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EU, Onward

Jul 4, 2019

The selection of candidates to lead the European Union’s top institutions has been well received. Assuming they are confirmed by the European Parliament, how should the new Eurocrats approach their jobs?

In this Big Picture, Daniela Schwarzer of the German Council on Foreign Relations advises the nominees – particularly the candidate for the European Commission presidency, Ursula von der Leyen – to address the bloc’s “democratic deficit” and internal divisions. And Philippe Legrain of the London School of Economics urges Christine Lagarde, the nominee to take over the European Central Bank presidency, to demonstrate the kind of bold, fresh thinking she has shown in the past.

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j. von Hettlingen Jul 6, 2019

Philippe Legrain and Daniela Schwarzer support two candidates for EU top jobs. Schwarzer advises the German defence minister, Ursula von der Leyen, candidate for the European Commission presidency, to address the EU’s “democratic deficit” and internal divisions. Legrain urges the IMF managing director and a former French finance minister, Christine Lagarde, nominee for the European Central Bank presidency, to demonstrate the kind of bold, fresh thinking she has shown in the past.
Many in Europe breathed a sigh of relief following the absence of a far-right surge in the May Parliament election. This month the European Council has delivered a “slate of highly qualified, well-chosen candidates” to replace leaders who are stepping down later this year. The only problem Schwarzer sees is that it may have exacerbated the EU's "democratic deficit," leaving the bloc to “face significant challenges from within.”
Pan-European alliances of national parties would each nominate a Spitzenkandidat, or lead candidate, ahead of the election. That person would also be their candidate for the European Commission presidency. The European Council, made up of national leaders, would then nominate the candidate of the winning party, who would then be confirmed by Parliament. MEPs argued the system brought more democracy to the choice of Commission chief.
Struggling to agree on the candidates like the German, Manfred Weber and the Dutch, Frans Timmermans, has led to the elimination of the Spitzenkandidaten, and the return of “backroom deal-making, resulting in the surprise choice of von der Leyen,” which is seen as “undemocratic.”
If the European parliament approves her nomination, she will make for an unusual European Commission president: a consensus candidate who has won the approval of liberals in Western Europe and eastern rightwingers. Yet she is so divisive at home that Germany abstained from the vote to nominate her.
Legrain says Lagarde’s nomination to head the European Central Bank is “a breath of fresh air for the stale, male-dominated institution,” she has what it takes to succeed.” If confirmed by Parliament, rebooting growth in the Euro area, keeping the Eurozone together, and display the ECB’s independence, should be among the Bank’s top priorities. Her nomination was not expected, as Jens Weidmann, the German Bundesbank president was one of her leading rivals for the job.
The author heaps praise on Lagarde, confident that she would live up to his expectation, although she would be the first ECB president without any direct experience of monetary-policy experience. During her tenure at IMF, she has “wisely listened to a glittering array of chief economists.” At the ECB, she will also be well-advised by its chief senior staff, like Philip Lane, the former Irish central bank governor.
Lagarde is “both bright and knowledgeable enough about economics to evaluate competing arguments, heed good advice, and make sound decisions.” Besides, her “flexibility and openness to different ways of thinking stand in sharp contrast to the rigidity and closed-mindedness of dogmatic policymakers” such as her rival, Weidmann.
A former lawyer, she could be helped by the political experience she has gained through stints at the IMF and as France’s finance minister. Presiding over the ECB, whose responsibilities include setting the eurozone interest rate and ensuring the stability of the banking system, is viewed as a tough task given the requirement to oversee 19 Eurozone economies.
Financial markets across Europe have rallied on the news of her nomination, with investors viewing her as a continuity candidate who is not likely to ditch Mario Draghi’s policies – outright monetary transactions (OMT), and the ECB’s quantitative easing (QE) – that support economic growth.
Among the “big challenges” she will face: “The ECB failed to meet its inflation target of below but close to 2% even when the eurozone economy was booming. And now that it is flagging and vulnerable to China’s slowdown, US President Donald Trump’s trade wars, and a no-deal Brexit, there is little scope for further stimulus.”
The author says the Eurozone needs a “common safe asset” that would “bolster the stability of the financial system, boost the effectiveness of monetary policy, and provide an alternative to the dollar, whose privileged global status is being weaponized by Trump.” For the moment its “internal architecture remains incomplete, and its external role is inadequate. Its half-baked banking union has not severed the links between banks and governments that almost destroyed the euro.”
Indeed, interesting and – perhaps also – worrying times lie ahead of Lagarde. It remains to be seen how the Eurozone will develop in the years ahead.
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Henk Crop Jul 5, 2019

It is hopeful to see some fresh faces at the top of the EU.

We have to hope they set out on a course for the EU which incorporate the results of the Parliament and learns from the failures of the past: divisiveness, economic decline ( 2,4 % between 2009 - 2017), uncontrolled migration, disdain for the EU citizen.
It means:
- no more ever closer Union policy
- no unattainable federation, but a successful confederation ( like the EEC ).
- only selected and limited migration
- no transfer Union
- focus must be on serving the EU citizen
The strength of the EU must come from decentralized responsibilities and lean cooperation ( like the NATO). The talents of the EU must be enhanced and not stagnate in bureaucracy.
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