The risks of a visionless Europe

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

Europe's recent crisis-driven reforms have been implemented through a piecemeal approach lacking an overarching vision. This method of policymaking comes along with corresponding risks, which can undermine the success of current efforts, writes Danuta Hübner.

Danuta Hübner is a Polish MEP  (European People's Party) and member of the World Economic Forum’s Global Agenda Council on Europe. She is also a former EU Commissioner in charge of regional policy.

"Looking at the history of European integration, reform efforts did not tend to focus on a 'finalité politique.' For grand change, however, there was always a comprehensive vision, a strategy and an action plan.

This was the case of the free trade area and custom union, of the establishment of the single market and, last but not least, of the euro area.

Europe's recent crisis driven reforms have been implemented through a piecemeal approach lacking an overarching vision. This method of policymaking comes along with corresponding risks, which can undermine the success of current efforts. This is why, today, Europe once again needs a vision.

Without an overarching goal, the Union is susceptible to five major risks:

1. A weakening of the democratic legitimacy of current reforms

In Europe, democracy remains a largely nation-state based phenomenon. Despite an increasing number of federal solutions to crisis-driven reforms, the EU-level democratic legitimacy is largely absent. As a result, the distance between citizens and the decision-making process in Brussels grows.

The lack of a long-term vision is aggravating this problem. As politicians cannot present a comprehensive vision of where Europe is heading, they are unable to get citizens on board and mobilise public opinion in favour of reforms.

Without a vision, the Union loses a major reform endorsement machinery and could ultimately face difficulties in lending its reforms the needed democratic legitimation.

2. Losing oversight of the total impact of reforms

Without a clear vision, current reforms will not add up to a coherent whole.

The reforms of the financial sector provide an example in this sense. Measures taken thus far aimed to address banking sector problems, depositor protection and financial market infrastructure, among others, to fill in policy voids and impose regulation with a view to restoring financial sector stability and preventing future crises.

These reforms however have failed to consistently take on board horizontal issues, cutting across the reforms of the various financial sector components, in particular, differences in economic size of financial institutions, differences in financial sector structure (the home/host issue), differences resulting from membership in the common currency, to name but a few.

Measures which fail to see the big picture are likely to be shrouded in uncertainty and may eventually lead to negative spillovers and single market disintegration.

3. A weakening of the Community method by swinging more and more towards intergovernmental agreements

Europe is currently pursuing both the Community as well as the intergovernmental method in its current decision-making process. Lacking a vision, Europe is likely to reach out more and more towards the intergovernmental method to the detriment of the Community one.

The crisis has already ushered in the European Stability Mechanism (ESM) and the Treaty on Stability, Coordination and Governance (TSCG), both under the auspice of the intergovernmental method. The eurozone continues to be governed through intergovernmental agreements. This ambiguity with regard to the choice of method to be applied, leads to an elevated institutional confusion.

This dualism in policymaking clearly points to a need for Treaty change in order to integrate current and future reforms into the Treaty framework.

4. A strengthening of the emerging euro/non-euro divide

For obvious reasons, the focus of crisis driven reform efforts has been largely on the euro area. This is reflected by recent economic governance and financial sector reforms, as well as by the financial assistance facilities created as a result of the crisis. Europe has also experienced a gradual strengthening of the Eurogroup and this trend is likely to continue over the coming years.

Even though Europe has also witnessed a number of policy measures with a partial openness towards non-euro members (the six-pack of economic governance, the TSCG, and the soon to be established single banking supervisor), safeguarding the position of non-euro members remains a constant struggle based on a case by case approach.

Whenever a new measure is proposed, a debate then emerges on whether non-euro members should be allowed to opt-in. Slowly, such a stance might create further uncertainty about the role of these member states in the Union.   

To address this concern, a type of opt-in blueprint, to be used for future EMU initiatives, could be put forward.

5. The undermining of existing EMU foundations

With the EMU still a work in progress, the prospects of a genuine fiscal and political union remain distant for the time being. Further delaying the completion of the fiscal union however may eventually undermine the existing foundations of the monetary union.

We have already seen that the incomplete union we have today has notoriously failed to secure market confidence.

All these risks make the need for a common vision more pressing than ever. Over the coming months, European leaders will need to grapple with the question of Europe's direction and choose a clear path for reforms. With the European elections around the corner, the time to decide on such a vision is now."

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