A federal Europe in the making? Europe 2020, the European Semester and the Euro Plus Pact
Prof Alistair Cole & Dr David Grant with First Minister Carwyn Jones
Over the last 18 months the European Union and its Member States have faced unprecedented challenges precipitated by the global financial and economic crisis, which have drawn into question the future trajectory of the European Union and the very existence of the Euro. This half-day conference sponsored by the School and the European Commission, and organised in association with the Learned Society of Wales, brought together high profile speakers from across Wales, the UK and Europe to discuss the future of the European Union and the potential strategic options that UK and Welsh governments face in responding to these issues.
Lord Kinnock, former European Commissioner and the conference chair, opened proceedings by emphasising the timeliness of the half-day conference given the key challenges which faced the European Union and Eurozone and the crucial European Council Summit taking place in Brussels in the same week. Lord Kinnock argued that the Summit had to produce two fundamental areas of agreement in response to the Eurozone crisis – firstly, a system which guarantees fiscal discipline across Eurozone member states and secondly, an agreement to promote conditions which foster economic growth across Europe. However, he reflected that the UK Government’s position in these negotiations was potentially undermined by ‘internal politics and confused rhetoric (which) push the UK towards the periphery of decision-making.’
Lord Kinnock - opening remarks
Panel: A Federal Europe in the Making?
Following Lord Kinnock’s introductory remarks, Professor Kenneth Dyson provided an overview of the historical and institutional background to the crisis. He noted that although the performance of the UK was actually inferior to the Eurozone across a wide range of economic indicators, it was insulated from the sovereign debt crisis by a number of key factors including the absence of adequate legal capacity for Member States to act decisively in response to the ‘supreme emergency’ which threatened the very existence of the European Union.
Professor Kenneth Dyson
Professor Dyson reflected that we have actually seen two crises, firstly the initial financial crisis which mutated into a wider economic crisis and originated in the US and UK and secondly the sovereign debt crisis which has centred on the European Union. He warned that the UK had initially set the agenda in responding to the first crisis but risked being isolated in the future.
Following Professor Dyson, the European Commission’s Michele Calandrino introduced the package of measures and initiatives introduced by the Commission to manage the crisis. He emphasised that the choice facing member states was not between a European federal state and complete national sovereignty but between European democracy and ‘unchecked, unaccountable market forces.’ The range of measures developed by the Commission, including the European 2020 strategy, 2012 Annual Growth Strategy and ‘six pack’ of legislation, enshrined economic and financial surveillance and initiatives promoting economic growth.
Michele Calandrino's presentation
The third speaker, Welsh Conservative MEP Kay Swinburne, also stressed the importance of the measures developed within the ‘six pack’ legislation and the key role that the European Parliament had played in securing a consensus across Member States. She argued that a key challenge remained the macro-economic imbalances across the twenty seven Member States and that it was crucial that structural reform encompassed measures ensuring fiscal discipline, the strengthening of the European Central Bank and promoting competitiveness across the whole of Europe. She emphasised that the issue was less the UK versus the Eurozone or Eurozone versus non-Eurozone but more the continued commitment to the community method which had been undermined by the intergovernmental approach adopted by France and Germany which had effectively sidelined the European institutions and fellow Member States.
The final speaker on the panel, Rory O’Donnell, Director of the National Economic and Social Council in Ireland, drew on work undertaken by the Council to reflect on Ireland’s experience in the Euro and European Union. He argued that a key problem in responding to the Eurozone crisis had been the institutional imbalances built into Economic and Monetary Union and in particular the relative weakness of fiscal and political union to accompany monetary union. Furthermore, he challenged the traditional interpretation of Economic and Monetary Union as being based primarily on political rather than economic rationale. He stated that ‘there was a strong, long-lasting, widely held and increasing economic motivation for economic and monetary union and the difficulties…largely reflect the political complexity of creating monetary union in European circumstances.’
First Minister Carwyn Jones
The half-day conference concluded with a keynote speech delivered by the First Minister of Wales, the Rt. Hon. Carwyn Jones AM which emphasised the continued importance of the European Union and the stability of the Eurozone for Wales. The First Minister stated that given its status as Wales’ biggest trading partner ‘the break-up of the Eurozone would be a catastrophe for Wales’ and that the Welsh Government was ‘fully supportive of measures to improve stability of the Eurozone’. Furthermore the First Minister stressed the importance for Member States to work for the common European good and eschew ‘recrimination and parochial self-interest.’
Lord Kinnock - closing remarks
These points were echoed in Lord Kinnock’s closing remarks which re-stated the need for the UK to move beyond the ‘surrogate war’ which had characterised the approach of all governments in the past thirty years and to instead recognise that ‘real sovereignty, the power to effect real decisions and implement those decisions is in the modern world, requires the pooling of sovereignty and enhancement of accountability at national and international level.’
Further information on the ‘Reforming European Economic Governance: Implications for the United Kingdom and Wales’ programme of events is available.