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IEP Lunch Debate with Günther VERHEUGEN: “European Policy for Growth and Employment”

left to right: Prof. Dr. Wolfgang Wessels (University of Cologne), Günther Verheugen (EU Commission), Dr. Elfriede Regelsberger (IEP).

In his talk Günther VERHEUGEN, Vice President of the European Commission and Commis­sioner for Enter­prise and Industry, empha­sised three main points: the deepening of the EU, its economic future, and the inter­na­tional respon­si­bility of the EU. Verheugen let there be no doubt that the EU requires a new and improved treaty foundation in order to create an insti­tu­tional framework that allows timely and just decision-making processes. In doing so, partic­i­pative and trans­parent elements must receive increased attention. The EU must provide an answer to substantive challenges, such as the mainte­nance of internal security and climate change, and it must be prepared to take on an active inter­na­tional role. Verheugen explicitly rejected the widely accepted thesis that current integration fatigue is a reaction to the enlargement: “The problem is that the funda­mental question, ‘what now?’ was also unclear before, among the EU-15.” After the European Council (15–16 July 2006), he carefully diagnosed the first steps to overcoming the crisis and addressing future respon­si­bil­ities. He noted that a double-rendezvous is planned. The German federal government is to above all play a strong agenda-setting role during the German Council Presi­dency in the first semester of 2007 and propose a timetable for the contin­u­ation of the consti­tu­tional process. The process should be concluded by the end of 2008, just before the elections to the European Parliament in 2009. Given the upcoming French presi­dential elections in 2007, one should not prema­turely expect substantial results from the German Council Presi­dency, but rather more of a guiding process management role. The ratifi­cation process must be continued, said Verheugen, and it is necessary to stick to the name of the treaty. He explained that it is necessary to implement as soon as possible the next steps of deepening strived for in the Consti­tu­tional Treaty, including a more efficient and more trans­parent Council of Ministers, the reform of the compo­sition of the Commission and progress in European foreign policy. With the discussion of a deepening of the EU, the model of a “core Europe” is frequently brought into play. Verheugen empha­sised that a “core Europe”, meaning stronger cooper­ation between fewer member states, should not be viewed as a threat. In contrast, it forms a fall-back position that should not be ruled out if further progress cannot otherwise be achieved. A Europe of differ­ential speeds may not truly be desirable, but it is a possi­bility if the will is lacking for all states to participate.

The economic future of the EU formed the second main point of the presen­tation. Verheugen delivered a cautious judgment of the new growth and employment strategy: “The gover­nance struc­tures are functioning.” The respon­si­bility is accepted and the method – priority-setting, action plans, Commission recom­men­da­tions – will eventually be implemented.

The Commission itself places value above all on the effects of its measures for fostering small- and medium-sized businesses, a modern indus­trial policy and better regulation. Verheugen however rejected national inter­ven­tionist, direc­torial and protec­tionist endeavours. The Commission is only respon­sible for the framework. A higher growth rate, more employment and higher profits are all respon­si­bil­ities of businesses. Politics cannot thus compensate for the necessary changes or assume the respon­si­bility through constant struc­tural modifi­ca­tions such as outsourcing or mergers.

The Commission has set three goals for the coming years: On the macro­eco­nomic level the completion of the internal market occupies a prominent place. The coordi­nation of tax and financial policy is also an essential element. At the micro­eco­nomic level the emphasis of the Commission lies with the downsizing of bureau­cracy and improved legis­lation, said Verheugen.

In order to ensure the compet­i­tiveness of Europe, key quali­tative areas, such as education, research and devel­opment, and innovation, must be promoted. This relates more to an added quali­tative value rather than quanti­tative growth. For job-seekers it is their employ­a­bility that occupies the central place.

Verheugen’s remarks on the inter­na­tional respon­si­bility of the EU related above all to enlargement and neigh­bourhood policy. “Enlargement is a win-win situation”, he said, responding to critics and sceptics. Even using a conser­v­ative calcu­lation of interests one reaches a positive decision, and the enlargement of the EU by ten members was a necessary historical step in the aftermath of the artificial partition of Europe.

Verheugen expressed his support for the upcoming accession of Romania and Bulgaria even if the problem areas remain unresolved. This was based on the pedagogical effect of full membership, which could trigger a further impetus for the strength­ening of democracy and the rule of law. Regarding the Western Balkans he empha­sised the European perspective of the countries but also expressed his surprise that the internal reform process has lasted so long. There may now no longer be any new criteria or hasty enlarge­ments in the short-term since the last round must first be completely handled by the EU. Still, Verheugen explained that, funda­men­tally and in the long-term, no one can be excluded from EU membership

The European Neigh­bourhood Policy (ENP) offers diverse possi­bil­ities for the strength­ening of economic and political reform processes and for the stabil­i­sation of European neigh­bours. In principle, the ENP is the utili­sation of a privi­leged partnership and repre­sents a devel­opment step/phase in the European integration process. The result here, however, remains open.

To conclude Verheugen empha­sised that the EU will only be capable of survival if national elites engage themselves more strongly for the EU and the process of European integration. This dichotomy, i.e. the nation-state here, the EU or the Commission there, needs to be overcome.

By: Marcus Delacor