Report State of the Union Conference: Day 3 - 30 Sept 2021

Narratives on solidarity and solidity in the eurozone (09:30-10:45)

Online conversation with Maria Demertzis, Lex Hoogduin, Daniel Gros and Michel Heijdra. Moderated by Adriaan Schout and Luuk Molthof.

Originally, the euro narrative was “one market, one money”, Daniel Gros explained. Price stability was key. High inflation was a risk and national central banks lacked the stability of the Deutsche Bundesbank. “Even after the eurocrisis, when the loans to Greece made people think money was lost, and recently the corona crisis, the risks of the euro continue to exist. But the fears do not materialise. Prices are still stable. We might have a problem with housing which could spark inflation, but only to a rate of 2%.” Yet, there are concerns. Germany will show solidarity with the EU, but not with the euro.

Maria Demertzis underlined security as overriding motivation and narrative for Greece to join the EU. Greece needs to be part of a bigger group. It was not so much the euro itself but the longing for stability – including less inflation – that motivated Greece to join the euro and eurozone as soon as possible. Yet, national transformation was underestimated but “with a delay of 20 years it is happening now”. We should not so much talk about solidarity in the EU and eurozone but we should recognise that we are interdependent. “If something happens elsewhere in the zone, it will affect you. But the interdependence was never discussed in Greece, and it should be discussed more often.”

Lex Hoogduin was less optimistic than Gros about the price stability in the eurozone: “Public debts go up. We also see a slower recovery in euro countries after COVID-19 than in the countries surrounding the eurozone. Price stability still causes real headaches. The eurocrisis and COVID-19 have shown the eurozone is not complete. They also show that budgetary criteria should be less tight, because monetary policies cannot further stimulate economies.”

Michel Heijdra stated: “We have not touched upon Brexit. It was a huge shock that polarised the union, but it was a blow to the eurozone too. It is also a tragedy that strong countries like Norway, Denmark, Sweden and Switzerland do not want to join the eurozone, while the weaker countries do. It will put pressure on the euro. The narrative and focus is on other problems now, but these issues are crucial. Are we prepared for a new crisis? Touching upon solidity and solidarity: How are we going to repay the euro funds in the next generation? The funds exceed national budgets by far. But in the end there is no free money, there is no European budget, it is national money piled up.”

Leadership and narrators in Europe (13:30-14:45)

Online conversation with René Cuperus, Hugo Brady, Saar van Bueren and Luuk van Middelaar. Moderated by Duncan Robinson.

“In the geopolitical wild-west world we are living in today, the EU should be much stronger, less divided, slow and technocratic, and get its act together in foreign policy and security politics”, René Cuperus stated. “We need convincing European leaders for that task.” But what makes a leader convincing? What leadership styles or practices make leaders particularly effective narrators? According to Saar van Bueren, for leaders to be effective it is important that they understand who they are talking to, really understand the culture and people, like Frans Timmermans does very well. Taking Donald Tusk as his example, Hugo Brady explained that political communication is about talent, credibility and likability. Having technical abilities without the ability to communicate politically is worthless. An ‘opportunity’ that really brought out Tusk’s talents, was Brexit. It gave him the one thing that the EU lacks sometimes in its public communication: conflict, an ‘other’. “Brexit somewhat saved the EU by giving it something to oppose, and therefore gave shape and definition in the public’s mind.” Tusk knew how to pick a fight, and win it. Because the key thing to not make yourself look foolish as a leader is: do not lose.

Elaborating on convincing leadership narratives, Luuk van Middelaar talked about a bug in the EU’s communication system: the rhetoric of dramatization. In times of crises, when very far-reaching measures need to be taken, national leaders and public opinions can only be convinced to do so if there is a real, existential risk, like in the eurocrisis when the euro was at the brink of collapse. Van Middelaar sees that there is always an element of exaggeration there; dramatizing the situation in order to make sure that all 27 national leaders sign certain conclusions. “It seems that in normal times in the EU you cannot take these very important steps or radical drastic decisions without that rhetoric of dramatization.” And that is a weakness, because it creates a lot of uncertainty and anxiety among the public. “It is not a great way of communicating your message, if you really have to say that your house is on fire before you can take action.”

While discussing the crucial leadership of big member states Germany and France, the panellists agreed they do not think it will be one person filling the ‘Post-Merkel vacuum’. There will be a number of leaders taking that up: Macron, and perhaps also Rutte and Draghi – the three of them, representing a certain amount of seniority and a difference of views, can fill some part of that gap. Furthermore, regarding the Franco-German relationship and the expectations we have of who narrates Europe, Van Middelaar concluded that it would be good to have more balance in the narrating, in the storytelling, in the communication between Paris and Berlin. In the current narrative, the French are supposed to come up with ideas, initiatives and drive all things forward, whereas we ask of the German chancellor to be pragmatic and have no visions at all. It is up to the next chancellor to take over some parts of that task of setting an agenda, instead of only 'nein-saying'.

Concluding reflections & the Netherlands’ EU-narrative (17:00-18:00)

Online conversation with Saïd Fazili and Robert de Groot. Moderated by Monika Sie Dhian Ho and Nienke van Heukelingen.

Europe has for a long time been a more internal project, but the main challenges it faces are becoming more external and global, with the rise of China, geopolitical rivalry and security issues, large scale irregular migration and climate change. Robert de Groot explained that Europe’s leaders are increasingly trying to get to grips with this changing world around us, which is quite an interesting and significant development, since years back most European Councils only concentrated on issues that had to do with saving the eurozone, and after that the migration crisis. “Nowadays, there is a substantial increase in the amount of time spent by leaders on global issues.” This is also reflected in the increased competition for funds within the European Commission.

In the area of security and defence there is also a new narrative evolving with the development of a Strategic Compass and the discussion on the concept of strategic autonomy: what should the EU be able to do on its own? There is the realisation that the EU should be a global player and not a global playing field. Furthermore, the European level has been important in indicating a significant paradigm shift when it comes to the rise of China by seeing the country as a cooperation partner, a competitor as well as a systemic rival. On this issue, De Groot stressed that we have to accept that we have to deal with counterparts that in some aspect we can, want and need to work with, while there are also other aspects on where we utterly disagree on what is happening. There is even a link between the two: “If we work together, for example on CO2-reductions worldwide, this gives us also the opportunity to speak our minds on things when it comes to forced labor or human rights.”

Saïd Fazili emphasised that the various paradigm shifts taking place did not really come forth out of a changing narrative, but because the (global) changes demand this of us. The strength of the EU is that it is always adapting to the situation, taking into account the world around it as well as its own societies. In the past years, the narrative on trade policy has shifted, maybe due to the rise of China or other competitors, from a view where trade was always good to the idea that trade can also be used for political reasons and the promotion of broader standards in the field of climate, sustainability and labor rights. Fazili also sees a shift in the role of the state, where state intervention is necessary for making the risky investments needed to keep up with our competitors that are already way more advanced with regard to the key elements of our future economies.

When it comes to the relations between the EU Member States, we have also seen new narratives about alliances in Europe. With Brexit as a gamechanger, all Member States, especially The Netherlands, have to adjust to not having the UK around the table and look for new allies. Something we have already been doing in the past few years with, for example, the Hanze initiative and within the already existing Benelux. In the next years, the EU will be adapting to this new world, developing new narratives. These narratives are essential, to conclude with the words of De Groot, because politicians have to be transparent about what they are doing. “I see the need for a narrative also as an explanation to the public on why we make – sometimes very difficult – decisions." And it takes courage to make clear what you stand for.