Now, it is up to Juncker to make the EU more efficient, effective and accountable


Picture of Guy Verhofstadt
Guy Verhofstadt

Minister of State, Co-Chair of the Conference on the Future of Europe, former Belgian prime minister and Trustee of Friends of Europe

If any one thing is certain in the wake of the European elections, it is that the new European Parliament will be rowdier, with more heated debates as tensions rise between clashing supporters and haters of European integration. The elections saw the widely predicted gains for eurosceptics, so there are now some 170 self-styled eurosceptics and europhobes among the Parliament’s right-wingers, plus a further 52 critics of Europe’s economically liberal direction on the left, in total some 220 or 29% of the newly-elected or re-elected MEPs.

Mainstream parties were scapegoats for the tough austerity measures imposed in response to the debt crisis that had threatened the eurozone’s stability. There were notable exceptions on both sides, but there’s no denying that many Europeans have been falling out of love with Europe. Reversing this trend has to be one of the major challenges facing those at the helm of the EU over the next five years.

Eurosceptics, and those who voted for them, are right in one sense; Europe isn’t working well. They are wrong, though, to think that a return to nationalism and hiding behind Europe’s national borders will protect citizens from global political and economic forces.

The disjointed and belated response to the sovereign debt crisis and ensuing impact on the economy and society, in particular on the eurozone’s southern periphery, led to heightened antipathy towards the EU, which rightly or wrongly was perceived as the instigator of tough austerity measures and tax-payer funded bailouts of under-capitalised banks. The medicine was necessary, but could have been administered more sensitively. Despite signs that the worst of the crisis is now behind us, the effects on much of the European economy remain real; unemployment is stubbornly high – unacceptably so amongst young people with one in four of them out of work. SMEs, which account for two thirds of all new jobs created, are still finding it difficult to access finance to fund investment, and labour mobility within the EU is four times lower than in the U.S. The European Union cannot create jobs per se but it can do much to lay stronger foundations for growth and stability that will allow businesses to flourish and employment levels to rise.

There’s the need to make the most of what I call the ‘European dividend’ – that is the benefit of economies of scale by removing remaining single market obstacles to the free movement of goods, capital, services and people

I and the ALDE political group in the Parliament that I lead, backed the nomination of Jean-Claude Juncker in July because the political programme he presented to MEPs reflected our own priorities for reform. As a strong supporter of the so-called Spitzenkandidat process, in which I too participated, the approval of Mr. Juncker is a major and historic step towards a more political and democratic EU in which the people of Europe have a say on who will lead the main executive institution.

The system isn’t perfect, and Europe is not yet a fully-developed polity, but an important precedent has been set and a transnational debate on Europe’s future direction and priorities took place between candidates from different parties ahead of the European Parliament elections. The process needs to be consolidated and embraced by all member states and all the major political parties if it is to be truly representative, and in future all candidates should present themselves on the ballot papers for the parliament, as is the case with national parliamentary systems.

There’s a growing consensus on what measures are required, but speaking for myself my priorities are fourfold. First, there’s the need to make the most of what I call the ‘European dividend’ – that is the benefit of economies of scale by removing remaining single market obstacles to the free movement of goods, capital, services and people. The EU should launch a ‘Delors II’ style integration drive in three key areas of our economy – capital markets, energy and digital services – which are central to our competitiveness and re-industrialisation. It is illogical that individuals or small businesses in a single market should be unable to use collateral or assets in one country to access capital or loans in another. Private capital markets should be made to work better and speed our economic recovery,  rather than relying on traditional bank loans which often come with too many conditions or too high interest rates to encourage investments.

Second, we need to strengthen our economic governance. A number of important measures have been put in place over the last few years, not least a single European bank supervisor with a resolution mechanism and fund to wind-up failing financial institutions. But it is as yet untested and incomplete. The decision-making mechanisms appear overly complex for quick and decisive action over the course of a weekend, while the fund won’t be fully operational for another few years. The commendable European Commission blueprint of 2012 for a deep and genuine EMU should be dusted off and concrete proposals brought forward for completing the medium to long-term ambitions of a full banking union with a comprehensive debt-management mechanism.

Austerity cannot be an end in itself, and must be complemented by a serious plan for investment in growth as part of a twin-track approach

There can be no going back to the lax fiscal and monetary policies of the past which allowed public debts to accrue to unsustainable levels. But equally, austerity cannot be an end in itself, and must be complemented by a serious plan for investment in growth as part of a twin-track approach. Jean-Claude Juncker recognised this in his commitments to the European Parliament in July when he promised to mobilise €300bn for growth and jobs. We need to leverage both public and private capital in this endeavour through the EU budget and also through the European Investment Bank and the financial markets.

Third, Europe needs to show its human face – that it is more than a purely economic or monetary union, but also a political and social union that shares, and is prepared to defend, commonly-held fundamental values of freedom, non-discrimination and respect for the rule of law. These principles are rightly a condition for candidate countries and they should be regularly enforced amongst existing member states. The commission, as guardian of the treaties and acting through a commissioner with specific responsibility for upholding fundamental rights, is the most impartial body to do this. It also possesses the tools to bring any recalcitrant member states to heel. But that will require more explicit powers and measured sanctions than just the ‘nuclear option’ of suspending voting rights laid out in article 7 of the treaty.

Last of all, the commission must acknowledge the many calls for reform through its internal organisation and setting of priorities. If we are honest about it, there’s no need for 28 policy portfolios for communities if the aim is to focus on where the EU can bring added value on the big things while relinquishing the small things better left to the national level. We should be more serious and systematic about applying the principle of subsidiarity, and prepared to listen to national parliaments so that they take ownership of more policies. By doing so, the EU would avoid many of the misunderstandings that have given rise to much negative publicity.

There’s a lot to be done to make the EU more efficient, more effective and more accountable, and it’s up to the new commission president, with the backing of the broad political majority in the new European Parliament, to deliver. The disparate forces of populists, sceptics, europhobes and fascists who have entered the parliament are set on a wrecking agenda rather than building a better, stronger Europe. They prefer to grandstand in public debates than work on detailed legislation, and it’s largely because of that the Liberals and Democrats of ALDE have agreed to be part of a broad and stable majority for the next five years to ensure that. Despite the noisy confrontations that can be expected on the floor of the House, we can still get things done to make Europe work for its citizens.

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