Failure to reform Europe would have disastrous consequences for France’s recovery and on Europe’s ability to be a major player in the 21st century.
The narrow window of opportunity for reforming Europe is about to close after another failure. The more Emmanuel Macron talks about it, the more Angela Merkel is paralyzed and the more points are scored by Victor Orban.
Europe is benefiting from the improvement in the world situation, which will bring growth in the Eurozone up to 2.4% in 2018. But the high point of the cycle has been reached and there is a revival of risk linked to the overvaluation of equity markets and the rise in interest rates, as well as the trade, monetary and technological wars between the USA and China. The populist shock wave has regained momentum with the inroads made by the AfD in Germany, by Italy – which has become ungovernable – and by the victory of illiberal democracy in the Czech and Hungarian elections. It has become obvious that the five roads down which European reform should be going are being blocked off.
The first involves the limits and the identity of the EU. On the one hand, during the second phase of Brexit negotiations, the cohesiveness of the 27 members is crumbling, notably concerning the status of the City of London, with regard to which the European Commission has advanced the possibility of applying a system of equivalence in financial services. On the other hand, there has been no clarification on the candidacy of Turkey despite the waywardness of Recep Erdogan’s Islamic démocrature [a combination of democracy and dictatorship]. Furthermore, the Commission is proposing to open membership discussions with Albania and Macedonia in spite of the current chaos in the Balkans.
The second concerns the Eurozone. All the French initiatives aiming to strengthen it in order to meet any future upheavals – with regard to budget, a European Minister of Finance, widening the mutual-support mechanism by means of a European Monetary Fund, completion of a banking union, fiscal and social convergence – find themselves trapped in crossfire from the CDU-CSU in Germany, from Northern Europe backed by Mark Rutte’s Netherlands, and from Luxembourg and Ireland who are both hostile to fiscal and social alignment and to a common policy on taxing the digital giants.
The third concerns freedom of movement and the immigration crisis, which is dividing EU members and fuelling a new rise in populism. A space within which free movement is possible is not tenable without clear and effective rules on immigration and political asylum or strict control of external borders. At the moment, this remains in limbo.
The fourth concerns a security union, whose mandate would include the fight against terrorism, the protection of essential infrastructures and control of external borders, and cyber-defense. But actions are not matching words. The war in Syria and air strikes in condemnation of chemical bombings by Damascus have shown that France is the only post-Brexit European military power. Its sole credible partner is the UK since Germany has neither the will nor the means to take action.
The final issue concerns democracy and European values. The EU seems incapable of responding to the political challenge presented by Victor Orban and his pseudo-democracy – both illiberal in its nature and a destroyer of liberty in its acts. At the same time, Emmanuel Macron’s plan to create a European Republic with moderates from left and right has dwindled in the face of the collapse of socialist parties – like Martin Schulz’s SPD and Matteo Renzi’s PD – and the upsurge of populism.
Germany must assume most of the blame for this imminent shipwreck. It once again has a government but no more real Chancellor – the cult of stability and a panicky fear of the far right have killed off any European ambitions and plans it might have. But Emmanuel Macron must take some of the blame too. Basically, he has cultivated ambiguity with regard to border control and security, whilst going down the road of uncontrolled expenditure, revenue and public debt – which constitute the first obstacle to mutualization within the eurozone.
Failure to reform Europe would have disastrous consequences for France’s recovery – it is a necessary corollary – and for Europe’s ability to be a major player in the 21st century. This failure can only be avoided if Angela Merkel and Emmanuel Macron wake up to the danger and take a radical change of direction, but their time is running out. When Hegel encountered Napoleon who was on a reconnaissance mission before the battle of Iéna, he wrote to his publisher saying he had seen liberty on horseback. Emmanuel Macron has claimed to be the herald of a Europe en marche [moving forward, an echo of the name of the political movement created by Macron], but he is increasingly becoming the embodiment of Europe en panne [broken down].
(Column published in Le Figaro, 24th April 2018)