Center EvropaLjubljana, 25.5.2010

dr. Žiga Turk

professor, University of Ljubljana, SloveniaSecretary General, Reflection Group on

the Future of EU, Brussels.

Timeline• Sept 2007, Sarkozy’s idea wise man’s group• Dec 2007: Treaty of Lisbon Signed• Dec 2007, EC sets up “Reflection Group”, names

Gonzalez, Freiberga and Ollila. Group up, Felipe Gonzalez as Chair, Vice Chairs

• June 2008: Failed referendum in Ireland.• Sept 2008: Lehman Brothers• Oct 2008 EC accepts proposal for the members of the

group• Dec 2008: 1st of 16 group meetings in Brussels• Oct 2009: Successful referendum in Ireland• Dec 2009: Treaty of Lisbon steps into force• March 2010: Greek & Euro crisis• April 2010: Last of group’s meetings• May 2010: Report Published

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The Group

The Group is chaired by Mr. Felipe Gonzalez Marquez, assisted by two Vice-Chairs, Ms. Vaira Vike-Freiberga and Mr. Jorma Ollila, and includes 9 more members, all eminent experts in their own fields: Ms. Lykke Friis, Mr. Rem Koolhaas, Mr. Richard Lambert, Mr. Mario Monti, Mr. Rainer Munz, Ms. Kalypso Nicolaidis, Ms. Nicole Notat, Mr. Wolfgang Schuster and Mr. Lech Walesa. The Group is supported by a secretariat headed by Secretary-General, Mr. Žiga Turk.

Mandate• the Group was invited to identify the key issues and developments

which the Union was likely to face and to analyse how these might be addressed. This includes, inter alia:– strengthening and modernising the European model of economic

success and social responsibility, – enhancing the competitiveness of the EU, – the rule of law, – sustainable development as a fundamental objective of the European

Union, – global stability, – migration, – energy and climate protection, and – the fight against global insecurity, international crime and terrorism.

• Particular attention should be given to ways of better reaching out to citizens and addressing their expectations and needs.

Fear of the future

Issues of Concern

Broader context

• Time for Europe to look outward– European Dream etc.

• Grand transformations

The grand transformations

• abundance and automation of industrial production

• BRICs and globalization• climate change and energy• demography• e-everything

Automation&Abundance: Routine work dissappearing Economy-wide measures of routine and non-routine task input (US)

(Levy and Murnane)

Mean t

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960 t

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ABCDE: GDP Trends

ABCDE: GDP in 1500 – (BR)IC

ABCDE: GDP 1960

ABCDE: Climate change and energy

Sources of Energy

Demographic Structure

Demographic Decline

Share of EU in global population

Quality? The (education) world is flat!

%

1. Excluding ISCED 3C short programmes 2. Year of reference 20043. Including some ISCED 3C short programmes 3. Year of reference 2003.

13

1

1

27

R&D Expenditure

Share of Scientific Papers

Trends in Olympic Gold Medals

ABCDE: eCommunication

ABCDE are historic …• end of industrial,

information age, dawn of creative economy

• end of the dominance of the West

• end of below ground energy and fossil fuels

• end of a population growth, youth dominated society

• end of paper based society, dawn of digital society

Results in a sentence:

Europe has a choice: reform or decline

“After 50 years of consolidation, through both deepening and widening, the EU faces a fundamental choice. 2010 could mark the beginning of a new phase for the EU and the next 50 years could be about Europe's role as an assertive global actor or, alternatively, the Union and its Member States could slide into marginalisation, becoming an increasingly irrelevant western peninsula of the Asian continent. ”

“build on the strengths of the EU and use its collective weight to become an assertive and relevant player in the world, or cultivate fragmentation and contemplate the possibility of absolute decline in a world where the rules are defined by those who matter”

Results in 3 bullet points• EU will be an assertive global actor if

– … it has “capacity to secure solid growth and internal cohesion within the Union”

• EU will have solid growth if:– “Above all, our focus must be on creating growth and jobs.",– "Our shared vision is that technological change, globalization

and ageing populations call for urgent structural reforms with a view to enhancing flexibility, competitiveness and dynamism.”

• EU will be cohesive if:– speaks with one voice externally– has common policies (not just markets) internally– receives proper ownership at all levels.

BCDE

AEurope has choices

• restructure for post industrial society

• agent of change, trend setter, player

• build walls for migrants and dams for seas

• family and immigration friendly

• embrace digital like we embraced print

• cherish industrial traditions

• bunch of passive selfish former superpowers

• maintain technological and political lead

• a continent of grumpy old men (an women)

• defend the ways of paper based society

Renewing Europe’s Social and Economic Model• complete single market• complete rules and regulations of the market• run common policies

Complete single market• “fully functioning Single Market.” A bargain: more

single market, less state aid, fewer non-market obstacles in exchange for some “tax coordination” so that social objectives could be pursued.

• Europe wide market beyond coal and steel. (financial) services, digital market, content, knowledge (patent, IPR), healthcare, learning, clean energy technology, new materials …

• “Single European Defense Market and joint procurement”

• Free global markets that respect intellectual property rights are the essential breeding ground for innovation.

Complete rules of the market

• “Give leadership for economic coordination to the European Council, while fully respecting the role of the Commission and working closely with the European Parliament”

• “Reinforce and extend the eurogroup.”• “Extending macroeconomic coordination to

private debt”• “Reform financial supervision of financial

institutions and governments”.

Run common policies

• “The EU needs to implement a common energy policy with both internal and external dimensions”

• “social security rights should, once and for all, be readily transportable between Member States”

• “develop a common immigration policy with the aim of attracting the most qualified, talented and motivated immigrants”

Positive about Reform Agenda and Europe 2020• “The Commission’s new ‘Europe2020’ agenda

should be supported, yet ultimately will need to be embedded in a broader perspective”.

• “effective ‘name and shame’ peer pressure mechanism”

The challenge of demography: Ageing, migration and integration• “family friendly policies”• “intra EU labor mobility”• “Retirement should become an option for

individuals rather than an obligation.”• “create a labor market for 50-70 year-olds”• “develop a common immigration policy with the

aim of attracting the most qualified, talented and motivated immigrants”

• “co-ordinated system of issuing visas to third-country nationals”

Energy security and climate change: A new industrial revolution• “The headline target for energy efficiency should

be raised to 50 per cent by 2030”• “open new frontiers of potential gas resources,

by removing licensing barriers and by allowing investments in frontier areas, such as the Arctic.”

• “supplementing the (ETS) market mechanism with CO2 taxes”

• “redirect CAP resources towards environmentally-friendly agriculture and stockbreeding”

Common energy policy

• Likewise, there are important gains to be made from the implementation of a coherent European Energy policy, including:– the completion of a genuine, liberalized Single Market

in the energy sector,– a strong European investment policy in new

technologies and in major common energy infrastructures,

– a common external position, – and a common fiscal approach contributing to fund

this investment policy.

Internal and external security: The eternal challenge• “Create a European civil reserve team of

specially trained units ready to be deployed at short notice, shaped along the lines of the military component”.

• The EU needs to agree on a long-term vision of EU defence, which could be laid out in a White Paper with clearly defined priorities in terms of threats, engagement criteria and earmarked resources.

EU and its citizens

• participatory democracy, meaningful EU elections

• Provide citizens with the option of resorting to a European legal status (the “28th regime”) which would apply to contractual relations in certain areas of civil or commercial law alongside the current 27 national regimes

European Political Market?

Growth Through Knowledge: Empowering the Individual• “Knowledge-based and creative industries and

services have expanded significantly over the last two decades, becoming the central pillars for employment and economic dynamism in Europe”

• “European Research Area must become a reality – an area without borders where all scientific potential, wherever it is, can be fully tapped thanks to the free movement of researchers, ideas, technologies and capital”

Reform of education• “providing teachers with the professional recognition they

deserve; developing flexible and open curricula capable of nurturing curiosity and creativity among children”

• “The administrative and financial autonomy of universities must also be encouraged”

• “high income students should contribute to the mounting cost of education”

• “Competition between universities must also be promoted, as should governance models based on accountability and transparency”.

• “University systems characterised by clientelism and corporatism must be thoroughly challenged”.

Creative economy

• “The creative economy will continue to evolve faster than the political processes intended to support or regulate it. Every day it reveals new horizons and revolutionary prospects. Flexibility and responsiveness must therefore be the backbone of any regulatory framework in this field.

• Facilitating a culture of risk-taking and entrepreneurship is even more important. Only this will allow the EU to fully reap the rewards of research and experimentation, and with it to create new jobs.”

Europe in the world: becoming an assertive player

• Member States should increasingly understand and rely on the EU as a power multiplier, which helps them achieve goals which they otherwise could not.

• “the root of the problem remains: the gap between the EU’s capacities in the areas where it is entitled to act (economy, trade, development aid, competition policy) and its lack of real common instruments in the area where its original remit has expanded: foreign and security policy” climate policy …

• “A new grand bargain therefore needs to be struck that takes into account the concerns of emerging and existing powers about the existing rules, while insisting on the importance of multilateralism, inclusiveness, equity, sustainable development, collective security, respect for human rights and the rule of law and fair trade practices.”

Enlargement and limits of Europe

• The EU must stay open to potential new members from Europe, assessing every candidacy on its own merits and compliance with the membership criteria. These are in fact the “true limits of Europe”.

• In line with this policy of engagement and inclusiveness, the Union must honour its commitments with regard to the current official candidates, including Turkey, and carry on with the negotiation process.

Building on EU’s strengths

• think long term, but start acting now– get ahead of the curve; proactive, not reactive

• “the situation calls for strong political leadership”

• the Union of values. – leaders must be honest about the scale of the

challenges ahead

Members of the European Council should be the leaders of Europe• “If governments continue as and when it suits

them to treat the EU and its institutions as alien or hostile, there is little hope of creating the kind of popular identification with the EU which is needed for its success.”

Conclusion

• “The crisis has therefore acted as a wake-up call for Europe to respond to the changing global order.

• As with all transformations, the emerging order will result in new winners and losers.

• If Europe does not want to be among the losers, it needs to look outwards and embark on an ambitious long-term reform programme for the next twenty years.”

“What does not kill you makes you stronger”• The ‘eurosclerosis’ of the 1970s led to the launch

of the single internal market project;• competitive currency devaluations in the late

1980s provided the political energy to create the Euro.

•economic crisis of the 2010s lead to … ?

Acknowledgements

photos:Google photo search, Flickr, EU, Rem KoolHaas …

charts:Erste Bank, Stanford University, OECD, WEO,

IMF, NASA

more information, author contact atwww.zTurk.com