Never mind Merkel! The EU’s not doing so badly

Paul Taylor, a contributing editor at POLITICO, writes the “Europe At Large” column. 

PARIS — Last month, Angela Merkel painted a decidedly gloomy picture of the state of the European Union after attending her 107th, and probably final, EU summit as German chancellor. But was she right? 

It is hard to argue with such a seasoned practitioner who was in the room through crises over the global financial system, the eurozone, Russia’s aggression against Ukraine, mass migration, Britain’s exit from the EU and now the rule of law in Poland and Hungary. But a more optimistic reading of progress in European solidarity and integration is possible. 

In her parting comments, the veteran center-right leader, who forged crucial agreements to keep the EU together over the last 16 years, voiced great concern that it was becoming increasingly hard to find compromise due to the “centrifugal forces” in the 27-nation bloc, and she warned against an “ever-widening spiral of conflict” between Brussels and Poland. 

Yet 2021 was also the watershed year in which the EU successfully began collective borrowing in the financial markets for the first time, funding a €750 billion recovery program that is already showing economic benefits, even before most of the money has been paid out. Indeed, Brussels is able to sell bonds that mature up to 2058 on even better terms than Germany, belying long-standing warnings that the EU’s credit would only be as good as its weakest link. 

The market’s enthusiastic embrace of these new safe assets illustrates investors’ confidence that the euro is here to stay. Germany and its allies had insisted this was a once-only crisis measure and not the birth of “eurobonds” or a long-demonized “debt union.” But Berlin’s incoming center-left coalition parties are already discussing another EU fund financed by collective borrowing, this time to permit massive public investment in green energy and digital networks. 

2021 was also the year the European Commission implemented a massive collective vaccine purchasing program, which after initial delays — mostly due to problems with a single supplier — hit its target of vaccinating 70 percent of the adult population. It ensured that all member countries had access to vaccines in a timely, equitable and affordable way, instead of engaging in a beggar-thy-neighbor race for national advantage.  

This year also saw the EU position itself to set the standard in the fast-expanding sustainable finance sector by launching the world’s largest green sovereign bond issuance as part of its recovery fund. 

Moreover, the EU buttressed its leading role in the global fight against climate change, agreeing on ambitious targets and concrete plans to reduce greenhouse gas emissions by 55 percent by 2030. Even the most reticent or coal-dependent European nations went along with the objective, after wealthier EU countries promised more financial support toward their energy transition. 

Each of these achievements was the result of months of haggling and brinkmanship that often captured far more media attention than the ultimate agreements themselves, which are sometimes discounted as “old news” by the time they happen. Train wrecks make headlines, not trains that arrive on time. And as is often misattributed to another German chancellor, Otto von Bismarck, “Laws are like sausages, it’s better not to see them being made.” 

Each new landmark in European integration is inevitably preceded by dozens of meetings with ministers, officials and lawmakers that end in disagreement. Ministers and officials fight like ferrets in a sack for their national or institutional interests; MEPs voice indignation (usually at not having enough power), and when a deal is finally reached, it is often greeted by a chorus of boos from activists dismayed that the outcome falls short of their ideals. It was ever thus. The EU looks more impressive from afar than it does upon daily close-up. 

Of course, Merkel is still right that there are grounds to worry about the EU’s deepening East-West divides over values issues, such as judicial independence, media freedom, asylum and immigration, and women’s and LGBTQ+ rights. And she does have a point when warning that Europe is not living up to its ambition to be the world’s most innovative knowledge economy, and that it risks over-regulating innovation and entrepreneurship to death.  

However, the chancellor’s own explanation of the values gulf is worth considering. Countries such as Poland and Hungary, she argued, were not as fortunate as Western Europe in recovering their democracy, sovereignty and market economy after World War II. After Nazi tyranny, they endured four decades of Soviet communist domination before the Berlin Wall fell in 1989. 

When they were finally able to join the EU, signing up of their own free will to treaties that enshrined the principles their governments are flouting today, the Poles and Hungarians entered a union that was fashioned by others over decades in ways that did not always reflect their national traditions. The same was true of the U.K., and we know how that ended. 

Still, the outlook may not be as dark as Merkel suggested, not least because the EU is very popular among Poles and Hungarians, who are big net recipients of EU budget funds. Defying Brussels may help Polish de facto leader Jarosław Kaczyński and Hungarian Prime Minister Viktor Orbán rally their hard-core right-wing supporters, but opinion polls suggest their defiance no longer commands majority support in either country.

Orbán faces a challenge from a united pro-European opposition, which is neck-and-neck in the polls with his Fidesz party ahead of elections next year. And a poll taken last month found that nearly three-quarters of Poles think the government should rescind some or all of the judicial reforms that the EU says violate European law. In the same neighborhood, Czech and Slovakian voters have already evicted their populist leaders who tried to play the Euroskeptic card.   

Merkel is right to caution, despite the strides the EU has made this year. Notwithstanding her warning of the difficulties of keeping the EU united and moving forward, the glass is more than half full.