Four issues on which the EU must change

21 Jun 2016 - 15:37
Source: alyssalaurel Suivre – Flickr

The EU needs reform

Whether or not the British leave, the EU needs reform. They are not the only ones grumbling. Years of repeating mantras like 'subsidiarity' and 'the EU must be big on the big things and small on the small ones' have, of course, not bolstered support for European integration. Time to set out some issues on which change is necessary. The real sore point is the European centralisation demanded by the euro, coupled with the development of the EU into a 'state'. By identifying four issues for negotiation, the EU would already start moving in a different direction. With these reforms, European integration can continue in important areas  ranging from cyber security to market regulation and monitoring implementation.

The euro cannot be strengthened from above

Firstly: The euro cannot be strengthened from above; the countries of the eurozone must themselves reform. Wish lists for deepening integration, euro budgets and a ‘real’ European Parliament fail to appreciate the fact that the cause of the euro crisis lies with the member states. Failing member states that lag behind the others render the single currency untenable. The crumbling foundations of the euro can be summarised in the following list: Italy, France, Spain, Portugal, Slovakia, Slovenia, Greece and, yes, even Belgium. The weaker these countries are, the more the EU has to step in, and the more the EU has to be dressed up as a federal state. The countries of the eurozone need not only to have their public finances in order, but there also need to be guarantees on the rule of law, quality of legislation, education, the fighting of corruption, independent supervisory bodies etc. It is an unacceptable fact that France, one of the largest countries of the eurozone, has fallen out of the top-twenty competitive countries and that eurozone countries are still plagued with corruption. If the euro project goes on like this, the EU will crumble. It is not the EU that is the problem, but the weakness of member states. Some member states really need to modernise. This also implies that ECB president Draghi has to stop his debt subsidies. To paraphrase Kennedy, 'Ask not what the EU can do for your country, ask what your country can do for the EU'.

Risks must be borne primarily by the countries themselves

Secondly, risks must be borne primarily by the countries themselves. We need to re-institute the no-bailout clause. This also applies to the banks. Member states and investors must themselves be vigilant, ensuring that banks do not become systemic risks. We will make more progress with a few rules on compulsory bank recovery and resolution and on independent national and Europe-wide bank supervision than with sharing the losses. Risks are nothing strange, and must not be elevated to EU level. Member states and banks may not be absolved of their responsibility.

The European Commission must abandon 'political' ambitions

Thirdly, the European Commission must abandon the 'political' ambitions that President Juncker so cherishes. The Commission must scrutinise the implementation and enforcement of economic rules and regulations. To achieve this, the Commission needs to be chopped up. Bodies such as the Directorate General for Economic and Financial Affairs (DG EcFin), the statistics branch, Eurostat, and the agency that scrutinises the quality of European policy-making must, after years of discussion, be put at arm's length. Independent scrutiny and the tasks that go with it should not be vested in a political committee. The Commission's dawdling cannot be rewarded with respect in any way. And the Commission could also be downsized. A smaller Commission would simply be forced to collaborate with member states to a greater extent. At the moment, the general idea is that the member states are the problem, and that the EU can take on duties. But the EU cannot exist without fully-fledged member states. A strong and independent Commission is essential, but a growing, political Commission is a hazard.

Prevent Europe-wide taxes and abolish senseless subsidies

Fourthly, prevent Europe-wide taxes and abolish senseless subsidies. Discussions have started on how to overhaul the EU budget. Not just in southern member states, but within the institutions of the EU, too, there is a desire for EU taxes. Taxation at EU-level is the last and ultimate game changer. With taxes, the Commission would be promoted to an EU finance minister, while the European Parliament would become a real parliament. If the door to EU taxes is opened, the result would be more taxes. Taxation is the final game changer in European integration towards centralisation and  it will make the EU unsellable. This issue also entails the overhaul of spending on agriculture, the regions and investment. Apply the rules: no EU subsidies where the benefit is not clear-cut.

There are more issues that can be listed that would give citizens more clarity. For instance, replacing ever closer union in the Treaty with ever stronger European member states. Juncker as the elected President of the Commission was also a bridge too far (spitzenkandidaten). However, the assumptions referred to above do already outline important contours.

A new strategy

The imposition and monitoring of issues demands power. The Netherlands needs another EU strategy to do that. Former Dutch Minister of Foreign Affairs Hans van Mierlo once talked about being 'in the armpit of France and Germany'. As a junior minister, Ben Knapen banked on 'changing coalitions'. That was all well and good while the EU was merely concerned with the single market and a range of subjects. In order to watch over a strategic line, the Netherlands must invest in a fixed group of like-minded countries surrounding Germany, like Denmark, the Czech Republic, Austria, Sweden and Finland. Now is the time to join forces to prevent an unworkable Europe.

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