Cause and Effect in European Politics and Law

Emmanuel Macron Put France Back into EU Driver's Seat

Adelina Marini, September 28, 2017

A leader has been born. For a very long time Europe has lacked leadership and vision, and for even longer France was the passive part of the Franco-German motor of European integration. But this has changed on 26 September, when the young president of France, Emmanuel Macron, turned a new page and sat boldly in the driver's seat of Europe - a seat that was considered to be reserved for German Chancellor Angela Merkel, but she never managed to become a great leader and visionary. The only thing she has been skilfully doing during her three terms in power was to drive safely but without clear direction and a final destination. To her, the EU is a house of cards, which should be approached very carefully and cautiously.

After the painful writing of the Lisbon Treaty, the EU fell into weightlessness and apathy. The crises that were overwhelming it one after the other hardly managed to move it a few steps forward, but without great ambition out of fear that this could feed the Eurosceptics. In the past decade, the EU has been developing along the line of least resistance, doing only what was most necessary and avoiding to ruin the house of cards. All more ambitious ideas were left for better times. There was always to wait for something - these or those elections, this or that referendum, this or that crisis. Emmanuel Macron's European speech (the entire speech in French here and a synopsis in English here) of 26 September is precisely what Europe was lacking for a very long time.

The French president's speech was very passionate and revealed his sincere conviction. It comes precisely 13 days after the annual state of the Union address of European Commission chief Jean-Claude Juncker (Luxembourg, EPP) - one of the few European visionaries on the list of disappearing species in the company of Guy Verhofstadt and Andrew Duff. The speech took place a few days after the nondescript and boring Florence speech of UK Prime Minister Theresa May, which revealed time and again the painful deficit of solutions and vision of the British political elite. Macron's speech echoed two days after the parliamentary elections in Germany, the outcome of which fuelled fears that Germany could pull the handbrake of Europe.

Fellow journalists were joking a day before the long-awaited speech of the French head of state that he probably tore apart the industriously drafted speech after he saw the first preliminary results from the voting on Sunday, which showed that nationalists will enter the Bundestag for the first time in post-war Germany and with the size of a third political force at that. The bigger problem, however, is that the Free Democrats also had a good performance and they are openly Eurosceptic party which is against almost all ideas for the future of the euro area outlined in Juncker's address and in Mr Macron's speech. And the Free Democrats are mentioned as a potential coalition partner of Mrs Merkel's conservatives.

There's talk that Berlin asked Emmanuel Macron to be cautious in his vision and it is very likely that he changed the initial draft of his speech because the part that was about the eurozone was quite vague and sticked to the well known ideas. This, however, did not diminish tangibly the huge ambition of the French president's vision for the future of Europe. A bold, ambitious, idealistic and very French speech which clearly shows that as early as of next year Europe is about to leap forward. The smell of a new treaty is now in the air, the ambition of which could surpass even that of the Maastricht Treaty, which the EU made a huge leap forward in its integration with.

What does Macron want?

The shortest answer is to shake the EU down to its foundations. The longer is that his vision spreads from the building of a European identity, the creation of European sovereignty, a European army, reform of the institutions, to the breaking off of the eurozone from the slower and hesitating members. As could be expected, the French president started first with defence - an area where intensive work is ongoing on the deepening of integration. Defence is a central part of his vision to create a European sovereignty. He proposes a "common intervention force", which is a euphemism of a European army; a common defence budget and something very important - a common doctrine for action. The latter is a very bold idea to converge defence cultures. As part of that he proposes the member states to start accepting in their national armies soldiers from other countries.

He urged for the as quick as possible implementation of the European Defence Fund and the Permanent Structured Cooperation (PESCO). This will be e major topic on the agenda of the October European Council. Under the heading of European sovereignty Macron proposed the establishment of a European Intelligence Academy, which is to work for convergence of intelligence services in the fight against terrorism. This issue is very sensitive for France and that is why the French president proposed a European prosecutor's office, which is currently in the making, to be expanded to include fight against terrorism as well.

This will be one of the difficult files because even now work on the European Prosecutor's Office (EPPO), initially planned as an office to fight fraud against EU's financial interests, is hard and in the beginning of this year it has detached as a separate integration speed because some member states could not accept the deepening of integration in the area of the judiciary and that is why the future office will be established by 20 countries. Negotiations on its establishment have been going on for more than 3 years, as all this time the ambition of the initial draft has been significantly reduced, including by France. Italy was among the very few countries which insisted the power of the office to be expanded to cover the fight against organised crime and terrorism. Italian representatives in Brussels expressed satisfaction on Twitter with Macron's speech.

The French president's bold ideas are many: creation of a common force for civil protection; a common asylum agency which will process asylum requests; a European border police (a stronger version of the current Border and Coast Guard agency); an agency for breakthrough innovation; a European trade prosecutor who will investigate whether EU's trade partners are adhering to the rules, and will sanction unfair practises (this is a continuation of the European Commission idea for a change of EU's trade policy with a focus on introducing reciprocity); introducing a carbon border tax to be collected at EU's external borders; launching an industrial programme to support production of ecologically clean cars and infrastructure.

Solidarity though taxation convergence

Among the proposals is the one for more taxation convergence, which means creation of criteria for gradual convergence of social and taxation models between the member states. Emmanuel Macron believes that adherence to these criteria should be linked to access to European solidarity funds. Macron also proposes to define a "corridor" of corporate tax rates and of social affairs (minimum wage). Surprisingly, the French president has beaten the dust out of the idea to introduce a financial transaction tax, which has been suffering failure after failure for years.

Currently, only 10 member states are ready to introduce it but even among them negotiations are going on very slowly and it is possible that they fail. In an attempt to motivate the sceptic member states Emmanuel Macron decided to give personal example announcing that the French proceeds from such a tax will be invested in a European development fund.

In search of a European Palo Alto?

The French president focused a lot on Europe's digital lagging behind and called for complete transformation. His focus, however, was more on rethinking taxation of digital companies and regulation of big platforms. The establishment of an agency for breakthrough innovation he sees as something that could boost the creation of European breakthroughs in the digital area. Will this lead to breakthroughs of the scale of Elon Musk's activities, who sparked a revolution in the auto market and in the approach toward Space, or Mark Zuckerberg, whose Facebook affected even democratic elections? Hardly through opening of new agencies only.

Emmanuel Macron listed a serious number of new agencies, although a large part of them would have rather a symbolic purpose - to show where the EU should work together. In Europe, though, it is bureaucracy that is nipping in the bud personal initiative, and the lack of alternative funding to the monopoly of banks is another problem which keeps Europe stuck in the 20th century, whereas America is already deep into the waters of the 21st century.

A European identity

European leaders have rarely paid attention on education as a tool to build European identity. Emmanuel Macron believes that every student should by 2024 know at least two European languages and proposes the establishment of European universities that will give students opportunity to study abroad. Half of every group age of young Europeans should spend at least 6 months in another European country.

Breaking of taboos in exchange

As a sweetener to some of his boldest and most contentious proposals Emmanuel Macron is proposing the opening of some French taboos. One of them is the reform of the Common Agricultural Policy (CAP), which has always been a red line for Paris. According to him, CAP should pursue two main goals. First is to protect from volatility of the global markets, and the other is to inspire a serious agricultural transition, allowing more flexibility at national level and reducing bureaucracy. There are no details in his speech, which shows that the main purpose behind the raising of the issue is to rather demonstrate France's readiness for change. This move has a great significance against the backdrop of two key developments - Brexit and the upcoming negotiations on the next multiannual financial framework.

In terms of Brexit the consequences for CAP are two. The first is that Britain has always been a major driver of reduction of the CAP share in the common budget. In the very beginning, since there are EU budgets, CAP share was almost 80% of the expenditure until it shrank to its current share of less than 40%. UK's exit created fears that France will now feel unconstrained to insist on increasing subsidies for French farmers. The second consequence is that Britain is a large donor despite the solid rebate it benefits from.

Without Britain the European budget will have less money and the initial reaction of the member states was that they don't want a change of the status-quo - each of them wants to keep its current allocations while, if possible, without paying more. The goals outlined by Macron on the future CAP hint that this policy will be allocated much less money. France's readiness for a change of this sacred for the country issue is an invitation to the others to make concessions too.

Macron returned on the table another issue which has always been a source of conflict in the EU - reduction of the number of commissioners. This issue was raised for the first time on the eve of the big-bang enlargement of the EU with 10 more countries in 2004 with the aim to make the Commission more efficient. All previous proposals to cut the number of commissioners failed. The French president proposes the number of commissioners to be reduced to 15. This should happen before the next EU enlargement to the Western Balkans (by the way Macron did not at all mention Turkey in the context of enlargement in his speech), whom he warned though that although the door for them is open, the EU is a rule of law and democracy zone.

As part of the reform of the European institutions Macron proposes to introduce a pan-European electoral ballot for the upcoming European Parliament elections in 2019. The idea is not new, but so far member states couldn't find will to get rid of their numbers of MEPs, agreed after tough negotiations on the Lisbon Treaty. The leaving of the UK opens an opportunity because 73 seats will be left vacant. For several weeks in the EU a debate has been going on on the possibility, if not all the British seats, at least some to be left to a common European election. The pan-European list (also known as trans-European) suggests voting for candidates from any point in the EU.

The idea behind this proposal is to break the link between national and European politics. Emmanuel Macron not only entirely supported the idea but also proposed later in time (possibly for the elections after 2019) half of the EP members to be elected through a pan-European list. This would have a huge impact when the big integration of the euro area happens because it is envisaged the parliament to oversee the decision-making process in the currency club. Emmanuel Macron, just like Jean-Claude Juncker, excluded the possibility of creating a separate parliament for the euro area. According to him, it is a serious mistake to view the EP as a continuation of national politics.

Building a sovereign Europe requires MEPs to be supranational. He imagines the European Parliament as a melting pot. On the occasion of European elections, Macron revealed his anti-systemic nature. His movement En Marche! is not a member of any of the European political families nor does it intend to become. Moreover, he said in his speech that he would not allow these parties to keep their monopoly over the debate for Europe and the European elections. This position of his could influence significantly the procedure for election of a European Commission president, known as Spitzenkandidaten, and introduced for the first time for the 2014 elections.

The European political parties nominated candidates of their own. This marked a significant progress for the European democracy because the candidates participated in debates broadcast live throughout the EU and outlined their views for the future. Jean-Claude Juncker was appointed president, because the European People's Party, whose candidate he was, won the 2014 elections. It seems the French president has some ambitions his party to also participate in the Spitzenkandidaten procedure. It is not quite clear yet how can this happen but it is a serious demand, which suggests the next European elections will be much more interesting than the previous ones.

A coalition of the willing is being built

The time horizon for the changes Emmanuel Macron is proposing is 2024, as the beginning is to be in 2018 when democratic conventions will be established all over Europe to discuss the proposals for reform, including the enhanced cooperation procedure and possible treaty change. In addition, Macron is creating a group of reformist countries which are to push for reform. This group will consist of representatives of each participating country and of the European institutions. Apart from the natural ally Germany (with which Macron proposes to conclude a new Elysee treaty on 22 January next year), Macron invited also Italy, Spain, Portugal, Belgium, The Netherlands, Luxembourg. He said that everyone who wishes a change is also welcome.

The proposal for a new Elysee treaty also bears a lot of symbolism. This means an ambition of the scale of the first steps toward a united Europe made after the end of World War II. A curious coincidence is that the 50th anniversary of the treaty passed under the shadow of David Cameron's "European" speech, with which he proposed a Brexit referendum. A speech that has caused a series of devastating events. The choice of date for the former prime minister's speech was quite indicative for the British moods at the time. The French president proposes France and Germany to fully integrate their markets by 2024, meaning to apply the same rules for business and this to be part of the new treaty.

There were times before when Berlin and Paris had ambitions to be pioneers in wading in the deepest integration waters, but so far not much has been done, and with the new post-election political scene in Germany Macron's ideas might not be welcomed warmly. Positive reaction to Macron's speech in Germany came from the Greens, who are a potential coalition partner, and from the Social Democrats. The Free Democrats poured cold water over Macron's ambition. Among the conservatives there were reservations as well but not in all corners. The speech was welcomed in other parts of Europe as well. The first test will be in October at the EU summit.

In his European speech, the French president outlined many proposals for large-scale and deep reforms of the Union, but they are not the most important part in his speech. The discussion of these proposals is rather a technical issue and certainly a common denominator will be found in the Council if and when they reach the Council in the form of legislative proposals. The most important part in his speech is the timing. The EU is facing a new era. For the first time a member will leave, especially a country which has always played a key part in the building of Europe (more often as a handbrake). On the other hand, the Union is facing the betrayal of some of its mainly new members, which has put to the test the values which it was built upon.

The third challenge is the future integration of the countries from the Western Balkans, for which Emmanuel Macron said he wants to make the EU so attractive that they wouldn't need to turn their back on Europe and look for Russia, Turkey or other authoritarian forces which do not protect "our values". As a matter of fact, some of the candidate countries hinted they don't want to be isolated from the process of changes of the EU. In a tweet in French, Albania Prime Minster Edi Rama welcomed Emmanuel Macron's powerful speech, which, in his words, would wake Europe up and that is something everyone needs, including the candidate countries.

Macron entirely supports the concept of a multi-speed Europe and in his vision the main motor of the Union is the euro area. The creation of a group of like-minders is in fact a last call for the passengers. His speech should not be viewed only in the context of relations with Germany, especially given the election results, because the French president's ambition is big enough to allow France to be the leading part of the Franco-German motor in case Germany closes in and becomes introvert.

In 2019, when the big bang reform is about to start, 10 years will have passed since the entering into force of the Lisbon Treaty. A new treaty was necessary even before its entry into force. Not only there was no appetite for change, but there were also no leaders. Now, there's both. So, buckle up! It will be bumpy.