This article is not about Donald Trump’s bestseller, The Art of the Deal – I’m sure I’m not the only one to claim I find no inspiration from what the US President says or tweets. Rather, this article is about an interpretation of what makes EU leaders tick and how all this affects European citizens’ lives.
The most immediate challenge facing the European Council is the approval of the EU’s budget for 2021-2027. Those who were expecting this budget to be approved in the first round of negotiations may not understand how important decisions are taken in the EU.
One thing must be made clear from the very start: it may take several more weeks, if not months, but the budget will be approved.
The reason for my conviction is quite simple. Whatever structural weaknesses the EU has, and it has many, EU leaders believe the EU is the best way they can achieve their economic and geostrategic interests. This determination for tested more than a decade ago when the eurozone faced a major financial crisis. Many analysts were not excluding that lack of agreement on how to handle this crisis would lead to the demise of the common currency and possibly even the EU itself.
Luckily the crisis did not lead to a meltdown because EU leaders could strike a deal based on a minimum of measures that would postpone another crisis for some more years. By then, most of the 2008 eurozone leaders would have been replaced by others, and it would be the latter who would have to worry about finding a more convincing and durable solution to the Union’s fragmented economic and financial system. This strategy has revived the popularity of the political phrase ‘kicking the can down the road’ meaning defer conclusive action with a short-term solution.
Burden-sharing is one of the essential elements of a long-term migration strategy for the EU
Far more important than the approval of the next budget, the EU needs to address two more crucial priorities. The first is the question of what to do with the deluge of migrants coming from Africa, Asia and the Far East and wanting to settle in Europe where they see better living prospects.
It does not take a brilliant political strategist to conclude that burden-sharing is one of the essential elements of a long-term migration strategy for the EU. Why should small countries like Malta and Greece have to carry the whole and sole responsibility of integrating these migrants in their small societies?
The answer to this question is quite crude but at the same time simple. EU political leaders are driven by their national interests rather than by integration interests when they negotiate solutions in the European Council. After all, it is the local electorate that guarantees the future of these leaders. So it comes naturally for the Council members to strike a deal with the bare minimum of elements on which there is a collective agreement?
The art of the deal is the art of compromise. Paying more European taxpayers’ to assuage the frustration of member states on the front line of the migration problem is preferred to agreeing on long term solutions like sharing the migration burden across the Union.
Just as urgent is the need to come to some agreement to integrate economic, fiscal and banking regulation and resolution. When the European Monetary Union was created in 1999, it was believed this would have been a valuable tool to foster more political cohesion in the EU.
Monetary policy was entrusted to the European Central Bank with the result that we now have a policy of one-size-fits all on essential issues like interest rates. Fiscal policy remains the prerogative of individual member states who do not think twice about invoking their right of veto if anything is agreed centrally that damages their national interests. Political leaders from such countries unashamedly declare that federalism is the boogeyman that could kill the EU. The harmonisation of banking regulation has been partly achieved, but the resolution of banks that are no longer fit for purpose because of insolvency or illiquidity problems is still mainly left in the hands of local competent authorities.
Going for short-term solutions on which there is a minimum of an agreement by all member states may have saved the EU from a dramatic collapse. But politically, the perception that the EU is continuously in crisis is undermining popular support for European integration and the credibility of the EU on the world stage.