Brussels can't reverse the outburst

The EU's policy recommendations for each country reads like a compendium of what's wrong with Europe. Add a monumental outburst of truth from one regulator and you've got a clear list of problems with no solutions.

Last Wednesday, the European Commission released a set of economic policy recommendations in its very own style. Written in the usual diplomatic and legal prose of utmost transparency, and available in all the European Union’s official languages, it told each individual member state which reforms needed to be tackled if Europe ever wanted to return to growth and full employment.

Though the typical EU jargon almost makes the whole exercise sound like a harmless technicality, the Commission’s ‘country-specific recommendations for 2013’ boil down to a compendium of what’s wrong with Europe: France desperately needs to get its deficit under control and tackle its unsustainable pension system. Bulgaria should finally reform its labour market to deal with its unemployment problems. It’s high time for Italy to reform its tax system to increase economic efficiency. And so the list of recommendations goes on and on and on.

Not a single EU country got away without harsh admonishing words from Brussels. On the other hand, no European government needs to lose any sleep now. Similar consultation rounds happened over the past few years – without ever triggering any meaningful change.

In fact, this time the European public would not even have noticed much about the Commission’s recommendations – if France’s President François Hollande had not protested loudly against the European intrusion into French domestic affairs. But then again, Monsieur Hollande is still relatively new to the business of European politics so he probably did not realise that all he had to do was to just ignore the EU’s recommendations.

Coincidentally, on the very same day the Commission launched its recommendations, one of the EU’s commissioners unwillingly managed to summarise the state of Europe in a much pithier way. In a speech to business leaders, which was certainly not meant for publication, the EU’s energy commissioner Günther Oettinger called the EU a ‘restructuring case’. And that was the most positive thing the German politician had to say about the institution he works for.

Somehow, excerpts from Oettinger’s speech made it into Bild newspaper, Germany’s best-selling tabloid. What the Christian Democrat had to say was remarkable indeed.

“I am concerned that there are too many people in Europe who believe that everything will be just fine”, Oettinger is quoted. Brussels still had not realised how bad Europe’s situation really was, he reportedly said. Instead, the “Europeans celebrated their starry-eyed idealism” and pretended to be “reformatory for the rest of the world”.

Then Oettinger became more specific, scolding individual countries. “I am worried about countries that are essentially ungovernable: Bulgaria, Romania, Italy.” He added that growing anti-European sentiment was a problem, particularly in the United Kingdom in which Prime Minister David Cameron had to govern against his “unspeakable backbench, the English version of the Tea Party.”

While he was at it, Oettinger also fired a broadside at France. France was “zero prepared” for what was economically necessary: cutting pensions, increasing the pension age, reducing the size of government. France had twice as many government officials as the EU average and a public spending ratio of 57 per cent of GDP but it lacked a culture of small and medium-sized companies and generated very little innovation.

Probably not to be criticised for any kind of national bias, Oettinger then lashed out at Germany. Though Germany stood at the zenith of its power, the German government was moving in the wrong direction. By increasing the welfare state, resisting fracking, and introducing minimum wages, Germany was jeopardising its competitiveness.

It was not the first time that Oettinger voiced his criticism of the EU. In February, he gave a speech in which he complained that the EU Commission felt responsible to intervene in too many areas. “Sometimes we should actually dare to produce a Non-Action-Plan,” he said back then. In any case, he did not believe that EU initiatives to promote growth were all too useful: “The only thing growing are the manuscripts of our speeches – nothing else”, Oettinger quipped.

After all of these outbursts, it is surprising (to say the least) how Herr Oettinger remains part of the EU’s executive. With his frank statements he certainly did not make friends. The governments of those countries he had just labelled ‘ungovernable’ jointly demanded an explanation. They got one, as Oettinger’s office issued some much needed clarification. Suddenly, everything sounded as it usually does in Brussels: dry, boring and very diplomatic.

Oettinger’s spokeswoman thus explained what her boss had really meant to say about Romania, Bulgaria and Italy. She now quotes him as saying: “If there is no clear mandate by voters and no stable majority in the national parliament, it is more difficult for a government to address the deficit and debt issue and challenging to implement painful but necessary structural reforms.”

Well, yes, and that’s what one might call, in essence, ungovernable.

But what about Oettinger’s dictum that the EU was a “restructuring case”? On that point, his office insists that the Commissioner only meant to focus on the “enormous challenges still lying ahead of the Union”. He is now quoted as saying “Europe in a very difficult phase and the reform process is certainly not over yet, I expressed my personal concerns”.

Which, if you translate it back from eurospeak into plain language, sounds as if the EU really is in crisis.

We may only speculate what motivated the EU Commission’s energy commissioner to turn into a loose cannon. Perhaps his Brussels job frustrates him so much that he wishes to be kicked out of office. Or he is already preparing for a return to national politics, in which case such headline-grabbing exercises may be helpful.

Regardless of his actual reasons, Oettinger was simply right in his analysis – as indeed evidenced by the Commission’s very own policy recommendations to member states. Europe needs major reforms to get its existential problems under control.

This is not a eurosceptical exaggeration, but apparently now also the view from inside the EU machinery. At least once you decipher its usual eurospeak.

Dr Oliver Marc Hartwich is the Executive Director of The New Zealand Initiative.