Date: 28 April 2004

Speaker: Laurent Fabius, Member of the French Parliament, former Prime Minister of France
Chairman: Etienne Davignon, Vice-Chairman, Suez-Tractebel, Member of the CEPS Board of Directors

Laurent Fabius, senior member of the French Parliament and former Prime Minister of France, spoke at a CEPS membership meeting on Wednesday, the 28th of April, assessing the future of European integration and outlining his socialist project for the future. Mr Fabius was introduced by Etienne Davignon, Member of the CEPS Board of Directors.
M. Fabius began by assessing the positive and negative achievements of European integration, the overall judgement being that albeit Europe brought peace and stability to the continent, it is still far from fulfilling its initial promise of a United Europe. In this respect, he levelled some criticism at the EPP-ED party, which, unlike the Socialist group, seems to be swerving from its original commitment to further European integration.
Listing the pluses, the French parliamentarian spoke of the victory against war, of economic growth, of the big scientific and industrial projects. He stressed the importance of the monetary stability brought about by the euro, reminding the audience that the continent was experiencing the longest period of currency stability it has known in more than a century. M. Fabius added that one should not underestimate the added value of the European Union when it comes to managing globalisation. Indeed, it would be difficult to tell which would be the fate of isolated national economies in the era of global competition. Finally, he observed that the EU represents the first successful attempt to create a Society of Nations, with the kind of cooperation and coordination between states to which many countries today aspire.
With regard to the failures, first and foremost is the lack of agreement on foreign policy issues. The fact that member states have been reluctant to recognise the diplomatic role of the Commission resulted in a lack of visibility and, worse, of decisions. The EU has not performed particularly well from an economic point of view either. In particular, there has been a lack of macroeconomic guidance, since the only overriding objective in this field has been the fight against inflation. In addition, the EU has had a coherent and effective competition policy, but its industrial policy record has been rather weak. As a consequence, the EU has grown, but not as much as it should have. In comparison to the US, which has a more ‘voluntaristic’ economic policy, it has actually become poorer (the EU’s GDP has grown by only 20% since 1990, as opposed to 30% in the US). Additional problems are the weak social policy and the lack of fiscal harmonisation.
In the meanwhile, people have come to expect more of Europe, which has led to an ever-increasing gap between the project, the ambitions that citizens have for Europe, and the institutions that are supposed to implement this project. The institutions are no longer able to cope with the increased number of tasks, but reform is taking too long, which means that nowadays European leaders are debating institutional reform more often than the underlying political project.
It is here that M. Fabius believes the Socialist family can make a contribution, helping to give Europe the means to tackle the problems that the citizens expect it to solve. But before putting remedies forward, the former Prime Minister noted that many of the difficulties arise at the level of the member states themselves, stemming in particular from the latter’s lack of political will in certain areas. In order to restart the engine, the Socialist group has identified three main objectives in which action at the EU level is vital, as they include problems that cannot be dealt with at the national level anymore.
First, a Europe of sustainable development. Here, the EU should be given more teeth, and allowed to control all of the leverages of economic policy. However, economic policy should be bundled with social and environmental policies, as well as with democratic participation. In this last respect, the powers of the European Parliament should be further increased, and the political groups themselves should make an effort by creating transnational lists for the elections.
Second, a Europe of security. The EU should be equipped with a judicial and policing system that is capable of meeting the challenges it has to face .
Third, a Europe of solidarity. The EU should continue to protect its social model resting on the two legs of market economy and social security. It should continue to be engaged and actually increase its activities in the field of culture as well as in aid to development. It should have a powerful regional structural policy.
 
To achieve these goals, thought should be given to the structure of the organisation. Here M. Fabius described his idea of a Europe of concentric circles, the first one being the circle of United Europe, which would consist of those countries that have the willingness and ability to pursue policies in ever-closer cooperation. In his view, the countries that are currently members of the eurozone would obviously be the best suited to integrate this group. A second circle, that of Enlarged Europe, would bring together all of those countries that are not willing, or not in a position, to engage in such an ambitious plan, but still want to be part of the organisation. Finally, the third circle, that of the Associated Europe, would cover all of those countries (e.g. those of the Mediterranean basin, Russia and Ukraine) that have a long-term vocation to become part of the organisation, and which would thus be closely associated, but without the possibility of admission into the inner circle. The speaker acknowledged that this is a controversial position, but one dictated by realism, since in his view it will be impossible to make much progress with 25 members.
Concerning security issues, the former French Prime Minister welcomed all of the innovations of the draft constitutional treaty (stable President of the Council, Minister of Foreign Affairs, etc.) as positive developments. He added that further steps should be taken to consolidate the ESDP acquis, and in terms of concrete proposals, he put forward the idea of a merger of the French and German armies.
With regard to the first of the above-mentioned goals, growth initiatives should be given substance. The Lisbon strategy has not brought many concrete results so far. Therefore, instruments should be created and sanctions applied to make the whole exercise more coercive. In particular, to tackle the sluggish growth, a countercyclical budgetary policy should be adopted, with much higher public spending on R&D. From this point of view, M. Fabius strongly criticised the current request of six member states to cap the EU budget at 1% of the combined GNI of the member states, declaring that, taken together with the inflexible high-expenditure for the CAP, this would spell death for all of the other policies. Instead, he advocated a rise of the EU budget to 1.5% of the combined GNI, which is even higher than the Commission’s proposal. Further ingredients in his recipe for economic recovery were a reform of the tasks of the Commissioner responsible for Competition, an amelioration of the accounting standards, and the introduction of good governance rules for companies.
As for the third goal, the obvious move to tie economy and solidarity more closely together would be to hold regular meetings of the Ministers of Social Affairs of the eurozone, and the introduction for companies of a code of social conduct. With regard to solidarity, the incorporation of the charter of fundamental rights in the draft constitutional treaty operated by the Convention should also be regarded as a major step forward.
Overall, the draft Constitutional Treaty has to be judged positively, since it has the merit of having given Europe a face. Having said that, M. Fabius expressed regret that the text is not more far-reaching from a social and economic perspective, and considered the revision procedure totally inadequate. The speaker emphasised that it will be imperative to change the constitutional draft on this point, because ‘one has to be able to correct insufficiencies’ (of the Treaty without the need to convene an IGC every time). On the issue of ratification of the Treaty, M. Fabius declared himself favourable to a referendum in France, following the example of the United Kingdom. Indeed, it would be difficult to explain why a referendum was deemed necessary to decide on the fate of the autonomous region of Corsica, while it could be considered superfluous on the rather more serious decision of whether to adopt the Constitution. On the contrary, it will be paramount to give citizens, both pro- and against European integration, the opportunity to express their views. The latter should then be accepted whatever the outcome of the consultation. Furthermore, regardless of the system, the single most important thing would be to have a simultaneous ratification in all the member states, in order to let the citizens fully appreciate the European meaning of their choice and to reduce the risk of the referendum being used as a tool to demonstrate dissatisfaction with governments.
Finally, the French MP spoke of the question of Turkey’s accession to the EU. First of all, he stressed the fact that the country is predominantly Muslim should not be a used to discriminate against it. The EU should help the country to develop, although the speaker admitted that letting in a country which, according to the estimates, might soon reach a population of 100 million will be very difficult. Turkey still has some way to go before fulfilling the Copenhagen criteria, but the current problems are also the result of the inversion of the logical order between deepening and widening of the European Union.
Responding to questions from the audience, M. Fabius explained in a few words his position with regard to the competitiveness of European enterprises. The starting point is that wealth is decisive, so one must create an environment that allows companies to develop. With regard to this, Europe has been ‘ambushed by the liberalist ideology’, adopting a radical attitude that not even countries that profess themselves liberal would take. In the future, the EU should not strive to find ways to hamper its companies. M. Fabius does not believe that there will be a long-term outsourcing to the eastern European countries that are about to join the EU, while on the other hand there is real reason for concern when one looks at India and China. Because of the size of these countries, and of their workforce, their economies of scale will never be matched, and M. Fabius does not buy the argument that the EU should refocus itself on higher technology and more sophisticated productions. He is convinced that Europe will have to defend its interests, mainly through a thorough application of WTO rules.
In all of these matters, the former French Prime Minister believes that an additional political difficulty is represented by the fact that the horizon of the problems to tackle is not the horizon of the elections. But one should not be short-sighted, and decisions should be taken regardless of political convenience, for the long-term. Only then can the horizon be brought closer.