7th May 2021

Top-level discussion glum on state of EU

A clutch of academics, policy-makers and politicians gathered in Brussels on Wednesday (2 October) for a glum and angst-ridden debate on the state of the European Union.

The discussion contained many of the perennial internal and external complaints about the EU - that it lacks charismatic leaders and a single external voice - coupled with more recent doubts about the threat of prolonged economic stagnation and, with EU elections next year, waning popular support.

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Christopher Pissarides, a nobel prize winner in economics, said the answer both to restoring Europe's external standing in the world and its own self-confidence lies with the economy.

"We should get the economy back to growth," he said, adding that a "rallying call" was needed to restore the euro’s credibility.

"Even more importantly we need one that will restore trust between the member countries. Without trust between us, we are not going to influence the rest of the world.”

But he questioned whether there are any European leaders with "the guts and the bravery to take this on."

Etienne Davignon, president of Friends of Europe think tank, hosting the debate, said the problem Europe faces is inspiring “hope” in people.

“Young people in university are convinced that there future will not be as good as that of their parents,” he said.

Long term stagnation?

Minouche Shafik, deputy managing director of the International Monetary Fund, said that Europe has done a “huge amount” to build the architecture for crisis management in the eurozone.

But she added: “the biggest risk facing Europe today is a long period of economic stagnation. A long period of very slow growth.”

She said this would occur if businesses in peripheral countries continue to face huge interest rates; if high debt levels mean consumers are reluctant to spend, and if a generation's productive capacity is “permanently damaged” by longterm unemployment.

Europe’s stagnant economy and record-high joblessness was seen as affecting its standing abroad too.

“Soft power is only good if backed by economic power,” said one speaker, referring to the EU traditional way seeking foreign policy objectives through cooperation and aid.

Nick Westcott, managing director for Africa in the EU's diplomatic service, said "you are only as strong as your economy."

EU Council President Herman Van Rompuy chose to view the EU glass as half full, rather than half empty.

He said that the EU would emerge more "resilient" from the crisis and spoke of the need for an "ever closer eurozone."

"We are not living the nationalisation of European politics, no, we see the Europeanisation of national politics. Europe is not a soft idea anymore but a firm reality. "

But he admitted that voters in next year's European elections are set to punish EU leaders.

"It is not an easy road, but one that will reward us in time. If not yet by next year's voters, then surely by later ones," he said.

Others were much more pessimistic.

Pierre Vimont, secretary general of the EU diplomatic service, said the EU does not need more treaty change - often mooted as a solution - as "we have everything we need on the table."

"The main problem is about political will and the ability of our political leaders to explain what we are trying to do," he noted.

"The problem with the European Union for the last 10 or 15 years is that we have lost public opinion. That is why we are all worried about next year's European election," he added.

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