The EU should stick to its course, pursue the Green Deal and complete the single market. It needs to demonstrate its resolve and act united as a new – potentially hostile – US administration rolls in and shakes up the foundations of transatlantic cooperation and the world order. But it must also stand firm if China makes its own attempts to split an EU united front.
To do so, the EU should act decisively with the powers it has according to the Treaty, while being much more vocal against any efforts to politically undermine Europe and divide it.
We’ll see over the next few weeks how up to this task the newish von der Leyen II Commission is and how determined it is to counter pressures from both Member States and from abroad. It should clearly indicate whether it believes Europe is still able to credibly anchor itself in between the US and China – but if the past few weeks are any indication, things are not looking promising. Europe, and the EU, have been pushed into a defensive position against full-on attacks from many fronts, including the new US President, but also industry and opinion leaders and the EU’s own extremist parties.
A political Commission cannot simply stand to one side. It must react to unfounded statements from leaders that directly attack its position, authority and reputation. The EU should effectively respond, in line with its Treaty values, to any risks and threats to the rule of law, as this is the essential precondition for trust-based cooperation in all other EU policy areas.
While authorities need to be careful, they cannot be absent from the public realm, as non-reaction may be viewed as tacit acceptance (bad) or weakness (even worse). What’s transpired over the past few weeks recalls the months just before the Brexit referendum, when then-Commission President Juncker forbade any member of the College to react in defence of EU policies, allowing the most blatant lies about the EU to run rampant in the UK.
The EU being proactive is particularly important in the case of the Digital Services Act (DSA). It was adopted in mid-2023 but the Commission has barely done anything to enforce it or effectively communicate about it. And yet content and account manipulation on social media is now very much the norm and large platforms are being used to push political and commercial interests – and spread lies. Content moderation is attacked and undermined with the ‘censure’ argument, whereas it’s the social media algorithms that secretly but steadfastly manipulate information.
It goes without saying that this all goes against the DSA’s core objectives.
The groundwork for the new Commission was laid by the Letta and Draghi reports, which focus on completing the single market but also better enforcement of what we already have. Far too often, the single market and overall European competitiveness have been sacrificed for the sake of Member States’ local interests. This is why the single market has receded and price competition has declined, such as in financial services.
Member States actively allow firms to maintain uncompetitive practices, which in the end benefits no one. That’s why the Commission should react much more forcefully to this during trilogues and if these bad habits cannot be overcome, then the proposal should either be withdrawn entirely or the Commission must be much more rigorous in terms of enforcement. It should not be afraid to drag violating Member States in front of the Court of Justice.
But firms also need to be consistent and encouraged by EU authorities to make use of the freedoms accorded to them by the single market. For a variety of reasons, many firms simply don’t use the facilities available through the single licence (namely that if a firm is authorised to operate in one Member State, then it can automatically operate across the entire single market).
For example, Euronext, the pan-European stock exchange, hasn’t used the single licence to develop a truly single EU-wide trading platform, but instead has seven different licences in the seven countries where they own a regulated market, with seven different reporting structures and (at least) seven different supervisors – so much for a ‘capital markets union.’
The current obsession to reduce the regulatory burden within EU rules by 25 % shouldn’t create false expectations. Seasoned Brussels watchers will remember many similar plans, from the SLIM exercises starting in 1996, to the regulatory ‘pauses’ under Commissioner McGreevy in 2005-06 or the better regulation ambitions of Vice-President Timmermans under the Juncker Commission. While all these plans are/were commendable, it would be better to attack the causes of regulatory complexity – the decision-making process – rather than merely treating the symptoms.
Specifically, regarding some aspects of the Omnibus Simplification Package (due to be published in February), the impression emerges that the Commission isn’t entirely sure about its green ambitions. It may water down standards at the precise moment when they need to be enforced and instead relinquish the ambition to become the leading global sustainable standards setter.
This is certainly the case for the CSRD and the CSDDD, as some industry groups have already commented (see for example France’s C3D). Exaggerated stories are circulating on the CSDDD’s scope and reach, as its obligations will initially only apply to a small number of corporate groups.
All the above examples may seem disjointed and separate upon first glance – but they all tell the same story, that of an EU that appears meek and unable/unwilling to stand up for itself and its tasks. That’s why the Commission should have clear ambitions for the next five years and stick rigorously to the acquis and Treaty obligations.
Giving in to unsubstantiated pressures – both internal and external – will create uncertainty and make the EU appear weak. The Commission must deliver on what’s been agreed and lead by example, demonstrating its strength and resolve.