Diagnosis for Europe

Last week heavy-weight EU think-tank, Friends of Europe, has gathered a wide spectrum of acknowledged EU speakers, thinkers and officials, with an aim of diagnosing a state of Europe, which seems is still in trouble, but with some signs of hope. An exercise worth an attention of Dr. House.

The event started with Lithuanian foreign minister Mr Linas Linkevičius, who represented a rotating EU presidency Lithuania, next to the other speakers, such as the President of European Council Herman van Rompuy, Nobel price winner in economics Mr Christpher Pissarides or former economic adviser to the Czech President Vaclav Havel being also famous for his latest bestseller on economics of God and Evil, Mr Tomas Sedlacek.

The picture as presented by the team of organisers, led by Etienne Davignon, was rather gloomy. So there were in fact two options – either disagree and make a case of ever stronger Union, or disagree and say it is even worse.

It could be picked up from Lithuanian foreign minister, that indeed many things require our attention – resources are squeezed, political will not yet there, while on the other hand the demands are even higher as being pressed by global competition and polarised geopolitical landscape. This makes a forthcoming summit on EU Eastern Partnership, which is to be held in Vilnius on 28-29 November, at the epicenter of events. This could be a chance to show that EU vision is there and is working as a pillar of stability and progress for our Eastern neighbours. And indeed, it would be possible to do more by EU (with less) for more reforms from its partners.

On the other hand, the EU can show a lot by its work done throughout last five years – a stability fund for sovereign states, restructuring agendas led by European Semester, and by European Commission with its trio partners (ECB and IMF) for a programme countries, EU regulatory advance with centralized supervision of Member States’ fiscal positions and reinforced conditionality on budget deficits and debt, fast progress on supervision of banks which leads to a Banking Union and reinforced EMU.

Others could say, no, nothing is working, as we are still in austere economic recession, unemployment numbers are too high, confidence too low, leadership not there, while the world is moving fast and not waiting. Good, this would simply prove that EU should not stop there and make progress further. It is worth mentioning in this case a new initiative of Spinelli Group outlining a new draft Treaty of the European Union, called as a Fundamental Law. Indeed, it rings the bell and asks the same question – can we advance further with our prior-to-crisis wheels or are we as good as old? It seems that Spinelli Group of MEP’s have made their mind. Did we make ours?

It seems Germans made their mind in Parliamentary elections by voting for “no change” in Germany, but does that mean “no change” for Europe? It might be not so. The house-keeping in Europe requires some attention and newly re-elected Chancellor of Germany Angela Merkel can make it happen. But before that she has to reassure her counterparts that this must be done for the future of Europe on success of which we all depend, including Germany, Spain, or Greece. Only then the Treaty bargaining exercise could see a deal broker in a five-year horizon.

Meanwhile, the unfinished must be finished, which is in the hands of the President of European Council. We have to finalise the Banking Union and agree on a single resolution mechanism for our banks. We have also to agree on main features for contractual arrangements with Member States to let them finish the implementation of structural reforms. This would then create a solid starting position for the new five-year EU policy cycle, which will commence with European Parliament elections in May 2014. I can predict that this one will be as exciting and bringing real changes.

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