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