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2011 State of the Union Conference summary | 2011 State of the Union

Conference summary

The biggest event of the Festival d’Europa 2011 was The State of the Union conference, an international symposium, which took place at the Palazzo Vecchio on 9-10 May. The conference took stock of the current state of the European Union, its international situation and the main EU policies. Several high-ranking academics and practitioners, among which the president of European Parliament Jerzy Buzek, Culture and Youth Commissioner Androulla Vassiliou , the chairman of the European Parliament constitutional affairs committee Carlo Casini , Italian Foreign Minister Franco Frattini  and many other personalities,discussed the current situation and the future of the European Union. The event was coordinated by the European University Institute. This text summarises the most important lines of discussion.

In the four panels of the conference, there were broad and colourful discussions and many important challenges that Europe faces today were covered. AsEUI-President Josep Borrell  underlined, Florence and Palazzo Vecchio were the perfect places to hold the conference: Florence is the place of European renaissance and many of the speakers agreed that in some sense the EU needs a re-birth. As Lorenzo Bini Smaghi (Member of the Executive Board of the European Central Bank) elaborated, Michelangelo’s David, a copy of which is situated in front of the Palazzo Vecchio, can serve as a symbol for the current EU: fragile, but with determination and gaze towards the future.

In the morning session on Day 1 “Lisbon and Beyond” the President of the European Parliament Jerzy Buzek underlined that the EU is still a picture in the making and that it can be looked at from different perspectives. He stressed that the EU has reached a lot and can be proud, but that there is still much to do to finish the painting. In this regard he reminded that it is above all important to show solidarity and responsibility towards partners.

On a much more negative note, NYU-professor Joseph Weiler gave provocative presentation, in which he analysed the “possibly worst situation Europe has ever been in”. Recognising as well that Europe has reached a lot (above all peace and prosperity), he detected a serious democracy deficit, a political deficit and a grave lack of legitimacy. Prof. Weiler claimed that these failures are somehow build into the DNA of the EU and that Europe is currently failing, because it succeeded – the mobilising aim of Schuman has been reached and now “we are left with messy reality”.

While many panellists were as well very sceptical about many facets > to really move forward. Possibly the integration process reached to some extent a dead-end street and several speakers put the idea of a new Utopian or messianic approach on the table. Or, as MEP Sylvie Goulard claimed that the EU needs to enter a new cycle of integration.of the current integration process, they shared the overall positive judgement on what has been reached historically and reminded the audience that we are talking about a huge and ambitious project. Nevertheless, there was an agreement that currently there is a strong integration fatigue and that proper political will is missing

Another big issue was the Lisbon Treaty and the question whether it contributed to overcoming the EU’s problems. In this regard, Süddeutsche Zeitung journalist Martin Winter stated that the mission of the Treaty clearly has not been accomplished. According to him, the Treaty started off with great hopes, but it came at too difficult times and did not at all manage to create a positive momentum. However, as the US-ambassador to the EU William E. Kennard said, the Treaty is just a document and what is decisive is political will to implement it.

Furthermore, several speakers underlined that a major challenge is to get citizens on board of the integration project. There is no doubt that the EU recently continuously failed to reach the hearts of most of its citizens, as Italian Minister for Foreign Affairs Frattini  stressed. While the Constitution and the Lisbon Treaty had the aim to bring the EU closer to its citizens by making its structures clearer and more transparent, this clearly has not been achieved.

Strongly linked to the problems of getting the citizens on board, is the issue of rising populism and anti-Europeanism that is witnessed in many EU-countries and which was mentioned by several speakers. EP-President Buzek underlined that such a development is as well a natural reaction to the current financial crisis and the lack of money and that it is the task of responsible politicians to face this challenge. Almost all speakers agreed that to successfully tackle the populist challenge, European leaders have to make the case for European integration – with words and with deeds. In this regard, however, FrenchMEP Sylvie Goulard stressed that many politicians, who claim to be pro-European, make the situation worse: while speaking pro-European words, their actions are too often contradictory. Such behaviour puts citizens off and gives rise to populism. There was agreement that only by matching words and actions, by telling citizens the truth and by convincing them why we need a stronger Europe, the challenge of populism can be faced.

Another issue that was regularly referred to was that of identity. As the President of the Croatian Republic Ivo Josipović  stressed, a core challenge is to build a common identity, without damaging national ones and various speakers underlined that more common norms and values to rest on are needed. TheHungarian Minister for Foreign Affairs János Martonyi   underlined that the Union has to understand again better that it is a community of values

Opening the afternoon session of Day 1 “Europe in a Globalised world”, EUI-Professor Adrienne Héritier reminded the audience that the common foreign policy field is dominated by questions of sovereignty and gave an overview of what has changed in the policy field after the Lisbon Treaty. She summarised that the Treaty formulated in this area many lofty goals, but that the implementation remains overall disappointing.

Talking about the new institutional structure of Europe’s foreign and security policy, many speakers pointed to the problems of the double-hatted High Representative Ashton, which is a member of the Commission as well as of the Council: a set-up that is very difficult and which Martin Winter called a naive hope of the Treaty. As to the External Action Service (EEAS), the fight between Council and Commission regarding details and functions was refereed to several times.  While there was agreement that the Service currently still is incoherent and confusing, the fact that it is very ambitious and just born was stressed and that there would be hope for the future.

In this regard, many speakers highlighted the problem that the economic and financial trouble of today takes away much energy and that it is difficult for an economically weakened Union to develop its foreign policy. Linked to this, the argument was made that that the EU as well needs to be formulated realistic and reasonable aims in its aim to become a global actor.

More concretely, in the realm of the policy field of CFSP, there was a debate on what a European global actor should and could do. There was a broad agreement that the EU has all preconditions to be a strong actor in shaping global governance and that it is a role model for multi-lateral decision-making. Interestingly, this view was put forward in a particularly positive notion by the non-European panellists.

As well the American, Russian and Chinese diplomats speaking expressed their deep belief in what Europe can and should reach on the global stage. US-Ambassador Kennard and the Russian Deputy Minister for Foreign Affairs Alexander Grushko  reminded the Europeans that they should manage their expectations and that one has to be patient with judging the outcomes of the (according to them very positive) Lisbon Treaty.

On a more sobering note, however, many speakers reminded us of the weak performance of Europe as an international actor during the recent events in North-Africa.

During the morning session of Day 2 “The Euro after Lisbon”, renown academics and influential decision-makers, discussed “The Euro and Global Economic Governance”. First of all, many of the speakers reminded that the crisis of the eurozone is actually not a crisis of the eurozone, but more a crisis of individual countries. Furthermore, Lorenzo Bini Smaghi underlined that we are not in a cyclical, but in a structural crisis.

To start the session, however, Professor Paul de Grauwe from the University of Leuven pointed to some paradoxes of the relationship between sovereign debt and the spread of 10-years government bonds. To do so, he used Spain and the UK as demonstrating examples, showing how investors can and cannot trigger liquidity crises. Developing this example, he elaborated on self-fulfilling prophecies and the power of bad market equilibriums, when markets distrust governments.

After this general introduction to the crisis of the euro, there was a broad discussion on what the eurozone can do against the crisis and on the measurements that have been taken so far. Regarding the latter, the whole panel agreed that much has been reached in the last year and that the changes point towards the right direction, but that they are at the time not enough. Zsolt Darvas from Bruegel said in this regard that the taken measures are good and ambitious, but that they focus too much on fixing existing bugs. Yves Mersch, the Governor of the Central bank of Luxembourg, stressed that the right institutions were created, but that they now would as well need the proper instruments to prevent future crisis.

More basically, all speakers agreed that the missing coordination of economic policies lies at the heart of the crisis. Former Commissioner and President of Università Bocconi Mario Monti reminded the audience, how the ‘E’ in the EMU was neglected during its construction, because there was so much focus on political and administrative resources – only with the crisis, the needed focus on the ‘E’ emerged again. Overall, there was a broad agreement that eurozone-members have to closer coordinate their economic policy to protect the euro. Governments were told to have the task to develop proper economic governance and to not leave too many decisions to the markets.

On the issue of Eurobonds there was disagreement in the panel. While many speakers underlined that such bonds, when constructed properly, could be very positive, others warned of dangerous consequences. Erik Jones from the Johns Hopkins SAIS Bologna Centerunderlined that Eurobonds would only make sense when being coupled with a common tax system.

Furthermore, there was disagreement on the issue to what extent the focus on conditionality and budget stability makes sense. This disagreement pretty much reflected today’s political debates as well as dominating and diverging national cultures. Several panellists underlined that for a fully-fledged EMU, a fiscal and budgetary union would be needed.  At the same time it was stressed that such a development would require a political union, for which there currently does not seem to be sufficient political will.

Other issues discussed were the need of a stronger and further going single market, the urgency to resolve the European banking crisis and to conduct proper stress tests, to sort out sovereign insolvency from liquidity and to tackle the problem of real economic imbalances.

 

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