Europe 2004-2009: the five-year parliamentary term marked by a series of crises

On the eve of the 2009 European election campaign, let us take a moment to review the parliamentary term that is now drawing to a close. The events that have taken place during that parliamentary term are enough to make your head spin!

In 2004, the challenge facing the European elections was clear: the European Union had five years to try to catch up. It was behind in terms of its economy, mired in slow growth in comparison with the spectacular performance of emerging market economies and the continued strength of the US economy. It was behind in terms of its organisation, with the EU’s major enlargement to include the countries of Central and Eastern Europe ultimately taking place before the institutions had been reformed, something which should have been a prerequisite for enlargement: the political Europe of 25 was still operating according to the rules of the modest little Common Market of the Six from 50 years ago! It was also behind in terms of its diplomacy, too often marred by disagreements or simply absent when it came to major international issues. For the peoples of Europe, this series of failures to make any real progress became a source of growing concern at a time when the increasing pace of globalisation was heightening the contrast between a world that was undergoing a process of change and a continent that was struggling to ensure that its mechanisms were in full working order so that it could face the challenges of the 21st century.

Indeed, just after the 2004 elections, all the conditions seemed to have been met for the Union to be given the fresh impetus that it so desperately needed. The 12 new Member States joined the European family with impressive ease. In its role as guarantor of democratic legitimacy, the European Parliament, for the first time, imposed on the European Council its own candidate for President of the European Commission, the youthful José Manuel Barroso. The newly appointed Commission soon set about relaunching the ‘Lisbon Strategy’ in a major effort to catch up in terms of global competitiveness, whilst making the Stability and Growth Pact more flexible in order to render it more conducive to economic growth. In October, the Rome European Council signed the draft Constitutional Treaty, designed to provide greater Europe with the effective and democratic institutions which it clearly needed.

Unfortunately, in spring 2005, the Union was plunged into a very serious internal crisis. Ostensibly, the crisis was brought about by the rejection of the Constitutional Treaty in the referendums held in France and the Netherlands. However, under the surface, and just as crippling, was the budget crisis which arose as a result of the Member States’ refusal to address the fundamental problem of Community budget resources. The compromise reached in December 2005 under Tony Blair’s Presidency ‘guaranteed’ that the Union would not have available resources that were greater than 1.04% of GDP until 2013! Greater Europe was left with no institutions, no money and, consequently, no credible projects. Its economy was still crippled by the stagnation of the three major continental countries, Germany, France and Italy, which were unable to carry out the necessary reforms to enable them to catch up with the front runners of the economically stronger countries.

Yet, at that time, Europe showed an amazing ability to bounce back in the face of adversity. The European Parliament, acting in the stead of the Commission, which had been left stunned by the referendum rejections, took legislative power by completely rewriting the Directive on free movement of services, for which the Member States’ governments were quick to show their support. Its Committee on Budgets found a solution for the funding of the EU’s iconic project, Galileo, the future European GPS. The European Commission, generally uneasy about dealing with institutional and financial matters, continued working towards the completion of the single market and showed far greater courage in tackling environmental issues, particularly with regard to the proposed REACH Regulation for the chemicals industry and the establishment of a quota system for greenhouse gas emissions. The reforms undertaken by the outgoing Schröder Government enabled Germany to restore its strong competitive edge, while, in France, the birth of a new political generation in keeping with the times reflected a desire for real change.

During the first half of 2007, the astral conjunction which saw the German Presidency of Angela Merkel aligned with the election of Nicolas Sarkozy provided an opportunity, in just a few weeks, for an alternative solution to be found to the Constitutional Treaty: this was to be the Treaty of Lisbon. In another stroke of good timing, the German Presidency was followed soon after by a French Presidency. The French President, driven by the desire to restore people’s faith in Europe and plagued by the Old Continent’s continuing failure to make any real progress, set himself an ambitious agenda to breathe new life into the Union. He successfully encouraged his partners to reach agreement on a common immigration policy, as well as on a highly ambitious plan to fight climate change.

However, it was said that, during this five-year parliamentary term, the gods on Mount Olympus would certainly spare Zeus’s princess-elect nothing. The French Presidency began amid a new internal crisis: the ‘No’ vote in the Irish referendum on the Lisbon Treaty; it then continued with the diplomatic crisis over the conflict between Russia and Georgia before ending with the global financial crisis triggered by the collapse of US investment bank Lehman Brothers.

The second half of 2008 was to mark a dramatic shift from one world to another. These massive events ruthlessly revealed the strengths and weaknesses of all international players. It came as a nice surprise that, under Nicolas Sarkozy’s energetic leadership, the European Union established itself, for the first time, as a key player on major international issues. Europe’s strong diplomatic intervention led Moscow to halt its troops 40 km from Tbilisi and then bring them back to their bases. In response to the threat of global financial meltdown, it was the European Plan for Economic Recovery that succeeded in restoring market confidence where the Americans’ Paulson Plan had failed. It was also Nicolas Sarkozy, supported by the 27, who secured a meeting of the group of the world’s 20 largest economic powers, the G-20, first in Washington in November 2008 and then in London in April 2009, in order to find global solutions to a global crisis. In the light of the urgency and severity of events, a unique and successful working relationship was established between Paris, Berlin and London. Meanwhile, in this maelstrom of uncertainty, the euro area emerged as a haven of strength and confidence.

At the same time, however, the crisis grew more widespread and more devastating with each passing day. As the parliamentary term draws to a close in spring 2009, Europe is facing its worst economic recession since the end of World War II. While America has found strong and inspired leadership in Barack Obama, the European Union’s newly acquired visibility is drowning in the murky waters of Czech politics. Meanwhile, the worsening state of the Irish economy is making it increasingly difficult to secure the lifting of Ireland’s veto on the Lisbon Treaty, which it is still hoped will come about by the end of the year.

Five years later, here we are, living in a different world. All the major Western banks have been given a financial lifeline from the State, as has the automobile industry. The response to the crisis has sent most governments spiralling even deeper into debt, whilst prompting the central banks to focus on ‘quantitative easing’, which consists of nothing more than printing excessive amounts of money. The crisis will have unpredictable social and political consequences on every continent. The end of the crisis will bring about a tremendous redistribution of wealth among the various economic actors and between countries, and it will require an unprecedented revival of the political debate between Left and Right: bleeding-heart anti-capitalism now has no more meaning than militant liberalism. It will be up to the new Parliament, the new Commission and future Council Presidencies to lay the foundations of this new world.

That is the challenge facing the elections on 7 June 2009. It is quite simply mind-boggling! Will the people of Europe understand quite what is involved here? It is now for the political parties, universally formed and structured for the sole purpose of securing political power within a national government, to urge European electors to cast their vote. However, this is clearly one area where it is not going to be easy to make up for lost time…

Alain Lamassoure, 6 April 2009