22 May 2020

Paul Goldschmid: Disappointments

I would have enjoyed rejoicing, with no second thoughts, over the new European horizons unveiled at the recent Franco-German summit. Indeed agreement between their leaders is a precondition to badly needed reform to ensure the EU’s survival. It is vital to reinvigorate a disabused public opinion which has been misled into believing that the Union rather than the Member States (“MS”) is responsible for the weaknesses for which it is blamed.
 
Unfortunately, the announcement on Monday evening of an “historic agreement” between France and Germany concerning the financing by the EU of an unprecedented economic stimulus package, is further illustration of how the powerful (as mentioned in my latest paper) succumb to the temptation to impose rather than negotiate solutions, each time they think that they can get away with it.
 
Instead of formulating their proposals in a letter addressed to the Presidents of the Council and of the Commission, as a contribution to the ongoing debate – as was previously the custom - the two Heads of State ostensibly ignored the mandate given to the Commission to submit by May 27^th, new proposals concerning the plurennial EU budget.
 
This happened despite the fact that Ursula von der Leyen had already formulated publicly some of her thoughts on mobilizing the EU budget – whose equilibrium is guaranteed jointly and severally in the treaty by all 27 MS – in order to increase available resources through the issuance of debt (€1000 billion) which would be disbursed to a great extent by non-refundable grants over the 7 year period covered by the financial perspectives (2021-28).
 
By unilaterally setting the amount (€500 billion) to be borrowed under a budget guarantee – as if they had authored the scheme – we were offered a cheap self-promoting show upon which French media seized immediately to crow over their President’s “political victory” over Germany (the Germans will appreciate!). Notable is also the speed with which the French Finance Minister boasted about the benefits France would reap in helping to refinance the French Health Service, Airbus and Air France; all this augurs of the resurfacing of the old Thatcherite disputes over “I want my money back” rather than encouraging the emergence of an appropriate powerful “transfer” mechanism, cruelly lacking in the previous budgetary toolkit.
 
Though there can be no doubt that the support given to these ideas by the Franco-German couple constitutes unequivocally a decisive step forward towards the further integration of the EU, the highhanded way by which the EU institutions and the other MS were treated could, regretfully,  considerably weaken their effects if not compromise their adoption.
 
At the very time when the goodwill of all is required to ensure the progress of the EU’s integration process, the arrogance shown by the Franco-German couple is humiliating to other EU leaders and creates a suspicion of hypocrisy among some of those pretending to promote a true European sovereignty.
 

-------------------------------------

 
Turning to the current stalemate in the Brexit negotiations, it is essential not to allow this situation to delay either the process of European integration or the coordination of the planned economic recovery. A recent enquiry by the British Foreign Policy Group points to the sharp fall in the confidence of the British public opinion in both the USA and China while trust in the EU has improved slightly; this creates serious doubts as to whether the U.K government will be able to implement its ambitious “global Britain” program. The EU should not shy from taking advantage of this development which its interlocutor would not have hesitated for a single moment to use, if the shoe has been on the other foot.
 
In practice, in order to end the uncertainties that are delaying – at the worst possible time – investment decisions and reorganisation measures on both sides of the Channel, the EU should notify the British,  when they resume talks at the beginning of June, that they fully endorse their stance, often repeated, not to extend negotiations beyond December 31, 2020. The Union should confirm its readiness to sign an agreement along the lines included in the “political declaration” agreed last October. It should encompass provisions to enforce common or equivalent standards to avoid unfair competition (level playing field), a workable control mechanism of trade between the UK and the Republic of Ireland (consistent with the Good Friday agreements and Single Market rules) and fisheries – probably the lesser of the controversial points – where, within a long term framework requested by the EU, a mechanism for fixing annual quotas satisfying British demands could be elaborated.
 
This modification of the Commission’s mandate should be adopted by the forthcoming European Council meeting, on the basis that any division breaking the unanimity between the 27 would automatically lead to the failure of the talks. It becomes therefore far more productive to focalise on an agreement based on WTO rules rather than extend discussions between parties whose ideological reference points seem unbridgeable: the British fetish over “national sovereignty” and the non-negotiable necessity to safeguard the privileges and obligations of Single Market members in order to avoid the disintegration of the EU.
 
Unfortunately, the behaviour of the British PM, with his frequent about-turns, makes it particularly difficult to accept vague promises to maintain equivalent standards in the current environment; equally, in order to take account of contradictory interests between MS, the cohesion among the EU 27 requires an agreement in which all “I” are dotted and “T” crossed!
 
Conclusion
 
The pandemic and its consequences have dramatically accelerated the calendar for implementing needed EU reforms. Given the new economic, financial, social and geopolitical challenges, vain political squabbles and overbearing egos should not be allowed to clog a path already sufficiently strewn with obstacles. Inspiration, drawn from the countless expressions of solidarity during the pandemic, should definitely take precedence over the morbid illusions of inward retreat and the dangerous compromises with the values of freedom and democracy that are resurfacing.

© Paul Goldschmidt