An ever-closer union

Why the EU budget agreement has broken a major taboo on the EU creating collective debt and built a possible architecture for handling future crises

Deal! EC President Ursula von der Leyen and Council president Charles Michel
Deal! EC President Ursula von der Leyen and Council president Charles Michel

After days and nights of haggling over more than 90 hours of official meetings, European Union leaders reached an agreement on a €750 billion pandemic recovery plan in the early hours of last Tuesday. For the first time, the EU committed itself to borrow money collectively and distribute much of it as grants that do not need to be repaid by the countries hardest-hit by the virus, like Italy.

The agreement has broken a major taboo on the EU creating collective debt and has also built a possible architecture for handling future crises.

The talks saw a split between nations hardest-hit by the virus and so-called ‘frugal’ members – the Netherlands, Austria, Sweden, Denmark and often Finland – who were concerned about costs.

By tying the recovery fund with the EU’s seven-year budget, the first without the UK, the European Heads of States managed to solve two extremely difficult and contentious problems at once. For all the reported disarray, there was little doubt that what they had achieved for the bloc was ground-breaking.

The fissures in the EU that needed to be bridged ran in all directions. There were divides between the frugal north and the needy, hard-hit south; but also between the west and east; and between Brussels and budding autocracies like Poland and Hungary that are testing the limits of the EU’s liberal democratic values.

A compromise had to be found between President Emmanuel Macron of France, who pushed for large-scale grants to southern European countries like Italy and Spain hit hardest by the pandemic, and Prime Minister Mark Rutte of the Netherlands, who pressed for more loans than grants and for structural economic reforms in return. One has to consider that the ‘frugal four’ went to Brussels declaring that they were opposed to any outright grants based on collective debt.

Thanks to their opposition, the agreement now includes checks so that the funds will not be misused. Recipients will have to submit spending plans to the European Commission, and a majority of states will be able to block projects.

But allowing the crisis – caused by the pandemic – to worsen was in the end considered more dangerous than redimensioning some of the EU’s larger ambitions or even allowing some continued challenges to the rule of law.

It is the biggest joint borrowing ever agreed by the EU and summit chairman Charles Michel said this decision was a ‘pivotal moment’ for Europe.

Mr Michel, the President of the European Council, called it “the right deal for Europe right now” while the French President Macron said it was a “historic day for Europe”. The Dutch Prime Minister, Mark Rutte, who led the ‘frugal’ group, acknowledged the testy nature of the talks, telling a reporter that all leaders “can take a few punches.”

I reckon that the most telling comment, however, was that of the German Chancellor Angela Merkel who told reporters: “During the last negotiations David Cameron’s view loomed large. Now he is no longer with us, others have come to the fore.”

This is significant because the UK would never have allowed the EU to borrow the €750bn on the international markets and distribute it as aid. This aid now comes along with agreement on the bloc’s next seven-year budget, worth about €1.1 trillion.

The UK, which has recorded more coronavirus deaths than any other European country, left the EU in January and is not involved in the deal. Many English Brexiteers had actually ‘predicted’ that the EU will disintegrate because of the recent squabbling between its member states as a result of the pandemic at a time when an anti-EU, pro-nationalist and populist wave hit the European political arena.

The British – who were on the winning side of World War II – never really understood the core values of the European Union: peace, democracy, culture, security, prosperity and the rights to live, study, work and move freely in Europe as are implied in the EEC Treaty and the subsequent amending treaties of Maastricht and Lisbon. The roots of these ideals originate from the social, cultural and economic phenomena that affected Europe after the Second World War.

The British particularly resented the fact that the European Treaty is based on an ‘ever closer union among the peoples of Europe’, interpreting this ideal as leading to a federal Europe. In doing so they ignored the fact that the ever-targeted, closer union is ‘among the peoples’ – and not ‘of the states’ – of Europe. In the end the EU core values won the day, leaving the British isles in the ‘splendid isolation’ that they opted for when they decided to quit the EU.

Obviously not all the dust has been settled.

An issue that was practically ditched but will come back to the fore when the European Parliament is asked to endorse the agreement centred over linking aid to the ‘rule of law’. Hungary and Poland both threatened to veto the package if the EU adopted a policy of withholding funds from nations deemed to fall short of democratic principles. Many critics and many MEPs think that Brussels is showing weakness in the face of abuses of the rule of law and of European values by some Central European member states.

I am sure, however, that the EU’s resolve will win the day. Charles Michel, perhaps put it in a nutshell when he said: “We showed collective responsibility and solidarity and we show also our belief in our common future.”


The twist in the tail

Following the no-confidence vote in Delia being backed by a majority of the PN Parliamentary group, the party’s youth section – MZPN – issued a statement in support of the anti-Delia faction, provoking the PN administration to contemplate disciplinary action against it. The strong statement claimed that the allegations Delia faced were immense, and that he had been caught misleading the media and the party itself on his relationship with the wrong kind of people.

The threat of disciplinary action has, apparently, now fizzled into thin air.

Few know that this spat between the PN’s administration and the party’s youth wing (MZPN) seems to be a case of history repeating itself. In the early sixties when Herbert Ganado led a splinter group from the PN to form the Democratic Nationalist Party (Partit Demokratiku Nazzjonalista), the PN youth wing moved to Ganado’s party en bloc.

It was then that the MZPN was set up with a young Mario Felice entrusted to do the job.

So the MZPN was born when the original PN official youth section followed the revolt against the Borg Olivier leadership.

Now it is following the revolt against Adrian Delia...