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Benoît Potier: "EU Challenges And Opportunities Ahead"

An essay by the President of the European Round Table of Industrialists (ERT), Benoît Potier, for diaNEOsis' book "The Future Of Europe".

"The Future of Europe" is a collection of 20 important essays written by some of the most prominent EU figures in Europe and in Greece. The book is available for purchase, currently only in Greek, here.


"All flows and nothing stays the same", the ancient philosopher Heraclitus famously said. That is certainly true for the European Union and for Greece’s role within it. The European Union must evolve in order to survive and continue to provide the benefits to its people that were at the core of its inception. Little more than a year ago, the atmosphere in Europe was rather negative and some even predicted the falling apart of the European Union. At the time, the EU was under pressure as a result of the disappointing Brexit referendum outcome and the highly mediatized rise of populist anti-EU political movements in several Member States. However, the tide has now turned.  The Dutch elections did not produce a populist landslide and essentially pro-EU parties are negotiating to form a government coalition. France elected President Macron who not only accepted his victory at the Louvre Palace to the tones of the European anthem, Beethoven’s Ode to Joy, but who immediately emphasised his desire to work closely with the EU leaders and especially with Germany’s Chancellor Merkel to give renewed impetus to the EU integration process. Anti-EU candidates do not stand much of a chance in the September German elections. Following the notification under Article 50 of the Treaty of the UK’s intention to leave the EU, the 27 other Member States rapidly reached a unanimous position on conducting the Brexit negotiations.

Public opinion in the EU is gradually becoming more favourable towards the EU Institutions. The April 2017 Eurobarometer survey across the EU reveals that nearly half of all respondents tend to trust the European Union (47%)—up 11 percentage points since autumn 2016. Almost six in ten respondents (59%) are in favour of a European economic and monetary union with one single currency, the euro. In the euro area, the level of support reaches 72%, i.e. the highest level since 2004.

Of course certain EU policies still draw criticism, as is normal in a democracy, but most seem to understand the enormous advantages of the internal market and the common rules system. The fundamental freedoms of movement of goods, services, capital and workers, enshrined in the European Treaties since 1957, do still appeal widely in the EU.

At the same time, the EU and its Member States must find and implement common solutions for the major continent-wide crises that no single country can solve on its own. The EU must deliver on controlling the refugee influx, on drastically reducing youth unemployment, on continuously combating terrorism and on meeting its climate change reduction goals. Crucially, sustainable economic growth with financial and monetary stability demands a common approach throughout the EU. Ten years after the financial and economic crises hit hard, enhancing the competitiveness of EU companies should remain a permanent concern.

At a global level, the EU is seen as a beacon of democracy, human rights and an open, market-based economy, resulting in the highest quality of life for its citizens, with strong consumer and environmental and privacy protection. The EU economy is currently growing faster than the US: the euro-area grew 1.7% in 2016, the US 1.6%. The Trump administration focuses on a domestic agenda and publicly advocates a protectionist policy. The EU has a real opportunity to take the centre stage in the world economy by setting standards and by offering model regulation in many sensitive areas that other countries are keen to adhere to. Many countries wish to conclude trade agreements including regulatory alignment with the EU. The most recent example is the conclusion in principal of the largest free trade agreement ever, with Japan.  Equally, the comprehensive economic and trade agreement (CETA) with Canada is now entering into force. The EU’s internal market with its 500 million consumers remains a most desirable trading partner for important economies around the globe.

This relatively optimistic picture of the situation in the EU should not make us complacent. We must adapt the way in which the Union functions in order to be equipped to face any new challenges that are inevitably ahead of us. The European Commission recognises this need to reflect on how the Union could evolve in the years ahead. In a White Paper released in the spring of 2017, the Commission has spelled out the possible scenarios for the Future of Europe to generate a broad and deep debate in the Member States and among the citizens. The Commission thinks that the EU could just carry on as it does today, or could limit itself to deepening the internal market and economic issues, or could allow smaller groups of Member States to do more, or could focus on delivering more and faster on a restricted number of policies, while returning some areas of policy to the Member States. The last scenario talks about doing more together with 27 countries increasing the common policy areas to new domains.

The Commission also published a series of reflection papers on specific policy areas. They talk about the social dimension of Europe, the need to harness globalisation, the deepening of the economic and monetary union, the future of European defence and the future of EU finances. The papers aim to stimulate novel forward thinking and we should all consider these ideas seriously.

I think it will be very important for responsible political leaders and for civil society to dive into the reflection and to let the Commission know what the preferred way forward is. Economic operators and leaders cannot shy away from this debate. We need clarity on what we wish to achieve together and on how we need to organise to EU to get there. And then we need to mobilise the public to support the way forward by communicating clearly and transparently.

Policy priorities

To foster and increase the emerging sustainable growth of the EU economy, EU leaders and institutions would do well to keep the focus on delivering and implementing the policy priorities set out at the start of this Commission’s mandate. The Juncker Commission is right to concentrate its efforts on a limited number of priorities that really benefit businesses and citizens. It is the enterprises that create valuable additional jobs, so we should do everything that encourages and stimulates enterprises to flourish, invest and innovate. The helpful Commission priorities include the better regulation program to cut red tape and burdensome or obsolete regulation. We must have the courage to examine every proposal to consider its impact on companies and citizens before moving ahead with it.  The broadening and deepening of the internal market into new areas will create the right conditions for growth and jobs in activities of the future. The energy union, the capital markets union, the banking union and the digital single market must be finalised and demand the constructive cooperation of the European Parliament and all Member States, including Greece. We need the solid and reliable regulatory environment in which companies great and small can develop to reap all the advantages of the European market to 500 million potential customers. Growth, jobs, investment and innovation should be the constant concern of every political decision of responsible leaders.

The EU should also continue to advocate and construct the further development of rules-based international trade to ensure that the reality of the globalised economy is not perceived as a threat, but brings home the rewards for EU citizens. The recently concluded trade agreements with Canada and Singapore, the agreement in principle with Japan and the many negotiations underway, with Australia and New Zealand, with Mercosur and others, clearly establish the EU as the global leader and preferred partner for fair and rules-based free trade. An example of this has already been seen, with the conclusion of the EU-Japan FTA—the largest free trade agreement ever negotiated. Before the US election, the deal looked seemingly dead, however, with the US withdrawal from the Trans-Pacific Partnership (TPP) and overall more inward-looking sentiment expressed by President Trump, Japan sought to build economic ties with a like-minded economic partner. The EU-Japan FTA will cover more than a quarter of global economic output and the European Commission predicts that EU exports of processed food could rise by up to 180 percent and export of chemicals could surge by more than 20 percent. Europeans do not want savage unruled global trade battles.

We want a reliable system that creates a level playing ground for trading partners to result in benefits for all. The common trade policy approach of the EU gives us exactly the leverage needed to conclude these beneficial agreements.

I know that events of the day can distract people from working on the fundamental longer term goals. Let us not fall into that trap and keep our compass clearly steering on the course to more growth and jobs. The EU has now enjoyed 21 months of higher economic growth than the US. We need to sustain that momentum and not let it slip again.

Greece and the EU

Greece’s problems and difficulties are the EU’s problems and difficulties. The necessary political decisions on structural reforms may be hard and painful at times, but the progress is encouraging: Greece has come out of the excessive deficit procedure and can again borrow on the financial markets. Greece never left the EU or the euro, its people courageously and proudly feel that they belong to the common destiny of the European Union. The voices that once suggested Greece did not belong to the EU have quietened.

As a member of the Eurozone, Greece will always be at the heart of European development and decision making. One should not underestimate that role, neither the responsibility that comes with it: countries united by the voluntary wish to share a currency are together in charge of their fate. The Greek voice will be heard all the more clearly at the European table if Greece continues to improve its economic situation and ensures that the structural reforms to which it committed are fully implemented. That will grow the confidence of political and economic partners in Greece’s future and strengthen the trust needed to attract investment. Bringing reform to a successful end demands daily focus on carrying out the decisions taken.

The adherence of the Greek people to the idea of an integrated Europe has not diminished. Greek leaders, political and economic, should continue to enhance that credibility by relentlessly pursuing the policies that permit businesses to deliver growth and jobs for the Greek people.

The challenge to convince people

Through all this we must strive to bring about the policy changes that result in economic growth, jobs and quality of life improvements people rightly expect.

Yet, we need to recognise that threats to EU unity still exist. Anti-EU sentiment is still rife with important groups in some European countries and that will probably remain the case in the coming years. The leading personalities in our countries must have the courage to fiercely praise the immense achievements of the European Union. And they should never shy away from reform to be prepared for the future. Everything can be improved, always. The reflection on the scenarios for the future of the EU and the required policy changes is underway and we should actively contribute to it. Once we have the clear view outlined, we must make it happen in practice. The key to gain the necessary confidence of the public and the partners is honest, open and transparent passionate communication. Convincing people of what needs to be done in order to create growth and jobs cannot be left to politics alone. That is the task for all of us, leaders in business, politics and civil society, because indeed, all flows and nothing stays the same.