Macron and Junker’s prescription of ever closer European integration is misguided, writes Evgeny Pudovkin.
The notion of a United States at ease with itself served as one of the central themes during Ronald Raegan’s presidency. “With the idealism and fair play which are the core of our system and our strength”, he said in his inaugural address, “we can have a strong and prosperous America, at peace with itself and the world”.
Margaret Thatcher, Reagan’s foremost ally, always found little sympathy with that notion. For her, there was always something to be dissatisfied with, something to improve upon. It was the virtue of restless striving forward – not of hubristic indolence – which Thatcher espoused – both in her private life and in politics.
On this, if not on much else, the European Commission President Jean-Claude Junker and Emmanuel Macron seem to be in agreement with the former UK Prime Minister. Both, it appears, are incapable of letting Europe be, feeling instead a constant urge to push on towards ever closer union.
“Now that Europe is doing better, people tell me I should not rock the boat, but now is not the time to err on the side of caution”, Junker said in his State of the Union address to the European Parliament. “Today and tomorrow we must patiently, floor by floor, moment by moment, inspiration by inspiration, continue to add new floors to the European House”. Speaking in the University of Sorbonne, Macron shared the sentiment. “I have no red lines – I only have horizons”, he proclaimed with regard to his desire for bringing Europeans closer.
As a demonstration of Thatcherite resolve, these aspirations may be laudable. As the policy blueprint, there is little chance that either Macron’s or Junker’s proposals are workable.
First of all, Macron’s asserted vision of a “sovereign and united” Europe seems incongruous to one that is also “democratic”. According to a survey by the Pew Research Center, 43 per cent of Germans, 39 per cent of Italians and 39 per cent of French people would like to see more powers repatriated from the EU to their respective national assemblies. Meanwhile, only 26 per cent of Germans, 21 per cent of Italians and 34 per cent of French citizens support transferring more responsibility to Brussels. So, when Junker puts forward a stark choice between coming together “around a positive European agenda” and retreating “into our own corners”, most Europeans, it seems, would support the latter option.
But where Junker’s plan errs, Macron has just the right agenda to bring the federalist dream ever closer. To cultivate European sovereignty, he argues, the European Parliament needs to elect its MEPs on pan-EU lists. But could this really be a solution?
Not really. As academic evidence attests (here and here), European Parliamentary elections remain second-order contests. Electorates, in other words, are not involved in party politics at an EU level. Instead, they use their votes as a mid-term referendum on the national government’s record. Introduction of a Spitzenkandidat system, whereby candidates for the Commission presidency are nominated by the EU parties did little to raise people’s interest. So why would pan-European lists be more successful?
National identities remain much stronger than the European one. People are deeply attached to their local culture and politics. The EU already tried overlaying national identities under a single umbrella when they introduced the Constitution in 2005. We know how that story ends.
Another issue raised by Macron and Junker concerns allocating more funds to the supranational institutions. The two have their differences. Junker wants the 26 EU states (Denmark and UK have an opt-out) to adopt the euro, while increasing the overall EU budget. Macron, for his part, is pushing for the ‘multi-speed’ EU. That would allow for the expansion of the Eurozone with closer fiscal integration with other member-states catching-up at their own pace.
In any case, it is unclear why any of those proposals would fly. Take Junker’s call for “doubling European budget capacity”. Is this really what Europe needs? Why is it mandatory to pull resources on the supranational level for investing in, say, digitalisation or environmental programmes? Why are nation-states incapable of enacting this themselves?
Macron’s objective of the Eurozone budgetary union certainly has some merits. Having its own treasury would have made the single currency area more stable, offsetting its member states’ inability to weather shocks via currency depreciation. Yet there are three key problems with Macron’s initiative.
Firstly, and once again, the idea of allocating more funds to a federal centre is not popular. The recent Eurobarometer survey found that majorities in France, Germany, Italy and Belgium oppose any increase in the size of the EU budget. Hostility to fiscal integration is especially pronounced in Berlin. The centre-right Free Democrats (FDP), a possible member of Angela Merkel’s new ruling coalition, said it would block any further steps toward mutualisation of the Eurozone countries’ funds.
Secondly, the need for the single currency area treasury has subsided over the years. The storm of the financial crash has passed. Macroeconomic imbalance between the single currency area, meanwhile, has narrowed in the last few years. As the Financial Times’s Martin Sanbu pointed out, Germany’s trade deficit with the rest of the Eurozone has fallen dramatically since 2011. In France, Macron’s move for internal devaluation via reducing labour costs can be a useful example southern states might choose to follow.
Thirdly, the Eurozone already has its reserve fund. The European Stabilisation Mechanism (ESM) has a financial capacity of €500,000. Moreover, there is room to strengthen it. As the European Parliament report noted, the ESM needs to expand its analytical capacity to detect and prevent future crises in time. This might involve transferring responsibility for supervising fiscal rules from the Commission to the ESM or a new independent agency.
Federalists may take refuge in the fact that a majority of Europeans trust EU institutions more than their national governments (33 per cent against 27 per cent). What they miss, however, is that the EU is popular precisely because it is lean and bureaucratic. Responsibility over fiscal matters and security policy remains in the hands of national governments. Once you put people in Brussels in charge of those problems, you will politicise the Commission, making governance ever more turbulent and divisive.
The truth is, the EU has found its equilibrium. It is unlikely it will need to be fixed anytime soon. David Cameron found this out during negotiations with the EU before the referendum in 2016. But at least you could see why he would do that, pressured by both his electorate and party. Just what put Junker and Macron to their quixotic crusade against ‘nationalism’ is harder to pin down.