by Hugo Brady

The EU needs new thinking. After eight years of stop-start negotiations, the Union finally has a new rulebook, the Lisbon treaty, which entered into force earlier this month. The member-states are waiting for a new European Commission and a new European Council president to take office early next year. But, despite Europeans’ shared anxieties about economic growth, government debt, the stability of the euro, immigration and the environment, there is not yet a clear sense of what the EU’s priorities for the next five years should or will be.

Given the global recession, many assume that the EU’s next ‘big idea’ will have an economic focus. Mario Monti, a former competition commissioner, has already proposed that EU countries should quicken their recovery from the crisis by opening up trade in services in exchange for a deal on harmonising tax bases. Others expect a new initiative on climate change – like a European carbon bank – or tighter rules on deficit spending to prevent the risk of default in the euro area.

But those thinking seriously about the EU’s future would do better to use the dying days of the decade to consider carefully the Union's mistakes and failures over the last ten years – before they chart ambitious new courses. The EU was neither sclerotic nor paralysed during the years 2000-09. It successfully rolled out a single currency, expanded to 27 members, established the world’s first functioning carbon trading scheme, deployed its first military missions and agreed a common arrest warrant to tackle cross-border crime. Nonetheless, the member-states would be wise to acknowledge several key failures from the same period:

• The EU spent most of the decade following the will o' the wisp of a grand constitution, to the detriment of its reputation both within the Union and in the outside world. That the Union repeated the exercise of treaty-writing so soon after a similarly troubling experience with the Treaty of Nice reveals a weakness for introspection which should be resisted in future. Let us hope that the innovations to EU business brought in by the Lisbon treaty will justify the time and effort spent on it.

• The premature accession of Bulgaria and Romania to the Union in 2007 damaged the credibility of EU enlargement, due to persistent problems with corruption and organised crime in these countries. Now that they are full EU members, reform of public administration and the judiciary has slowed.

• The EU made a similar error in allowing the accession of Cyprus in 2004. In doing so, the member-states removed probably the only international leverage that could have helped to push the island's territorial conflict to resolution. Since then the Cypriot government has unabashedly used its EU veto to complicate the Union’s ties with Turkey and NATO. Both of those relationships are critical for the Union's geopolitical standing.

• The EU spent most of the decade trying to convince key global players like the US or China that it is an emerging actor in a multipolar world. Yet it has been unable to overcome internal divisions over its relations with Russia, energy policy and reform of European representation in international organisations. Even the Union's jealously guarded image as a global leader on climate change is exaggerated (the final deal at the Copenhagen climate change summit was crafted in the absence of the EU). Unless the member-states find a way of summoning the political will to forge common positions on sensitive issues like, for example, how to handle meeting the Dalai Lama, the Europeans will continue to play ping pong while the rest of the world plays chess.

• The EU was wrong to lump together its external policies towards non-EU countries in the Mediterranean and Eastern Europe in the so-called European neighbourhood policy. Within a few years that policy error had to be tacitly acknowledged with the decision to create both a 'Union for the Mediterranean' and an 'Eastern Partnership'. But both these initiatives still suffer from a lack of substance.

• The EU's agreement on a lacklustre 'services directive' in 2005 was a missed opportunity to boost intra-European trade in services and thus help complete the single market. If the EU had been able to agree on something like the original ‘Bolkestein directive’ – before member-states and the European Parliament watered it down – the ability of the eurozone to withstand economic shocks like the current recession would have been greatly strengthened.

• In 2005, the member-states failed to find the political courage to reform the EU's budget and have so far reneged on a commitment to engage in a serious review of how the Union's annual expenditure of €120 billion should best be allocated. This is despite the Sapir report, commissioned by the European Commission, which described the EU's budget as “an historical relic”, in which “expenditures, revenues and procedures are all inconsistent with the present and future state of EU integration.”

• The EU's Court of Auditors declined to sign off its accounts at any point throughout the decade, mostly due to irregularities in how funds are dispersed within the member-states. This, plus a number of scandals over expenses paid to MEPs, have damaged the EU's credibility with taxpayers. Any future increase in the size of the EU's budget would be politically untenable without demonstrable reform.

The Irish historian and former diplomat, Conor Cruise O'Brien, famously said of the UN that the institution was prized by its member governments because of its “proven capacity to fail, and to be seen to fail.” To avoid a similar fate – that of a powerless body towards which its member-states push intractable problems – the EU must use the period 2010-15 to demonstrate that it can learn from the failures outlined above, correct them where possible, and avoid their repeat at all costs.

Governments and EU officials looking to the future should also reflect on the wisdom of reflections by Ralf Dahrendorf, a German-born British peer, who died earlier this year after a unique life committed to bringing Europeans closer together:

“All too often, today’s European Union forces its supporters to apologise for its strange ways: towards democrats for its bureaucratic opaqueness, towards free traders for its protectionism, towards applicants for membership for its apparent lack of a sense of urgency, and towards trading partners elsewhere, notably in the poorer parts of the world, for its crude and at times destructive pursuit of self interest. If such apologies continue to be necessary, support will wane and eventually vanish. European reform is imperative if the European Union is to survive.” *

A fine mission for the EU in the years ahead would be to ensure that these words – written in 1996 – do not ring true in 2015.

Hugo Brady is a senior research fellow at the Centre for European Reform.

* Why Europe Matters: A personal view, Ralf Dahrendorf, CER essay, 1996.
See: www.cer.org.uk/pdf/p009_dahrendorf.pdf"
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Hugo Brady is a senior research fellow at the Centre for European Reform.