High-Level Expert Group Meeting
11-12 April 2002
Paris, France
Chaired by Helmut Schmidt
On the 11th and 12th of April, 2002, the High-Level Expert
Group met in Paris as the guests of UNESCO. Under the
chairmanship of Helmut Schmidt, the group discussed the
future evolution of the European Union.
Introduction
1. The citizens of Europe today face unprecedented
challenges. The dramatic achievements of previous European
Union initiatives - the growth of the European Community
to encompass all of Western Europe, the thorough
integration of European economies, and most recently the
launch of the common currency - have validated the faith
of all those leaders who, over the last 50 years, worked
to foster common aims of deeper and closer union. The very
success of their efforts, however, has forced Europe to
address new and even more daunting questions.
2. The present state of the European Union must be seen in
historical perspective. Over the past 50 years, at first
six, then nine, then 12 and nowadays 15 nations have
embarked on a political journey without any parallels,
relinquishing and sharing sovereignty, joined together out
of shared political interests and a common civilization.
They joined voluntarily rather than by a violent
conqueror. Viewed through the prism of time, the success
of the EU in establishing structures and institutions is
remarkable and unique in the history of mankind.
3. Today, however, the problems facing Europe are grave.
National leaders seem to have lost their drive, they
appear to lack conceptual energy in regard of the future
of the EU. The expansion of the EU to the east, which will
raise the number of member states to more than 25 over the
next decade, raises issues of governance with which the
current institutions of the EU are incapable of dealing.
The recently established Convention may succeed in
reforming the structure of power in Europe, but the
outcome of that process is far from certain. Demographic
plus climatic changes are looming large. They will result
in geopolitical changes, which will challenge Europe to
face the outside world united, or to gradually lose its
own autonomy.
4. The several points in this report may appear as if
there is already consensus about them between national
governments. In fact the EU is far from that. One might
even call the present situation a standstill-crisis.
Reforming the Institutions
5. The institutions of the EU have been modified piecemeal
wise over the years. But the structures which exist today
were meant for six states only. When faced with 15, those
institutions have gradually declined both in operational
efficiency and in democratic legitimacy. Both these
problems will be exacerbated by the upcoming enlargement.
Wholesale reform of the EU structure is a vital
necessity.
6. Many hopes are now pinned on the general Convention of
leaders currently meeting under the direction of Mr.
Valery Giscard d'Estaing. Everyone recognizes the absolute
necessity of this effort's success, and it is to be hoped
that the Convention recognizes the need for fundamental
reform. The Convention should concentrate on the most
basic and high-level ideas; it is vital that it not become
bogged down in the narrow or specific immediate
difficulties. A unitary, solid structure would be a vastly
more desirable outcome than a patchwork design. Whenever
possible, the right of a single state to veto European
policy should be abolished: meaningful union implies the
agreement to accede to the decision of the majority, even
when that decision is controversial.
7. No democratic polity can succeed without the support of
its citizenry, and European enthusiasm for the
institutions of the European Union has steadily waned.
Europeans find themselves unable to understand the
Byzantine treaties and regulations governing the Union's
activities, and alienated by its highly centralized and
professionalized network of bureaucrats. Discontent is
demonstrated by low voter turnout in elections to the
European parliament, in the results of European referenda,
and in popular unrest with the accretion of power in a
non-transparent Brussels. This feeling of disengagement
must be immediately addressed by the European
leadership.
8. The European Parliament is a clear case calling out for
empowerment. The Parliament should be intimately involved
in all legislation, and in the selection of the
Commission. Direct election of the Commission's President
by the Parliament should be considered, along with other
means to strengthen the democratic mandate of the
Parliament itself.
9. The European Council system itself is one of the
institutions most in need of reform. The proliferation of
Councils has decentralized decision-making, and should be
reversed. Most importantly, the rotation of the Presidency
every six months should be amended so as to allow for
better continuity of leadership.
10. The fiction that all members of the EU are equal is
itself a structural failing, and will become more glaring
with the addition of transition states from the former
Soviet bloc. Reform proposals should take account of
political and economic reality - a stable structure will
emerge best from institutions, which adequately represent
the genuine, legitimate interests of the Union's dominant
members.
11. Similarly, differentiation between states with
different goals - variable geometry - should be encouraged
as a means of fostering flexibility and realism within the
European system. Long transition periods for new entrants
and new initiatives, opt-outs for particular states,
enhanced cooperation on certain issues and other means of
customizing the application of European policy to meet the
needs of specific situations should be viewed not as a
derogation from a European ideal, but rather as beneficial
and practical means of furthering the goal of European
integration.
12. Europe should be united, but not uniform. Europe needs
simplicity and efficiency, and the EU should not confuse
lack of harmonization with a lack of effective
integration. As the EU grows and matures, it should resist
the temptation to regulate and legislate every issues.
Those issues not directly related to the Union's core
competencies - development of the common market,
expression of shared foreign policy objectives, promotion
of justice and human rights - should be left to the
individual states. Subsidiarity should be actively
pursued, and European leaders should use the current
period of institutional reappraisal to exercise a tactical
retreat from EU involvement in issues more properly
relegated to the various nations.
13. Finally, it should be recognized that institutional
reform will take Europe only so far. In many cases,
institutions can facilitate the development of good
policies. Well-designed structures, however, are not a
substitute for properly crafted laws, properly applied
regulations, and skilled political leadership.
Expansion to the East
14. The expansion of the European Union will begin within
a few years, and the EU is not yet ready. Ultimately, the
EU will include more than 25 nations.
15. Enlargement, if pursued without dramatic institutional
reform, will challenge the decision-making capability of
the entire EU structure. While expansion will pose severe
economic challenges, the European Union has long ago
demonstrated its ability to surmount purely economic
problems. The more difficult questions will be political
and psychological. Political paralysis and bureaucratic
drift would be a disastrous conclusion to this ambitious
project, and can be avoided only by long-term thinking and
preemptive action.
16. Turkey represents a special case, and one which will
require special delicacy by European leaders. History,
culture, religion, and geography pose obstacles to the
integration of Turkey into the fabric of the Union. Yet it
cannot be denied that Turkey is not only an eager
applicant but has been officially added to the list of
candidates - though at the very end of the list. It should
be made clear that the distinction between membership and
non-membership is not black-and-white. There should be
grades and degrees of participation in EU activities, and
some levels of integration may be more appropriate for
certain countries, at certain times, than others. This
concept should be asserted with regard to all the
countries on the EU's borders: it would be extremely
unwise to paint the distinction between members and
non-members in stark and unnuanced terms.
17. Enlargement of Europe is a priority, a duty, and an
ideal. The process of accession will transform Europe
fundamentally, and some aspects of this adjustment are
completely unforeseeable. What the EU faces is not merely
the addition of several new states to its roster of
members, but also deep going changes in the mentality of
an entire region of the world. The extent and depth of the
upcoming changes, for the current member nations as for
the newcomers, must not be underestimated.
Supporting the Monetary Union
18. The successful launch of the Euro has been a symbol
for the accomplishments of European unification. It has
astonished skeptics of EU integration. It leaves Europe
with the challenge of deepening the integration of other
aspects of the financial system. The financial
architecture of the EU is not yet complete.
19. The Euro has replaced its predecessor currencies with
astonishing rapidity. Euro-denominated bond issues already
dominate outstanding issues in national currencies. The
Euro is more widely used for bank loans than the
combination of all its constituent currencies together,
though it does not yet have as large a market share as the
US dollar. The Euro is the global leader as the reference
currency for OTC interest rate derivatives. It does not
yet compete with the dollar as a reserve currency, but
this is expected to change gradually. It is, in fact,
highly desirable that shifts in asset holdings be
progressive, not dramatic.
20. At this point, the major challenge for the EU is to
remove the remaining barriers to the integration of
European financial markets. Complete integration will lead
to lower prices for borrowers, greater efficiency, and
higher growth across the Euro-zone. The European
money-markets have already achieved full integration, as
have fixed-income markets and payments and clearing
systems. It should be noted that many of these integration
measures came about only as unforeseen by-products of the
adoption of the Euro. Some issues, however, remain.
21. The Stability and Growth Pact which sets limits for
the budgetary deficits of Euroland - Countries remains an
important foundational aspect of European monetary policy.
It should be recognized that maintaining the credibility
of this agreement is important, and it will require
political determination to objectively apply the
thresholds, the surveillance procedures and, if necessary,
sanctions.
22. Thought should be given to the stabilization of US
dollar and Euro exchange rates. Extreme volatility in the
dollar-Euro exchange rate has negative systemic effects,
not only for Europe and the United States but also for
third parties. Asia has been especially impacted by this
volatility, and trade flows are hard hit by
unpredictability in exchange rates.
23. Finally, the EU needs to be seen as competent to speak
for Europe as a whole on matters of monetary and financial
policy. The European Central Bank cannot represent the
entirety of the financial and fiscal policy-making
establishment in discussions with outside nations. A
common financial policy and an institutional base for that
is still absent.
Toward a Common Foreign and Security Policy
24. From Asia to Africa, from the Middle East to South
America, nations around the world strongly support the
emergence of a stronger, more unified Europe. There
currently exists the perception that the EU does too
little for the international community: eloquently
espousing concepts grounded in democracy, liberty, and
equity, yet lacking the united political and military
power necessary to put those principles into action.
Today, the common foreign and security policy is more
smoke than reality.
A common European foreign and security policy, centrally
conceived and consistently pursued, would both
counter-balance the sometimes disproportionate influence
of the United States in global affairs, and present the
European Union as an international actor worthy of serious
partnership. World leaders would greet such a development
with enthusiasm. At the start of a millennium which may
well come to be dominated by the vast populations of
China, India, or Brazil, alongside the powerful economies
of the United States and Japan, Europe is simply too small
to preserve its sovereignty and pursue its own interests
unless it can be perceived abroad as a single, credible
actor.
The goal of a common foreign policy is a relatively recent
development in the EU's history. It should not be
surprising, therefore, that the instances of European
solidarity on international affairs are, more often than
not, outnumbered by examples of intra-European
disagreements. This discord weakens the ability of all
European states to effectively pursue their interests
overseas.
25. One of the greatest challenges facing Europe today is
management of the relationship with the United States. The
collapse of the Soviet Union has left the US virtually
alone in terms of military, political, and economic might,
transforming the world political network overnight into a
unipolar system. The emergence of Europe as a major player
on the international scene would be a major realignment of
global politics. Though Europe would undoubtedly serve to
temper American unilateralism, it should be remembered
that the EU and US are fundamentally allies, brought
together by historical ties, economic interests, and
shared political ideals. On the world stage, amicable and
beneficial competition would benefit all parties involved,
including the United States.
Linked to Europe's interaction with the United States is
the North-Atlantic Alliance plus NATO. This alliance has
been the mainstay of trans-Atlantic security cooperation
for almost half a century, and Europe will strive to
maintain that special relationship. NATO has changed
significantly, however, over the last decade. The fall of
the Soviet Union has left NATO in search of a new enemy,
and the threats of the 21st century - non-traditional
conflicts, international terrorism, drug trafficking, and
the proliferation of nuclear capacity and weapons of mass
destruction - are not easily dealt with by NATO, which was
conceived to fight a ground war in central Europe.
Simultaneously, the increasingly disparate military
capabilities between the United States and its European
partners has led to a diminished voice for the EU within
NATO councils.
26. Weapons of mass destruction and terrorism based in
remote areas of the world cannot be countered with
conscript armies tied to depots in central Europe, and the
transformation from current force structures to a modern
military will require a political and financial commitment
which Europe has heretofore avoided. That reluctance,
however, robs Europe of the ability to project abroad its
legitimate interests, and does a disservice both to itself
and to the world as a whole.
27. Concurrently with the development of military power,
however, Europe will strive to further the efficacy of
international law and of the U.N. The rule of law,
enforced through international tribunals such as the newly
inaugurated International Criminal Court, offers the world
the best long-term prospect for lasting international
peace. Europe should work with its allies and partners
around the globe to encourage participation in these
agreements and institutions.
28. Finally, the EU should examine its relationships in
regions where its interests have traditionally been less
fully represented. China should be the focus of sustained
diplomatic attention. In the Middle East, the active
participation of a strengthened Europe in the resolution
of the Israeli-Palestinian conflict would be of tremendous
benefit.
Addressing Long-Term Concerns
29. The European Union is a work-in-progress. In the
rapporteur estimate it will take at least another half
century to reach maturity. This applies particularly to a
joint foreign and security policy. During that time,
however, the world will have changed dramatically. Europe
as a whole will represent a much smaller proportion of the
world's population, and the vast majority of humanity will
live in material poverty. Demographic shifts will increase
the pressure of immigration, and with the immigrants may
come new threats - conflict, disease, and international
crime.
30. Globalization will continue, and poses huge
difficulties to the economies of all but a few developing
nations. Simultaneously, the developing states all
together continue to spend far more for their military
than they receive in Official Development Assistance. The
instability of the Third World will pose problems for
Europe.
31. The development of information technology creates
additional questions: the rise of globally dominant
information networks makes it possible to disseminate
ideology rapidly and internationally. Cultural war-fare
should not turn the thesis of a clash of civilizations
into a self-fulfilling prophecy.
32. Europeans share a rich cultural identity, though this
identity may be more easily discerned from outside the EU
than from within. Europe's civilization clearly
encompasses the fields of democratic civilization, the
rule of law, private entrepreneurship and market
orientation, plus the welfare-state. If we look at the
fields of literature, science, religion, philosophy or
music, painting, sculpture and architecture, most of the
European nations have over centuries contributed and do
still participate in one great civilizational mosaic or in
one closely knitted culturel fabric, that is unique in the
world. By far most of the European nations have their own
national language, they are cultivating their national
heritage and identities. This is absolutely normal - but
at the same time it is the multi-faceted obstacle to
trans-national integration.
The present crisis in Europe is due to a lack of a common
concept for the future shape of the EU. This crisis is a
danger and as well a challenge and an opportunity. Within
less than five years will the outcome become clearer.
European development so far has been a story of many steps
moving progressively toward major accomplishments. The
European Union represents a tremendous success of skilled
diplomacy and bold leadership. Future progress will depend
on a similar level of leadership.