EUROPE
Is the EU coming to an historic turning point?
Ekonomika Alumni Brussels had the honour of welcoming Mr Ambassador Willem van de Voorde, permanent representative of Belgium to the European Union, and thus one of our most influential ambassadors. He was invited to give us his opinion about the evolution of the European Union, and whether or not it is coming to an historic turning point? This event took place in Brussels at the venue of KU Leuven campus Brussels on 14 November 2023.
Mr Ambassador van de Voorde started by evoking three of what he calls the ‘fatal’ dependencies of the European Union and its Member States. First, the energy dependency. For a long time, Europe thought it had a very successful energy strategy, relying on cheap Russian gas. It had long-term contracts at low prices and could rely on a stable supply. However, this strategy turned out to be risky after all, as we painfully experienced after the Russian invasion of Ukraine on 24 February earlier this year.
A second dependency that has appeared in recent years was the economic dependency, mainly on the Chinese market, both for the export of our products and for cheap commodities and raw materials. But more and more, China revealed itself not only as a partner for us, but also a fierce competitor and even a systemic rival.
The third dependency relates to security. “We did rely very much on the USA and NATO for our international security. We don’t have a strong unified military force in the EU, although the EU is working more and more towards a stronger European Defence Union.”
Mr van de Voorde stated that these three dependencies did not occur ‘overnight’, since they have been developing over the past three decades. But Covid-19 and the recent geopolitical developments (in Russia, China, etc.) revealed these dependencies very sharply. “It is a fact that these three dependencies have reached their limits. We had developed liabilities and vulnerabilities to which Europe needs to react, since it has effects in four areas: energy supply, external relations, financial issues and institutional matters.”
First, energy supply. Mr Ambassador stated that the very high prices of gas are a real menace to the industry in Europe and certainly in countries like Germany and Belgium, which have a very important chemical cluster. The idea of ‘capping’ the gas price at a European level, supported by Belgium, is a good idea as such, but not easy to achieve. It is indeed complicated, for several reasons. We don’t have much experience with such practices, there is the fear of possibly less gas supply (expressed by Germany and The Netherlands), there is the fear for destabilisation of the gas market, and also what could be the consequences for the international system? Meanwhile, there is also the proposal of an ‘oil cap’ pushed by the USA, mainly so as to be able to lower inflation – and to hurt Russia, of course. But at what price level? It could possibly be achieved by not insuring oil transport that ships oil above a certain price level. Thus, shipping companies need to be involved and committed in this policy.
Second, Mr Ambassador van de Voorde spoke about our ‘forgotten friends’ in the world. “There are 196 countries in the United Nations and ‘only’ 134 voted against the Russian invasion in Ukraine, with a lot of abstentions coming from mainly African countries. Not everyone thinks like us. That was a ‘disillusionment’ with Europe. So we have to reset our international relations. The recent African-Europe Summit, which took place just before the war, was very successful. We have to build on that. Our Indo-Pacific Strategy should also be developed more, to show our concern for and our interests in that important region.”
“Meanwhile, we should reflect further on the enlargement of the EU. Countries such as North Macedonia and Albania should be given the opportunity to become a member of the European Union. We need to be a strong Union to face the influence of the Chinese, the Russians, the Turkish, the Arabs, etc. And what status should we give European countries such as Ukraine, Moldavia and Georgia?”
Last but not least, Europe should give more attention to Free Trade Agreements (FTAs). With Australia, New Zealand and India, these are in preparation. These FTAs will strengthen our position in the world.
Third area: the financial issues. The annual budget of the EU is about 186 billion euros and is part of the Multiannual Financial Framework (MFF). “This is only 1% of the GDP of the EU countries. That is very low compared to the United States, where the federal budget is about 20% of American GDP. The NextGenerationEU, however, is a creative expansion of the European budget, since it implies 750 billion euros over 5 years in gifts and loans to the Member States. Europe is stretching its budgetary limits. But how far can it go? In the meantime, we should avoid initiatives of individual Member States that undermine the internal market. So we should be very critical of the German initiative to spend 200 billion euros on German households and companies suffering from the energy crisis. Because that would mean that countries ‘with deep pockets’ can do more in favour of their citizens and companies than poorer countries can do. This is a real challenge to European solidarity.”
The fourth area concerns the possible institutional changes. “Often, I get the question: ‘Is Europe able to decide?’ And indeed, we are very democratic, certainly compared to countries like Russia and China, and even the United States where the President has a lot of power. We in the EU have the European Commission, the European Parliament and the Council. All three are involved in the decision-making. And for some matters we need unanimity, such as for fiscal matters and foreign policy. That means that each country actually has a right of veto. And for a lot of other matters, a qualified majority is required. Can we improve the decision-making in Europe? That is a difficult matter. If this requires a review of EU Treaties, it is very risky. The final outcome could be even worse. But perhaps the idea of ‘bridges’ (the so-called ‘passerelles’) could be helpful. This means that some matters could be decided by a qualified majority instead of unanimously. If the European Council agrees unanimously to change this mode of decision-making, then it could improve the efficiency of the decision-making process.”
Will these changes happen? Mr Ambassador van de Voorde is not sure. “And the time isn’t good; there is a war going on in Europe. But if the EU wants to remain a ‘big player’ in the world, it should be more agile. And it will need a higher budget. Bur we should also beware of too much centralised leadership. How will it be executed? What will this mean for democratic decision-making in the EU? These are all important questions.”
Fa Quix