Opinion
03.03.17

EU white paper: Europe should focus on its core business

Henrik Enderlein sees devolution of powers with EU in a coordinating role, in new paradigm.

“The European Union has to do what a company or others would do in such a situation,” says Hertie School Professor of Political Economy Henrik Enderlein, in response to the European Commission’s proposals for post-Brexit Europe. “It has to concentrate on the most vital areas – on its core business – and become more effective in those areas.”

Of the five scenarios for the European Union to move on after Brexit, which European Commission President Jean-Claude Juncker presented on 1 March, Enderlein finds the fourth “most intriguing.” In this scenario, the EU would aim to work more effectively, leaving more decisions to member states and assuming a coordinating role where appropriate.

“The EU is now assessing whether it might be making promises it can’t deliver on,” says Enderlein. “Youth unemployment, some structural reforms - are these really the job of the EU, or could these be tackled at the national level?”

However, this does not mean abandoning the European integration, Enderlein says.  “You can’t fall prey to the trap of saying: ‘we’ll shut down the EU and Europe won’t do anything anymore,’ –  quite the contrary,” he says. In economic policy, for example, the EU should determine which areas will fall under its purview, and which can be decided at the national level.

Reducing the EU to an internal market alone, however, is not an option, Enderlein says. A currency union is necessary for an internal market that relies on the free movement of goods, people, capital and services, otherwise countries will simply devalue their currencies in a downward spiral of competitive bidding.  “Therefore the common currency, as a necessary building block of the internal market, is an essential component of European integration,” Enderlein says.

There are also many other issues that can’t be resolved at the national level – from defence to climate policies, refugees and migration.  “The nation-state is not in a position to solve today’s problems alone. Europe has to take action together.” This does not mean constantly pursuing “more Europe” or a “European super-state” or a “true federation,” Enderlein says, noting that even though he would find those options interesting, there is currently little popular support for them.

Still, he concedes that the EU has perhaps been too focused on the details of structural policies to allow it to make recommendations suitable for all member states. “Look at the long reports on unemployment policy, on structural developments like digitisation or energy. One has to ask whether these are not areas for member states, as long as their decisions aren’t detrimental to others.”

Many people have suggested that a two-track Europe is necessary – one that moves ahead in some areas faster than others. Enderlein says this discussion is superfluous. “One thing I don’t agree with the white paper on is how it describes these different speeds as a possibility – this is already reality, and will remain so.”

While the euro area needs a banking union, greater tax harmonisation or even a common corporate tax system, it’s possible to have much more flexible forms of cooperation in other parts of the EU. This would apply to defence policies, for example, where not all countries are currently on board for a common defence fund.  “These different forms are already a part of the European Union today, and we will simply move forward on this path.”

“I can only imagine the scenario of ‘doing less more effectively’ happening at different speeds,” Enderlein says.

More about Henrik Enderlein

  • Henrik Enderlein , Vice-President and Dean of Strategy, Professor of Political Economy