After Brexit and Emmanuel Macron’s victory, the European Union is convinced that the dark days of “dangerous populism” are behind it and even treaty change is back on the agenda.
Unveiling new proposals for a federal eurozone yesterday, Pierre Moscovici, the European Commission’s French economic and financial affairs commissioner was in a bullish mood. “Europe was on the defensive, now we can adopt a much more offensive role,” he trumpeted. “There is a window of opportunity and in recent elections people have moved away from dangerous populism.”
Back in its heyday, the EU would have a new treaty every five years: Maastricht, Amsterdam, Nice and all that. But it changed when French and Dutch voters binned the EU constitution following referendums in 2005.
While the votes were largely ignored with the Lisbon Treaty, a manoeuvre that is still much resented over decade later, the EU was scarred by the experience which was followed in short order by financial crisis, recession and a eurozone crisis.
Today as growth finally picks up in the eurozone (albeit much later than the rest of the world), awkward Britain leaves and, as the menace of difficult elections recede for now, the old mentality of “ever closer union” is back .
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Yesterday’s “reflection paper” on completing the EU’s project of Economic and Monetary Union (known as EMU) is well worth a read. There are flashes of rare honesty, not often glimpsed in commission documents.
The paper admits that the euro is badly designed with “no single, overall plan from the outset” and remains “sub-optimal” for tackling economic challenges and needs “to win over the mistrust of some parts of the population”. “There is a broader questioning about the value-added of the euro and the mechanisms of the EMU,” the paper admits.
Undaunted by this, in return to the tradition of “more Europe”, Mr Moscovici and the commission sets out a blueprint for a federal “euro area Treasury” complete with “an EU finance minister”.
As well as issuing European bonds (rebranded as “safe assets” in a poor attempt to pull the wool over eyes of German voters worried about eurozone debt mutualisation) the EU Treasury (aka commission) will have a new budget. The cash will come from “a dedicated source of financing, such as national contributions based on a share of GDP or a share of VAT, or revenues from excises, levies or corporate taxes”.
All this is to be “in place and fully operational” by 2025 and, as the commission paper notes, this is “not such a distant future”.
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The political battle will open after German elections this September and the commission acknowledges “a number of complex, legal, political and institutional questions that would need to be explored in greater detail”.
Top of the agenda will be avoiding referendums despite the obviously constitutional idea of an EU treasury. Asked whether his plans would be victorious in a French referendum on a future eurozone treaty, Mr Moscovici gave the game away. “I have never been a fan of referendums at all. They can come at a high cost,” he confessed. “There are other ways of ratifying a treaty without a referendum.”
The EU might well believe it is time to go on the political “offensive” but sidestepping voters will not endear voters to ever closer union behind their backs. European euroscepticism is here to stay.