Ideas Monitor #34/2017

State of the Union’s Ups and Downs

Andrew Watt discusses President Jean-Claude Juncker’s optimistic “State of the Union” speech. After populist defeats anywhere in Europe, the EU need to capitalize on the positive mood and carry out new and far-reaching institutional reforms: a common “Labour Authority” to ensure fairness in the single market, an agreement on the European Pillar of Social Rights, a European Social Standards Union, qualified majority voting on tax issues, a European Minister of Economy and Finance, merging the Commission and Council Presidencies. However, despite what Eurosceptics may believe, power lies with Member States. While the Commission has thrown down an integrationist gauntlet, we will need to see if they pick it up.

Pol Morillas  focuses on Juncker’s argument against a multispeed Europe, advocating all countries to join the Eurozone by 2019 and to open Schengen to Bulgaria, Romania and Croatia as soon as possible. Against Juncker, it is argued that multispeed Europe is a method, not a political goal. Goal-wise, it is reasonable that the European Commission aims to strengthen European integration and avoid any kind of “second class” Europe. But as a method, a multi speed or flexible Union still has a comparative advantage vis-à-vis the alternatives. In a Union incapable of delivering long-lasting solutions to its crises and where member states have often preferred zero-sum outcomes in their negotiations, institutional paralysis will always be a plausible outcome when the next crisis hits.

Reforming Europe

Barry Eichengreen observes that with (soon to be) new leaders in France and Germany, this is a good time to remedy the euro’s flaws. Yet the two sides are divided, since Macron believes that the problem is insufficient centralization, while Germany believes it lies in excessive centralization. But there is a narrow path forward that should be acceptable to both sides. It starts with completing the banking union, by assigning the European Central Bank a common deposit insurance scheme. Next, Europe needs to transform the European Stability Mechanism into a true European Monetary Fund. Compromises would have to be made with Germany on stricter surveillance, but they will be an acceptable price to save the euro.

Jennifer Oser and Marc Hooghe discuss a new and deep study on american and european support for democracy and redistributive measure. They discovered that  Europe lacks a distinctive group that in the US opposes government intervention to reduce poverty, and this may be a key asset to work on the necessary reforms recently advocated by Juncker’s State of the Union speech.

Katy Hayward and Maurice Campbell discuss a recently published a paper on resolving the Irish border issue following Britain’s exit from the EU from the Legatum Institute, a think tank that is considered to have a significant degree of influence over the UK’s approach to Brexit. They found the proposal based on misperceptions of the border and the situation in Northern Ireland, as well as of the fundamentals of European integration, international trade law and customs practice.

This Ideas Monitor is by Carlo Burelli and Alexander Damiano Ricci

Photo Credits CC epp group

Also published on Medium.