Commentary on Political Economy

Tuesday 5 December 2023

 

Trivial concerns threaten big decisions on Europe’s future

EU leaders must display political will at this month’s summit and push ahead on aid to Ukraine, enlargement and budget
Headshot for Martin Sandbu

The EU’s top leaders meet this month for the last European Council of the year. How decisive they manage to be could make the difference between a summit that would rank among some of the most consequential — or a massive wasted opportunity.

Consider the unresolved decisions that have been piling up. Whether to make good on the promise to finance Ukraine with €50bn over four years, half a year after it was made. Whether to open formal EU membership negotiations with Ukraine and possibly other candidate countries. Whether finally to sign off on a trade deal with South America’s Mercosur bloc. Whether to adopt proposed new common rules for national public finances, as well as midterm revisions to the EU’s seven-year budget.

Contrary to appearances, what has been holding up these decisions is not that they are deeply controversial. Everyone understands that they are necessary or would bring momentous benefits to the EU and its relations with the rest of the world. Instead, what they have in common is that they have all been impeded by much more trivial concerns. 

It is not good enough to blame the delays on the obstructionism of Viktor Orbán’s Hungary. It is true that Orbán is holding up the Ukraine decisions to extract advantages — in particular, a release of EU funds held back due to his undermining of his country’s rule of law. But, as in earlier big decisions, there is a limit to how far others will let him delay them. Already there is talk in national finance ministries of circumventing Budapest by funding Ukraine “at 26” as a possible if not preferred option.

Just as big a problem has been the European Commission’s bundling of Ukraine support with other top-ups to its budget from member states. As for Ukraine’s accession talks, some are tempted to string things out for a few months in a misguided belief this would make Kyiv reform faster.

The hold-ups range beyond the Ukraine questions. The shape of the fiscal rules has long been largely clear. The remaining technical details finance ministries are fighting over will make next to no difference to the EU’s economic prospects. The Mercosur deal, meanwhile, is being held up by narrow sectoral interests and overzealous environmental demands. That’s unsurprising — and in a narrow sense even legitimate — but these interests are nowhere near enough to justify scuppering the deal. The budget revisions, too, are over trivial numbers.

In all these cases, the EU remains hamstrung by the narcissism of small differences. But we are well past the point where holding out for one more marginal concession, haggling over technical details or gathering more knowledge is of much help. On all these issues, the political decisions just have to be made.

Doing so would make this into one of those summits that take the European project into a new chapter: setting Ukraine on a firmer western course, creating the world’s largest free trade area and establishing a predictable framework for securing the big investments needed in defence, decarbonisation and digital modernisation. No one is presenting an alternative political course: the failure of political will this month would simply be a massive exercise of kicking the can down the road.

The longer it takes the EU to decide things that should just be wrapped up, the more the genuinely hard deliberations will be delayed.

They include a full, good-faith and sustained engagement with how to ready the bloc for enlargement. A tentative debate earlier this year on deep reforms of EU decision-making and European institutions has, for the moment, fizzled out (which also means it has become unlinked from the decision on advancing accession talks).

They include, too, the shape of the EU’s next seven-year budget, and how to make it fit for an age of economic insecurity and geopolitical tension. It is clear that very large common investment projects have to be carried out — in energy, for example, and in stronger transport and infrastructure links with neighbouring countries — while protecting the integrity of the single market and dealing with enlargement. That requires a bigger, fundamentally reshaped budget, to satisfy the interests of both net contributors and recipients.

Dealing with such challenges must no longer be displaced by second- or third-order interests. One solution is to take more decisions by majority, as some propose. But that is an inferior substitute for statecraft that builds broader agreement. Next week, leaders have a chance to show they can deliver it.

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