Κώστας Μποτόπουλος:Game-changer? The whys, hows and ifs of the “Next Generation EU” package
The “final response” of the European Union to the pandemic, if put into effect according to the Commission proposal, or something closely resembling the Commission proposal, could turn out to be a real qualitative step. It may even qualify as a “leap”, however that term, and that idea, might seem contrary to the founding fathers’ (Monet, Schuman) view of the only way forward for the Union. In reality, this is not about glory; it is about survival –and in that sense the belated European reaction must be seen not as heroic but only as realistic.
A bad start
The full panoplyof measures was surely hard to come. At the beginning of the pandemic, the European Union seemed closer to paralysis than to a political revolution. Member-states closed their borders and took measures unilaterally; Schengen re-became just the name of a village in Luxembourg; the Commission and its President fell silent, and the fact that health is not a common policy and thatthe Cypriot Commissioner for Health was nowhere to be seen did not help either; the first measures (exemptions from the Stability Pact, lifting of the state-aid restrictions) “gave back control” to member-states instead of paving a “European way”.
When that way began tentatively to be traced, the reactions were nowhere near unanimity: hostility from German representatives, and some weeks later from the German Constitutional Court, to the ECB bond-purchasing programme based on quantitative easing (although the PEPP programme was not directly challenged by the Court, its logic was surely affected by the judgment); open acrimony between member-states and their representatives, centered mostly, but not exclusively, around the “Eurobond” idea which has been briefly floated and then unceremoniously sunk by both the Eurogroup and the Council. The Hoekstra-Costa exchange of words after the Dutch Minister of Finance succumbed to the daemon of dividing countries into “good” and “bad”, even in the face of a pandemic, was the culmination of this first period, where bad habits and chacun pour soiseemed to have had the upper hand.
A path-breaking proposal
The political turnaround took place around Germany –and the Constitutional Court decision may have been a catalyst. It is surely not by chance that the German Chancellor reacted very cautiously to the decision and chose to speak about “European solidarity” and to quote Jacques Delors. It is even less fortuitous that a few days later a German-French initiative saw the light, taking up and amplifying the European Commission President’s idea of supplementing emergency measures, both at EU and national level, with a substantial increase, and change of philosophy, of the EU budget. With the hitherto dormant “European axis” openly advocating the supremacy of policy-making over legal technicalities, but also over business as usual, the Commission was emboldened enough to propose the “Next Generation” project.
“Hamiltonian” references abound, although we are still far from, and I strongly doubt if we will ever be close to, a federal union and common taxation. The historic importance of the project, however, is hard to negate or underestimate: its importance lies more in its audacity than in the sums of money involved. At least four of its core elements are unprecedented, potentially game-changing and at the heart of the progressive agenda:
- The fact that there will be some “debt-sharing”, given that the idea is to raise money from the markets, with a common instrument (a “one-off-euro-wide-bond”, since the word “Eurobond” is banished), a common purpose, andon behalf not of sovereigns but of the Union as a whole and using the Union budget as a guarantee,
- The reality of “monetary transfers” within the Union, since the sums allocated to the various member-states will not be analogous to each member-state’s contribution but to the needs of the respective economies and the severity of the hit taken by the lockdowns imposed to stop the pandemic. How to calculate who gets exactly what, as well as the mix between grants to be “gained” through the budget and loans to be repaid after 2028, is another story, which does not alter, but might hamper, the redistribution mechanism,
- The increase of budgetary “own resources” constitutes not only the end of a long-rooted taboo (own resources of the Union are not prohibited by any text but have been turned to “red lines” by many member-states, long before the “frugal four” voiced their dissent) but also the beginning of a “real” European budget –and it is well known that there are can be no policies without budgets. Again the unanimous approval to “tax” non-green emissions, big companies and the giants of technology is a looming battlefield,
- The clear political choices underlying burden-sharing, aid-provision and reform-orientation, i.ea Green Economy and a Digital Transformation, are up to speed with the necessities of our era and the proclamations of the new Commission and constitute the best goals around which to coalesce. Many vested interests and opponents of common European policies will of course not see it that way.
Frau Merkel’s flexible intelligence, boosted by Monsieur Macron’s ambitious convictions, offered the Commission a second chance to redeem itself, as well as the European project, and have turned the game from theory to praxis and from the economy to politics. That would already constitute an important moment, but the real challenge is still ahead. A potential tendency to consider that the game has been won by the Commission proposal and its warm reception by the peoples of Europe would be disastrous. The real danger lies not so much in the various “coalitions of the unwilling” (“frugal four”, Visegrad countries, “net providers” versus “net beneficiaries” of the EU budget, “federalists” versus “inter-governmentalists”) but in losing sight of the political objective. The will, and the necessity, to move together on a clear new path must be cemented before engaging in technical negotiations.
The game can be won only by focusing on what is path-breaking not for its own sake but in order that bigger majorities of citizens may prosper. Principles –serious issues necessitate robust political responses, the “social market economy” is not only fairer but more efficient, common policies constitute the only possible scale for Europe’s, and the world’s, problems to be tackled- must always, in the incoming debate, come before national interests, percentages, horse-trading. The pandemic has hopefully paved the way for such a change of perspective.