Will the year 2017 be a defining moment for the EU?

Speakers: Butikofer Reinhard, Swieboda Pawel, Freudenstein Roland
Moderator: Burns Chris

On the 28th of February, PubAffairs Bruxelles hosted the debate ‘Will the year 2017 be a defining moment for the EU’ with Mr Reinhard Butikofer, MEP (Greens/DE), Mr Pawel Swieboda, Deputy Head of the European Political Strategy Centre (EPSC), Mr Roland Freudenstein, Policy Director of the Wilfried Martens Centre for European Studies. The event was moderated by Chris Burns, longtime journalist and moderator.

Chris Burns introduced the speakers and asked, as a first point of discussion, to what extent the speakers conceived the 2017 as a defining moment.

Mr Swieboda started his intervention by referring to the White Paper on the future of Europe that was going to be published in the coming days. He stated that the Commission’s document on Europe’s future focused on a number of key themes that are strictly connected to the most recent internal and external challenges. He emphasised that the current period is characterised by a seminal shift from times of crisis management to a more pragmatic approach in which the European Union will increasingly focus on the best way to shape its functioning in order to succeed. He added that Europe’s main concern is no longer whether its competences should be extended or reduced, but how the EU as a whole should effectively redefine them. Mr Butikofer began by explaining that this year could possibly foster Europe to improve in several domains. On a political level, he argued, new balances will need to be established in order to avoid internal fragmentation, while on an a global level, finding new alliances or new forms of alliances would strengthen Europe in facing the rising of external threats. Lastly, he supported the idea of regaining the old crisis narrative, according to which EU member states should be able to take advantage from adverse moments to find long-term common solutions. Mr Freudenstein claimed that instead of asking how pivotal 2017 would become, we’d better ask what we can do to improve the Union.  He continued by stating that great opportunities may be seized in the years to come, but the outcomes will depend on Europe’s ability to create sustainable growth, to address people’s fears as well as to respond to the nationalist and populist threats.

A second point of discussion concerned the Eurozone, with special regard to the question emerging from the Stability and Growth Pact and the so-called ‘Juncker Plan’.

Mr Butikofer argued that there should be a paradigm shift that would allow Europe to switch from austerity to investment-based policies, the latter being boosted mainly by private enterprises once the government has created the right framework conditions for them. Furthermore, Mr Butikofer added that the shift should also help highly indebted countries to move beyond the crisis. In this regard, by taking Greece as an example, he stated that requiring a big primary surplus every year for the years to come is counterproductive. In addition, the speaker stated that the Juncker’s flagship initiative should have been restricted to three purposes only, namely infrastructure, IT and energy efficiency in order to have a greater impact on competitiveness and investment facilitation. On the same question, Mr Freudenstein explained that, with regard to the European stability mechanisms and the need to create more jobs, the solution is neither suspending nor loosening the Stability Pact, but keeping it unchanged in a more sustainable manner. In his opinion, given that jobs cannot be created, at least sustainably, by governments’ spending, but rather by consumers’ demand and entrepreneurs’ decisions, the optimal policy should not entail more government intervention. Mr Freudenstein also argued that doubling and tripling the volume of the Juncker Plan would not help, but that a renewed focus on fiscal consolidation, cost-effective innovation and cutting red tape would be much more promising. With regard to the same matters, Mr Swieboda maintained that the Juncker Plan was meant to address at least one third of Europe’s investment gap. Moreover, he expressed his optimism as a valuable amount of jobs have been created in Europe since the last crisis. In the speaker’s opinion, this fact testifies not only that job creation in Europe is possible, but also that the EU has viable solutions and tools that other parts of the world do not have, such as for example the possibility of providing financial services through passporting. Furthermore, although SMEs financing is an issue to be further discussed within EU institutions, Mr Swieboda argued that the Juncker Plan enhanced a pro-growth approach and fostered entrepreneurial opportunities for SMEs as well.

A third point of discussion concerned the political fragmentation within Europe and the competences of national parliaments in response to the rising of populist and nationalist anti-European streams.

Mr Swieboda began by explaining that the phenomenon that is characterising western democracies shows the rise of fragmentation and polarisation and affects the possibility to create consensus. He emphasised the fact that governments are required to keep their mutual commitment to the EU and implement in their countries what they have agreed upon at European level. The right approach, he argued, lies in adopting a humbler attitude based on both a listening mode and on extending the scope of the discussion to issues of interest for a wider portion of citizens. Indeed, by bringing forward issues of daily interest for EU citizens the EU should be able to gain further support. A second way to better face problems, according to Mr Swieboda, is to foster the sense of partnership between institutions by adding to the Brussels’ usual activities of monitoring and pinpointing wrongdoings a new special sensitivity towards member states’ objectives and visions of the future. Mr Butikofer noticed a lack of clearness in the way national governments often tackle their problems. In fact, he stated that the burden of dealing with the difficult national situations of some European countries has mostly been on the Commission and on the Parliament, so far. However, few measures have already been adopted in order to strengthen the link between member states and the European Institutions, such as First Vice-President Timmermans’ proposal in support of an enhanced exchange between member countries and the Council. Moreover, the speaker advised that in this important moment when European solidarity values are at stake, the best way to address the issues emerging from the different member states is to start from the national level, namely by involving the national parties all around Europe and following the model of countries such as Denmark, Ireland or Sweden, where the legislative branches of government have strengthened the democratic involvement and the understanding of the public on the real nature of the issues addressed at European level by discussing within the national parliament before representing their country at the EU Council. In addition, Mr Butikofer referred to another specific proposal, included in the negotiations with the UK before the referendum, which consisted of allowing the parliaments that represented the 55% of citizens to stop EU legislation that is deemed damaging their legitimate interests. On the same question, Mr Freudenstein suggested three different approaches to be adopted in order to successfully overcome fragmentation in Europe. Firstly, he stated that it is up to the political parties to take the fears of people seriously. Secondly, he stated that greater effort should be put on delivery. This last necessary feature of EU polices implies faster decision-making and better communication. Thirdly, the speaker, although he agreed on involving national parliaments as representatives of their national interests, warned that by fostering their involvement at European level, the process might slow down.

A fourth point of discussion concerned the future relationships between the US and the EU, in particular the extent to which the new American administration will affect Europe in a number of issues, such as the defence programme, the upcoming European elections and the environmental policy.

Mr Swieboda expressed his concern on the effect of Trump’s new stances, especially in the field of security defence. He stated that the right approach to face Trump’s policy is neither to embrace its transactional policy, which is against the European principles, nor to be confrontational, since the character of the European economy is open and a confrontational approach would expose the EU to risks. On the contrary, he highlighted the need for the European Union to be pragmatic about Trump and to strengthen the core values that lie in the EU foundation. Mr Butikofer emphasised the threat that the Trump administration represents for the European Union not only in view of the upcoming European national elections, but also with regard to the new defence policy issues as the new US government represents a major change compared to the past American governments. In this regard, he stressed the need for Europe to come together more energetically, in order to counter the changes of the international context. Moreover, in sight of the next European elections, Mr Butikofer fears that the Trumps’ support for a transactional approach, which is against the EU values of solidarity, could also encourage the rise of the anti-EU sentiment among voters. Finally, Mr Butikofer emphasised that the Trump’s administration objective not to comply with the Paris Agreement does not prevent single US states to adopt different policies on this very matter or to establish partnerships with the European Union. Whereas, Mr Freudenstein refrained from promoting a counteractive approach to these challenges, since, in his opinion, the Trump effect on the European right is going to be weaker than it is now assumed it will be. Moreover, he objected to the assumption that the current American administration is an enemy to the European Union as the US will rather judge Europe by both the extent to which the old continent can be transactional with Washington and Europe’s ability to propose concrete solutions.

The final part of the debate and the Q&A session, also covered the following issues: the difficulties in delivering the messages out of the “Brussels bubble”, the psychological impact of the populist streams on the member states, the transfer of sovereignty from the European Institutions to the member states on a number of policies.

Do you want to go further into the issues discussed in our debate? Check our list of selected sources which we have provided for you

The Five Presidents’ Report: Completing Europe’s Economic and Monetary Union

State of the Union Address 2016: Towards a better Europe – a Europe that protects, empowers and defends

The European Union First, Javier Solana

The significance of the Treaty of Rome, The Economist

White Paper on the future of Europe: reflections and scenarios for the EU27

Speech by President Juncker – Quo vadis Europa at 27? Avenues for a united future at 27

Future of the EU: MEPs discuss five scenarios set out by Jean-Claude Juncker

The Role of National Parliaments in the European Union, Report, House of Lords

The Trump Presidency: Policy Outlook, Scenarios and Possible Implications for the EU, European Political Strategy Centre

The Eurozone is Still Vulnerable, Project Syndicate

The European Union at Sixty, by F. Romero European University Institute

E.U. Leaders to Back Multi-Speed Europe at Summit, Global Handelsblatt

Wilfried Martens Centre for European Studies – Blog