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Ahead of the summit of EU leaders in Granada this week, 32 former high-level politicians, EU officials and economists published a manifesto for “the European Union at the Time of the New Cold War”, calling for a central fiscal capacity for the EU, the completion of the Banking Union and Capital Markets Union, a shift to a new EU “business model” and institutional reforms.
The signatories, who include former EU Commission president Jean-Claude Juncker, former European Council president Herman van Rompuy, former Italian prime Mministers Romano Prodi and Mario Monti, argue for a “gradual and pragmatic federalism.”
“The time has come to acknowledge that nationalism is contrary to the national interest, that Member States’ national sovereignty is ineffective unless it is redefined in terms of European sovereignty, and that the supply of European Public Goods is crucial to satisfy national demands for economic, social, and political security,” the manifesto argues.
Looking at the challenge for European industries to adapt to the technological changes, a lot of money will be needed, according to the signatories, encompassing economists like Jean Pisani-Ferry and former central banker Erkki Liikanen.
“Reaching the technological frontier will require mobilising private and public resources that no Member State can do alone,” they write, arguing for the completion of the Banking Union and the Capital Markets Union.
According to the signatories, what is needed is “a decisive move towards the construction of integrated and deep European financial markets based on the issuance of a European safe asset and the definition of a fully-fledged crisis management system.”
The need for a European Safe Asset and further fiscal integration to achieve a Capital Markets Union has recently also been put forward by the leadership of the European Central Bank, namely Fabio Panetta and Christine Lagarde.
The manifesto also hails the EU’s reaction to the pandemic with its recovery fund as a positive step, especially compared to the European approach to crises in the previous decade.
However, it criticises that the fact that the EU can only go for common solutions in times of crisis made the institutional structure very fragile and argues for a more stable regulatory framework.
For this, the manifesto also brings back the call for achieving a Fiscal Union: “Short of that, the EU will not be successful in pursuing its green and digital agendas and will continue to be at the mercy of external events, thus remaining vulnerable domestically and on the global scene.”
According to the signatories, stable EU funds underpinned by proper revenue streams will also be needed to ensure European security in light of the Russian invasion.
more at EURACTIV