By Duncan Lumsden - 17th May 2004
Europe is facing a “triple crisis” that will need EU governments to dig deep – up to fifty per cent deeper.
This was the conclusion of former French finance minister Dominique Strauss-Kahn, presenting the results of a ‘round table’* debate on the future of Europe to European Commission President Romano Prodi on Tuesday.
The EU’s “institutions are not functioning well: they are threatened with paralysis and questioned because of their democratic deficit. Its project has broken down: to the questions of knowing why Europe and where Europe is going, nobody can give a satisfactory reply. Its territory is uncertain: for the first time, the Union really poses the question of its ultimate frontiers,” Strauss-Kahn warned in his preamble to the round table’s report.
This prognosis, he added reassuringly, “does not announce the death of the Union.” But the tonic to revive the EU from its torpor and avert implosion in the future does not come cheap.
The fifty-point Strauss-Kahn plan will cost up to fifty per cent more than current donations from EU treasuries allow. Expenditure at the moment is just under one per cent of Gross National Income, and an imposing coalition of six national governments wants to cap it there, bringing down the existing ceiling of 1.24 per cent of GNI.
Strauss-Kahn, defying the line of his national government in which he once was so prominent a figure, claims the EU’s budget has a “vocation” to expand rather than retract, and even “surpass the ceiling” (the 1.24 per cent figure).
He told reporters in Brussels his ambitions would be for a figure closer to 1.5 per cent of GNI, which on today’s financing would mean the €100 billion budget swelling to €150 billion.
Strauss-Kahn’s blueprint for closer ‘affiliation’ arrangements with neighbouring countries, rather than the arm’s-length ‘association’ agreements to date, would absorb some of the extra cash.
He is particularly keen to bring other Mediterranean countries closer in to the EU fold, in order to make the Mediterranean “some kind of internal sea” for Europe.
He also foresees boosting EU development aid handouts.
But his chief focus is on incorporating targets on governmental research and development funding into the EU budget, as national treasuries continue to fall short.
EU governments committed in 2000 at a summit in Lisbon to make the EU ‘the most competitive economy in the world by 2010,’ and in part to this end pledged to increase research and development funds to three per cent of GDP. This they have failed to do.
“Why have they not done so?” asked Strauss-Kahn. “Because they did not have to tools to do it.”
The choice for governments was either to abandon the Lisbon aims, and aspire instead to being “one of the most advanced” global economies, or to embrace them fully and pay the necessary price tag through Brussels, he said.
*The Round Table, 'A Sustainable Project for the Europe of Tomorrow', was commissioned by Romano Prodi as an intellectual venture, and included senior figures from politics, academia, NGOs and business.
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