How will the trajectory of the European Union be affected by the recent European elections? My positive take on ‘the day after’ the results.
As the dust settles on elections that collective tilt the European political centre of gravity towards the right, what impact can we expect of the trajectory of the European Union? My expectation is that while we shall see changes in the dynamics of politics, both at country level and in the EU parliament, the consequences for the direction of EU policies are likely to remain limited.
The strategic outlook for the European Union is at once daunting and undeniable. Collectively, Europe’s economic strength is eroding. At the onset of the global financial crisis back in 2008, the combined nominal GDP of the eurozone was similar to that of the United States. Today, the US economy is three quarters bigger. Lack of economic dynamism has mixed with demographic ageing and structurally high levels of migration and asylum flows to produce a toxic anti-immigrant sentiment that has infected politics across the European continent.
At the same time, Europe faces truly epochal external challenges. The invasion of Ukraine and the conflict with Russia is an existential battle for values and security of European integration as a project for peace and stability. The great power rivalry between the US and China is unravelling the fabric of international order and trade upon which Europe’s political and economic model was built, while at the same time destabilizing its long standing alliance with the United States. The European Union has become a project at odds with the wider world that has moved away from globalisation and peace.
The overarching political dynamic in Europe is one of collective fear for a dangerous new world where Europe faces multiple adversaries at once. Crises and fear equal in Europe equal European Union development. In the past few years, EU-member states have collectively used the European Union to confront Russia through weaponizing trade and finance, to orchestrate economic security screening and protect Europe against foreign dumping practices, to determine the critical industries and technologies for which Europe seeks a ‘made in Europe’ sovereignty, to federalise migration policies and establish a common border protection, to compete in geopolitical trade and energy diplomacy, to fast track ammunition production and to nurture common defence planning.
This reactive and defensive dynamism has significantly altered the mission and the course of European unification. The European Union has become the de facto crucible of superpower politics in Europe. Brussels is now called upon to compete with Moscow, Beijing and Washington but it is struggling to keep up. It lacks the centralised political power and budget to compete. It cannot match Moscow in organising a war economy for the Ukrainian front, it cannot match Beijing in planning and steering its economy towards strategic goals at scale, and it cannot match Washington in unleashing massive industrial and energy investment through fiscal incentives. But it can achieve all of these better than any given European country on its own. Hence the forward lurch in de facto European federalisation.
As long as these outside pressures and challenges remain, the collective self-interest of European countries to achieve a degree of superpower strength that none can achieve alone is likely to trump political differences within and between individual member states. European countries realise they all need and will all benefit to varying degrees from more combined strategic cohesion and autonomy – in energy, security, defence, industry and technology – vis-à-vis an unrepentant Russia, an ambitious China and a protectionist or unreliable United States.
This shared sense of urgency will raise the bar even higher for the next few years: more common defence and security spending, more European level industrial policy, more European economic competitiveness, more ambition to marshal the European market and European capital to serve European geopolitical needs. Indeed, this is the strategic agenda for the future of the EU that is currently being finalised under the outgoing the Belgian EU-presidency.
None of this will be easy. The main hurdle however, is not politics for or against further EU integration. It is money. With a total budget of little more than 1 percent of EU GDP, the European Union is underfunded and underequipped for its new missions. Finding additional money without raising member state contributions to the bloc will be the main challenge. Allowing member states to spend individually and domestically, as has happened in recent years, does not generate sufficient scale and leads to unwelcome subsidy races within the EU itself. If the EU can find ways to raise and pool private capital, public investment or public debt for common EU priorities, it can accelerate.
Call it the Airbus model: an example of how a common EU-priority can be achieved through a shared strategic cluster that in time becomes a trans-European global champion. This a flexible model where progress does not depend on having all member states commit in the same way to the same goals at the same time. If the EU can multiply this for a number of critical industries and technologies it can advance its strategic agenda while serving its green deal as well. Finding the nexus between autonomy, industry and ecology is where the sweet spot lies.
The answer to the fractious and divided nature of EU-politics lies in flexibility and creativity. The 2022 European Political Community has already succeeded in reconnecting post-Brexit United Kingdom to the EU’s security strategy while enabling closer collaborations with countries such as Moldova and Ukraine well before any formal EU-enlargement. In the same vein, groupings of member states are already emerging around defence planning and a potential European ‘iron dome’ against Russia.
This is not to say that political differences do not exist and will not complicate decision making, as is the case for national democracies as well. But the EU has remarkably found a way to thrive in response to external crises, despite and partially because of polarised domestic democracies. One should expect this dynamic to continue, with all member states where possible, and with more coalitions of the willing where necessary.
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