Four steps to usher EU out of austerity

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV.COM Ltd.

The transition to a more integrated eurozone within a vaster internal market may usher Europe out of austerity, if applied properly. Berlin has given indications it would not stand in the way. The French Socialist Party must map the way forward at its June convention and act between September’s German elections and the May 2014 European elections, writes Christophe Leclercq.

Christophe Leclercq is the founder of EURACTIV, a media network in 15 countries. He is writing in a personal capacity.

A German version of the commentary can be found on EURACTIV Germany here. A French version is available here.

A more integrated Europe is possible but not fiscal laxity, which the Germans would reject immediately. With this caveat, Germany does not oppose the negotiation of a European growth plan. This would lead to a modernist revision of the European Union’s long-term budget, wanted by the European Parliament, and pave the way for those (in)famous eurobonds that the southern countries and France are calling for.

But politically the task will not be easy. Whoever the winner is of the upcoming elections in Germany, its constitutional tradition will imply framing the debate as a federalist and parliamentarian thrust towards a political union.  Of course, this is a sensitive issue, notably in France… However, a political union would make decision-making more transparent than the backroom deals which were so decried during the time of the “Merkozy” duo.

For the socialists, there is a chance to be seized.

Four steps towards a more integrated union

The subject was largely absent from public debate, until a leak of a Socialist draft in Paris caused an unfortunate political flare up on both sides of the Rhine. But it is now that the seeds of ideas need to be sown for them to have a chance of sprouting in 2014 and bearing fruit in 2015.

Suggestions, from think tanks and the like, will form the first phase. Germany tried to open that debate six months ago with the initiative ‘Ich Will Europa’ (I want Europe), launched by a number of foundations. Then comes the political phase, in the preparation of national and European election campaigns.

The May 2014 European Parliament elections will be the third phase, when the general public gets involved. Finally, politicians will enter into negotiations, handing out that summer the European “top jobs” at the head of the institutions, and in 2015 the union’s priorities could enter the institutions, probably through a treaty change.

Paris can jump on the proposals train

Currently, the European debate is focused on the short term problems of the eurozone – Cyprus most recently – and on the risk of the United Kingdom leaving the EU. These problems mask the true issue, integration of the eurozone over the medium-term.

France must assume part of the leadership in Europe, and not criticise from the sidelines. The Socialist Party (PS) has been divided since the 2005 referendum on the Constitution. Let’s hope that its “Convention on Europe”, on 15 June, will result from a constructive government culture, and not only in a compromise between factions.

We need concrete proposals to motivate the countries concerned, starting with Germany, the main engine of the eurozone. We must therefore prepare minds in Berlin, as George Soros said recently.

The Franco-German marriage has not yet recovered fully from the election of François Hollande. Of course, the PS must work with its German counterpart, the Social Democratic Party (SPD), also within the framework of the Party of European Socialists in the European Parliament. But without forming exclusive camps.

It seems that Angela Merkel, the German chancellor, will win the elections in September. But in Berlin, foreign policy usually falls within the mandate of the ‘junior’ coalition partner, which still could be the liberals, the Greens or indeed the SPD. But in all these cases it is the chancellor’s office which will pitch its line at the May 2014 elections, then to the European institutions and governments.

Busy with the ratification of the banking union in late 2012, Paris has missed the opportunity to mark its influence on the joint letter by the 11 foreign affairs ministers on the Future of Europe, which was led by the German minister Guido Westerwelle. 

Will we also miss the next step? In the past, France was visionary, while Germany listened and decided with the small countries. It would be a shame to reverse definitively these roles.

Negotiations in 2015 for a union of many facets

Here is a hypothesis for intergovernmental negotiations after 2014. What you need is neither a revolution nor a Constitution, but a pragmatic evolution. This will not be a Europe “à la carte” – which many deem unacceptable – nor a “multi-speed Europe”, which implies some countries need to “catch up”, which does not suit the British case.

We must preserve the current union for those who are content with a few improvements. For the UK, we can dress this up as a “focused EU membership”, the belonging to a refocused Europe stabilised around a single market.

Or even a return to the old European Economic Community, excluding any transfer of sovereignty without a referendum. This could be of interest to other countries in the current EU and also among the candidate countries.

Regarding the eurozone, current and future, what is needed is to gather complementary elements of sovereignty together. In short, to create the economic government that the eurozone so lacks and lay the foundations of a more integrated Europe. 

It rests with the socialists, on both side of the Rhine, to better set out the blueprint of this new union. Otherwise, austerity and stagnation will continue.

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