More integration is still the right goal for Europe

31/8/2014

By Karl Lamers and Wolfgang Schäuble*

Each tier of government must be given greater powers, say Karl Lamers and Wolfgang Schäuble

Ideally, Europe would be a political union. As such it would be best placed to meet the challenges of the 21st century in a way that serves its own interests. This was also the original idea behind the move to bring about European unity after the second world war. Those efforts were stymied as early as 1954, when the French National Assembly failed to ratify the European Defence Community. As a result, the decision was made to focus on economic co-operation. This enjoyed legitimacy: the people of Europe rightly expected rising prosperity.

Since then, the project of European integration has been a process in which each step forward has been the step that was feasible at the time. This was also the case 20 years ago when disputes arose over whether to widen or deepen the EU. In 1994, when we published “Reflections on European policy”, we argued that what Europe needed first was a constitution. And second we argued that because of the varying appetites of individual member states for integration Europe had to be flexible in moving forward. But we were convinced that within this flexibility Europe needed a solid core to press forward with integration.

This became reality with the establishment of monetary union in 1999. That event was preceded by a huge debate over what should come first: political or monetary union? We said at the time: start with the monetary union and conclude a stability pact with rules that every member has to observe. But sadly Germany and France undermined the pact in 2003, setting a bad example that others followed. We all know what happened after that. Today, after much effort, we are emerging from the crisis step by step.

The task now is to keep moving forward along this path. This will include a focus on Europe’s “core” – in every sense of the word. It is necessary to undertake a review of Europe’s core tasks, and to distribute responsibilities in accordance with the subsidiarity principle, whereby power resides locally wherever possible – just as we argued 20 years ago. We look forward to specific proposals from the UK on these issues as well.

We believe that the EU should focus mainly on the following areas: a fair and open internal market; trade; currency and financial markets; climate, environment and energy; and foreign and security policy. In these areas lasting success can be achieved only if member states act at the European level.

EU-level action is also required to deal effectively with demographic challenges and the concomitant shortage of skilled labour. If we want to remain strong and competitive, we need enough qualified workers. The EU’s fundamental freedoms will help us to achieve this aim. We must uphold the freedom of establishment – the right of people and companies to carry out business wherever they want. But even here, it is essential to set the right incentives in order to prevent “benefit tourism” and a wave of poverty-driven immigration. Levels of economic wellbeing still diverge greatly throughout Europe; for this reason, when it comes to legislation on access to social security systems, we have to find EU-level solutions that take these differences into account.

Once responsibility for these tasks is situated where they can be tackled most effectively, each tier of government – regional, national or supranational – must be given the appropriate legislative powers and the authority to enforce the rules.

To do this, we have to revisit the EU’s core institutions and procedures. Consider two proposals. Why not have a European budget commissioner with powers to reject national budgets if they do not correspond to the rules we jointly agreed? We also favour a “eurozone parliament” comprising the MEPs of eurozone countries to strengthen the democratic legitimacy of decisions affecting the single currency bloc.

However, most member states are currently unwilling to transfer additional authority to Europe. And that brings us back to the heated debates over European policy in 1954 and 1994. Then, as now, our conclusion remains the same. We must continue to advance the European project using the imperfect and incomplete instruments and institutions that we have today. To this end, our efforts in the coming years must focus on policy areas that are decisive for boosting growth and employment. This means ensuring sound public finances, continuing to regulate financial markets and to reform labour markets, deepening the internal market, concluding a transatlantic free-trade agreement and curbing harmful tax competition. And it means building an energy union and a digital union in Europe.

In order to make progress in all of these areas, we should keep using the approach that proved its mettle back in 1994: to establish cores of co-operation within the EU that enable smaller, willing groups of member states to forge ahead.

*The writers are, respectively, the former foreign policy spokesman of the Christian Democratic Union, and the German finance minister

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