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IEP Lunch Debate with Michael Clauss: “Current challenges for German European policy”

Minis­terial Director Michael Clauss, Head of the European Department in the Federal Foreign Office gave an address on “Current challenges for German European policy” on 29 May 2013 at the Repre­sen­tation of the Saarland in Berlin. Prof. Dr. Mathias Jopp, director of the Institut für Europäische Politik, moderated the event.

At the beginning of his speech, Clauss stressed the precarious situation in the Eurozone. The high youth unemployment rate of 23.5% as well as the economic recession in the crisis countries of the euro-zone dominate the public and media debate. Although the position of euro-zone countries such as Spain, Portugal, and Italy on the financial market has improved thanks to various rescue measures and first successful reforms, an economic recovery is not to be expected before 2014–15.

The southern European crisis states are faced with the double challenge of having to reduce their debt levels and deficits on one hand and invest in the recovery of the economy on the other hand. Regarding the lack of economic compet­i­tiveness and the high levels of unemployment, Clauss did not exclude the possi­bility of heavy strains being placed on the affected popula­tions, since the success of reforms is generally visible only after long-term adjustment processes. This will put the social accep­tance of the national govern­ments and the EU severely to the test.

Therefore, the pressure on the EU to act is large. First starting points for encour­aging investment are an inten­sified credit allocation by European Investment Bank (EIB) and a re-allocation of unspent resources from the Multi­annual Financial Framework to promote investment in economic growth and to combat youth unemployment. In the medium-term, it is necessary to reform the Economic and Currency Union (EMU), to implement stronger economic policy coordi­nation and to conclude binding contracts between euro-zone member states and the European Commission over national reform programs. Concerning the estab­lishment of a solidarity mechanism in the EMU, Clauss empha­sized that this – if at all – needs to be strictly separated from other rescue measures such as the ESM. The German federal government sees this merely as a project-related and restricted instrument to absorb shocks created by reforms in the crisis countries.

In the long term, according to Clauss, the EU cannot avoid a treaty revision to funda­men­tally reorganize the EMU and strengthen the EU’s foreign policy capacity. However, a simpli­fi­cation of the European political system and the political decision-making processes is met by strong reser­va­tions in the member states and will hardly make the agenda in the run-up to the European Parliament elections and the appointment of the new Commission in 2014.

Clauss spoke out strongly against concerns over the insuf­fi­cient function­ality of the Franco-German tandem: despite the economic dominance of Germany in Europe, both EU states are still the central motors of integration, which Franco-German initia­tives in the near future will show.

Clauss noted a lack of devel­opment in the European enlargement policy. The accession negoti­a­tions with Serbia are above all dependent on progress with regard to the relationship with Kosovo and, despite first successes, will most likely not begin before 2014. The accession negoti­a­tions with Turkey have also stalled due to French opposition and the unresolved conflict with Cyprus.

Furthermore, Clauss intro­duced the German legal initiative for Europe with the goal to establish a new procedure for the protection of the EU’s common funda­mental values without neces­si­tating treaty change. The current instru­ments, namely the removal of voting rights according to Article 7 TEU and the infringement proceeding of the European Commission are either extreme sanctions or limited to the revision of the acquis.

The subse­quent discussion focused above all on the role of Great Britain and the planned refer­endum on EU-membership. Despite criticism of Cameron’s notion of a “patchwork” EU, Clauss empha­sized that it is funda­men­tally in Germany’s interest for Great Britain to be an important member of the EU. Without Great Britain, the EU loses not only its inner counter­weight to the Franco-German tandem but also a partner with concep­tions of trade, economic, and financial that closely resemble Germany’s. Despite the urgent need for a new EU strategy to repair and stabilize the euro-zone, its break-up is – contrary to British opinion – an unlikely scenario, since the stabi­lizing measures so far are showing first signs of success.

By Julia Klein