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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Although some in Brussels are hard at work preparing for the political rentrée — a new European Commission will soon be presented by commission president Ursula von der Leyen for parliamentary scrutiny — the still of summer continues to envelop much of Europe. So before the new five-year EU political cycle starts, take a moment to contemplate what success would look like once it is over.
The first marker of successful change would be an EU that is more reckoned with in the world, a bloc whose choices affect how things go elsewhere and must be accommodated by other powers. That will not be the result of more spending on defence or a more coherent common foreign policy, necessary though both are. If it happens, it will be by restoring the EU as a pole of economic attraction.
In five years, judge the EU on how much leaders not only in its neighbourhood, but also across Asia, Africa and Latin America, have chosen to orientate their countries towards Europe. In addition to recovering growth and investment at home, that presupposes the EU credibly inviting others to genuinely share in its prosperity if they ally themselves with its values and broad interests.
Concretely, this requires fast progress on existing commitments: from finally ratifying the trade deal with the Mercosur bloc of South American nations to rapidly integrating Ukraine and the Balkans into EU markets and structures on a steady road towards membership. But it also means coming up with both new funds and institutional structures to persuade countries where membership is not on the horizon that increasing their interdependence with the EU is their best bet.
That demands infrastructural ambitions that truly match — indeed outmatch — China’s Belt and Road Initiative, and also granting much deeper market access in return for greater adoption of EU rules and standards.
The second marker would be a more powerful budget for the bloc. As a rule, the inordinate amount of time spent negotiating the EU’s seven-year “multiannual financial framework” is only matched by the smallness of the funding reallocations those talks results in. The next MFF, due to start in 2028, must be different.
Budget talks will start with one advantage: it is now well understood that the next common budget faces very different concerns from earlier ones, including massive investment needs for decarbonisation, energy, defence and broader geopolitical security, and preparedness for Ukrainian EU membership.
Only one compromise can achieve this. Net contributors must accept a significantly bigger budget than the traditional 1 per cent or so of EU national income, and net recipients must accept a root-and-branch reform of spending, with much more targeted and results-driven allocations of funds towards common European needs — even if this entails less redistribution from rich to poor states.
A third achievement would be a much more unified pan-European economy. A legislative patchwork still fragments the EU’s supposedly single market. Many ideas for how to clean it up were set out in a recent report by Enrico Letta and more will no doubt feature in a forthcoming one on competitiveness by his fellow former Italian prime minister Mario Draghi. (It’s a very welcome sign that von der Leyen promises a simplified regulatory “28th regime” to let companies scale up easily rather than navigate 27 national ones.) But it is also necessary to physically bring the continent’s countries closer together — with much better road, rail, energy and digital connectivity.
It is easy to agree on these three aspirations. It is harder to agree on the steps that would take the EU there, since each single reform will create local losers. That makes them unlikely to be realised — unless two conditions are met.
First, the commission must be willing to use up political capital on pushing more change through without consensus so long as it has sufficient majorities. A case in point is the Mercosur trade deal: it is overdue to push for a vote among member states and dare France and its few allies to put together a blocking minority.
Second, enough national leaders must be mature enough to pursue, and explain to their citizens, the overall prize. In a truly successful five-year EU cycle, many national special interests will be outvoted, but the combined changes will make all better off.
The EU’s motto is “united in diversity”. Applying this to the bloc’s internal decision-making means embracing more divisive processes for the sake of Europeans’ common interests. Casting your mind into the future and looking back will make that easier.
