In June 2015 the presidents of the five major divisions of the European Union, led by Jean-Claude Juncker, the President of the European Commission, published their report, titled Completing Europe’s Economic and Monetary Union.
“This report has been prepared by the President of the European Commission, in close cooperation with the President of the Euro Summit, the President of the Eurogroup, the President of the European Central Bank, and the President of the European Parliament.”
In this page of our blog we take a detailed and critical look into the report – the ‘5PR’ we shall call it for short.
The Table of Contents gives the flavour of the document, which is 24 pages long:
There is also a brief Introduction, before the first section.
In the posts on this page we will quote liberally from the 5PR and offer our interpretations and comments. We believe that this report maintains the strong vision of the EU’s founders and gives the lie to those who claim that this federal vision – of a unified and integrated supra-national legal entity – has been diluted with the passage of time.
Key words, from the Contents and frequently repeated throughout the report include: Union, Convergence, Integrated, Complete.
To be fair – though we hope we are fair, if critical, throughout – here is the EU mission, as seen by the five presidents:
“A complete EMU is not an end in itself. It is a means to create a better and fairer life for all citizens, to prepare the Union for future global challenges and to enable each of its members to prosper.”
An admirable mission, but one that is failing and is bound to fail because of the inherent contradictions within the project, as we shall show in some detail in subsequent posts.
This is the formal title of the report:
COMPLETING EUROPE’S ECONOMIC AND MONETARY UNION Report of the Five Presidents (European Commission, June 2015) and it can be downloaded from here:
The Introduction opens with a quotation from the Euro Summit of October 2014: “closer coordination of economic policies is essential to ensure the smooth functioning of the Economic and Monetary Union” (EMU). This assumes what cannot be proved, that EMU is itself necessary (and successful). It also puts the cart before the horse.
A sound purpose for economic and monetary union would be to support the successful functioning of the economic and commercial activities of the citizens of the EU. The varied and competitive nature of these economic and commercial activities will ensure that things are never smooth and “closer coordination of economic policies” will not be able to smooth what is intrinsically bumpy. As a result, economic policies have become an end in themselves, requiring masses of unwanted regulation to grind down every perceived bump.
Much in the Report contradicts the final paragraph of the Introduction, which says that a “complete EMU is not an end in itself“. One warning signal for Britain is “complete“.
Until the project is complete any shortfall in the outcomes can be blamed on the Member States and their capricious unwillingness to conform and complete the project. On the view of the five presidents, EMU will only be complete when there is nothing but dust and no corner of the EU can be distinguished from any other. This cannot be achieved and should not be attempted.
The presidents do not offer a theoretical, let alone a plausible causal, connection between a complete EMU and “a better and fairer life for all citizens“. I doubt that there are such connections, outside the fantasies of the presidents, indeed current experience suggests otherwise.
Another guide to the thinking of the five presidents is their view that, “… completing and fully exploiting the Single Market … should be part of a stronger boost towards economic union…”. This surely is back-to-front: the purpose of any economic union should be to support activities in “goods and services, digital, energy and capital markets“. Economic union is clearly seen by the presidents as an end in itself, despite their claim that there is a higher goal.
The five presidents do not participate in any economic market place; they see their job as ruling and regulating these markets (completely and smoothly). That is, economic activity is secondary to economic policy and the laws that derive from such policies. Perhaps this is why Europe cannot compete successfully with the USA in economic activity.
The reference in the Introduction to the world beyond the EU/EMU is “to prepare the Union for future global challenges“: are they suggesting that they see the rest of the world as presenting problems rather than opportunities (a view characteristic of bureaucrats and, of course, Eurocrats)?
It is extraordinary that the EU appears to be founded on the notion that the purpose of economic activity is to “boost … economic union“.
In the posts that follow we have extracted, and commented on, quotations from the 5PR’s main sections, which illustrate how the EU/EMU projects are misdirected and misrepresented.