Finance and Economy

How Green Is the State of the Union?

In this address to the European Parliament, Barroso called for a move towards a federation of nation states to resolve the Eurozone crisis. But like Barroso, the Greens too need to work further to explain how this will occur, and what it will involve.

After months of political trial and error and under the constant pressure of the ‘financial markets’, the European Council that took place in June 2012 agreed on an extensive set of objectives to restructure the Economic and Monetary Union (EMU) which should lead to concrete legislative proposals beginning as soon as autumn 2012. In the meantime, strengthened coordination of national budgetary policies has come into effect and the European Stability Mechanism should be operational in 2013.

If we were to summarise the main characteristics of solutions to the Eurozone crisis put forward by the European Council and other institutions, it would seem that three main points could be highlighted:

  • In legal and institutional terms, integration within the Eurozone has developed over the last two years but at the same time the Union (and the monetary union within it) remains politically fragile. Integration has developed because it now appears evident that the monetary union will not disappear following the decisions made by the ECB with regard to the purchase of government bonds, and by governments with the creation of the ‘European monetary fund’.
  • Proposals in terms of European banking supervision are also leaning towards a strengthening of the Union’s central authority; however in other political domains such as tax or social policy, or foreign policy, the institutional future of the Union remains open. The pursuit of integration is taking place in a context of political fragility. This fragility can be explained by the economic and social heterogeneity of Member States (‘north/south, centre/east’), by the loss of trust between the leaders of the various Member States, by the rise in the number of euro-sceptic voters, and by the ‘constructive ambiguity’ that has always loomed over developments of the Union.
  • The European guidelines for social and economic policy implemented in response to the Eurozone crisis and the ‘sovereign debt’ crisis of certain States repeat the precepts of ‘supply-side economics’ supported by the Commission and nearly all national governments for several years. Since 2010, these guidelines have resulted in generalised policies aimed at reducing public debt, leading to a relative stagnation of economic activity.
  • The particular contexts of countries such as Ireland, Portugal, Greece and Spain – not to mention countries such as Romania and Bulgaria – seriously puts the ‘community of destiny’ and the solidarity that it requires between Member States to the test. We are limited to a basic model of competition between national economies in which the aspect of cooperation and solidarity that exists within the Union remains a minor element. Furthermore, to the extent that these policies are carried out on behalf of the Union (or/and on behalf of Germany) and are perceived as such, the popular opposition that they give rise to further increases the political fragility that we mentioned earlier.
  • The construction of Europe came about over sixty years based on a broad consensus between the main political families grouped together within the centre-right European People’s Party, the centre-left Party of European Socialists and the liberals. This is particularly the case for the main structural decisions such as the relaunch of the single market in 1985 codified in the single European act, the creation of the monetary union incorporated in the Treaty of Maastricht, as well as the big enlargement of the Union to ten members in 2004. Indeed, this consensus is made indispensable by the unanimity required to modify the Treaties, but it also reflects a relative erasure of the classic ‘right/left’ divide in a globalised economy that exists both at the national and European level.
  • The pursuit of current austerity policies in all countries, regardless of the majorities in place, illustrates this situation. This political consensus that characterises the Union’s politics has nevertheless left a space for another divide which became particularly apparent during public debates on the draft constitutional treaty in the 2000s, and today over the Eurozone crisis; the political divide between ‘Europhiles’ and ‘Eurosceptics’ is an old one but today it is of a different level intensity and we can expect a solution that is more definitive than what we have seen until now to become inevitable.

These different elements that characterise the European context should be kept in mind when reading the ‘State of the Union’ speech by J.M. Barroso during the opening of parliament in September. Beyond the voluntarist and optimistic style that he is used to (in terms of the order of the speech in any case) and general announcements of legislative proposals in line with what was announced in the text on the Economic and Monetary Union submitted during the last European Council in June, the main merit of his speech is the acknowledgement that defining a legal and institutional horizon is essential for European integration in order for us to know the direction that we are headed in. He very clearly appears to be on the side of the ‘Europhiles’ and adopts an opposing stance towards sovereignists, whilst very clearly indicating that it is not about creating a ‘super-State’.

That is the meaning of his reference to the notion of a ‘federation of Nation-states’, to maintaining the uniqueness of the institutional framework for all Member States and to a new renegotiation of the Treaties. He set a relatively tight deadline because the Commission will put forward its proposals before the next European elections. The other concern with the proposed approach is to first agree on the policies to be implemented in order to then identify the tools and skills required at the European level. Calling for a public debate, during European elections and prior to holding a convention is also proposed by Mr Barroso.

Despite this, the speech was very prudent inasmuch as it does not contain any specific proposals beyond the words used but then we didn’t expect the President of the Commission to explain the stagnation of the European economy and high level of unemployment through the economic and social policies implemented and supported by the Commission. In brief, the speech was a general call to action for a strong and democratic political union seeking to mobilise governments, political families and all stakeholders. In this sense, it is certainly not the first of its kind, or the last.

The next steps will be in the European Council in the last part of 2012, with the introduction of more specific proposals but also the discussion of the 2014-2020 budget, which pre-empts the financial part of the debate opened by Mr Barroso.

The Greens in the European Parliament received the President’s speech with reservations and with the criticism that he needs to be clearer about the federal dimension of overcoming the crisis in the Eurozone. They continue to affirm their pro-European but critical profile, which will feature in their campaign for the European Parliament in 2014. But to be more convincing, Greens in different National Parliaments need to adopt common positions on European issues, which unfortunately is not the case at the moment. Thus, Mr Barroso is not alone in having further work in terms of ambition for the Future of Europe.

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