The New Year of 2007 sees the European Union at a crossroads. The direction that it decides to take will have an inevitable impact on the future of the continental entity that is beginning to take shape, overcoming differences dating back to sixteenth century Spain, when Carlos I of Spain was also Carlos V of Germany. Among the most immediate challenges will be dealing with the integration of Romania and Bulgaria, which became members of the EU in January, raising the number of members to 27. Another challenge is the introduction of Slovenia as the first Eastern European country in the EU. Finally, there is the extremely important challenge of getting beyond the Constitution, which has been a big failure in terms of trying to construct the new Europe. Since 2005, the Constitution has been at an impasse because of its rejection by voters in France and the Netherlands.
For Sara González, a professor at the Complutense University of Madrid, “The challenges involved in the process of European construction are many, and they have a very varied content.” In addition to the Constitutional Treaty and the future implications of Turkey, the following areas of concern stand out, she says: “The reform of the labor market; an active policy of research and development; creating an energy policy for the future; the opening of an authentic intercultural dialogue that reflects cultural complexity; and overall, the definition of a common foreign policy that reflects the arrival on the scene of such new powers as China and India, as well as changes in the priorities of the United States.”
These challenges are being considered in a climate of general pessimism. Economist Andre Salir, who is a professor at the Free University of Brussels and a member of the advisory group of the current president of the European Commission, [José Manuel] Durão Barroso, recently revealed his distaste for the current situation. “It seems that nobody is piloting the plane; there is a problem of lack of leadership,” he says. According to Salir, “We don’t see any leaders who might explain to mature European societies the pressing necessity of adapting to the great challenges that Europe faces.”
Along the same lines, Josep Borrell [Fontelles], a socialist politician who was president of the European Parliament until recently, declared that “the current European climate is depressing; the weakness of the EU political system and its legitimacy are obvious.” From the economic point of view, Borrell believes that Europe must “create a unified policy” since “the global economy passes through Asia and the United States, while Europe only watches what is happening.”
Germany will be one of the key countries in the immediate future, not only because it has the greatest political weight within the European Union, but also because it has the strongest economy in Europe. In addition, Germany will occupy the rotating presidency of the EU over the next sixth months. Angela Merkel, Germany’s chancellor, appeared before the European chamber on January 17 in order to present her program to the Presidency. Its highest priority is to resolve the impasse surrounding the Constitutional Treaty so that the EU has the rules in place that its 27 member states need. Merkel announced last June that she will present a roadmap for getting out of the crisis. She noted that a definitive solution has to occur before the elections for the European Parliament take place in spring 2009.
“It is important for Europe, its member states, and its citizens that the process come to a positive conclusion before the European parliamentary elections take place in spring 2009,” Merkel said. “Anything else would be an historic failure.” Her speech was greeted by a great deal of applause from the European representatives.
To achieve these goals, European politicians will have to attract the attention of citizens to the constitutional process, and in such a way that the process receives the backing of such countries as France and the Netherlands. Analysts attributed its rejection to the fact that the population of those countries felt excluded from the process, and to the highly technical and bureaucratic contents of the treaty, which generated distrust. “People want a Europe that works effectively, not one that requires them to waste time on institutional battles and power struggles. Too many years have been spent rewriting the treaties, involving too large a dose of rhetoric, and leading to minimal agreements. That approach is clearly insufficient. From Amsterdam to Nice, it now seems that that the Constitution is going to present another mini-treaty. Naturally, people are tired” of that approach, notes Jose Ignacio Torreblanca of the department of political science and administration at the UNED.
With the arrival of Merkel, the widespread pessimism seems to have abated somewhat. “Angela Merkel is a leader who is very much appreciated, not only in Europe but in the whole world. She has made proposals for revitalizing the Union and bringing it out of its current morass,” notes Victor Pou, a professor at the IESE [business school]. Despite confidence in Merkel, Pou believes that [her term of] six months provides her with “little time to achieve the great goals that the Germans are aiming for.” At the very least, Pou adds, Merkel will not have enough time “to lay the groundwork of an institutional recovery that will, in any case, depend on the results of the French presidential elections in 2007 and whose results will not be complete until the European elections in 2009.”
Sara González also believes that “there is hope” at the start of 2007 that the German presidency of the Union will enable the member-states to end their impasse and “begin a process of review and create a consensus that will make it possible to achieve a text in the Constitutional Treaty that is generally acceptable, while also ratifying a larger and more fundamental text. Such an agreement would postpone the more functional parts of the treaty, which would define development, until a second Treaty” is created] Nevertheless, she says, “we are realists,” and conversations could begin with “less ambitious goals” given the fact that “a compromise involving a lot of political content will be required among the different member-states of the EU, especially those countries that play a leadership role.”
For González, the position of France is a “great weakness.” “Neither the [French] candidate of the right nor its Socialist candidate appears to have made it a priority to commit to building Europe. There is no significant effort to demonstrate a creative and popular [version of] ‘Europeanism.’ I believe that this position on the part of France does not simply represent a reversal but also a regrettable weakness in the process of constructing Europe,” she argues.
Merkel has defended the contents of the constitutional treaty, especially its provisions for a foreign minister and three presidencies, which would give greater continuity to the actions of the EU. In fact, Merkel has dramatized new initiatives that would, for the first time, establish a triumvirate of presidencies with Portugal and Slovenia. Over a period of 18 months, their priorities will be presented in the European legislature to José Sócrates, the Portuguese prime minister, and to Janez Jansa, the Slovenian prime minister. Socrates will assume the reins of the EU during the second half of 2007 and Jansa will play the same role during the first half of 2008.
Economic developments will favor the next captains of Europe. Europe is recovering, and its economic growth rate will grow, in contrast with the United States, where growth is declining. Economic forecasts of both the European Commission and the United Nations are optimistic. Consumers and business people in Europe are more optimistic than they have been since 1999. One piece of good news is that things aren’t merely getting better in the countries recently admitted into the EU; that is, the emerging nations of Central and Eastern Europe. Instead, growth is focused on the core of the euro zone itself. Germany, which seemed to be mired in total stagnation, appears to have revved up its growth engines. For 2006 as a whole, the estimated growth rate of the euro zone is 2.6%; the future for the EU as a whole [including countries outside the euro zone] is somewhat higher because of the emergence of the new member-states from Central and Eastern Europe. The growth rate for the euro zone is twice as high as it was in 2005, or a half point higher than it was in forecasts made six months ago.
When it comes to Romania and Bulgaria, both countries’ membership in the EU has been a source of concern. That’s not because those countries are two poor and instable members but because when the doors were opened to them, the intention was to help them strengthen their democracies and economies. The problem is that they had not complied with the conditions for admission, but they were admitted nevertheless. As a result, for the first time in history, the EU is imposing safeguard clauses on recently admitted members –turning those countries into second-class members.
The mistakes made when those two Eastern countries were admitted led the EU to take a calmer approach to membership negotiations, and to lengthen the negotiation process whenever necessary. This will hurt official candidates for membership in coming years, especially Turkey. Several countries have opposed its entry, including Cyprus, Greece, Austria, the Netherlands, Denmark, France and Germany. Finally, Croatia and Macedonia complete the short list of countries officially recognized as candidates for EU membership.
In any case, this question is in the air: Will admitting new members turn out to be a good idea? “Admitting Romania and Bulgaria is major news, and it opens a great deal of opportunities for everyone, both here in the EU and elsewhere,” says Torreblanca. “Nevertheless, the leaders and peoples of Europe are in an introspective mood. They are somewhat melancholic, with people yearning for a past that was supposedly better. As a result, this expansion has not been something that was celebrated in Europe but something more often viewed as a heavy burden; not a collective success. However, it takes from 10 to 20twenty years to judge the success of admitting these countries, as in the case of Spain; you can’t do that in one day.”
For Victor Pou, there are both moral and political reasons why the EU could no longer delay its expansion into the nations of Central and Eastern Europe. In 2004, eight formerly Communist countries entered. Pou emphasizes that some of these countries are already seeing indicators of high economic growth that are typical for other emerging nations. “This is excellent news,” he says, because it will guarantee that “there is no reason to fear expansion.” Further expansions of the EU offer “enormous possibilities” for the older members of the EU “There will be new business opportunities for companies located in the old members, in many different respects: new markets, new investment opportunities, strategic outsourcing…”
Among the eight formerly Communist countries that joined the EU in 2004, the best success story has been Slovenia, which has just been incorporated in the euro zone on January 1, 2007.
On January 16, the European Central Bank reported that it had successfully completed the process of introducing the euro in Slovenia, where it has completely substituted for the Slovenian tolar as the only legal currency. “Two weeks after the introduction of euro bills and coins, Slovenia has successfully completed the process of changing its currency, as planned,” said the ECB in a press release.
Slovenia was the only country among three candidates selected to participate in the euro zone beginning in January 2007. Lithuania was rejected because of its inflation rate, and Estonia decided to withdraw [its application] before an evaluation was completed. None of those countries has made it clear when it will try again. Malta and Cyprus hope to pass the entrance exam in 2007 so that they can enter the euro zone in January 2008. Everything seems to indicate that they will succeed. Latvia has rejected the same timetable. Slovakia could be prepared for a test, and could become the fifteenth country in the euro zone in 2009.
Returning to the present, many analysts say that the situation in the European Union at the beginning of 2007 continues to revolve around the institutional crisis and related disagreements. The European Commission admitted as much recently when it organized a seminar in Paris that had the meaningful title, “What are Europe’s bad points?” The eloquent comments collected there from politicians, bureaucrats, experts and academics speak volumes. Some refer to a “profound crisis.” Others confirm that Brussels is experiencing a “surreal” period. Some go further, and talk about a Europe that has been “kidnapped.”
Analysts agree that big countries such as France and Germany must play a decisive role in leading the way. Experts believe that the European elections of 2009 will be a key date for assessing efforts made in that direction. That’s how Victor Pou views the situation, at least. “We have the two years ahead of us to possibly recover from the European crisis, so that we can finally see some light at the end of the tunnel.”