Over the years following the financial crash a series of far-reaching reforms were introduced in the EU that addressed many of the institutional weaknesses that had been exposed. Again, during the Covid pandemic, the EU crossed previous red lines by agreeing to the mutualisation of sovereign debt to help member states cope with battered economies and health services.
The twenty-seven member state union is now built on firmer foundations. Even many far-right parties in the member states, which have traditionally been strongly Eurosceptic, have moderated their tone and demand reform of the EU, rather than their country’s withdrawal.
But the EU has work to do. Economic growth is weak and the single market remains incomplete. Donald Trump’s crude economic nationalism may have the short-term effect of turbocharging US growth. Inevitably this has put the focus on the EU’s shortcomings.
Ursula von der Leyen, the president of the European Commission, has responded, unveiling a roadmap to competitiveness, which includes pledges to slash red tape and boost investment in innovation. This followed a report she commissioned on the issue from former European Central Bank president, Mario Draghi.
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Many of the proposed reforms are obvious and some have been under consideration for a long time. So it now all comes down to delivery.
Take, for example, the EU Capital Markets Union, which was first proposed in 2015. A decade later it has not been introduced and has been renamed as the Savings and Investment Union. Its objective is to channel the estimated €1.3 trillion in savings among member states into funding for the EU corporate sector. It would be a key measure to boost growth.
The EU needs to start delivering on these issues, rather than avoiding politically sensitive reforms, if it is to compete with the new regional alliances forming around the globe. It needs to find ways to tap its latest strengths, rather than getting caught up in endless squabbling.
