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Scholz’s post-national Europe

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

PARIS — Five years after French President Emmanuel Macron outlined his ambitions for a more integrated, sovereign Europe, a German leader has finally responded, setting out their own vision for an enlarged, reformed European Union to counter a revanchist Russia — one that brings the bloc’s impasse over reform to the fore.

Chancellor Olaf Scholz’s vision for a geopolitical union stretching from Dublin to Tbilisi was welcomed without effusion in Paris, where there’s little enthusiasm for further EU enlargement. But it raised red flags in Central Europe too, as it runs counter to the determination of many smaller EU countries to preserve their national veto rights on issues ranging from taxation to foreign policy and enlargement negotiations.

In a speech he gave in Prague in August, the leader of Berlin’s three-party center-left coalition declared that “the center of Europe is moving eastwards,” and voiced strong support for admitting all Western Balkans countries, Ukraine, Moldova and eventually Georgia into the bloc.

However, he made the expansion from 27 to 30 — and ultimately 36 — members contingent on reforming the EU’s cumbersome decision-making procedures, looking to allow qualified majority voting on a range of vital policy areas currently subject to the unanimity principle.

“We must also make the EU fit for this enlargement,” Scholz said. “Where unanimity is required today, the risk of an individual country using its veto and preventing all the others from forging ahead increases with each additional member state. Anyone who believes anything else is in denial about the reality of Europe,” he added.

The veto is, indeed, the curse frustrating the union from taking timely and decisive action — as Hungary’s foot-dragging on sanctions against Russia has recently shown — and Scholz was right to put the issue on the table.

But in so doing, he fell into a hornet’s nest of resistance not only in Budapest and Warsaw — the two Central European members on the EU’s naughty list for trampling judicial independence — but also in Dublin, Luxembourg, Vienna and perhaps even silently in Paris.

The Central European backlash has historical, ideological and practical roots. The countries that joined the bloc in the last two decades are haunted by their history of Soviet vassalage and are, hence, reluctant to cede their veto power, even to more benign and democratic EU partners.

Ideologically, the issue pits supporters of a looser “Europe of nations” in which national capitals wield the most power, against those who advocate for a more integrated, centralized, federalized and sovereign EU, where the European Commission and the European Parliament have much more say.

Scholz suggests a halfway house, where qualified majorities of member countries, weighted by population size, would gain more sway, and outliers would have less opportunity to shield national exceptions — whether to lure multinationals with ultra-low corporate taxes or to block sanctions and EU crisis management operations.

Nationalist leaders in Warsaw and Budapest rail against what they perceive as a power grab for a Germany-dominated Europe. They warn that the EU’s most populous nation would use the voting system to throw its weight around, bending smaller countries to its will _ just as it was accused of doing when trying to force reluctant eastern neighbors to accept migrant quotas.

Moreover, the proposals come at a time when Central European governments feel they’ve been proven right — and France and Germany wrong — about the danger of Russia, which makes them even less inclined to be outvoted by their Western European cousins.

Anti-German and anti-Brussels rhetoric is likely to loom large in the run-up to next year’s parliamentary election in Poland, with Jarosław Kaczyński’s ruling conservative nationalist Law and Justice party facing a strong challenge from a pro-EU opposition coalition, which is led by former European Council President Donald Tusk.

The outcome of that poll may indeed prove more influential on the future shape of EU integration than any debate about institutional fixes.

For its part, France is broadly in favor of more majority voting, notably to prevent a race to the bottom in corporate taxation. But even Paris may balk at the risk of being outvoted when it comes to policy on Africa or the Middle East, where it has historic interests.

Another area where Scholz’s proposals will struggle to advance is in overcoming old disputes within the EU over migration policy and fiscal rules.

The German leader seems to be counting on labor shortages in many member countries to help surmount more than a decade of deadlock over how to control and manage asylum and immigration. He advocates the promotion of legal migration for work in return for a more effective crackdown on illegal immigrants, using EU funds as leverage on transit countries to accept their repatriation.

The trouble is, not only do most migration experts say such repatriation strategies don’t work —given the underlying drivers of migration like climate change, poverty and conflict — but politically, Scholz is swimming against a tide of public hostility to all migration, legal or otherwise, which has helped sweep hard-right nationalists and populists from the fringes to the brink of power in countries like Sweden and Italy.

This noisy populist chorus is likely to drown out moderate voices advocating for managed migration.

Similarly, Scholz’s call for a reform to EU’s budget rules, which would set a realistic pace for reducing national debt while allowing “transformational investments,” may well be derailed by a looming recession and the Russia-related energy crisis. The fiscal rules are currently suspended and are due to go back into force next year, but it may be easier just to kick the can down the road than to try and to negotiate a fraught compromise against a backdrop of high inflation, jittery bond markets and shrinking economies.

The last decade of serial crises has shown that when under the gun, the EU can agree on innovative and previously unthinkable solutions, such as common borrowing, collective purchases of vaccines and giant recovery funds. This may prove to be a more plausible route for future integration than formal institutional debates over majority voting and veto rights, whatever Scholz or Macron may propose.

Another year or more of war will further transform the EU from an exclusive common market into a geopolitical community, grouping all the countries to the west of Russia — except Belarus. That may well force the bloc to eventually change its rules. But it is more likely that the EU will instead go on finding creative ways of bending those rules to make what is necessary possible.



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