[FR] Crisis notebooks

There is no doubt about it. The agreement reached on the morning of 21 July by the European Council is truly historic: the possibility of having a kind of Eurobond guaranteed by the EU budget and therefore by all 27 Member States was unimaginable just a few months ago. But the agreement reached by the heads of state and government is only a start: there is still work to be done, both at European and national level, to establish the practical application of a series of programmes, agreements and measures that this compromise entails. This ratification and implementation work will be carried out in part by the European Parliament, in part by the Commission and in part by the EU Council of Ministers in its various configurations. Nothing has been won yet. For potentially very important innovations such as the new own resources that are the proposed eco-taxes on plastics or CO2, the required unanimity has yet to be found before they can be effectively implemented. With regard to the national plans to be presented for the proper use of the future recovery fund, the debate in Italy shows that many – and this is a good thing – may have a little bit of Mark Rutte in them in their concern to demand clear criteria for the use of subsidies, particularly with regard to the European Green Deal and the digital transition, in order to avoid fossil fuel and corporate abuses.

Despite its potential and beyond its still unclear areas, the agreement reached at this long summit of heads of state and government leaves a somewhat bitter taste for several reasons. The first is that the share of subsidies from the recovery fund has been reduced from €500 billion to €390 billion. Drastic cuts have also been made to the multi-annual budget, which remains at €1,074 billion, more or less the same amount as before Covid. Admittedly, this is better than nothing, considering that the ‘frugal’ states wanted zero subsidies. But we are still well below what is needed to get our economies back on track.

The second reason is that, in the negotiations and in the comments on the winners and losers, the prevailing idea is that the EU is an ATM. The amount of money that goes to each country becomes the sole measure of success or failure. There has been virtually no room – which is nothing new at these summits – for discussion of the EU’s role and the strategic vision that should guide financial choices. While the Green Deal and digitalisation priorities were saved in the agreement, these choices had already been adopted previously. However, the considerable autonomy given to Member States to implement them will make it possible in the coming months to verify the seriousness of their commitment in this area.

It is regrettable that the most significant cuts made in order to grant gifts and rebates to the “stingy” and others, in order to preserve the €750 billion of the NextGenerationEU recovery plan, were precisely those related to the most innovative European policies and measures, those which the pandemic has shown to be indispensable in preparing and defending us against this crisis and those to come. The research budget (Horizon Europe) has thus been reduced from €15 billion to €5 billion, and the important Eu4Health initiative, which was worth €9.4 billion in the Commission’s proposal, has been completely cancelled, as has the fund intended to provide immediate assistance to small and medium-sized enterprises. InvestEU, the successor to the Juncker Plan, has been reduced from €30 billion to €5.6 billion. The Just Transition Fund, which is intended to support the regions that consume the most fossil fuels in their transition to green energy, is being reduced from €40 billion to €10 billion over seven years, etc. The planned and necessary recapitalisation of the European Investment Bank also remains in limbo for the time being, pending the decisions of the EU Council of Finance Ministers at the end of the year. In short, there is less money for European programmes and more resources and repayments to Member States.

In this regard, it is possible and highly desirable for the European Parliament to fight to recover at least part of the lost funds, as it has the power to reject the multiannual financial framework outright and to co-decide on annual budgets. But many doubt that the world’s only democratically elected supranational assembly with legislative powers has the strength and majorities to do so.

On the highly controversial issue of the governance of the recovery fund, i.e. who ultimately decides on the granting of loans and subsidies, the victory of Mark Rutte and his group of ‘frugal’ countries in asserting the primacy of governments over European institutions is real but theoretical. Its application is highly unlikely: governments are unlikely to put their peers in the dock. Proof of this can be found in the cases of Hungary and Poland, which have been violating the already fragile rule of law almost continuously for years. The transfer of power from the Commission to the Council is therefore a mistake, both because it makes the evaluation of the various national recovery plans more arbitrary and politicised, and because it further diminishes the role of European institutions in favour of the intergovernmental method. This method has once again shown all its limitations and even its ugliness during this summit, as evidenced by the incessant haggling and bitter exchanges.

The same applies to the conditionality of respect for the rule of law in order to obtain funds, which is changing from a quasi-automatic mechanism to a complex system of appeals and referrals, a system that is ultimately in the hands of governments. As with the procedure provided for in Article 7 of the European Treaty, which in theory can lead to the suspension of a state’s rights and which has been open for months and months for Poland and Hungary, very little action will be taken on this issue in practice. Unless the European Parliament manages to secure some improvement during the next negotiations.

What conclusions can we draw from this European Council for the future?

The first is that we are facing another déjà vu that the Covid crisis has only partially limited. An already considerable number of European Councils or negotiations with historic results have been overshadowed by pointless squabbles and the desire of many to slow down EU action rather than speed it up. These summits have invariably fallen short of expectations, which over the years has had a devastating impact on the EU’s ability to act in the interests of Europeans. The reason is always the same: the principle of unanimity and its corollary, the right of veto. If the ECB worked unanimously, there would probably be no more euro. If, in 2007, Angela Merkel, already in her year as German President, had not granted the Poles unanimity on strategic decisions on climate change, we would undoubtedly be further ahead today. If unanimity were not required on fiscal issues, we might now have had a carbon tax for several decades, as first proposed by the Delors Commission. We would also have a law on pluralism and against media concentration, which would not give Member States free rein, as Hungary is currently doing. And today, it is still the unanimity rule that gives so much weight to the “frugal” countries and their leaders, Mark Rutte and Sebastian Kurz. Two leaders who, like the other three “frugal” countries, gave the impression of having absolutely nothing to lose, remaining insensitive to appeals to European sentiment or the mutterings of their government allies. As they themselves acknowledged, their only concern was their national interest. The unanimity rule gave them the power to potentially block everything, which they used to obtain concessions that were too quickly granted for rebates on their contributions to the European budget. In short, without the requirement for unanimity, the EU would already be a true Union, perhaps for several years now, and today we would have many more common instruments at our disposal. Consequently, if we do not get rid of this obstacle of unanimity, it will not be possible to move forward at the necessary pace and with the necessary rules and resources.

But the problem is that reforming the Treaties and abolishing the unanimity rule requires… unanimity. How can we get out of this situation? There are two tools we can use: the European Parliament and… the Europeans themselves.

The European Council is accustomed to keeping the European Parliament out of the control room, arrogating to itself powers that the Treaties do not confer on it, since it has no legislative role but rather a strategic guidance role. It is up to the European Parliament to put itself back at the centre of the initiative against the EU’s intergovernmental drift, making maximum and vocal use of the vast powers it has acquired over the years.

Another avenue is to resume the constituent initiative, involving those – and there are many – who consider joint action to be essential in the areas of economic and social development, the fight against climate change, the rule of law and the resolution of conflicts on our doorstep. Many governments have taken great offence at the attitude of the “frugal” countries, which calls for a serious discussion on how Europe can become closer, more inclusive and more democratic. It is no coincidence that the programme of the German Presidency of the Council of the EU mentions possible amendments to the Treaties, an issue that will be difficult to avoid at the conference on the future of the EU due to open in the autumn.

In short, rather than crowing about the sums of money promised or lamenting the insolent exploits of the ‘frugal’ countries, we should be better prepared to make the most of what is good in the 21 July agreement and relaunch the battle to strengthen democracy and European integration.