Next Commission needs ‘courage’ to redress Europe’s economy, experts say

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Political analysts in Brussels are urging the next European Commission to be bolder and more strategic than it has been so far in proposing ways out of the crisis as it will have to ward off economic nationalism and win over EU governments and citizens.

With the worst economic crisis in the EU’s history, a return to economic nationalism and increasing cynicism about the role of government, the stakes for the incoming EU executive are high, pointed out Professor André Sapir, senior fellow at think-tank Bruegel and a member of current Commission President José Manuel Barroso’s economic policy analysis group. 

In a series of policy memos addressing the next Commission president and his/her future commissioners, Sapir and other Bruegel fellows will call this week for a sound strategy to preserve past EU achievements and prevent possible slippage towards the wider disengagement of EU citizens with the EU project.

A bold strategy for economic revival 

Unlike previous executives, which for a quarter of a century have been defined by flagship achievements – the single market,  the euro, enlargement, climate change and possibly the Lisbon Treaty for the Barroso Commission – the strategy for the next five years lies in maintaining what has been achieved and proposing an economic revival package. 

“At a time when each and every head of state and government will be overwhelmed by domestic problems, you cannot expect them to come up with ideas and initiatives for the collective good,” stressed the memo’s address to the next Commission president. 

“Their consensus is unlikely to provide useful guidance. Boldness will be needed and it is unlikely to come from them,” added Sapir, echoing repeated criticism of key members of Parliament who blamed President Barroso for having been too much in the service of member states, rather than the guardian of the treaties (EURACTIV 13/05/09).  

The package proposed by the scholars includes a programme to restore the sustainability of public finances, blueprints for national recovery and euro-area enlargement, a plan for exiting from exceptional crisis-management action and, finally, a European Growth and Employment programme. 

“Internally the Commission must tackle head on the growing economic and social tensions between individual member states. Externally it must ensure that Europe is coherent rather than a fragmented actor both globally and regionally in its own backyard,” added Sapir. 

Boost growth and jobs, improving EU budget 

The EU will not have any money to pour into the new European Growth and Employment programme for the period after 2010 as stimuli plans have stretched finances, so the next Commission needs to improve the EU budget, the memos propose. 

Since 2005, the EU has been tinkering with the idea of a budget review, but one initially planned for 2009 has been postponed until the entry into force of the Lisbon Treaty. 

“The new economic situation calls for new spending priorities. Postponing changes until the start of the next programming period in 2014 would be as sing of misplaced inflexibility,” noted the analysts, stressing the need to propose a revision of the EU budget effective in 2011. 

Reviewing the Commission’s institutional architecture 

Designing a sound strategy requires leadership and a more policy-oriented rather than process-oriented executive, stressed the think-tank. 

According to Sapir and colleagues, the next president would need to turn the institution into a more effective actor, better equipped to deal with major evolving challenges. 

In practical terms, Breugel’s memo eyes the creation of five new commissioners posts: economic and financial affairs, internal market and industrial affairs, climate change, the knowledge economy, enlargement and neighbourhood policy. 

On the economic side, the analysts think the previous arrangement of splitting economic from financial affairs by including the latter in the single market portfolio has been detrimental to both the Commission and the EU during the crisis. 

“It weakens the Commission internally vis-à-vis finance ministers and externally in international forums,” noted Jean-Pisani Ferry, director of Bruegel. 

Notably, the crisis has exposed fault lines in the current European governance system. At the height of the financial crisis in October 2008, the EU was able to act but only outside its institutional framework, begging for reform of governance to include more policy centralisation in some fields. 

Other suggestions include reforming the civil-servant recruitment procedures in order to benefit from the immense pool of talent that exists in other national and international institutions. 

Better evaluation of regulatory and budgetary measures is also identified as key to redressing the lack of ex-post assessment of policies already in place. 

A new narrative to bring citizens on board 

Criticising the outgoing Commission for having failed to demonstrate what the EU stands for, the analysts stress the need to redefine the EU narrative. 

Barroso’s executive had to backtrack on the Services Directive, proved inconsistent on financial liberalisation and was unable to define what a renewed European social agenda might consist of, reads the memo. 

“Citizens need to know what the raison d’être of the EU is, i.e. what it is about and what it stands for,” noted Sapir, adding that the EU has been seen as a project led by an alliance between free marketers and federalists. 

Another compromise needs to be found that allows citizens of various cultural and political backgrounds to take ownership and identify with Europe. 

According to the scholars, new ideas like former Competition Commissioner Mario Monti’s call for a new balance between liberalisation and redistribution have been postponed. 

“You will need to find words that capture the idea you intend to recommend but, more importantly, you need to reach out to member states, the European Parliament and civil society to build consensus on and elicit support for your proposals,” added the scholars in the memo to the president. 

The selection of a new European Commission, never the simplest of political tasks, will this year be more complex than ever. Politically and institutionally, 2009 contains a whole range of permutations regarding the 'how?', 'when?' and 'who?' of the next EU executive. 

José Manuel Barroso won unanimous backing from EU heads of state and government in June for a second five-year mandate at the head of the European Commission (EURACTIV 19/06/09). 

Their political support was formalised by written procedure on 9 July. However, the re-election of Barroso took a different course in the European Parliament. After consultations mediated by the Swedish EU Presidency had taken place, the EU assembly did not vote on Barroso's re-appointment at its July plenary as expected (EURACTIV 02/07/09). 

This week, Barroso is expected to present his five-year programme to the political groups in the European Parliament (EURACTIV 26/08/09). 

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