Does the European Union's ability to act erode?

SPEECH/07/102 Meglena Kuneva Member of the European Commission, responsible for Consumer Policy Does the European Union's ability to act erode? Strategy Group on the Future of Europe Berlin, 26 February 2007

Excellencies, ladies and gentlemen, I am honoured to address such a prestigious and timely forum. Let me start with a passage from something I was reading recently: I quote: " [some people believed that it was] particularly inappropriate to draw up a report on European Union at a time when the European concept was passing through a crisis and the incompleted European structure was swaying. Furthermore there was the feeling that the economic recession has made itself felt in our Member States without any large-scale joint action having been planned to counter the effects of economic depression and unemployment. Public opinion is extremely sceptical on the will to establish a genuine European Union and solve the real problems of the day at European level. It wants results and questions the lack of political will on the part of its leaders. The crisis in Europe is so serious that we must, in the immediate future, save what has already been achieved and, working on this basis, take drastic measures to make a significant leap forward. European Union will only achieve its objectives by means of institutions which have been adapted to its new requirements. Seen in this light, the proposals put forward in my report should help us to overcome the present crisis, improve the functioning of the institutions, give shape to yesterday's and today's political options and work out new ones. As I see it, this is the main task at the present time." Sounds familiar? Crisis, economic depression, unemployment, need for results, lack of political will... No, it is not from the latest pamphlet by a Brussels or Berlin think-tank. It is from the Tindemans report, written in 1975 by the Belgian Prime Minister at the request of Heads of Government of Member States of the European Communities. Sometimes it is good to go back to the past to put the present into perspective. This is not to belittle the present challenges. But it is a healthy reminder that we have been there before. It can also be recalled that the gloom of the 1970's and early 1980's was followed by arguably the most successful period in European integration: the single market, the Euro, Schengen. All the while, the EU was increasing membership at regular intervals. So, is Europe's ability to act eroding - again? I must confess I have a problem with the proposition, for two reasons: Firstly, I am at variance with the diagnostic. The question comes uncomfortably close to the suggestion by some that the EU is in crisis. And this suggestion, in turn, is sometimes linked to the recent enlargements of the EU. For reasons that I will elaborate in a moment, I cannot subscribe to the proposition. Secondly, I am an incurable optimist. And as such, I cannot believe in the inevitability of Europe's decline. I will later set out a few thoughts on why I believe it is in our own hands whether the EU will slide into a slow decline or find the will to accomplish a renewal. 2

You may remember the early years of the new millennium. During the build-up to the 2004 enlargement there were frequent alarms that the forthcoming expansion with 10 new Member States would paralyse the EU. The EU would lose its capacity to decide and act, it was suggested. Now, with the 3-year anniversary of the May 2004 big bang enlargement approaching, the EU's track record would not seem to lend support to the doomsday scenarios preceding the enlargement. Just for the record: after May 2004, the Union of 25 Member States agreed on the new Constitutional Treaty in June 2004. The Union of 15 had not been able to do it before. The Union has thereafter taken fundamental decisions such as the so called Hague Programme in the area of migration, combating terrorism and justice. The EU completed the accession negotiations with and took in as members Bulgaria and Romania. It launched the negotiations with Croatia and Turkey in 2005. And it agreed on the financial framework for the period 2007-2013. I therefore can only conclude that the doomsday scenarios of a paralysis were clearly exaggerated. As Olli has put it: the Cassandras were proven wrong. Problems of EU decision-making are not primarily caused by the number of Member States. Again, one only needs to look at history: the EU-9, 10, 12 and then 15 were perfectly capable of sitting on the Community patent or, say, the European Company Statute, for 20 or 30 years. This is not to say decision-making has become easier. It is difficult now. It was difficult in Leo Tindeman's days. But paralysis, or erosion? I simply do not believe that is borne out by the facts. We should look for ways to make the club function better. Like all organisations, the EU should constantly seek to adapt to changing circumstances and search for more efficient ways of operating. That is why as a former member of the Convention and now member of the Commission I fully support the efforts of the German Presidency to pave the way for an institutional settlement. But I do not agree with those who attempt to inject a sense of urgency by proclaiming that the EU is in a deep crisis. It is misplaced and detrimental to put the blame on the EU for the domestic policy failures of Member States. I am thinking in particular of the failure of a number of Member States to undertake the necessary reforms in good time. I'm reminded of Ortega y Gasset who in a different period noted that "Spain is the problem, Europe is the solution." I'm too polite to name the problem, or rather problems, but I also offer Europe as the solution. It is fair to say that a general air of pessimism seems to be hanging over much of the European Union. The disappointing economic performance of many Member States including the 3 central economies I just referred to is raising questions of legitimacy. And whilst those questions should properly be addressed to the governments in question, the EU all too frequently becomes a soft target and a scapegoat. For it can hardly be held as a failure of the EU when Member States do not implement commonly agreed rules and when as a result policies do not yield the results they were designed to deliver. 3

A case in point is the Internal Market. More than 15 years after its conception, the Internal Market is still cruising well below potential. At any given moment, we have 1000+ infringement proceedings for poor transposition and implementation of precisely those rules that were agreed to establish the Internal Market. Moving from the diagnostic to the prescription - how do we shift gear and start to take things forward again? I must start by saying that I thought this pessimism was specific to Bulgaria! The present gloom and lack of self-confidence in Europe is very disturbing to me. It gives the impression of a static entity, almost like something that has lost its will to live. The Europe my country joined, or thought it was joining, is much more dynamic, outward-looking and humane. That is the Europe we should all be working for. The renewal of Europe - renaissance - needs to start now. Europe is our best response to globalisation. Europe should be about confidence in the future, about managing change. We need new images. Let's retire the images of Europe as a teetering bicycle or the eternal train leaving the station. What about Europe as Global navigation system for the new world? I am always equally puzzled by the suggestions by some that we should not talk about Europe in the run-up to certain national elections. How can this be? How can this be, when we know that a good 60 or 70% of national legislation of Member States have their origin in commonly agreed European policies? If we believe that Europe is our best response to globalisation - as I firmly do - why should this not be a leading theme in national elections? My colleague Peter Mandelson in a recent speech made the case that the EU needs a new rationale for the 21st century. I agree with Peter to a certain degree. I think Peter is right in saying that the institutional settlement is not about re-launching the old Europe. Whilst we should not shy away from rejoicing about the remarkable achievements of the past 50 years, we do need a new narrative for the next 50. And it seems to me that the way the world is shaping, a number of themes suggest themselves: globalisation, energy, climate change, and - even at the risk of sounding immodest - the citizen as consumer. These challenges are faced by all our Member States. None of us can deal with them alone. It is through these themes that we can raise both the relevance and the visibility of Europe amongst our citizens. Not through crisis-mongering. Europe is not in crisis. But through setting our clearly the enormity of the challenges we face. And through setting out convincingly the case for why, in order to be able to deal with these challenges, we need to adjust and streamline our own capacity to act. At the same time, we need to be realistic. We cannot expect citizens to embrace Europe simply through arguing the case for Europe in broad strategic macro-political terms. 4

What counts equally is how citizens engage with Europe in their daily lives. If people see or feel no apparent benefit, we can hardly expect to attract and retain their enthusiasm. Hearts and minds can only be won if Europe gets under the skin of its citizens; if it becomes part and parcel of people's lives; if it actively demonstrates both its relevance and its benefits. This need to engage more closely and effectively with citizens is not lost on the European Commission. Quite the reverse. Indeed, recognising the essential need for greater citizen connection, the Commission adopted the Citizens' agenda in May of last year. The Commission is at present addressing this by, amongst others, conducting a review to establish an Internal Market for citizens. I firmly believe the Barroso Commission is right in picking this as a flagship initiative of its remaining mandate. The internal market has led to some significant victories for citizens. For example, effective action at EU level has resulted in lower prices in telecommunications, and lower prices in air transport. The next prominent example might be the forthcoming action to clamp down on excessive roaming charges for mobile phone users. But much remains to be done to improve the functioning of the Internal Market. Admittedly, I have a direct interest here. I believe Consumer policy is ideally placed to help the EU rise to the twin challenges of growth and jobs and re-connecting with its citizens. Europe s 493 million consumers are the lifeblood of the European economy. Consumer consumption accounts for 58% of EU Gross Domestic Product. Picking winners is generally a poor proposition. Except if you pick the consumers. If we let consumer outcomes be the guiding standard for policy decisions in a host of areas, including the Internal Market, we will hit two birds with one stone: efficient resource allocation and competitiveness on the one hand, and increased consumer satisfaction and therefore increased legitimacy for the EU on the other. This is an important bridge between the Citizens Agenda and the Growth and Jobs agenda. Ladies and Gentlemen, The need to revitalise Europe, and in particular some of the large, original Member States, is pressing. To bring this point home, I might by way of conclusion reiterate an anecdote shared by Massimo D'Alema. Mr D'Alema recalled a meeting some time ago between European socialist leaders and the Chinese Prime Minister. The Europeans voiced their concern with the rising unilateralism of the U.S. The Chinese PM did not share the concern: he was confident that on present trends, the world was heading for a bi-polar U.S.-China system by the middle of the current century. He then remembered the company he was in, and being a polite Chinese, added that of course there were also the Europeans - if they are united. That is the future of your children, and mine: a bi-polar U.S.-China system. And there are also the Europeans - if they are united. 5