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May 15, 2020

Brace for east-west tensions

Expect not only north-south but also east-west tensions to intensify as the result of the crisis. Central and eastern European countries have fared far better than western Europe in managing the first wave of the Covid-19 pandemic. They locked down early, shut their borders quickly, and some made mask-wearing mandatory in public spaces. Some of them did so well aware of the fragility of their health care systems. Even the worst-hit amongst them fared better in terms of infections and deaths than western Europe. Slovakia for example had just 1413 confirmed cases and 25 deaths, while neighbouring Austria had ten times as many infections and twenty times more Covid-19 related deaths. We still have a long way to go before reaching a final verdict, as there are more virus waves to come, but central and eastern Europe are already in a better starting position.

Their governments will have to pump into their economy much less money in terms of stimulus and guarantees this year. They are also likely to emerge from the economic recession more quickly, not least because they stand to benefit as European businesses seek to secure their supply chains by moving away from China, writes Ben Hall in the FT. The image of a well-managed and fast response to the crisis will increase these countries' attractiveness as suppliers for sectors such as cars, machinery, pharmaceuticals or medical supplies. Closely linked to Germany, they also benefit from a relatively benign pandemic effect there.  

Expect a politically much more assertive bloc of eastern and central Europe facing the west in EU negotiations. Will they be ready to let go of subsidies to give a bigger share to Spain and Italy in the upcoming EU budget negotiations? Unlikely. Also, they may overplay their luck and the role of an authoritarian crisis response with their Western counterparts. Viktor Orbán has used the pandemic as a justification for introducing rule by decree, exacerbating fears in western Europe that he is installing a de facto dictatorship. 

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May 15, 2020

Why European sovereignty is a counter-productive concept

We  usually stay away from the abstractions of modern political science, but we were struck by Hans Kundnani's wise takedown of the concept of European sovereignty. This is a notion we have avoided ourselves, but that has become a widespread concept among EU leaders, including Angela Merkel and Emmanuel Macron. Kundnani argues that the concept is too vague to be useful, and that its vagueness might actually be counter-productive. We ourselves prefer to talk about the projection of common strategic interests, but this obviously raises the question of what these interests are and who decides. We would, for example, disagree that policies to support structural export surpluses constitute a strategic interest, even though that seems to be a consensus in many European countries. The vagueness of a concept often constitutes a cover for vested interests.

Kundani notes that pro-Europeans were originally sceptical of the notion of sovereignty, as it was mostly linked to the idea of national sovereignty. Indeed, the entire Brexit debate stuck to that narrow concept of sovereignty, as opposed to strategic goals to achieve. The consensus among pro-Europeans until about 2010 has been that we are living, or should be living, in a post-sovereign world. We remember the debates in the first decade of this century on soft power and whether the EU should exert its strength through the power of regulation rather than military engagement. In those days, the notions of European integration and sovereignty were polar opposites.

With the euro crisis, the election of Donald Trump and Brexit, the debate shifted and the concept of national sovereignty was somehow lifted to the European level. Pro-Europeans found it easier to talk about Europe exerting power rather than Europe having to integrate more.

Kundani is doing a good job to disentangle much of the muddled thinking that has been going on in this area. We agree with his central thesis that the notion of European sovereignty is ill-defined. The new notion of sovereignty is a wider definition than, for example, the sovereignty discussed in the UK over the least four years. It's not about whether you have the right to make your own laws, whether you can resist the pressures of other large powers, or the pressures of globalisation. In that sense we would characterise the EU as partly successful, but only in the few areas that are almost fully federalised like competition and trade policies. We were not part of the soft-power advocacy, because we feel it is not ambitious nor ultimately likely to succeed. But at least we can see a logic to it. You are trying to make the best of what you have.

We would like to offer an additional thought. If you extend the notion of national sovereignty to the European level, you are hiding, through nebulous language, the deep reforms needed to achieve it. You are essentially talking about a federal Europe, with clear assignments of responsibility between different levels of politics. That used to be a German ambition until the Kohl years, but abruptly ended when Germany embraced mercantilism since the late 1990s. Of course, a fully integrated political union, with a centralised foreign and defence policy, could defend politically-agreed strategic interests, in contrast to the old soft-power EU. But the loudest advocates of European sovereignty, Merkel and Macron among them, are not investing their political capital on the necessary reforms. Defence integration is mostly symbolic. The EU has not even managed to organise a common procurement policy. Merkel and Macron are thus talking about a strangely inverted form of sovereignty where they, the national leaders, take the decisions. That was precisely the system that gave us the eurozone crisis, and a generalised lack of policy co-ordination. 

We will see what the now-postponed conference on the future of the EU will bring. We are not sure that member states will accept the inevitable trade-off between deep integration and the possible loss of one or more member states who do not wish to be part of a closer union. So long as that does not happen, the notion of European sovereignty remains a dishonest aspiration, one that hides what needs to come first. 

If you don't want to talk about a federal Europe because you don't know how to sell it, you may seek refuge in the fog of European sovereingty as a consolation prize. But reality will always catch up. 

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