Never mind the EU’s policies, where is its strategy?

by Giles Merritt*

The installation of a new leadership team is surely the moment for a clear-sighted strategic relaunch of aims and means. Alas, there are no signs that this is on the agenda.

Instead, all eyes in Brussels have been on Ursula von der Leyen’s skill in juggling personalities and portfolios within her team. The suitability of new commissioners to their responsibilities is, as usual, hotly debated.

This scrutiny has acquired the status of hallowed tradition, yet as the EU opens its new chapter the reality is mission creep within the commission combined with progressive myopia on the part of member governments. The EU institutions continue to concentrate on short-term issues when their focus should be the horizon.

The European Commission routinely uses each five-year mandate to extend and gold-plate existing programmes, and sometimes to accommodate commissioners’ desires and power plays. The result has been slogans like Jean-Claude Juncker’s “last chance commission” and his predecessor Jose Manuel Barroso’s promise to “do more with less”.

The truth is that the EU is ill-suited to defeating populism and has yet to show either aptitude or ambition in confronting the long-term demographic shifts that gravely threaten future living standards.

The European project has enabled national governments to achieve goals they can’t fix on their own. Its achievements span substantially freer trade, high levels of social protection and the euro. But now other urgent issues are crying out to be addressed. Unless bold pan-European solutions are found, these challenges risk undoing much that the EU has accomplished.

How should Europe respond to the rising costs of its rapidly ageing population? Could shared fiscal policies encourage faster economic growth? How can productivity throughout the EU be improved to counter the shrinkage of workforces? What measures might stimulate stagnant wage levels, particularly for younger people?

These are just some of the thorny macroeconomic questions that confront Europe’s national governments. They cry out for a common recognition, even when solutions may be as local as better housing programmes or improved childcare subsidies to raise fertility rates.

A quarter-century has passed since ‘Europe’ seized the initiative and forced citizens to face up to structural disadvantages like intra-European protectionism and the volatility of national currencies. The fall of the Berlin Wall of course helped to strengthen the EU, but the chief factor was widespread popular support for concerted policies.

National governments have fought back since then, denouncing ‘power grabs’ by the EU. Despite the European Parliament’s stronger role, they have reduced the commission from an executive body to something closer to a secretariat to the Council of Ministers.

Meanwhile, the price of 50 years of declining birth rates is evident. EU governments already have to devote over 40% of their spending to welfare-related benefits, and that’s rising sharply. In 10 years’ time, a quarter of the EU population will be over-65s, up from 19% today. Pensions are Europe’s most dangerous political time bomb.

Nobody can say how Europe’s political leaders will cope with looming confrontations between poverty-stricken pensioners and today’s under-privileged younger generations. It is plain, however, that these tensions risk tearing apart the EU’s consensus mechanisms.

Solutions no longer rest in the hands of the European Commission. What’s needed is a far stronger engagement of the EU’s member governments. A first step towards this would be the creation of a new ‘Strategy Council’ within the Council of Ministers with an agenda consisting of long-term issues.

In theory that is the role of the European Council, but not in practice. Its summits have become a last resort for EU heads of government to resolve issues that lesser councils kick upstairs. A ministerial Strategy Council could also answer the question that has fuelled so much Euroscepticism amongst voters: “What is the EU for?”

*Founder and Chairman, Friends of Europe

**first published in: www.friendsofeurope.org