Published on June 06, 2005

Changes on the horizon should give Europe a chance to find a new way forward

Much has been said about the decision last week by the voters in France and the Netherlands to reject the European Union constitution. The former proponents of further EU integration have become prophets of gloom and doom, unable to see past this setback and plot a way forward.

But life must go on, even if it means regrouping and doing some new thinking. To this end, there are some developments on the horizon that could create an opportunity for the member states of the EU to form a new consensus on how to move forward. Among these are the upcoming EU presidency of Britain, a self-declared sceptic of the federal system.

Another is a national election in Germany that could take place ahead of schedule this autumn, and which could see the Christian Democrat Party returned to the helm under the leadership of Angela Merkel, a tough woman from the former East Germany with a reputation for pushing liberalising economic reform.

In France, a relative latecomer to the sceptics club, any hidden potential that the voters will reverse course and embrace further integration is likely to remain bottled up for a bit longer. If the French “no” vote was really a proxy vote against President Jacque Chirac and the country’s political elite, then it’s going to take time to clear the air.

The new prime minister, Dominique de Villepin, probably will not last long. Chirac is not likely to stand for another term, paving the way for his rival, Nicholas Sarkozy, another liberal reformer, to become the next French president.

These changes, should they come to pass, will provide an opportunity for fresh thinking on the future of the EU. Based on the public sentiment on display during the recent referendums, it seems clear that most Europeans do not want to see Brussels extending its tentacles into all facets of life. Rather they expect it to facilitate and embrace decentralisation.

In administrative terms, this translates into a smaller bureaucratic system that is not excessively legalistic – a far different animal than the one that has lurched to life during the past few decades. This new Brussels should also facilitate differences and draw synergy from them, thereby extracting and adding value.

Once the 25 member states have weathered the changes likely to take place over the next year or so, they will once again have to work on building the kind of mutual confidence necessary for mutual integration. The next item on the agenda will be to consolidate as much as possible the group’s foreign-policy apparatus.

This is important for the EU’s role both in international business and in international politics and security. In addition, a more unified EU on the international stage will give ammunition to the different national governments to deal with their economic agendas at home. The situation is particularly urgent in Italy, France and Germany, which are reeling from high unemployment and low growth.

Overseas business opportunities are the most reliable likely sources of growth for these three nations. Milan and Hamburg, for instance, are leading growth engines for Italy and Germany, respectively, because of their openness and skill in international business. The key is making it easier for these two cities to extend their energy and international outlook to other areas of the two countries through support from some strategic policy-making on the part of their respective national governments.

For its part, France is going to have to learn to embrace globalisation, rather than resist it in the name of preserving the French way of life, which is becoming unaffordable.

None of this will be easy when it comes to the nuts and bolts of implementation. It will be up to the individual governments to show the people that such changes are in tune with their needs – and with those of the broader European Union. The potential downside is that these changes could come at the cost of suspending further enlargement, particularly for Turkey.

The European Union started with a vision of peace and prosperity, and the union has achieved both under the Franco-German axis of leadership. But that partnership has apparently ended, and the era of decentralisation now beckons.

Such a change does not have to mean the end of core leadership. Rather it should be seen as a change in leadership. In the short and medium term, the emphasis is likely to be more on economics than on security. Closer integration with the world economy will lead to changes at home – changes for the better. The objectives do not have to change, but the means and strategies must.

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