard but not impossible. After all, Britain, Scandinavian countries and Eastern European states are traditionally in favour of markets; Germany is lecturing others on the importance of competitiveness; and many crisis-hit countries have been forced to embrace market reforms whether they like it or not. In addition, achieve Europe’s industrial competitiveness through public-private partnerships (PPPs) for aviation, new medicines, energy storage, electronics, bio-technology, energy efficient buildings, green vehicles, factories of the future, the process industry, robotics, photonic, high performance computing, and 5G for the future internet; boosting Europe’s innovative SMEs (they provide two out of every three private sector jobs and they contribute to over half the total value-added created by businesses in the EU);  facilitating access to finance for research and innovation e.g. health, demographic change and wellbeing; food security, sustainable agriculture and forestry, marine and maritime and inland water research, and the bio-economy; secure, clean and efficient energy; smart, green and integrated transport; climate action, environment, resource efficiency and raw materials.

5. Reducing red tape and subsidiarity:  A determined assault on red tape is an important economic priority. The EU has to back out of policy areas best left to nation states. That’s not just because such interference is unpopular or because it imposes unnecessary costs on the economy. It’s also because the EU gets distracted doing things it shouldn’t be doing and then fails to do properly the things it should focus on.

If the EU leaders can agree on their priorities, there will still be the question of:  Who will implement the agenda? The EU needs a crack team to run the European Commission.

In addition a new relationship of cooperation between the union, its institutions and the member states needs to be created, a loyalty between the institutions and the member states that goes beyond what's written in the treaties. A re-orientation of the EU requires national leaders to see their role not only as national but at the same time as European, and to close the existing implementation gap. When decisions are taken by head of state and government they must be followed at national level. A re-orientation of the EU also requires the European Parliament to embrace its role as a decision-maker rather than serve as an echo chamber for demands without regard for their feasibility. A re-orientation of the EU means that the Commission remains the indispensable and reinforced focal point of European politics.