For business, Europe is not an option, but a necessity

For business, Europe is not an option, but a necessity

Simon De Cesare, MBB President

This opinion piece featured in The Sunday Times of Malta, on 17th March 2019


Last week, French President Emmanuel Macron issued an open letter to Europe, highlighting that Brexit is a lesson for all of us, and that it is time for an EU renewal. A recent European Parliament poll concluding that the next election will likely result in diminished centrist pro-EU parties and a rise of radical populist parties, is worrying to us all.

Malta may be the most supportive Member State, with a Eurobarometer survey in 2018 concluding that 93 per cent of Maltese feel they benefit of EU membership. The reality, however, is that benefits can continue to be derived if we continue to be part of a strong unifying political project with the world’s largest common market. Should the growing disruptive forces prevail, benefits could transform into burdens.

President Macron’s call for EU renewal is timely, not because we are on the eve of an electoral appointment, but because we have been through a painful two-year Brexit process that should serve as an eye opener. EU-UK negotiations over the past two years have consumed a lot of energy for everyone, and the experience of the UK’s reversal of integration exposed how the EU affects every aspect of our lives.

For in past decades, progressive and pro-European political forces delivered the European Single Market; which is not perfect; far from complete; but has opened endless opportunities for businesses and citizens as a result of free movement of goods, services, capital and people. These principles were reinforced with political projects such as the euro and Schengen. The EU is an established leader in social rights, social protection, environmental standards and the fight against climate change. Not to mention the most important achievement of all. A reconciled continent after two devastating wars. These achievements should neither be discounted nor forgotten.

Indeed, as the world evolves, so do challenges. President Macron is right in saying that the EU also needs adapting to address new phenomena that became a priority. Doing nothing is not an option. This would only play into the hands of populists playing on people’s fears.

Defending our democracy is probably the most urgent in view of recent experiences whereby external forces tried to influence various European electoral processes for their own purposes with cyberattacks and misinformation on digital media. The proposal for a creation of a European Agency for the protection of democracies is interesting and should be explored. If its role would be to gather intelligence and pass information to national authorities, it could have a valid purpose.

President Macron also touches on the aspect of solidarity, reiterating his support for a single asylum policy, which has unfortunately alienated the EU and been a divisive factor among Member States in the last years. Migration is indeed one of the most worrying factors for EU citizens. European solutions for this issue will play a key role in overturning fears. The focus here should be on persuasion.

Addressing migration is not only about establishing migrant quotas for Member States as a policy in isolation, but there is a need for a holistic migration strategy that addresses the problem through different policies and instruments. Firstly, to invest smartly in Africa and create the conditions for would-be future migrants to prosper in their homeland. Europe already lags China on the investment front, whose presence has to do more with foreign policy ambitions than the socio-economic development of the continent.

Simultaneously the EU must have a strong EU border control and an efficient asylum processing to identify who qualifies for international protection and who needs to return. Finally, Member State solidarity can close the cycle with a migrant sharing quota that would include financial support, to avoid economic burdens on host Member States and facilitate migrant integration. Unfortunately, the European populist parties would see anything short of taking immigration back to a national level as simply unworkable and would like nothing more than to revert to an individual Nation State mentality which lest we forget subjected us to two world wars over the last century.

President Macron talks about other ambitious proposals such as setting an EU target of zero carbon by 2050. This is indeed an objective we should aspire to, but it could only be made possible with the right economic conditions and incentives for private investment. The suggestion of setting-up a European Climate Bank to finance the ecological transition is interesting, and other financing instruments such as the InvestEU Programme and Horizon Europe can complement the process. Nevertheless, the fight against climate change is global, and unless the EU exerts soft diplomacy forcefully to ensure the implementation of the Paris Climate Agreement, everybody loses just the same.

On the other hand, President Macron’s vision in the social field is not sufficiently sensitive to the EU’s model of a union of sovereign Member States. By calling for Europe to introduce a social shield for all workers, the French President seems to overlook the fact that the EU already has the highest standards of labour rights, social protection, health and safety and work-life balance.

Proposals for an EU minimum wage do not respect the principle of subsidiarity, which in the social field is safeguarded by the EU treaties. The EU can already be defined as a social shield for workers, and this is best reflected by the EU initiative proclaiming a European Pillar of Social rights during this mandate.

So indeed, Brexit and rising populism should serve as a wake-up call for Europe. Business as usual is not option. The EU matters too much for businesses and citizens, but it also needs to be seen as doing so. We all stand to lose with a diminished EU. In a global economy dominated by powerhouses such as the US and China, no EU Member State is big enough or mildly relevant on its own.

While this renewal is clearly progressive and certainly needed, with the loss of our strongest partner, the UK, Malta must remain vigilant and be fully involved in any reforms of the EU project. For while Presidernt Macron strikes a centrist conciliatory tone, his ambition for the EU integration in other areas such as EU tax harmonization goes beyond the interest of all Member States, and such developments would have significant effect on small and peripheral countries such as ours.

In this process of renewal, it would therefore be beneficial if likeminded smaller nations such as Ireland, Sweden, the Netherlands and others were to cooperate more to ensure that a future EU is strong to address modern challenges, delivers a high standard of living and equal opportunities to all citizens, while guaranteeing the sovereignty and competitiveness of all Member States.

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