José Manuel Barroso, president of the European Commission (EC), made a very important speech yesterday. He announced the need for a United Europe. From his speech it was evident that the EC has already prepared some of the steps necessary to modify the current European Union structure which, as has been manifest for some time, doesn’t work. His message was that “Europe needs a new direction. And, that direction cannot be based on old ideas. Europe needs a new thinking.” Because of the interconnected global markets a more powerful political system must be introduced.
Specifically that means an economic union. Long postponed structural reforms must be undertaken and the European Union must continue its efforts to create a single European market. The EU must also create a European labor market. The member states must put more effort into education, research, innovation, and science. He mentioned a common budget that will help complete a single market. The European Central Bank should have a much greater role in handling monetary policy. The EU must “complete the economic and monetary union” of the member states. The EU must also “create a banking union and a fiscal union and the corresponding institutional and political mechanisms.” It seems that legislative proposals for a single European supervisory mechanism are ready to be presented for a vote. Not only will the ECB have a greater role to play; the EU also wants to create a European Banking Authority that would be responsible for the supervision of the banks in the euro zone.
And what about political union? Barroso would like to have union-wide political parties instead of the current disconnect between political parties in the capitals and the European political parties in Strasbourg. It seems that a legislative proposal to change this situation is also ready.
Then Barroso moved on to a topic that was most likely inspired by the two Victors: the Hungarian Viktor Orbán and the Romanian Vicktor Ponta. Let me quote these passages verbatim:
A political union also means that we must strengthen the foundations on which our Union is built: the respect for our fundamental values, for the rule of law and democracy.
In recent months we have seen threats to the legal and democratic fabric in some of our European states. The European Parliament and the Commission were the first to raise the alarm and played the decisive role in seeing these worrying developments brought into check.
But these situations also revealed limits of our institutional arrangements. We need a better developed set of instruments–not just the alternative between the “soft power” of political persuasion and the “nuclear option” of article 7 of the Treaty.
Our commitment to upholding the rule of law is also behind our intention to establish a European Public Prosecutor’s Office, as foreseen by the Treaties. We will come with a proposal soon.
As the Hungarian Index wittily remarked, “Barroso uttered the f-word,” meaning federation. A word that has been taboo in Europe until now. According to Barroso, “a deep and genuine economic and monetary union, a political union, with a coherent foreign and defense policy, means ultimately that the present European Union must evolve. Let’s not be afraid of the words: we will need to move towards a federation of nation states.”
And finally, here are a few key words that the current Hungarian government will have to mull over. “No one will be forced to come along. And no one will be forced to stay out.”
I guess I don’t have to speculate here about what Viktor Orbán’s reaction might have been. So far, however, he hasn’t reacted publicly at all. Unlike Vacláv Klaus, president of the Czech Republic, who immediately announced that he firmly rejected the idea presented by Jose Barroso and added that “the only thing [he] appreciates in [Barroso’s] proposal is that the current advocates of deeper European integration have for the first time openly admitted their real objectives.”
Viktor Orbán may have said nothing, but I doubt that Enikő Győri, undersecretary in charge of Hungary’s relations with the European Union, could possibly express an opinion without approval from a higher authority. In an interview given to Dow Jones she said that Hungary has doubts about the European Commission’s proposal to grant supervisory powers over banking in the eurozone to the European Central Bank. “Our decision on accepting the proposal will be based on whether obligations and rights in the new system will be equivalent. After a cursory reading, our understanding is that they will not,” she said. She added that accepting the supervisory authority of the ECB would entail meeting every obligation imposed, while at the same time limiting rights, and that the new system would have a great impact on financial institutions operating in Hungary. The main concern for Hungary is that banks outside the eurozone would not get their fair share from European crisis management funds and that locals would therefore seek to transfer their money to banks within the eurozone. Győri also mentioned that Hungary is planning to formulate a joint position together with the Czech Republic, Poland, and other non-eurozone states prior to the first official debate on the proposal at an informal meeting of EU finance minister in Cyprus on September 14-15.
I very much doubt that this is the most significant part of Hungary’s objections. I’m expecting a slow stream of protest against the idea of a federated Europe coming from members of the Hungarian government. But, as Barosso stressed, no one will force Hungary either to remain within it or to stay out.
As for the Fidesz members of the European Parliament, only Ildikó Gáll Pelcz spoke at the EP meeting following Barroso’s speech. According to her, “the plans of the Commission are nice and promising but they are not realistic.” She complained that the ten countries outside the eurozone are effectively excluded from real participation. It is true that they can join, but they don’t receive any benefits by joining. On the other hand, if they decide to stay out, then they will have to suffer all the disadvantages of the decision.
I suspect that Mrs. Pelcz’s words bear the imprint of the attitude of Viktor Orbán. At least for the moment. Who knows what will happen tomorrow or the day after?