Employers' Group Manifesto on the Conference on the Future of Europe (CoFoE)

Making the European Union Capable of Action

The COVID-19 pandemic has shaken our societies and democracies. As we implement our exit strategies, we realise the magnitude of the economic, social and societal challenges we face, which are equal to the expectations citizens have of Europe. It is therefore the perfect moment for all Europeans to have their say in shaping the future of Europe.

The Conference on the Future of Europe is a one-time opportunity to open the debate beyond Brussels and the national capitals. The EU has been in crisis mode for more than 15 years: the failure of the Constitutional Treaty, the financial crisis, the Euro and sovereign debt crisis, the Ukraine crisis, the refugee crisis, Brexit and now the COVID-19 pandemic. The fact that the EU has somehow mastered all these crises shows on the one hand the degree of its resilience. But on closer inspection, it has often been more of a muddling through, rather than sovereign crisis management.

As it's clear to anyone that crises will continue to arise with the same regularity, and the next to come will be even more daunting for mankind, the EU must find a new way to deal with future unsettling challenges.

Climate change is a threat on a new scale – the droughts and floods of summer 2021 alone reached a new dimension – and it requires immediate and enormous efforts from our societies and economies. Green transformation is an opportunity for businesses but it also represents a huge challenge for them. The current skyrocketing of energy prices is worrying and might point to a future in which we face the risk of unstable energy resources.

Geopolitical situations remain highly volatile and dangerous: the unexpected escalation of the situation in Afghanistan is very critical and will require all efforts to avoid a humanitarian disaster. The oppressive political regime in Belarus – in geographical neighbourhood of the EU – remains unacceptable. On top of this, there are serious attempts to destabilise our Western democracies from the outside, especially from Russia (the latest example was during the German election campaign), which has increased the virulence of its cyber-attacks over the years.

If we accept the fact that the EU will remain in a permanent crisis ("permacrisis"), this must lead to the assumption that we will need more effective steering instruments that are flexible, agile, and simply faster not only to allow the European Union to survive, but also to act powerfully and effectively as a global superpower.

The economic and social polarisation which came with the financial and euro crises, coupled to the EU's inner conflicts following the refugee crisis of 2015/16 continue to have long-term destructive effects. As a consequence, in many EU member states, trust towards national governments is eroding. This poisonous combination creates a fertile ground for the rise of extremist political forces that not only want to destroy the EU, but are also sawing away at the cornerstones of our representative democracies. The Conference on the Future of Europe has been called upon to send a clear signal to reverse these trends. For democracy, for the rule of law, for a social market economy and for European unity.

The EESC is well placed to play a very constructive role at this conference. Representing the bone structure of our day-to-day life in all European countries with its deep-rooted links with all walks of life (employers, trade unions, civil society at large), the EESC has the unique role of bridging the gap between policymakers and civil society.

The Employers’ Group is the representative body within the EESC for more than 20 million European companies – big and small – that provide citizens with jobs, that deliver goods and services for consumers and form the backbone of our European economies and societal welfare.

With this paper we want to provide some impulse for the on-going discussions at the CoFoE, but certainly not anticipate the important discussions which have yet to take place. We, employers, feel hugely responsible and committed to this European Union, a historically unique peace and freedom project which has been able to develop prosperity and security in the EU and beyond. Yet, like every ambitious project, so too the EU needs continuous improvement and new ideas.

The objectives remain unchanged

The objectives of the European Union (Art. 3 TEU) have lasting validity: to promote peace, freedoms, its values and the well-being of its peoples, to work towards a fully functioning internal market and a competitive social market economy, full employment, and social justice, and strengthening economic, social and territorial cohesion.

However, unanimity must not be a dogma in common foreign and security policy

A major obstacle to the institutional capacity to act is the continued use of unanimity in key policy areas. The EU should speak with a strong, united voice. In foreign and security policy, the passerelle clause should be used by default to take qualified majority decisions. It is obvious: each single Member State – even the large ones – is too small on its own to be able to solve world policy issues on an equal footing with other global actors. This means that only if the Member States are prepared to relinquish sovereignty in this area will it be possible to gain a real strategic weight in foreign policy and act on par with the USA and China. In common trade policy, the exclusive competence of the Union (Art. 3 TFEU) has been clarified, but here the EU Commission must also actively and fully exercise this comprehensive competence, which the Treaty assigns to it. The problems the EU is facing with ratification of FTAs that have already been negotiated in line with the mandate of the Commission undermines the EU's credibility as a trading partner.

Take subsidiarity and proportionality seriously

In addition to "surrendering" national sovereignty in certain policy areas, there must also be a culture of "restraint" on the part of the Commission in exercising its right to propose legislation. The – much-strained – principles of subsidiarity and proportionality (Art. 5 para. 3 and 4 TEU) could prove to be a perfect instrument if they were finally taken seriously. The question of locating responsibilities is not an end in itself, but must be recognisably beneficial to citizens, i.e. plausible. Otherwise, there is a risk of loss of acceptance.

Not everything can be a matter for the heads of state and governments

The complexity of world affairs is leading to more and more decisions being dealt with purely by the heads of state and governments. This permanently overstretches the role of the European Council. The European Policy Centre (EPC)[1] proposes working more in accordance with  the "Barnier method". Crisis teams and task forces (e.g. for Brexit) should be increasingly set up. This would then be an intermediate form between the traditional community method and looser forms of coordination between the member states. (The Brexit Task Force chaired by Michel Barnier, who acted as a semi-political negotiator, succeeded in maintaining unity between member states while ensuring the full participation of the EU institutions). Such innovative structures and processes could also be used as crisis teams to deal with extraordinary future challenges. At the same time, national politicians and civil servants should understand that EU Policy is not Foreign Policy, but Domestic Policy and thus devote much more regular time to Brussels, so that EU dossiers are dealt with in the same routine as national files.

Migration: Solutions must be found

Migration is proving to be one of the biggest and most dangerous wedges dividing the EU.

European refugee policy is full of contradictions, visible to all European citizens. We invoke our European values and at the same time are unable to provide humane conditions in hot spot regions with large scale refugee camps, or to save people from drowning in the Mediterranean Sea. In all EU Member States, there are political forces that very successfully profit from these contradictions and politically exploit the fear of irregular migration.

The asylum system must be reformed. We currently have a state of lawlessness at the European external border, which risks being worsened by the Afghanistan crisis. We need to implement a humane border policy. For this, we need fast and fair procedures, safe corridors, humane reception facilities, agreements with countries of origin and transit for faster repatriation of those who do not need protection in the EU after the procedure.

At the same time, we are running into an increasingly noticeable shortage of skilled workers due to demographic change: this should be a reason for the EU to further promote regular migration and specifically facilitate the immigration of skilled workers from third countries (e.g. in the areas of IT, the green economy, and healthcare professions).

Breaking free from the "ghost" of a transfer union

The financing of the Recovery Fund by the issuance of European debt instruments has raised the old fear that debt-financing of expenditure at EU level could become the norm and undermine budgetary discipline in the EU Monetary Union. The European institutions – facing a pandemic of historical dimensions – showed their capacity to act swiftly. This type of crisis management can serve as an example for instruments used in future crises, under the condition that the funds are perceived as well-spent. Therefore, their use must be clarified in a transparent manner and controlled by the EU Commission. On this basis, it should be possible to transform the ghost of a transfer union into a European virtue, a union of solidarity in which neighbouring countries help each other in times of exceptional need caused by no fault of their own. Such wider sharing of risk might become a credible approach if market discipline can be significantly strengthened.

Strengthening the Single Market

The Single Market has contributed significantly to economic growth and consumer welfare within the European Union. It has not, however, achieved its full potential, and economic gains could be secured by better and more effective application and enforcement of existing legislation and a deepening of the Single Market. Therefore, infringement procedures should be accelerated and the EU Pilot tool applied more often. The cost of Non-Europe is costs arising from the lack of full achievement of the Single Market and the benefits foregone for citizens, businesses and Member States. Further removal of barriers to the free movement of goods and services brings benefits for everyone – customers, workers and businesses. The proper functioning of the Single Market also depends on the safety and quality of goods and services.

During the COVID-19 pandemic, businesses faced new barriers imposed by some Member States excessively restricting the free movement of goods, services and people. We need to ensure that this will not be repeated and that Member States will work in a more coordinated manner. One precondition of a well-functioning Single Market is better-law making. We have to avoid excessive bureaucracy that brings extra costs for business and society. Thorough impact assessments with SME tests, ex post evaluation and the application of the "one in, one out" principle are the golden rules of better regulation, and must be used in practice.

Furthermore, for all new initiatives, a specific competitiveness check should be undertaken before their launch.

Creating a new context for trade policy

Open markets and reducing unjustified trade barriers are and must remain the EU's fundamentals. In view of protectionist tendencies and geopolitical conflicts, the trade policy environment has become harsher. For the European Union, international trade and investment on fair terms are a prerequisite for securing prosperity, sustainability and jobs. In this context, the quality of trade agreements must be continuously improved in order to push back exploitative and environmentally damaging economies in favour of sustainable economic models. We call for an open, fair, inclusive and predictable international trading environment that throws its weight behind democracy and the rule of law, peace and stability, social and environmental sustainability, and an open, fair and rules-based world trade order. Europe needs to protect global trade rules, ensure a level playing field and strike the balance between strategic autonomy and openness to international trade, by promoting a strong industrial base and resilient international supply chains. We should not forget that more complexity, bringing excessive red tape for foreign companies, could harm the attractiveness of the EU Single Market, as well as the trust of our trade partners.

Moreover, trade policy has the potential to contribute significantly to mitigating climate change by, for example, facilitating trade of environmental goods, services and technologies. However, the global trading system is in its deepest crisis since the World Trade Organisation (WTO) came into existence. To revive rules-based multilateralism, it is crucial to adopt a positive approach based on a commitment to common goals – such as modern rules, better market access and climate action – and reinforced by the urgency of these overarching goals.

Becoming capable of action in order to remain relevant

If one agrees with the analysis of a "permacrisis", then structural changes are needed, otherwise the EU will only be driven by and react to global political developments. Instead of relying on the current rigid legal governance approach, which in most cases is designed to limit EU action, the Union must be enabled to exercise its powers more flexibly when confronted with crises. In return, it must exercise more restraint in areas that can be better resolved at the national level.

As much as there are good arguments not to underestimate the soft power wielded by Europe through the "Brussels effect" (Anu Bradford) of setting international standards through good governance, there is a need for complementary hard power through a common security and defence policy. A fully fledged European Defence Community would provide a strong foundation for the Common Foreign and Security Policy and also give more support to a common migration policy. Only in this way can the idea of constituting Europe as an area of freedom, security and justice become a reality again.

Social welfare requires a sound economic foundation. Competitiveness and higher productivity based on skills and knowledge represent a sound recipe for maintaining and enhancing the wellbeing of European societies. Investments in new technologies and innovations that will help to achieve a net zero carbon EU by 2050 need new mechanisms and regulatory frameworks that reward these efforts and create large-scale incentives. Political measures to address climate change will require agile and technology-driven approaches. It will require efforts at every level of society. Enterprises need to be enabled to act at the centre of this long-lasting combat by innovating, investing and offering solutions globally.

Whether the Conference on the Future of Europe will ultimately be a success depends largely on whether and to what extent the European Council is prepared to take on board the demands and proposals that this conference will produce. Together with the European Parliament and the European Commission, it must develop a follow-up that is not limited to a "roadmap" but leads to real action. A dashboard should be created allowing citizens to see how their proposals are followed-up. If suggestions are not taken seriously, citizens should receive an explanation.

The Conference on the Future of Europe shouldn't be seen as an end in itself, but rather as an ongoing process to substantially upgrade the implementation of Article 11 of the Treaty, and make it a structural element, not just an extraordinary gathering.

 


[1] https://epc.eu/en/Publications/Europe-in-the-age-of-permacrisis~3c8a0c

 

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