The European Union (EU) is an association of states that participates in the international community and its organizations, but is not a state entity. Its special characteristic is that it is not aggressive and does not have territorial expansion aims. You will remember the expression coined by Tommaso Padoa-Schioppa, who spoke of theEurope as a “gentle force”.
The European Union does not have an army and its military capacity is linked to the willingness of member countries to pool their forces to face events that threaten its integrity – something that has never happened before.
The international projection of the Union is illuminated by the values of thesocial market economy and from adherence to the objectives of the environmental transformationThe crucial game of development of the “green” technologies that will guide the evolution of the global economy in the decades to come. The continuity of this commitment in the legislature that is opening is cast some heavy shadows by the growing resistance of its industrial system, to which the right-wing governments elected in various countries are more sensitive.
The key to European competitiveness is the Single Market, which guarantees the free movement of people, capital and businesses. On this front, the new Commission announces a renewed effort to complete the single market in key sectors where we have fallen behind: services, energy, defence, finance, electronic communications and in general in all sectors of digital technologies. This should lead to a significant increase in the size of businesses, which on average are still insufficient for the new technological challenges.
Competition policy must find a balance with the strengthening of industry
A key issue in this context is that of competition policy, which requires a more open approach to the needs of growth and industrial and technological consolidation.
It's not about giving up on fighting anti-competitive behavior that result in unjustified price increases or worsening of the quality of products and services. But at the same time it is necessary to improve the functioning of markets and the conditions for doing business for companies. Business mergers must be encouraged, taking the European and global dimension of the markets as a reference. Overall, the balance between the needs of competition and those of strengthening industry seems destined to change in favor of the latter.
The ever repeated and promises of simplification poorly implemented must find concrete content: fewer bureaucratic and reporting constraints, more trust in economic operators, faster authorizations. President von Der Leyen has announced her intention to propose a new European legal framework to support and encourage business innovation and growth, immediately applicable instead of the 28 national legal regimes.
Easier conditions for doing business will also have to be reconciled with ambitious environmental targets, which also allow for lower energy costs for businesses and households. Von der Leyen has announced that she will propose a 90% emissions reduction target by 2040, supported by a new European Climate Law and a European Act to Accelerate Industrial Decarbonisation.
We know that these objectives pose severe industrial adjustment challenges – especially for the automotive sector, which is facing an epochal transition from internal combustion engines to electric motors. The costs, including employment costs, are potentially very high.
The ability to manage them by opening up new growth opportunities will be one of the most challenging tests for our industrial policies. No less complicated will be maintaining consensus around our environmental policies in a context of rapid industrial transformation.
A central aspect from this point of view will be to ensure the free movement of people, businesses and investors across our borders, while ensuring their security.
Looking ahead, this requires the development of a cross-border flow management system fully digital, capable of reconciling the mobility needs of people and businesses with adequate security conditions against external threats. To this end, Frontex, the European border management agency, must be able to have more resources and also more powers, while respecting fundamental rights.
Over the past two years, the EU has faced unprecedented challenges in its international relations with two wars breaking out on its borders.
The framework for joint action is constituted by the so-called Strategic Compass, adopted in 2022 to give the Union an action plan to strengthen the EU's security and defence policy by 2030 – just as the energy crisis was erupting and Russia was invading Ukraine.
EU Foreign Policy: From the War in Ukraine to the Conflict in the Middle East
In the same months a new conflict also broke out in the Gaza Strip, initially between Israel and Hamas, but which later tended to expand to Lebanon and then directly to theIran (which is the inspiration for anti-Israel groups throughout the Middle East).
Putin's aggression against Ukraine has not yet achieved its objectives of territorial conquest – but the imbalance of resources, especially human, between the belligerent countries weighs down the prospects – and it is not clear how Europe (together with the Atlantic Alliance) will be able to react to the possible military defeat of Ukraine.
The war in Ukraine has also sparked a serious energy crisis in Europe, pushing the price of gas above 300 euros per MWh and threatening a blackout of energy supplies. Europe has responded by reducing its imports of Russian gas from over 50% of the total to almost zero and significantly curbing its electricity consumption. It has also introduced a mechanism for adjusting the price of coal for imported goods to ensure their equality with the prices of similar products within the Union.
The conflict between Israel and the Palestinian people is of a different nature but is also centered on a territorial question. Two peoples are fighting (for almost a hundred years) for the same land, for which they both have legitimacy titles. If they cannot be willing to share that land, one of them will have to leave or accept a second-class citizenship status. This is why the European Union continues to push for the solution of a negotiated sharing.
This is precisely the aim of the two-state proposal, which has been discussed since 1947, which was at the heart of the 1992 Oslo Accords and which has represented the heart of the European strategy in recent years.
However, this solution no longer appears viable. The Palestinians of Hamas do not want it, and the Israeli government does not want it, which now openly aims for a balance of power in which there is no room for a Palestinian state entity. Whether this can constitute the basis of a lasting peace seems at least doubtful.
From unanimity to majority voting
The decisions I have described, and which we were finally able to deliberate, required theunanimity of the European Council.
A member country's vote against could have prevented the decisions. The Union would have been incapable of reacting to such dramatic events, which are also very relevant for our security. The Russian threat on our borders will not diminish, indeed it risks worsening; even the repercussions of the war in the Middle East on our security and peace do not seem destined to diminish.
The decision-making difficulties are bound to worsen with the further enlargement of the Union, which has already been decided, to Ukraine., Moldova and the Western Balkans. This new enlargement adds to those decided since the early 2000s, essentially for security reasons, which have perhaps achieved their specific purpose, but have certainly not improved the decision-making cohesion of the Union. I often wonder whether with those enlargements we have not already compromised every possibility of institutional strengthening of the Union.
What is certain is that the transition from unanimity to majority voting in the Union's foreign and security policy has now a existential value and must be resolved in the new legislature – but will face difficult obstacles to overcome in the enlargement of the membership, given that many of the new entrants will oppose the strengthening of the Union's decision-making capacity.
West vs Rest of the World
Looking further, the war in Ukraine has brought transatlantic allies together on common goals, but has exposed different views in the rest of the world – where the most relevant issue concerns the relations between China and the United States – as was well discussed yesterday.
Behind these tensions between China and the Western world are different models of economic security, industrial policy and state intervention in the economy – and in each case security considerations dominate over economic integration. Climate change and ways of addressing it are another determining factor in the emerging framework of international relations.
We do not know if the world that is emerging will be bipolar or multipolar – whether, that is, as already discussed yesterday, we will see two opposing blocs closed in their mutual relations, or a more complex framework in which many countries can play a significant, though not dominant, role.
In the first case, we could witness the rise of two opposing blocks, characterized by different security systems, IT technologies, and even financial and payment systems. In the second, which seems more likely, many other players, albeit smaller, will participate in the international game, aligning themselves now with one, now with the other major player, pursuing their own interests with transactional relationships.
In this second scenario, the extent to which the world will be based on shared rules rather than on balances of power is more relevant than whether it will be bipolar or multipolar.
From this point of view, the EU is firmly in favour of strong multilateral institutions and uniform rules applied to all states, regardless of their size and economic strength.
But we will have to deal with a world in which fragmentation is increasing and relations between the two largest countries may evolve in a more conflictual direction. So far, we can take satisfaction in the fact that Russian aggression against Ukraine has led to a strengthening cohesion among Western countries, particularly in transatlantic relations.
Looking ahead, there is a major question mark over the possible effects of the american elections on the relationship between the EU and the United States. Certainly, one of the candidates does not hide his preference for a closer bilateral relationship with Putin and his lack of empathy towards the European Union.
Nor are there any very peaceful prospects emerging on the Eastern front of the EU, where the war seems destined to continue without positive diplomatic interventions and the unity maintained so far between the member countries could in perspective weaken. It is no secret that some member countries do not share the vision of Putin's Russia as a strategic threat.
Also regarding the conflict between Israel and Palestine, the position of the member countries at the bottom is not unanimous, which does not favor its ability to influence the contenders.
The Union, as is well known, is a major financier of the Palestinian Authority and maintains very close relations with Israel. However, it has so far played no role in moderating the conflict, nor does it appear to have the political capacity and credibility to do so.
For Israel, the only significant international relationship is with the United States, from which it receives the weapons it needs to fight. The political vacuum created by the upcoming presidential elections allows Israel to act without much regard for American indications.
European Defence Union
Europe's weakness on the international scene stems first and foremost from weakness of its defense industrial base, in which it is necessary to invest significant resources. As I have already mentioned, President Von Der Leyen aims to create a true European Defence Union.
The commitment will initially translate for the first time into the appointment of a Commissioner for Defence. The President has also committed to presenting a White Paper on the future of European defence in the first 100 days of the new mandate. How ready member countries are to share resources and, above all, to strengthen common governance mechanisms remains to be seen.
There is no shortage of obstacles and the difficulties of advancing on this terrain are severe, due to the persistence of strong nationalist pressures in the military government apparatuses of the member countries. If we fail to overcome these nationalisms, Europe will continue to remain too weak to ensure adequate protection of its ability to operate effectively in the troubled framework of international relations.
*Intervention by Stephen Micossi in Lanciano for the Marcello De Cecco Association on the “European Union in an unstable world”.
