SOLIDARITY AND AUSTERITY
     
The 2012 State of the European Union (speech Barroso), Conference on 31st Jan 2012. EU governments are implementing austerity packages; populist and nationalist movements are growing; social discontent rages. The European Union is facing a crisis of multiple dimensions – both economic and financial, but also social and democratic. How to cope with these current threats to the EU’s political and social cohesion by balancing crisis-induced austerity and the principle of solidarity amongst member states was the issue of this year’s Brussels Think Tank Dialogue.

The annual Brussels Think Tank Dialogue is one of Europe’s leading dialogue platforms promoting the exchange between policymakers, scientists and civil society on the EU’s political priorities. Since 2010 It is jointly organized by the Bertelsmann Stiftung, Bruegel, CEPS, Confrontations Europe, the Egmont Institute, EPC, Friends of Europe – Les amis de l’Europe, Ifri, Madariaga – College of Europe Foundation and the SWP at the beginning of every year. The Dialogue is kindly supported by Agence Europe and in 2012 Euractiv.com has joined in as media partner for the first time.

The outlook is grim. Given the challenges, ten leading Brussels-based think tanks joined forces to discuss the unavoidable issue of Solidarity and Austerity in the European Union at their third annual Brussels Think Tank Dialogue. 'Gesticulation' of EU leaders echoed at the dialogue of EU and national research institutes

Jeppe Tranholm-Mikkelsen, Permanent Representative of Denmark to the European Union, Danuta Hübner, Member of European Parliament, Martin Schulz, President of the European Parliament, Andreas Mavroyiannis, Cypriot Deputy Minister for European Affairs and Arif Havas Oegroseno, Ambassador of Indonesia to Belgium, Luxembourg and the European Union were amoung the speakers who discussed on 'Setting the Political Priorities', 'Getting the EU Back on Track', 'The Post-Crisis EU: Phoenix from the Ashes?' and 'Bringing in the External Perspective: What Europe Do We Need on the Global Stage?'

Pierre Defraigne (Executive Director Madariaga – College of Europe Foundation), Janis Emmanouilidis (Head of Programme and Senior Policy Analyst, European Policy Centre (EPC), Philippe Herzog (President Confrontations Europe), Giles Merritt (Secretary General, Friends of Europe/Les amis de l’Europe) and Dominique Moïsi (Special Advisor, Institut français des relations internationales (IFRI) contributed to the public debate on 'Setting the Political Priorities'.

The debates amongst scientific and political experts from all over Europe, including distinguished speakers like Martin Schulz, recently elected President of the European Parliament, Danuta Hübner, Chair of the EP’s cohesion policy committee, and MEP Dimitrios Droutsas, former foreign minister of Greece, started with two perspectives on the austerity-solidarity equation currently predominating the public debate:

  1. indiscriminate budget consolidation efforts are accused to exarcerbate economic recession and social hardships particularly in those EU countries most affected by the sovereign debt crisis;

  2. austerity policies may be considered as necessary precondition for structural reforms enhancing competitiveness, growth and employment in member states lagging behind.

"You might create a few jobs with a public works programme, but with the euro crisis forget it, there's not going to be any money. The EU's economic strategy amounted to "fine-tuning". There's a strong smell of business as usual. It was also argued that insofar as the economic crisis was caused by a lack of liquidity – the inability of banks and governments to secure loans – the main institution capable of action was the European Central Bank. All this gesticulation at the Council level is becoming less and less relevant".

Most of the around 400 participants shared the second perspective that there is no automatic trade-off between austerity and solidarity – and that restoring sustainable public finances can and should be reconciled with a stronger focus on growth and jobs. Moreover, there was broad consensus that the issue of European solidarity should not be narrowed down to the current crisis-related debate. Keeping in mind that European integration is not just about economics but a political project, the principle of solidarity should also address issues like intergenerational justice in a resource-efficent EU, European migration policy or Europe’s role in the world.

Then, in five invitation-only workshops, the Think Tank Dialogue focussed on Energy and Natural Resources, Economic and Social Challenges, the EU Budget, Migration and Integration, and External Relations. These workshops served to deliver cutting-edge policy analysis and recommendations. The results were put to an open plenary session for discussion:
  1. 'Creating a Resource-efficient Europe: A New Source of Growth?', Rapporteur Maïté Jauréguy-Naudin, Director of Centre for Energy, Institut français des relations internationales (IFRI)
  2. ' Beyond European Economic Governance: How to Assess and Address the Social Impact of the Crisis', Rapporteur Thomas Fischer, Executive Director, Brussels Office, Bertelsmann Stiftung
  3. 'The Future of the EU Budget. Where Do We Stand? Where Should We Go?', Rapporteur Fabian Zuleeg, Chief Economist, European Policy Centre (EPC)
  4. ' An Arab Springboard for EU Foreign Policy?' Rapporteur Jo Coelmont, Senior Associate Fellow, Egmont
  5. 'Solidarity and Freedom of Movement at Stake? Future Perspectives for the Schengen Debate'. Rapporteur Sergio Carrera, Senior Research Fellow, Centre for European Policy Studies (CEPS)
Participants in the five workshops of the 2012 Think-Tank Dialogue sketched the following ways forward for an EU striving for sound public finances, solid growth and solidarity: “If we want to produce a resource-efficient Europe so that the pursuit of resource efficiency becomes a European resource in itself, we need to tailor the regulation to make sure that it is adaptable, flexible and able to evolve in line with costs and technological development.”

“As regards mitigating the social impact of the euro crisis, we must provide ways at EU level to give young entrepreneurs an incentive to try start-ups, to enhance young people’s mobility and to raise European funds and private funding for social enterprises with greater capital requirements, such as hospitals, social housing, or homes for the elderly and the disabled”.

The EU budget has an important role to play in Europe as a genuine investment tool for long-term growth and a source of finance for European public goods with high added value.”

“The Arab Spring offered the EU a perfect opportunity to present to the world a confident new foreign policy. But it came too early for the nascent European External Action Service to exert much influence. Member states still harbour different interests and pursue different priorities in the region, making it difficult to forge a common EU approach”.

“We must not over-react to the ‘immigration emergencies’ that the EU is experiencing, such as last April’s influx of Tunisians into Italy. No major changes to the Schengen Treaty are needed, but the Schengen Evaluation System must be improved.”

The Post-Crisis EU: Phoenix from the Ashes? with Martin Schulz on opportunities in crisis for a stronger Europe
Hereafter, Martin Schulz (President of the European Parliament) contributed together with Dimitrios Droutsas (Member of the European Parliament), Daniel Gros, Director (Centre for European Policy Studies (CEPS), Danuta Hübner, (Member of European Parliament), Volker Perthes, Director, German Institute for International and Security Affairs (SWP) and Jean Pisani-Ferry (Director, Bruegel) to the theme The Post-Crisis EU: Phoenix from the Ashes? ' Opportunities in Crisis for a Stronger Europe'.

"You might create a few jobs with a public works programme, but with the euro crisis forget it, there's not going to be any money. The EU's economic strategy amounted to "fine-tuning". There's a strong smell of business as usual. It was also argued that insofar as the economic crisis was caused by a lack of liquidity – the inability of banks and governments to secure loans – the main institution capable of action was the European Central Bank. All this gesticulation at the Council level is becoming less and less relevant".

Youth unemployment is 'nitroglycerin'. There is an increasingly concern about the deteriorating state of 'social Europe'. It was said there was likely to be reduced growth and an increased generational conflict due to the rise of both youth unemployment and pension costs.

Also put forward was a risk of serious unrest as social mobility was being "reversed", with many people falling out of the middle class, and youth unemployment in some countries reaching levels comparable North Africa. "Revolutions are not made by those who are poor, but by those who become disappointed. Opposite we have got a highly-explosive, volatile mix of people in society who feel quite rightly hard-done by. EU figures indicate the number of unemployed youth increased by 241,000 over the course of 2011, reaching 21%. The highest figures are in Spain and Greece where around half of young people are unable to find work.

Several present suggested EU leaders were unlikely to take the necessary action to remedy the situation in the short-term. "Many phobias have been overcome. Unfortunately we may be in another crisis before it's over.

Finally, Arif Havas Oegroseno, Ambassador of the Republic of Indonesia to the Kingdom of Belgium, the Grand-Duchy of Luxembourg and to the European Union debated on 'Bringing in the External Perspective: What Europe Do We Need on the Global Stage? and it was noticed that it should be questioned what is going wrong and what direction to go?