New European Union Strategy from German Perspective
Mirosław Skórka, March 18, 2010
On Wednesday 3. March Jose Manuel Barroso introduced a new strategy for the development of the European Union by 2020. This document was confronted with initial disapproval in Poland, but later gained somewhat more positive recognition. It is worth looking at this document and theses it presents from German perspective. The main aim of the "Strategy 2020" is to accelerate the growth of the European Union and to increase the number of jobs. According to Barroso, the strategy will foster an increase in EU’s GDP to an average of at least 2% per annum. The European Union should, according to this strategy, monitor the level of development of each country and to respond once a member state misses the road.
The new strategy should prevent the emergence of future problems by quick and effective disclosure and response to the signs of economic slowdown and public debt increase. Europe is currently undergoing a period of growth deficit, and it can be dangerous for the future. Therefore, it is vital to build a new economic model based on knowledge, reduction of greenhouse gas emissions and a high level of employment.
The European Commission has formulated the main objectives for 2020: employment, R&D, environmental protection, education and poverty reduction. 75% of all able to work between 20 and 64 years old should be employed. 3% of GDP across Europe is to be invested in research and development. At least 40% of all young people should graduate from higher-education institutions and the number of people who drop off from universities should be up to below 10%.
The European Commission will seek to ensure that the number of poor people in Europe declined from 80 to 60 million. In regards to ecology and climate change, it confirmed the previous assumption - GHG emissions should be reduced by 20% compared to emissions in 1990, renewables should achieve 20% increase, while energy consumption per GDP unit should fall by 20%. The new Strategy is meant to replace the Lisbon Strategy which was widely criticized by its enormous scope and implausible objectives. Overcoming the causes and effects of the current economic crisis requires closer cooperation and interaction between the state and government.
This Barroso’s declaration was considered another step towards the creation of federal economic government of Europe. This idea, however, met with Chancellor’s Angela Merkel firm opposition. She criticized the EU officials for their willingness to join the supervision of the implementation of those objectives with implementation of strategic Stability and Growth Pact. In addition, Merkel considered the creation such economic supervisory body as proposed by Jean-Claude Junker, Chairman of the Group of Ministers of Finance of the European Union, useless. She rejected his proposal of enhanced coordination of economic policy in the euro area. Merkel plans to present a problem at the level of heads of government and refuse credentials to Junker and his group on this issue. According to Mrs. Chancellor, any economic policies should keep as far away from sanctions used for the implementation of the Stability Pact as possible. This stands in clear contradiction to Junker’s and Barroso’s point of view.
Controversy about the so-called EU’s Economic government has started ca. 20 years ago. This is a dispute about a model of economic governance led by France and Germany.
The concept of closer coordination of economic policy was the basis for the introduction of a common currency and it dates back to 1988 and Jacques Delors. The French sought to link the monetary policy not only with the coordination of budgetary policies but also, for example, wage and tax policy. Germany opposed this idea from very beginning. Germans wanted to preserve the independence of national fiscal policy and had opposed supranational interference in the issue of tariffs. Another German concern was not to neglect the consolidation of the budget with excuse that the Union rather than the state would better take care about economy.
"Strategy 2020", however, provides another solution. It implies assigning specific targets for individual countries. That is why the share of expenditure on research should be rigidly fixed at 3%, employment rate of 75%. However, this will be possible provided that it is based on solid financial assets and ensures functioning of uninterrupted competition.
The Commission has already made similar proposals before. Nonetheless, only Lisbon Treaty received appropriate instruments to control its enforcement. The Treaty’s new regulations allow Brussels officials to refer to "Governance" while controlling national economic policies out of Brussels. Even earlier have the member states agreed on "main economic trends." Currently the Commission may point that, according to its assessment, a state departs from Strategy’s assumptions (as it happened in the case of Greece).
