Editor's note
International Internet Magazine. Baltic States news & analytics
Tuesday, 19.03.2024, 14:24
EU states’ problems through modern European challenges
Present EU’s critical stage is a reflection of accumulated
European integration problems: when started in 1950s, the then European
Economic Community was a perfect structure of the issues to deal with (until
1970s): with promises of peaceful coexistence, free trade and economic growth. And
so it was for a couple of decades.
However, during 1980s and 1990s (and most drastically in the new XXI
century) the initial administrative methods (quite adequate to the 6 “founding Community’s
fathers”) would have to be applied to almost 5 times (!) bigger
“community” called the “union”. Mildly said, it did not fit into a new
globalised world (the process called “globalization”) and increasingly powerful
financial capitalist’s system, becoming increasingly global too.
Modern
challenges within and outside the present EU need to get a proper understanding
within the modern EU policies and integration process differently affecting so
varied EU member states…
Quite remarkable: immediately after the Brexit vote, the six founding countries of the original European Economic Community (EEC) – Belgium, France, Germany, Italy, Luxembourg, and the Netherlands – gathered to discuss developmental perspectives; other 21 members, probably did not count…
Modern perspective in EU’s
Since the start of the new Commission (October 2014), the EU’s executive institutions has made a list of vital directions, so-called “political guidance” in the EU’s “path to progress”.
These are: Jobs, Growth and Investment, Digital Single Market, Energy Union and Climate, Internal Market, Economic and Monetary Union (EMU), EU-US Free Trade agreement, Justice and Fundamental Rights, Migration, EU as a Global Actor, and Democratic Changes. See more on: http://ec.europa.eu/index_en.htm
No
doubt, all these sphere are important; the question is which of them, to what extent
and for what EU member states? There is still a big gap among EU members: both
in the growth patterns and in models of development. As is known, these models
(at least four presently in Europe) differ drastically! One of the most
progressive is so-called Nordic model, at least in the sense of EU’s “social
market economy” pattern.
Let’s
take the first political direction (jobs, growth & investment); the EU currently
faces the challenge of labour market segmentation, which can result in a
divided “EU labour landscape”, with very different experiences and perceptions
of European integration.
Dissatisfaction is already arising from a
perceived limitation in social mobility due to, among other factors, labour
market segmentation, and a resultant disenchantment with the political
institutions that manage the drivers of change, may be one of the biggest
challenges that Europe currently faces. The answers to these challenges may
well be critical to defining the EU’s future.
See more in: http://www.eurofound.europa.eu/news/newsroom/48174.
Another EU’s “guidance”, supposedly having universal importance for all EU member states, is the Economic and Monetary Union (EMU); it needs a special attention.
Vital issue to re-assess
The EU economic and monetary union (EMU) is being attacked by a growing national egoism and collective irrationality in the last decade. While EMU’s issues have pushed national economies into the frontline in “union’s” integration, they did not escape criticism.
For
example, not all states follow EMU’s guidance: only four states stick to the
vital requirement of 60% public debt-GDP ratio; several states the EMU rule of
3% GDP deficit (Spain and Portugal have been recently reminded to be fined).
Then,
another aspect –changing national models in favor of the “union’s” one; for
example, German economic model has not changed during the last couple of
decades. But all other EU states are subject to the same kind of reforms, with
the same intensity being supported by the EU’s “united” policies.
It is to be said, that nothing is wrong with the German economic model, in particular as it concerns industrial development and social protection. However, it would be a disaster of a European dimension if all other states in the eurozone would accept the German pattern/model with wage deflation and enormous trade surplus of about 8 % of GDP.
It
would be impossible to absorb that developmental “surplus” for Europe … Power
elites wisely do not tell the electorate that German high economic potential is
built at the expense of its neighbors.
In fact, two main levels of integration exist presently in the European Union: the “single market” integration and states’ participation in the Economic and Monetary Union, EMU.
Besides EU-28, there are other European states, so-called EEA states, which do not belong to the EU but the rules of the internal market apply to them; though they do not take part in decision-making and voting (even though they can give an opinion).
These States enjoy the advantages of the free movement of goods, people, services and capital. In exchange they have to apply the corresponding rules (so-called the “community acquis”) except those which affect tax, agriculture and fisheries policies, as well as the trade policy in regard of third countries.
The initial EEA’s Agreement was signed on 2nd of May 1992, just before the first enlargement took place with the UK, Ireland and Denmark making the Comminity-6 into Community-9.
Reforming EMU
Most
of the reforming issues are dealing with the member states’ economy. Hence, the
EU’s economic policy is based on close coordination of
member states policies with “common European objectives” and principles
of open market economy with free competition (art. 119 TFEU).
Good
words, which particularly meant: single currency, single monetary &
exchange-rate policies (to maintain price stability). Member states’ activities
shall entail compliance with such guiding principles as: stable prices,
sound public finances & monetary conditions, as well as sustainable balance
of payments.
Broad guidelines for the member states economic policies are described in art 121 TFEU: “General EU objectives are defined in art 3 TEU, e.g. establishing EMU “whose currency is euro” (point 4).Hence, present division between 19 euro-zone states and 9 (soon 8, after Brexit) so-called the “rest” of the EU…
Reforms are in the EU’s agenda: two years (the whole of 2015 and presently, in 2016) have been devoted to discussions and adopting measures with the following main ideas: establishing National Competitiveness Boards & Advisory European Fiscal Board (both in October 2015); and additional measures for the European Semester (in force since 2013); see more on: http://ec.europa.eu/priorities/deeper-and-fairer-economic-and-monetary-union_en
Supervisory mechanisms
Already in January 2011, it was clear that further
integration would be impossible without a kind of “supervision” over national
finances and economy planning. Thus three European supervisory authorities
came into being:
= the European Banking Authority (EBA), which deals with bank supervision, including the supervision of the recapitalisation of banks;
= the European Securities and Markets Authority (ESMA), which deals with the supervision of capital markets;
= and the European Insurance and Occupational
Pensions Authority (EIOPA), which deals with insurance supervision.
Euro Summit (in October 2014, at the start of the new Commission) underlined that closer coordination of economic policies is essential to ensure the EMU’s smooth functioning. This “smooth functioning” is deemed to develop through concrete mechanisms for stronger economic policy coordination, convergence and solidarity.
Next steps in better economic governance in
the euro area have been
already described in another guiding document “Completing Europe's
Economic and Monetary Union”, so-called Five Presidents Report: by Jean-Claude
Juncker, Donald Tusk, Jeroen Dijsselbloem, Mario Draghi and Martin
Schulz in June 2015. See
source in:
http://ec.europa.eu/priorities/deeper-and-fairer-economic-and-monetary-union_en
Commission President, Jean-Claude Juncker mentioned in July 2016, that the Commission’s “leitmotif is to be big on big, modest and timid on smaller issues”.
See: http://europa.eu/rapid/press-release_SPEECH-16-2412_en.htm?locale=en.
However,
EU’s priority plans for the years ahead contain a detailed guidance:
• Stage 1 covering first two years (up to 2017);
•
Stage 2 to complete EMU
will begin in 2017 based on a White Paper to be published by the Commission at
the beginning of 2017.
This White Paper will determine DG ECFIN's operational priorities.
Source: http://ec.europa.eu/dgs/economy_finance/organisation/strategic_plan_en.pdf
Final remark
The EU’s perspective lies in Europe of “thinkers and
traders”: contributing to this, the member states can in the coming decades transform
Europe “into a hub of intellectual progress and innovation that created the
West and changed the course of humanity”, as Carl Bildt argued recently. See: http://www.ecfr.eu/article/commentary_more_europe_less_brussels_7079.
The European project can be renewed only if modern politicians can move away from the limited nation-inspired community’s vision, and demonstrate by concrete deeds that they are strongly for “ever closer Union”, as the present Treaty postulates. But that needs a different mindset seeing the European community as a single entity. Every part of Europe shall be important in this process, however without nationalistic preferences. May be the present nation-state structures in the EU formation are outdated: the single market has already stripped this structure of several vital national sovereignty symbols… So, the “union” will work if only all its members (not necessary in the form of states, may be just regions) are regarded as equals in determining an agreed common future.
More than that, gradual erosion of national powers in an
increasingly interdependent world has made it necessary for member states to
forge, by agreement, their own “common” solutions to common problems. Common
solutions require inclusion and a spirit of cooperation: in this way
“cooperative members” are driven to the “union of separatist” with national
interests behind. However, the problem
is not to make a “post-Brexit EU” a “community” that is much more closely
linked to existing political and economic realities to its members, but to make
it more “European”. Only sticking to “less-Brussels and more Europe” paradigm
will make the future EU both to survive and thrive!
When the EU-27 “remaining” states gather in Bratislava this September, they should begin to re-think the “union” from a different standpoint…
It is mostly for those involved in the European studies that have to tackle the ever-growing problems around EU’s administration and management. Teaching the EU integration “project” at all levels is becoming a challenging endeavor, as positive and negative project’s aspects are closely intervened. Instructors have to get “safely” through the waves of reformist ideology, “national patriotism”, globalization and sacrificed sovereignty (to name a few) if, of course, we stick to the progressive future EU’s picture. More than ever, EU studies need quality teaching…