The future of Europe: a collection of opportunities

What does the future hold for the EU? How will the EU hold on to the values which are fundamental to the European project? On 17 October 2018 Klaus Welle, Secretary-General of the European Parliament, gave a presentation with the title The Future of Europe, focusing on longer-term thinking, and on the political and societal challenges the European Union (EU) will have to face in the near future. With the EP elections coming up in 2019 he pointed out the numerous external pressures and influences that concern EU citizens, such as globalisation, migration, or economic stagnation. Below you will find the key issues he presented. Subsequently you will find the interview he gave Derek Meijers and Gaston Moonen about the links between the global race, institutional quality, and ambitions and their fulfilment.

Historical perspective: putting the EU of today in perspective

Attendance by ECA colleagues was high for Klaus Welle’s presentation, who was introduced by Eduardo Ruiz Garcia, ECA Secretary-General. Klaus Welle opened his introduction by looking at two words often heard nowadays: Europe and crisis. He suggested starting with a historical overview, presenting the achievements of the EU. Such a historical view could help to put things into perspective. He referred to the late eighties of the last century, highlighting that the existence of the EU overcame totalitarianism, not only in some Member States in Southern Europe, but also for Eastern Europe. The West — standing for human rights, a liberal democracy where the rule of law prevails — managed to move over 1000 km to the east, and in a peaceful way. He also referred to some figures that tell a story, such as, due to an increasingly global economy, life expectancy in Africa going up by 20 years — in approximately half a century.

He continued along these lines. Klaus Welle recalled that in the nineties Eurobarometer expectations were not very optimistic about the introduction of the euro or the ratification of the Maastricht Treaty. Nowadays, the euro is the second currency in the world. And from a historical perspective there has been, since the nineties, almost an avalanche of treaties: Maastricht, Amsterdam, Nice, Lisbon — with huge consequences for the mandate and activities of the EU as a whole and the EP in particular. In 1991, the EP’s mandate related mainly to budgetary provisions. In 2018 the EP is on an equal par with the Council, having the last word on a number of issues.

Geographical perspective: outside and inside the EU

In analysing historical trends, Klaus Welle found that, for every generation, once or twice sudden shifts occur and history seems to take a different direction. This was clearly the case in 1991 with many changes happening on the eastern borders of the EU. He referred to possible forces that might lead to such change, for example the general feeling of solidarity in Germany, allowing reunification in 1990. He has the feeling that now we are also living through a turning point. This was more clearly the case, in his view, in 2016, when the referendum for Brexit was held and Donald Trump got elected as US President. And there is much less of a feeling of solidarity now, it appears, with neighbouring countries of the EU. He pointed to tensions with Russia, blocking countries such as Ukraine and Georgia from taking over more ‘western’ based institutional reforms. And looking at the southern EU borders, he referred to religious battles going on in the Arabic world, military dictatorships and migrant burdens for some countries such as Libya, or failing state structures (Lebanon). He observed that, overall, the global order, established in1945, has been called into question, not least for the World Trade Organisation, handicapped by actions of one of the global players. As a last geographical perspective, he referred to trouble on the northern EU border, with Brexit looming. Insecurity seems to prevail on all of the EU’s borders.

Klaus Welle pointed out the same conclusion could be drawn for developments inside the EU: the 2008 financial crisis is not over yet since there is no proof yet that the EU can go back to normal financial conditions. He drew an analogy with a patient still used to the safety and comfort of intensive care. In addition, the financial crisis left some systemic question marks: is it a system where financial profits are privatised and losses are to be borne by the community, by the public at large? And has globalisation brought progress for all of us, also if you are less rich, less educated, less succesful? Klaus Welle referred to the last US presidential election, where industrial workers — apparently sharing a feeling that they did not benefit from globalisation — tipped the scale towards Trump. Job security also looms large for jobs formerly considered safe, like bankers and lawyers, where big changes also seem to be coming for ‘white collar’ workers. Another example he gave related to the media, where there used to be an intrinsic quality control, a certain codex of staying close to facts, and being explicit about it if you did not. Nowadays, in social media, this assurance of quality control seems to have disappeared, with news provision aiming more and more to be entertainment. Therefore, Klaus Welle concluded, insecurity also prevails inside the EU.

Changes in political outlook: from an open to a closed perspective

The EP Secretary-General also identified some changes on the political stage. While in the past a centre-left government would be succeeded by a centre-right government, leaving the fundamentals of the system unchanged, things have changed with the rise of populist parties. Klaus Welle mentioned that ‘nationalist’ parties was a more appropriate name here, since an important element in their programme was to provide protection to citizens through closure. This goes together with a key question on what kind of society political parties propagate: open — inside a country, towards the EU, or at global level. Or closed , closing doors on trade, migration, climate protection, multilateralism. For him this leads to the question of whether, if the citizen is looking for protection, it can be offered in an open society? Or is it necessary to close? He recalled the Bratislava Council meeting in 2016, where an agenda of protection in an open system was developed: border protection, immigration control, antiterrorism measures, or social protection, to mention but a few.

With this in mind, when looking at the EU and EU action, Klaus Welle identified a mismatch between what citizens asked for — protection — and what the EU delivered. Or, as he subsequently phrased it: ‘People have been asking for an elephant and we delivered a mouse.’ In his view, the EP is one of the most sophisticated legislative machines, processing thousands of amendments with no problem. But he argued that nowadays it is not good enough to be a legislator. What is needed is complementary executive capacity. This means an ability to deliver executive action, not only legislation. The EU needs to build up complementary executive capacity so that when a request from Bulgaria for border support arrives — as it did in 2015 — the EU can deliver.

Obstacles — and opportunities for the EU to deliver

Looking at citizens’ expectations Klaus Welle raised the following core question: is the EU able to deliver? He identified six obstacles to doing so.

A first obstacle is that the EU is not built on a demos present in one nation, but in 28, soon likely to be 27. So the EU is based on pluralism. This makes it a lot more difficult to provide solidarity. For the EU, however, the underlying motto is cooperation. And the goal is to bake a bigger cake so that everybody can get a bigger piece. The model is not: somebody else gets my piece of the cake. As soon as an image of winners and losers occurs, the EU model has difficulties coping. Redistribution policies at EU level are not popular and are often left in the hands of the Member States — see for example social security issues and taxation. Or, take the distribution of migrants — also more a zero sum game. If problems of redistribution occur, then the policy answers shift. Klaus Welle pointed to the shift in resolving banking problems — from bail-out to bail-in. Or the shift in migration issues — from redistribution to border control agreements with EU neighbour countries or solutions through development aid.

Secondly, solidarity is based on a common identity. Klaus Welle referred to figures of 5% of Europeans calling themselves first European and then a Member State nationality, while 40% would give the European identity as second choice. So how to grow such a common identity? He concluded that this needs time to be developed. After all, in the 19th century only 3% of what are now called Italians spoke Italian. Over 200 years ago Germany counted over 300 different entities.

As a third obstacle Klaus Welle referred to the EU budget, representing about 1% of overall EU Gross Domestic Income (GDP). Also here, history puts things into perspective for us: in 1913 the US federal budget amounted to a similar 1%, which changed substantially with the introduction of a national income tax and the challenges faced during the Depression. However, there are ways out, as Klaus Welle pointed out, referring to the Juncker Plan, formally known as the European Fund for Structural Investment (EFSI), which shows that leveraging EU finances is a possibility.

Klaus Welle identified the Treaty on the Functioning of the EU as a fourth obstacle, saying that, unlike in the past, a ‘wholesale’ Treaty change would be very unlikely for the future: ‘We need to work with the Treaty we now have.’ He suggested changing the perspective on the Treaty, looking not at the Treaty as what we are not allowed to do, but seeing it as a collection of unused opportunities. He pointed out that the real sovereignty transfer takes place through political decicions. He gave the example of the concept of Spitzenkandidaten, which was not speficied in the Treaty but worked out for the EP, the Commission, and the Council. The clearest example was Claude Juncker being elected as Commission President. He brought forward another concept — with a German name — the EP is currently working on: ‘Leistungsbilanz,’ identifiying at different levels, including communities, what the EU does for you, bringing the EU closer to its citizens.

Klaus Welle identified the executive capacity of the Commission as the fifth obstacle. Clearly the Commission has a need to have more executive capacity to assist where Member States cannot cope alone with transnational issues, such as security.

The sixth and last obstacle he mentioned was strategic planning capacity: to what extent is the EU capable of facing other blocs. China is establishing itself as a global power, leading to clashes with the US on trade. And with an annual growth rate of 7% India is moving up. For Klaus Welle this raises the question: will Europe be an actor or an object for others to toss around?

The future is soon, opportunities are now

Finally, he put time into perspective: 2030 seems like a long time away but that time span — from now — contains only two legislative terms. Klaus Welle pointed out that nobody knows what 2030 will look like. However, the question is how we have to change now to remain in command of our own fate. He concluded that the EU should be seen as a collection of opportunities, expressing the hope that the plans for improving the EU will turn out well.

Reflecting with Klaus Welle: interviewing him about the future of Europe and foresight

Level playing field and EU institutions

The EU is continuously competing with the rest of the world on economic issues, for example the costs and conditions of labour. Competitors may not always respect the conditions and regulations the EU has put in place to create a level playing field. How can the EU address this issue, ensuring economic activity within the EU?

Competing on salary levels or working conditions has never worked, because if that were the case, Africa would be the global economic leader. Yet it is not. I think you always have to see this ‘global race’ in the context of productivity levels, as high productivity levels give you the possibility to keep up an ambitious system of environmental and social protection. Therefore, I think that our productivity is a key factor in staying ahead and maintaining all the living conditions that we are very much attached to. But it will also depend on our innovative capacity and the quality of our institutions.

… our productivity is a key factor in staying ahead…

Speaking about the quality of institutions, there is some fear that, at the level of EU institutions, this quality is negatively influenced by the institutional habits that jeopardise good governance, the rule of law, human rights and social protection. How should the EU and its institutions deal with that? How can we arm ourselves against forces that seek to lower the hard-fought-for norms and values currently in place?

This issue is one of the reasons why I insist that we have to think of the EU, not only as the EU institutions, but as the sum of the EU institutions, the Members States, the regions, cities, localities and villages. Why? Because 99% of what is executed and administered, is executed and administered by the Member States, by regions, or even at local level.

… the moment you choose to join the EU, to integrate and benefit from it, you also commit to uphold a certain institutional quality, and you cannot deviate from that afterwards.

The quality of this multilevel EU is directly proportional to the quality of the administrative structures of the individual Member States. This is also why the European Parliament and the European Commission follow the issue of the rule of law in certain Members States very, very closely. And it is not an issue of sovereignty, because the moment you choose to join the EU, to integrate and benefit from it, you also commit to uphold a certain institutional quality, and you cannot deviate from that afterwards.

Looking at the quality and functioning of the EU institutions, and specifically the EP: was this one of the reasons you set up the European Parliamentary Research Service (EPRS)?

The idea behind the EPRS was to develop the EP’s secretariat general from a more administrative body into a parliamentary support service that actively enables the Members of the European Parliament (MEPs) to take best-informed decisions, thus adding value to the overall quality of EU politics and governance. To be able to do so, we first increased our productivity in the technical support services, such as translation and interpretation, which allowed us to innovate and to shift resources to political support for MEPs and to build up a fully-fledged research service of 160 analysts.

An important aspect of the ERPS is that its publications are public, whereas many national parliamentary research services do not share their documents more widely. This was essential for us. The result has been an EPRS that benefits the EP as a whole and contributes to a more informed public debate. And not only at EU level, but also in the Member States, where we can see that national parliamentarians are making use of our products to have a more informed debate at national level as well.

… the democratic quality of governance is not just decided at EU level, but also by the democratic quality that exists at national or regional levels.

This links back to my view of the European Union as a system of multilevel governance. As the democratic quality of governance is not just decided at EU level, but also by the democratic quality that exists at national or regional levels. And if we believe in democratic scrutiny, it is our obligation to strengthen those institutions and politicians in their role. Which in turn will boost confidence in the EU institutions as well.

The ECA is very conscious of writing in an accessible way for its stakeholders, for non-expert readers, and aims to be transparent and inclusive for the EU citizen. These are some of the key moral values of the EU, and where citizens expect EU institutions to lead by example. However, some people, like a former judge of the ECJ, warn of the moral corruption of EU institutions, referring to criticism related to the appointment of senior EU staff or discussions about the lack of transparency on cost reimbursements. What do you think should be done about this for the future?

The EU is a very complex organism and can only operate in a process of permanent adaptation. Surely, we can always improve ourselves, and we should! But when we compare our project, it becomes clear that the EU institutions are far ahead of what is currently the standard at national level.

The EU depends on people believing that through cooperation we can grow the cake and improve our lives […] Which is contrary to nationalism, which basically says […] your piece of cake would be much bigger if you wouldn’t cooperate.

The main question is: do people still believe in the gains of cooperation, or do they believe they are better off by just defending their own interests without that culture of cooperation? The EU depends on people believing that through cooperation we can grow the cake and improve our lives and well-being. Which is contrary to nationalism, which basically says to the whole population: your piece of cake would be much bigger if you wouldn’t cooperate.

Facts, perceptions and ambitions

Taking up the issue of a well-informed and fact-based public debate, you mentioned in your presentation that we have seen increasing friction between facts and perception in recent years even to the extent that subjective perception may have outweighed objective facts as the decisive factor in national elections. What role should the EU institutions play, and this is especially relevant for the ECA as an institution that is built on fact-finding and objectivity?

The EU can only be successful if it has the trust and the active support of its citizens, and to earn and keep this, we need to be factual and show them what we do. Of course, some national politicians try to take advantage of the people’s perception for their own gains, and people are entitled to choose to regard or disregard individual facts. Nevertheless, I am convinced that a clear and factual message will last longer than one that plays on gut feelings and fear.

As EU institutions, we should not formulate from our own perspective, but from the citizens’ point of view.

However, it is also a question of language. As EU institutions, we should not formulate from our own perspective, but from the citizens’ point of view. That is a big difference. When we write in a way that is widely accessible and ensure we are not excluding people just because of the way we are writing, or the words we are using, we can reach our public and enable citizens to make their decisions based on the facts.

In your presentation, you mentioned that one of the problems of the EU was that in some areas people expected the EU to deliver an elephant, but what the EU came up with was a mouse. In its most recent annual report, the ECA stressed that the EU should not make promises it cannot deliver. Although these are slightly different perspectives, both point out that the EU should be realistic in what can be done. What is your perspective on that?

… we have to be realistic today and at the same time ambitious to be able to improve ourselves tomorrow.

The trick is to combine realism and the question of what can be done today, with the knowledge that, in the long term, we have to be further ahead. People see the world changing around them and look at the EU for — bold — answers. They want to have a clear perspective and the EU should offer that. This means that we have to be realistic today and at the same time ambitious to be able to improve ourselves tomorrow.

What if …?

Foresight, the special theme of this ECA Journal, is an essential element of this realistic and forward-looking attitude. How do you relate to foresight and the way foresight is actually used in the political decision-making process?

Foresight is a very useful process in which the institutions and their administrations can explore different perspectives on the future with the help of scientists. Identifying different possible futures also means having the chance to avoid certain futures, or some of their aspects.

… Identifying different possible futures also means having the chance to avoid certain futures…

Moreover, foresight helps us to create and promote a culture of cooperation between the different institutions and other administrations, as we start to understand that we are really working on the same issues. We might come from different points of departure, but we are working towards the same goal.

Foresight includes thinking in ‘What if` scenarios, perhaps not unfamiliar for economists such as yourself. What do you consider the most daunting ‘What if?` question for the next ten years?

The key issue will undoubtedly be the rise of China and how the US will cope with it. The question being whether the global order can find a balance in that situation that is acceptable for everybody or not. China surely has the potential and ambition to develop to number one status and that implies it will contend with the US for that status. You can already see the US has been changing its view on China very drastically in the most recent months and taking action, and that will force everybody else to take a position.

In your presentation ‘The Future of Europe’, you opened by saying that the title is very positive, implying that it actually has one. Then you raised the question of whether the EU would manage to stay in charge of its own future, or be subject to other actors’ future activities. Given all the challenges ahead: if we continue the way we are working now, will it be a bright future?

I think that if you compare the EU with any other region in the world, we have the best starting position. The EU has the best living conditions and offers the best opportunities to its citizens. And although there is always room for improvement, people, when they look around, often realise they would not be better off anywhere else. However, in order to keep what we have achieved, we will need to permanently adapt, modernise and innovate. We need to be intelligent when making our strategic choices. That is the main point.

The EU has the best living conditions and offers the best opportunities to its citizens.

I see no reason to be gloomy. We have all the tools and opportunities, we are the biggest economy of the world, bigger than the US, and we are more populous. Sure, we need to continue to develop our institutions, our mechanisms, our policies, and our ambition, but the potential is all there. The only question is whether we have the political will to achieve it!

I see no reason to be gloomy. […] the potential is all there.

This article was first published on the October 2018 of the ECA Journal. The contents of the interviews and the articles are the sole responsibility of the interviewees and authors and do not necessarily reflect the opinion of the European Court of Auditors.