‘For Europe’ – Finally Some Visions « Euro

‘For Europe’ – Finally Some Visions

October 11, 2012 by

by Ferdi De Ville

Since the outbreak of the euro crisis, many observers, including yours truly, have lamented the lack of vision in the way European leaders have dealt with the eurozone’s problems. While their strategy of muddling through has until now succeeded in preventing the break-up of the euro area, many opinion makers argue that this cannot indefinitely be kept up, let alone that the crisis could be definitively solved through half-baked measures. Such halfway solutions only repeat the mistakes made by the fathers of the euro when they knowingly set up the Economic and Monetary Union (EMU) in an incomplete fashion (for a similar argument regarding financial supervision reforms see here). Moreover, a long-term vision is necessary to convince the financial markets and citizens of, respectively, the irreversibility of the euro and the desirability thereof.

Last week, Guy Verhofstadt and Daniel Cohn-Bendit have published their vision “For Europe!: Manifesto for a post national revolution in Europe”. This is only the latest in a number of visions that have been or are being developed by European policy-makers since European Central Bank President Mario Draghi followed commentators in urging the politicians to spell out a long-term plan.

Shortly after his summons, Draghi together with European Council president Herman Van Rompuy and two other EU presidents (Manuel Barroso from the European Commission and Jean-Claude Juncker from the Eurogroup) started working on a ‘master plan’ for the euro. This roadmap towards a genuine Economic and Monetary Union identified the four building blocks for a stronger EMU: Banking Union, Economic Union, Fiscal Union and Political Union, but did not spell out the details of these reforms. This has already caused confusion and resentment with regard to the one pillar where the European Commission has made progress: on banking union. There is a discussion between especially Germany and the European Commission about the number and size of banks that will be supervised at the supranational level by the ECB, as well as on the interpretation of bank recapitalisation by the ESM that was also agreed at the June Summit.

Not less struggle should be expected on the concrete interpretation and put into practice of economic, fiscal and political union. At the European Council next week (18-19.10.2012) the interim report of the Roadmap will be discussed (the draft conclusions have been leaked here). The most salient ‘new’ proposals, situated in the areas of economic and fiscal union, are for ‘individual contractual arrangements’ between eurozone countries and the European level on reform programmes and the mentioning of fiscal solidarity and an appropriate fiscal budget for the euro area.

Another ‘official’ visionary paper is the final report by the Future of Europe Group, made up of the Foreign Ministers of Austria, Belgium, Denmark, France, Italy, Germany, Luxembourg, the Netherlands, Poland, Portugal and Spain, thus not only representatives of euro area member states but also including an opt-out and a pre-in country. The time-horizon of this report is further away than that of the Van Rompuy roadmap, so it also proposes more profound reforms such as closer cooperation in external action, strengthened cooperation between European and national parliaments, and other reforms to enhance the democratic legitimacy of the Union, inter alia through the nomination of a European top candidate by each political group for the next EP elections. It also contains some ideas on how to improve the efficiency of the EU, as by reforming (the working of) the Commission, as well as the parliamentary system, with a European Parliament with the power to initiate legislation and a second chamber for the member states.

But the most utopian of these recent visions developed by politicians is without doubt Verhofstadt and Cohn-Bendit’s ‘For Europe’ called a ‘realistic utopia’ by the authors themselves. Verhofstadt and Cohn-Bendit give their all to advocate a real ‘Federal Europe’, hitting out at those who are merely defending their national interests during this crisis or, worse, want to use the crisis to (re)allocate competences to the state and regional level and play nationalist or regionalist emotions. It is also an unvarnished swipe at Barroso’s idea of a ‘Federation of Nation States’, yet another vision, which he outlined during his State of the Union. Verhofstadt and Cohn-Bendit claim that the democratic revolution (led by an avant-garde within the European Parliament) is not only a logic conclusion from an analysis of the crisis, but can simply be its single effective solution.

‘For Europe’ is less-detailed than its much shorter variants, insisting chiefly on the need to radically reform the constitutional structure of the EU (if necessary creating a two-speed or -lane Europe), and giving the federal level a substantial fiscal competence and budget. The authors expose themselves to easy criticisms that they simultaneously damn nationalism and advocate a kind of European pride, a post-national nationalism that could very difficultly not be seen as a contradiction. However, given the character of the authors this should be interpreted as provocation, rather than naivety. Verhofstadt and Cohn-Bendit are equally knowingly daredevillish when they propose that the European Parliament should declare itself a Constituante after the 2014 elections and should write a Constitution that is subsequently offered to the European populations on a take-it-or-leave it basis.

While the visionary politicians blame each other for being too timid or other-worldly, their discord is to a large extent explicable by their different positions – la fonction fait l’homme, en effet. More interesting is that on a more distanced reading we note some convergences that were unthinkable only a couple of months ago. We see some proposals returning in each of the visions discussed, most notably the (more) direct election of the President of the European Commission and the need for a eurozone budget that allows automatic redistribution, for example trough a European unemployment insurance scheme. It is now tensely waiting on the final version of the Van Rompuy Report that should be ready in December.

Dr  Ferdi De Ville is assistant professor at the Centre for EU Studies, Department of Political Science, Ghent University where he teaches and writes on economic and monetary union and the euro crisis.

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