www.epc.eu 23 October 2013 01/12/2009
Pre-Summit Analysis
On Thursday and Friday this week, EU leaders meet once again for a Summit. Expectations are low that much progress will be made: with the political situation in Germany still uncertain, complacency has set in, especially since the threat of a euro implosion has receded and Europe’s economy seems to be on the tentative road to recovery. But the key topics on the agenda deserve to be treated with more urgency: the Economic and Monetary Union (EMU) must be deepened and underpinned with greater legitimacy to avoid a re-emergence of the crisis and the repetition of similar crises in future; Europe needs to come up with a real growth strategy quickly to tackle unemployment and to maintain feasibility of reforms at national level; Europe’s economy must reap the full benefit from the digital transformation that has increased productivity in the EU’s competitors; and the European Union (EU) must find a convincing answer to the tragedies of Lampedusa and Malta.
Towards a Genuine EMU?
Contact: Janis A. Emmanouilidis, Director of Studies (J.Emmanouilidis@epc.eu)
EU leaders will, during the course of the Summit, deal with the four buildings blocks of a reinforced Economic and Monetary Union, with a special emphasis on issues related to a strengthening of economic policy coordination, the social dimension of the EMU and the establishment of a Banking Union. However, the Heads of state or government are not expected to take any concrete decisions, which will – once again – be postponed to the next European Council in December 2013. There are still some major bones of contention and no definite decisions can be taken before the entry into office of the new German coalition government, which will take until at least December. EU governments and institutions (including the European Central Bank) cannot agree on key issues related to the introduction of a Single Resolution Mechanism (bail-in rules forcing losses on junior bondholders rather than tax payers; direct recapitalisation of banks through the European Stability Mechanism), the main features of “contractual arrangements”
between individual Member States and the EU/Commission and the establishment of a “solidarity mechanism” providing financial means to support the implementation of the aforementioned contracts. In addition, there are major disagreements concerning the question as to whether these and other reforms will require an amendment of EU Treaties, as suggested by Chancellor Merkel.
Further recommendations and analysis:
Foretastes of a ‘new normal’: the results of a low profile summit A budget for the euro zone?
Developing the social dimension of a deep and genuine Economic and Monetary Union Pathways to achieve a Genuine Fiscal Union
A real growth plan for Europe
Contact: Fabian Zuleeg, Chief Executive (F.Zuleeg@epc.eu)
Growth and jobs are once again on the agenda of the Summit, not least because the economic and social situation in many Member States is still serious despite tentative signs of recovery. But on substance, there seems to be little new on the table: the European Council is likely to simply reiterate its commitment to the Youth Guarantee scheme and note the importance of funding coming from various parts of the EU budget and from the EIB, with better regulation also likely to feature. This is not the comprehensive and targeted growth plan the EU – and especially the euro zone’s weakest members – needs. There needs to be a much more serious effort made to address the lack of private financing and investment. The Banking Union is necessary but is not sufficient to boost lending in crisis countries. Concrete action is needed, for example through the provision of an EU-wide insurance scheme to cover excessive political and economic risks in the crisis countries. But this will also require more solidarity: the countries in crisis cannot shoulder the burden alone. Without a return to healthy, sustainable growth across the EU, unemployment, including youth unemployment, will not fall, the living condition of many EU citizens will continue to deteriorate and the political feasibility of
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this reform path will continue to weaken. The necessary policies take time to translate into growth on the ground; we cannot afford to wait for more decisive action – but without a German Government in place, real progress is unlikely
Further recommendations and analysis:
A New Deal to help save the euro
Squaring the circle – A European Investment Guarantee Scheme (EIGS) The bank credit crisis and its impact on growth
The digital economy
Contact: Romain Pardo, Junior Policy Analyst (R.Pardo@epc.eu)
During the Summit, European leaders should create a bridge between two items on the agenda by considering the digital economy as one of Europe’s best opportunities for sustainable growth and job creation. As digital technologies are innovative and evolving rapidly, European leaders must be particularly forward-looking in this area. The time has come to place digital technologies at the heart of the EU’s future as they can benefit all economic sectors. Simply endorsing a single market in telecommunications and declarations of intent will not be sufficient. The European Council must define concrete actions to remove all obstacles that hamper ICT availability and usage in order to achieve the objective of completing the Digital Single Market by 2015. In this respect, the meeting is also an occasion for Member States to accept their responsibility as the harmonisation of national policies is essential, given the cross-border nature of ICT. The effective implementation of common rules is a precondition for the creation of a pan- European digital market. Finally, in the context of the recent spy scandal, which has eroded citizens' trust, the Council conclusions should not only be operational, but they should also underline the social and economic benefits brought by ICT.
Further recommendations and analysis:
Is Europe's future digital?
Digital Single Market
A comprehensive response to Lampedusa
Contact: Yves Pascouau, Senior Policy Analyst (Y.Pascouau@epc.eu)
Lost lives in the Mediterranean Sea, as happened recently in Lampedusa and Malta, demonstrate the EU's inability to set up a common asylum and immigration policy and to become a central player at international level. This mainly has to do with Member States' inability to address current challenges and their unwillingness to consider the EU as the appropriate level of decision making and action. It is unclear what possible remedies will be discussed at the Summit, but one thing should be clear: EU leaders cannot escape giving answers to a situation where people are dying at the EU's external borders. No lives will be saved if Heads of state and government use the same old recipe: targeted and usual financial and practical support, good intentions and grand rhetoric recalling EU solidarity without committing anyone to action. EU leaders have to provide clear and strong answers on what actions will be taken together at EU level instead of descending into the usual petty politics which characterise EU migration debates. This week's Summit should begin a new phase and draw new orientations, aiming to establish a real and comprehensive common immigration and asylum policy worthy of its name.
Further recommendations and analysis:
People dying at the EU's external borders: Can the Summit find the right answer?
For more information and comments about the October Summit, follow us on Twitter: @epc_eu Press Contact: Jennifer Gibson (J.Gibson@epc.eu)
Disclaimer: The views expressed in this Commentary are the sole responsibility of the authors.
