Here is how Europe can get its act together
LONDON, Dec 8 (Reuters Breakingviews) - There was a telling moment two weeks ago when Marco Rubio went to Geneva to thrash out a peace plan for Ukraine. Asked what he thought about Europe’s proposals, the U.S. Secretary of State said he was not aware
of them.
Another revealing incident came last week when Ursula von der Leyen presented a plan to use Russia’s frozen assets to lend Kyiv up to 165 billion euros. Asked what Donald Trump thought of the “reparations loan”, the European Commission president said
Scott Bessent had given it a positive reaction. She did not explain why she had spoken to only the U.S. finance minister rather than its president. Perhaps, as Bloomberg has reported
, it was because the United States is trying to derail the plan.
It is not hard to see why Europe is marginalised on an issue vital to its own security. It is weak and divided. For years, it has failed to invest enough in its own defences. Meanwhile, far-right nationalism rots it from within and Brexit pulled the United Kingdom, perhaps Europe’s strongest military power, away from the European Union.
As a result Russia can threaten it militarily, the United States can bully it with tariffs and claims that the EU “undermines political liberty”, and China can squeeze its supply of rare earths. They think the EU is too pathetic to hit back, even though it toughened its ability to do so last week. This is extremely dangerous geopolitically and economically.
Europe can still pull itself together. But it needs to act fast, starting with beefing up its own defences and a reparations loan for Ukraine. The EU then needs to move forward with streamlining its decision-making process. That would help it, among other things, complete its single market and boost investment.
The UK and EU also need to do more to heal their differences. And mainstream politicians should hit back harder against far-right nationalists who are too friendly to Russian President Vladimir Putin. Cosying up to the Kremlin is disloyal.
MOMENT OF TRUTH
Ukraine could make or break the EU. The union’s most important card is the pile of frozen Russian assets sitting in Belgium and other member states. Using them to fund a massive loan to Kyiv could be a gamechanger. It would boost morale in Ukraine and make Putin realise he cannot win the war just because his adversary runs out of money. Putting a big sum of cash on the table might even get Trump to take the EU seriously.
This loan is still in the balance, not least because Belgium is resisting it. But the good news is that some countries such as Germany, the largest member state, realise it is urgent to act. So does the European Commission. The EU’s executive has proposed
using an “emergency” power to ram the loan through even if some countries resist. If that fails, it could try an alternative mechanism
for making the loan that I have helped develop.
The EU is also making progress on increasing investment in defence while encouraging cross-border cooperation. Its 150 billion euro SAFE financing scheme, funded by common borrowing, is a good start. But it is neither big enough nor generous enough to force member states to abandon their national champions. What is more, the UK has so far been denied full participation in SAFE.
Europe probably needs an additional vehicle to drive the creation of a pan-European defence industry. It should include only those EU states that are enthusiastic as well as non-members such as Britain and Norway. The European Defence Mechanism
, proposed by the Bruegel think tank, could do the trick.
Meanwhile, the UK should seek an ambitious security pact with the EU. This could cover not just defence and intelligence, but economic, energy, environmental, food, technology and border security.
One way to drive this forward would be for London to heed the European Commission’s call for third parties to provide guarantees for its reparations loan. The UK could offer to do so in return for joining SAFE. That would kill two birds with one stone: helping the EU get its loan over the line, while reinforcing European defence cooperation. The UK could do this as well as providing its own reparations loan to Ukraine using the Russian assets frozen in Britain.
MORE VOTES, FEWER VETOES
The EU is weak partly because member states can veto so many types of policy, and there is an overriding desire to reach consensus. This leads to painfully slow decision-making and often paralysis. It is the main reason why good ideas for boosting competitiveness and increasing investment, as suggested in reports by former Italian prime ministers Mario Draghi
, have made little progress.
Ideally, the EU would change its treaties to remove some of these veto powers – especially in the areas of foreign policy, spending and taxation. The snag is that each of the 27 member states has a veto over changes to treaties and there is always at least one that refuses to agree.
The union will therefore have to find imaginative ways to move away from unanimity. The Commission’s proposed use of an emergency power
for the Ukraine loan is one approach. Another is for coalitions of willing countries to move ahead with projects that others refuse to join. That is what happened when they created the euro. Both Denmark and the UK, then a member, opted out.
Countries that wish to move forward could even agree their own separate treaty to get round vetoes by recalcitrant members. Again, there is a precedent. The EU did that after Britain blocked stricter budget rules in 2011.
An attempt to override vetoes could, of course, provoke a backlash by nationalists in some countries. That is why mainstream politicians should take the fight to these far-right populists. They need to convince voters that true patriotism means standing up to Putin and Trump, not sucking up to them.
Those with Europe’s best interests at heart could still lose the battle. But it would be better to go out with a bang than a whimper.
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