Regardless of the geographical area, whether it is Europe, North America, Asia or the Near East, important mutations are taking place at societal level that determine paradigm shifts in the political sphere, with implications, of course, on the economy. Spheres of influence are being re-established, poles of power are being reconfigured.
In
this regard, the European Union has its place, consecrated and confirmed by the
evolution of the last decades, that of a pole of peace and stability, despite
the multiple challenges it has faced since its establishment until now: the
galloping inflation of the 1970s, Euroscepticism, economic crises, Brexit,
political and military events with a significant impact on the European space
such as the war in Ukraine, and more.
However,
systemic inertia seems to have a negative impact on the further development of
the European structure. The purpose of this material is not to blame, but, on
the contrary, to recognize the results and send an alarm signal for the future.
A strengthening of the positive perception of the European idea is necessary to
increase its relevance in the member states and to have the desired impact.
Economy, defense and – above all – a shared vision is what the European Union
must clarify in 2025 in order to strengthen its position as a global economic
and political player.
In
the current context, the European project is undermined by both internal and
external factors. There is no space here for an exhaustive analysis, but the
far-right movements, coming from the member countries, are becoming more and
more radical, even anti-system, attacking the foundations of European values.
We do not like to admit it, but the refusal to become founding members of the
Eurozone by Denmark and Great Britain (1992), or the position of the
Netherlands and France vis-à-vis the European constitution (2005) represented
strong signals, hidden at the time, by a political class unwilling to
understand the true causes of these specific forms of Euroscepticism. The
bureaucratization of the functioning of the European institutions, the decrease
in flexibility in decision-making generated a cumbersome and costly development
of the allocation of resources, mainly financial ones, and led to a decrease in
transparency of this process.
In
the early years of the millennium, the European Union faced the growing
economic power of China, with concerns about competition breeches, but with
President Donald Trump's first term in office, a new danger emerged: an
economic war between the United States and China, in which the European Union
became a collateral victim. The Russian invasion of Ukraine showed the European
continent how unprepared it was as a common military power. And when Trump,
recently re-elected, expressed his foreign policy ideas, whether it was an
increase in NATO members' contributions to 5% of GDP or the plan for Greenland,
his ideas fuelled extremism in some of the Union's member states, inducing the
idea that the new world order would be based on other foundations than those
established in the post-war period.
Three pillars are essential in guiding
the entire mechanism of transformation of the EU.
European
defense policy is at a crossroads. Will we go for a defense within NATO, as
before, and are we prisoners of the American system? Or do we develop separate
capacities, including troops, not just common policies? It is hard to believe
that, in the short and medium term, this process is achievable, especially if
we refer to the necessary budget and the capacities of defense industrial
production at the European level.
From
an economic point of view, it is indisputable that the membership of the member
states in a supranational structure such as the Community space has allowed
them to reap the benefits of the size of the market, with important gains for
each of them. The transfer of decision-making power from the national to the
supranational level has allowed for the application of common policies but also
the coordination of some national policies at the Community level. The Eurozone
and the need for a common monetary policy within it, accompanied by common
institutions grouped within the Eurosystem, demonstrate that an integrated
economic and monetary space can overcome moments of crisis without affecting
the well-being of citizens.
The
question arises, however, to what extent should the power of common
decision-making be extended, beyond the monetary area or that of the already
existing common policies? Currently, economic competences are, in their
quasi-totality, under national control. Fiscality, employment, industrial,
environmental or transport, energy and environment policies are managed by
national governments, responding, specifically, fragmentedly, to the challenges
generated by a potential economic crisis. This means that the so-called
diffusion effect, i.e. the impact of measures taken unilaterally by a state
towards the other member states, cannot be controlled in a unitary manner, the
results being similar to those generated by the 2008 crisis, or the
post-pandemic ones. Strengthening the Single Market, as conceived by Jacques
Delors and developed on the basis of established treaties (Single European Act,
Maastricht, Lisbon) could be one of the answers to the question of
strengthening the competitiveness and position of the Union as an important
actor on the global market. Rethinking the way the Community budget is formed,
by allocating a significant percentage of national budgets (for example 10%)
alongside the way the funding is allocated to cover common problems of the member
states would be another answer. However, this implies an additional surrender
of sovereignty, which in the current political context of some of the Member
States of the Union would generate tensions and could be an obstacle to the
deepening of the integration process. We practically have the second European
dilemma, do we continue European integration on an economic level or are we
doomed to failure?
The
great European jump is necessary but will not happen without a mobilizing
approach, assumed by all the actors involved both at supranational and member
state level. European leaders need to present a concrete and coherent long-term
vision for the economic, social and political development of the European
Union. At the same time, there is a need for immediate accountability on all
societal issues by finding a formula through which supranational institutions
and structures can cooperate effectively with member states to identify
solutions to the problems that European citizens face in the current context.
Article
signed together with Dr. Mihaela Luţaş (Babeş-Bolyai University in Cluj-Napoca
/ Romania) and published in
Ziarul Financiar.