SOTEU2023 - Travelling without moving

Blog, 14/09/2023, par Sven Franck

Yesterday, Commission president Ursula von der Leyen gave her last State of the European Union address before the 2024 European election outlining her ideas for the upcoming year. The speech was lip service in English, German and French - as it should be. However, pundits will argue that the Commission president was not addressing Europeans at 9am in morning, but rather her parliamentary group in light of her candidacy for a second term. And while she did cover a lot of ground including her ambition to complete the European project, she did not announce any tangible steps towards advancing the European project. Instead she opted for a plethora of commitments, symbolic conferences, regulations and reports. Europe in 2024 will remain an economic union that continues to refrain from adding the democratic and solidarity dimensions it is so sorely lacking today.

Completing the European project

The allusion towards the European Bauhaus, the concept Ursula von der Leyen evoked at the onset of her mandate, is obvious. It would of course be fitting to, akin to building a "power"house, completing the European project with the accession of countries like Ukraine, Moldova and Balkan countries. But is that all? Georgia was snubbed and just because the UK chose to leave doesn't mean, it wasn't an integral part of the European Union and wouldn't be welcomed back the day the country becomes an avid supporter of the European project. What about other countries like Switzerland? There may be a finality to the Commission president's mandate, but it is difficult to claim that the European project can ever be completed. It is rather a site permanently "under construction" - both from the inside and outside and as such, it will likely never be completed. There will always be something to improve and fix. Oddly, there was no mention of existing cracks and need for Bauhaus-style intervention in Poland and Hungary after their DIY renovation of democratic principles. Talking of completion is akin to never touching European treaties. These were supposedly also set in stone to last for eternity with the Commission president and member states shying away from fixing even its most obvious shortcomings, like the veto and unanimity decisions. Our union is more like a living organism: it grows in good and bad ways and the rules and regulations that were maybe fit for purpose 30 years ago must adapt with the changing environment. Bold steps are needed to advance the European project. The Commission President was just treading water.

An envoy for small business - already proposed in 2008

One of the three proclaimed major challenges for the European Union is to reduce the bureaucratic hurdles for SMEs by 25% on European and national level. Lofty goals accompanied by an envoy to report directly to the Commission President and a review of the effects of new legislation on small businesses. Sounds innovative, but it's not. Already in 2008, the European Commission adopted the "Small Business Act for Europe" which foresees not only to review legislation for compatibility with small business but to also appoint SME envoys to liaise between the Commission and SMEs. And even 15 years too late, it's a far cry from the US Small Business Act, which aims to assist and protect the interests of small businesses and funnels 20% of all public contracts to SMEs.

Also on the regulatory front, the EU goes into the opposite direction: The Cyber Resilience Act currently entering into trilogue includes provisions that the Commission itself estimates to cost businesses at least 40 000€ in additional bureaucracy to comply. Worse, it risks to wipe out the vibrant european open-source ecosystem, composed mostly of SMEs, by making anyone publishing source code liable for any damages incurred by third parties using this code in their products. Open Source software contributes between 65B€ to 85B€ to the European economy. It is vital for strategic autonomy and competing with the likes of Google and Amazon. But instead of borrowing from the US National Cyber strategy which places responsibility on the stakeholder most capable of taking action to prevent outcomes specifically excluding end-users and open source developers, the European Commission accepts our SME to leave Europe or cease operations. Small businesses are the backbone of our diversity and economy. The Commission should practice what they preach and not threaten SMEs through additional bureaucracy.

Managing migration by delegating responsibility abroad

The Commission president rightfully described the difficulties our economies are already faced with today to find qualified staff. Europe is loosing opportunities and demography will make it worse with our working age population set to shrink by 23% from 414 million to 317 million by 2100 with a corresponding increase of retirees and pressure on our social welfare systems. We can of course further increase the retirement age or, as outlined by the Commission president, mobilize the female workforce, NEETs ("Not in Education, Employment or Training") and, drum-roll.. immigration to try and keep our economy afloat. Germany already needs 400.000 immigrants per year, Hungary admitted to needing 500.000 and even Italy cannot help but look abroad for 800.000 immigrants in the next three years to fill vacancies in their industries. The Commission is correct in wanting to manage migration and address human trafficking. However, the deals struck with Turkey or recently Tunisia mean this "management" is effectively outsourced to countries outside of the European Union - often brandished with questionable records regarding human rights and humane treatment of immigrants. Worse, instead of acting ourselves, the Commission will force us to react, trying to extinguish fires by throwing cash. Europe is capable of monitoring financial transactions across the continent. The same would be possible for migration, if the Commission and member states accepted working together to the benefit of our economies. Illegal migration will cease to be a factor, if there are accessible legal pathways into the European Union. A 6-12 months try-to-find-work visas issued for providing, among other things, a return ticket and deposit for covering deportation cost would mean immigrants could legally enter Europe to find work instead of trying to cross the desert and mediterranean at the mercy of human traffickers for a multiple of the cost. Immigration will be essential for our economies in the future and in order to make it a success factor, the European Commission needs to act with pragmatism, vision and foresight.

These are only a few aspects of a SOTEU 2024 speech that can be summarized with "traveling without moving". The Commission President shied away from landmark announcements, especially with regards to advancing the European project. It was a speech that elaborated the multiple challenges we face as Europeans. However, and likely considering the little time that is left of the Commission President's mandate, the solution proposed to the challenges feel lackluster and superficial - like traveling without moving. The European project has come very far, but for taking the next steps, we need a greater vision than adding a few countries to the mix. We need bolder steps than symbolic conferences and summits. We need actual commitments for our SMEs instead of recycled proposals and overburdening bureaucracy. We need a long term perspective of how we turn immigration into the lifeline our businesses will need in the future. All these are big asks and the European elections will again provide the possibility for the people to elect a Spitzenkandidat. Let's hope that this time, their choice will be respected and our next Commission President will take us further towards the European Union that we need.