Political trends and priorities 2011-2012

December 2010

By Rosa Balfour Janis A. Emmanouilidis Fabian Zuleeg

EPC PROGRAMMES ON EU INTEGRATION AND CITIZENSHIP EUROPE’S POLITICAL ECONOMY ISSN 1782-494X EUROPE IN THE WORLD The EPC’s Programme on EU Integration and Citizenship

With the passing into force of the Lisbon Treaty, the new policy focus is on adapting the EU’s institutional architecture to take account of the changed set-up, and on bringing the EU closer to its citizens.

Continuing discussion on governance and policy-making in Brussels is essential to ensure that the European project can move forward and respond to the challenges facing the Union in the 21st century in a democratic and effective manner.

This debate is closely linked to the key questions of how to involve European citizens in the discussions over its future; how to win their support for European integration and what are the prospects for – and consequences of – further enlargement.

These questions are in turn linked to the search for appropriate and coherent policy responses to the challenges posed by Europe’s increasingly diverse societies and rising immigration.

This programme focuses on these core themes and brings together all the strands of the debate on these key issues, addressing them through a number of fora, task forces and projects. It also works with other programmes on cross- cutting issues such as the links between the EU’s internal debate on migration issues and the wider one on globalisation and migration, the international ramifications of the debate on intercultural dialogue, and the integration of the Balkans in the Union.

The EPC’s Programme on Europe’s Political Economy

Taking the steps needed to make the EU a world leader in today’s globalised economy and ensure the sustainability of the European economic and social models form the core of this programme’s activities.

Europe’s ability to create wealth on a sustained and sustainable basis, while at the same time ensuring employment growth, equitable income distribution and the efficient provision of public services, will depend on the necessary reforms being introduced to respond to the challenges of globalisation, the ageing of Europe’s population and climate change.

The Lisbon Agenda has provided a good starting point, but Europe needs to look now at reinvigorating this process to achieve its goal of becoming the world’s most competitive economy.

This programme addresses these issues through a number of fora and task forces. It engages in, and stimulates, debate on economic policy in general and focuses on specific issues such as the internal market, innovation, better regulation, energy and lifestyle risks. It also works with other programmes on cross-cutting issues such as the economic integration of migrants, the EU budget and the Union’s relations with Africa and Asia.

The EPC’s Programme on Europe in the Word

Building EU foreign policy over the past twenty years has been one of the most challenging and difficult aspects of the process of integration and, despite the innovations introduced by the Lisbon Treaty, is still far from meeting the expectations of European citizens and of the rest of the world. At the same time, the EU’s role in international politics is challenged politically and economically. The rise of new powers, an increasingly fluid system for global governance, the growing internationalisation of domestic politics and policies, all put the EU under the spotlight to deliver.

The EPC’s Europe in the World Programme, supported by the Calouste Gulbenkian Foundation, takes a dual approach. EU capabilities in foreign policy and its political will to play as a global actor are essential to understand the ways in which the Union engages with the world, by analysing the External Action Service, the use of the EU’s foreign policy tool box, and political dynamics in Europe.

Through seminars, public events, and special projects, the Programme also examines the EU’s ‘performance’ in certain parts of the world (especially in the Balkans and in the EU’s neighbourhood, but also in Asia) while addressing thematic and cross-cutting issues, such as foreign policy and international migration, international justice, human rights.

For details of the EPC’s activities under these programme, please visit our website: www.epc.eu

4 Table of Contents

I. Introduction 6

II. Analysis of trends and emerging policy priorities for 2011-2012 7

Long-term trends 7 Europe’s political economy 8 Europe in the world 11 Quality of EU governance 15

III. Analysis of likelihood of changes to the emerging agenda 19

IV. Conclusions 20

Endnotes 21

About the authors

Rosa Balfour, Janis A. Emmanouilis and Fabian Zuleeg are Senior Policy Analysts at the European Policy Centre.

5 I. Introduction

2010 has been an annus horribilis for the European Union (EU) and its Member States. In the first half of

December 2010 the year the Greek sovereign debt crisis developed into a fully-fledged euro crisis, which has not only shaken the common currency and spread to Ireland, but has also cast into doubt the overall prospects for the European integration project.

Today’s EU is burdened by an increase of national focus, an increasing distrust among Member States and a growing gap between national capitals and ‘Brussels’. The global financial and economic crisis had already provoked self-contemplation, national egoism, and even some unilateral reactions. But the effects of the European debt crisis are even worse as they go well beyond the realm of the economy.

The euro crisis and reactions to it have widened old cracks and opened new wounds between Member States and citizens, which will take time to heal and some scars are likely to remain. There is even a danger that the poisoned political atmosphere among EU countries and their citizens could bring the European construction to a standstill, because the European Union is still a project in the making and major reforms and new grand projects require the consensus and support of (almost) all Member States.

In the context of this deep crisis, the present paper provides an ex ante analysis of political trends and priorities in 2011 and 2012. The paper begins with a reflection on the major long-term political and economic trends, which are likely to set the overall internal and external framework in which the EU will operate in the years to come.

Subsequently, the paper identifies a number of major priorities for 2011/2012 on the basis of key trends, which are expected to determine the Union’s agenda in the years ahead. Three broad areas of concern are subject to the analysis: Europe’s political economy, Europe’s role in the world and the quality of EU governance following the entry into force of the Lisbon Treaty. This part of the paper is followed by an examination of the likelihood of changes to the EU’s emerging agenda, taking into account risks and uncertainties which could fundamentally change the agenda.

The paper concludes with a summary of the main findings and conclusions.

The present analysis is based on the results of a project carried out by the European Policy Centre (EPC) for the European Economic and Social Committee (EESC) in the first half of 2010.

6 Lisbon Treaty. Butwhat arethekeytrendsandprioritiesinthesethreeareas? (ii) Europe’s role intheworld; and(iii)thequalityofEUgovernance following theentryintoforce ofthe Three broadareaswillbeofparticularconcernintheyears tocome:(i)Europe’s politicaleconomy; be effectively addressedattheEUlevel. transnational securityrisks,demographic trends,publicfinanceimbalancesandclimatechange canonly from developed anddeveloping countries,resource scarcity, theincreasingcomplexityofnationaland concrete enoughtoaddressEurope’s keychallenges. The effectsoftheglobalcrisis,growing competition costs ifchoices aredelayed. The Unionneedsambitious,yet realisticpolicy responses,which are In thecomingyears theEUanditsmembers needtomakelong-termstrategic choices withincreasing among many citizenswho fearthattheirliving standardsmightdrop. Many questionthefutureadded-value ofEuropeanintegration: what istheUnion’s new and intellectualelites. has lostsupportbothamongordinarycitizensandincreasinglyalsopolitical,economic,cultural without acommandbridgesteeringtowards itsnextdestination. As aconsequence,theEuropeanproject reform andconstantroundsofenlargement,theEUresemblesasedatetankerwithglorioushistorybut orientation andriskslosingattractiveness insideandoutsideEurope. After two decadesofinstitutional arewearingoff. Today theUnionsuffersfromalack ofstrategic euro, ortheunificationofcontinent– such astheSingleMarket,abolitionofborders, But despiteallitssuccesses,pastachievements – political andsocialinterdependencehave tiedEuropeansclosertogetherthanatany timeintheirhistory. collectively inBrussels.Joint institutions,sharedsovereignty andanunprecedentedlevel ofeconomic, omnipresent: thereisvirtuallynopolicy areawhich isnotdirectlyorindirectlyaffectedby decisionstaken decisively topeace,prosperityandsolidarityontheoldcontinent. Today, the EuropeanUnionis success story. After theexperienceoftwo devastating world wars theEuropeanprojecthascontributed There canbenodoubt:thehistoryofEuropeanintegration sincetheearly1950shasbeenaremarkable Long-term trends II. Analysisof trends andemerging policyprioritiesfor 2011-2012 Europeans feelasenseofinsecurityandanxiety– world regions. As aconsequence,Europe’s economicandsocialmodelisthreatenedmany power isshiftingandEuropemightfeelthelong-termconsequencesofcrisesmoreseverely thanother financial andsocialeffectsoftheglobalcrisisEuropeandebtcrisis. The balanceofeconomic But theEUanditsmembersarechallenged by neweconomicplayers andby thenegative economic, Economically, Europeisamajorplayer, which haspromotedandprofitedfromeconomicglobalisation. risk ofgradual marginalisationandglobalirrelevance. proactively respondtothechallenges ofahighlydynamic globalenvironment theoldcontinentruns in afuturesystemofglobalgovernance. IftheUnionanditsmembersarenotabletocollectively and is necessaryifEuropeanswant toseetheircommonvalues, interestsandhistoricalexperiencereflected the newchallenges ofregionalandworld affairs.ButtheEUisnotabletospeakwithonevoice, which parts oftheworld. This geopoliticalshiftincreasesthepressureonEuropetofillgapsandrise is nolongerinthecentreofgravity andhistory, asglobaldevelopments areincreasinglyshapedinother politicallyandeconomically. Europe In globalterms,theEUandallitsmembersareinrelative decline– current financialandeconomiccrisistheeurocrisis. aphenomenonexacerbatedby theeffectsof fostering mutualdistrustandnationalring-fencing– EU countries.Contradictory andoftenirreconcilableviewsaboutEurope’s futureopposeeach other, the furtherdevelopment ofEuropeanintegration ishamperedby aconceptualschism betweenandwithin What istheEU’s futureadded-value beyond themerepreservation ofpastaccomplishments? Inaddition, 1 Zukunftsangst is becomingawidespreadphenomenon raison d’être raison ?

7 December 2010 8 December 2010 the EU:issuehasbeenpushed down theprioritylistofEuropeanleaders who arestrugglingwith move thisagendaoninthenextfewyears. However, therearesignsof‘environment fatigue’inside global agreement. With thefailureofCopenhagenatend2009,EUwillbetryingagainto To achieve Europeanclimatechange objectives thusrequiresthattheEUmanages to finda Green HouseGasemissionsisdeclining,while developing countries’emissionsare increasingrapidly. historical responsibilitiestoreduceitsemissions,ona globalscaletheproportionofEuropean The issueparexcellencewhich falls underthisdefinitionisclimatechange. While Europehas with effectively onagloballevel. predominantly domesticnow have aninternationaldimensionorareeven issueswhich canonlybedealt It isincreasinglyclearthatglobalisationhasmeant arange ofissueswhich werepreviously Trend 2:Internationalisationofissues ‘Euro-bonds’ onthetableagain. management ofpublicfinanceswillalsofeatureinthisdebatewiththeideascommonEUdebtand coordinated moreeffectively, includingforexamplecallsfurtherfiscalharmonisation. The Finally, itislikelythatwewillwitnessfurtherdiscussionsonhow macro-economicpoliciescanbe of financialinstitutionsatEUlevel. crises, includingtheimplementationofproposalsforimprovement oftransparency andsupervision Linked tothisisthewiderconsideration andimplementationofmechanisms toprevent futurefinancial changes potentiallyrequire Treaty modifications. into action,given thetimeittakestoreach significantEuropeandecisionsandthefactthatsomeproposed and effectively tofuturecrises.However, itisunlikelythatthecurrentproposalscanbetranslated quickly enforcement oftheStabilityandGrowth Pact andacrisismechanism which isabletorespondrapidly Current proposalsincludediscussionofthetightermonitoringeuro-zoneeconomies,astronger change mightbenecessarytomove forward onapermanentcrisismechanism. the EuropeanCouncil,althoughthereisstillmissingclarityinanumberofareas,forexamplewhat Treaty made anumberofproposalsconcerningeconomicgovernance. These have beenbroadlyendorsedby year(s). The Commissionandthe Task Force ledby EuropeanCouncilPresidentHerman Van Rompuyhave One directimpactisthatthecurrentdiscussiononeuro-zonegovernance willcontinueinthecoming impact andhave tobeaddressedcollectively. reinforced thismessage,showing clearlythatoneeuro-zonecountry’s difficultieshave aeuro-zonewide the cross-borderspillover ofany action. Within theeurozone,GreekandIrishdebtcriseshave further nosupportpackages forbanksorfiscalstimulusprogrammes couldignore financial andeconomiccrisis– Member Statebeingshieldedfromdevelopments inanother. This becameclearintheresponseto Recent developments have demonstrated thatEuropeaneconomiesaretightlyinterwoven, withnoEU Trend 1:Increasing EUinterdependence policy prioritiesinthenearfuture: There arefourmajortrendswhich willinfluenceandshapeeconomic,social,environmental EU Europe’s politicaleconomy a range ofthreatstoEurope’s economic,socialandenvironmental model. the reassessmentofeffectiveness ofEUpoliciesinlightnewchallenges; and rising globalinterdependenceandtheinternationalisationofpolicy issues; mechanisms todealwithassociatedrisks; increasing economicinterdependencewithintheEU,andespeciallyeurozone,butinsufficient breakdown ofnegotiations. European Parliament intheupcomingdebatesaboutMAFFand potentialimplicationsofa overall sizeoffutureEUexpenditureintimesausterity, butalsoconcerningtheroleof course ofthe2011budgetnegotiationswitnesssevere controversies with respectnotonlytothe (especially thenetpayers) willexertpressuretolimitthefutureEUbudget.Onecould already inthe point fortheseconsiderations. At thesametimeitisalready becomingclearthatEUMemberStates budget review, which was carriedoutfrom 2008to2009(publishedinautumn2010),isthestarting of thenextMulti-AnnualFinancial Framework (MAFF)fortheperiodfrom2014onwards. The EU Much ofthedebatewillfocusonEU spendingandinparticularonthebeginningconsideration of otherEUpolicieswillalsobeunderscrutiny. are stillfitforpurpose.Financial market regulationandsupervisionisoneoftheseareasbutawiderange ageing, willalsoleadtoare-examinationofEUpoliciesin arange ofareastodeterminewhether they The challenges theEUfaces,such as theimpactofeconomiccrisis,climatechange, globalisationand Trend 3:ReassessmentofEUpolicies the way forward. rating agencies.However, theEUneedsfirsttofindameaningfulandambitiousinternalconsensuson in areassuch astaxationoffinancialtransactions, ortheregulationofhedgefundsandcredit wide range ofissuesrealprogresscanonlybemadethroughinternationalagreements,it,forexample, well aswithintheEUlegislative process.Given theglobalnatureofthesemarketsitisclearthatona Finally, theregulationoffinancialmarketsandinstitutionsislikelytofeatureinglobalnegotiationsas energy securityareagaintopicswhich willaffecttheEUandshouldreappear on theagenda. This hasimplicationsforfood,commodityandenergypriceswhich arelikelytoincrease.Food and The globalcompetitionforresources isalsolikelytoheatupinlinewiththeglobaleconomicrecovery. migrants, includingastrengtheningofthepowers ofFrontex. EU actionismuch morelikelytotakeplacewithregardpolicingEurope’s bordersagainstirregular including circular migration, anexploration ofwhich isplannedforintheStockholm Programme. Joint As aresult,increasedpolicy attentionwillfallonthepossibilitiesoftemporary formsofmigration, the needforunanimityinCouncil. global economiccrisisandby reluctantelectorates, even thoughtheLisbon Treaty hasdoneaway with political manoeuvreforcommonEUinitiatives onlabourmigration iscomplicatedby theimpactof Europe’s pension,healthandwelfaresystemsaswellboostcompetitiveness. However, thecontextfor The belieffollows thatlabourimmigration would helprelieve theforecastdemographic pressureson in boththeEurope2020 with theabilitytorespondinaflexibleway totheprioritiesandneedsoflabourmarkets,arecalledfor to actcollectively. Pursuingthedevelopment offorward-looking labourmigration policiesforEurope, Migration islikelytocontinuebeakeyissueinthepublicdebate,butwithrelatively limitedEUpowers reaction tomigration. unease feltabouttheimpactofglobalisationislikelytobeaggravated by therecession,forexamplein Unfinished businessincludestheglobaltrade agreement(WTO DohaRound).Inmany EUcountries,the years. At theinternationallevel, thisisresultingindiscussions aroundcurrency andtrade imbalances. caused adipintheseflows, itlookslikelythatgloballytheseflows willcontinuetoincreaseinthecoming Globalisation alsoentailsincreasingflows oftrade, investment andpeople. While therecessionhas agenda significantly. ambitious agendainthispolicy area,especiallysincetheCancúnglobalsummitdidnotadvance the the impactofeconomiccrisis.Itremainstobeseenhow farEuropeanleaderswillpushan 2 Strategy andtheReflectionGroupreport. 3

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December 2010 the usefulnessofEUpolicy inthis field. performance inthisareawillremainsluggishmostparts oftheEU,which willraise questionsabout be whether thenewagendacandeliver growth andjobs. At thisstage,itislikely thatEuropean cohesion. The costofclimatechange mitigationisalsolikelytoberaised. Oneofthekeyquestionswill 2010, many openquestionswillremain, forexampleoneffective ways ofincreasinginnovation orsocial 2020 agendaandassociatedpolicy questions. While thebroadoutlineofEurope2020was agreed in At EUlevel, much ofthedebateislikelytofocusonimplementationandeffectiveness oftheEurope labour marketintervention inthecurrentstateofpublicfinance. situation ofEurope’s labourmarketswillremaindifficultgiven thesignificantchallenge tocontinue withdrawal ofadditionaldebt-financedpublicspendingwillhave consequences. Inaddition,the stabilised oreven improved (e.g.Germany). However, theausterityprogrammes withtheassociated continuing deterioration (e.g.SpainorGreece)inothercountriesthesituationseemstohave been European labourmarketswillcontinuetosufferinthenextfewyears. While somecountries areseeinga society, withausterityprogrammes implementedinmany EUMemberStates. consolidation andhow theinevitablecorrectionsinspendingandtaxationimpactondifferentlevels of which was available beforethecrisis. There isanongoingdebateonwho shouldbearthecostof market, areseverely limitingtheabilityofmany MemberStatestoprovide thelevel ofpublic services At thesametime,publicfinancesituationandadditionalpressures,forexamplefromlabour a greaterroleforthepublicsectorbutalsocivil society, communitiesandindividuals/households. also longerterm,questioningwhether Europeneedstoreassesshow itperceives ‘progress’andstipulating a reactiontothenegative impactsanduncertaintiescreatedby thecrisis.However, theseconcernsare The growing uneaseinthepopulationsaboutmarkets,globalisationandroleofcompaniesispart Trend 4: Threats toEurope’s economic,socialandenvironmental model attempt toholdonnationalframeworks. debate isbroadlygoingtobebetweenproponentsoffurtherEuropeanmarketintegration versus an energy, informationandcommunicationtechnologies orinrelationtopublicservicessuch ashealth. The Finally, inmany areastherewillbediscussionsonsectoral policies,beit,forexample,inrelationto protection beingpotentialareasofconflict. challenge, withdifficultpolicy issuessuch asIntellectualPropertyRightsanddataconsumer proposals. Among these,makingtheSingleMarketfitfordigitalworld continuestobeakey range ofmeasurestobeimplementedinresponse,includingtheSingleMarket Act which contains50 dimension. MarioMonti’s reportprovides newimpetusinthisarea industrial/sectoral policies,stateaidandpublicprocurementaswelltheSingleMarket’s social There isalsoanongoingdebateaboutthefutureofSingleMarketandassociatedpolicies,such as Greece andPortugal mightrequireadditionalassistance. direction butwereseverely affectedby theeconomiccrisis.Countriessuch asSpainandIrelandbutalso In addition,therewillbeare-evaluation ofthe‘needs’countrieswhich hadbeenmoving intheright new MemberStates,inparticularthenewestEUcountries. mechanisms canbeputinplacewhich canensurethatthemoneyisspenteffectively andtargetedinthe debate willfocusonwhether interventions arenecessaryinthericher MemberStatesandhow agriculture such asbiofuelsandapossible(partial)renationalisationofthepolicy. Oncohesionpolicy the agriculture, thebigissueswillincludefoodsecuritybutalsogreeningofsector, newusesfor willcomeundermuch scrutiny. On agricultureandcohesionpolicy – The two biggestspendingblocks – 4 , withtheCommissionproposinga identified for2011-2012. There arethreefrontstoexamineunderstandhow theEUisrespondingandwhat prioritiescanbe and economiccrisis,hasalsocontributedtotheEUlosinggroundattraction internationally. phase ofinward-looking politicswithintheUnion,compoundedby theprocessofinstitutionalreform governance structuresareleadingtoanincreasingmarginalisationofEuropeandtheEU. The long and the West, thefragmentation ofdecision-makingcentres,andtheongoingprocessrevisionglobal The riseofnewpowers, thefluidityinglobalbalanceofpower, which isshiftingaway fromEurope Trend 1:Globalmarginalisation summit didnotleadtoasubstantialrevisionoftheEU’s priorities discuss withnationalleadersthefutureofEU’s ‘strategic partnerships’withkeycountries. While the the expenseofrotatingpresidency. InSeptember2010heconvened aspecialEuropeanCouncilto European Council(which istaskedby theLisbon Treaty toprovide thegeneral foreignpolicy strategy), at important roleindefiningprioritiesandguidelinesforEUinternationalaction,alsothecontextof of thePresidentEuropeanCouncil,itislikelythatMr Van Rompuywillplay anincreasingly After theBelgianPresidency inthesecondhalfof2010andassiduousparticipationEUsummitry an adjustmentofthegroundtobecovered respectively by Catherine Ashton andHerman Van Rompuy. the numberofpersonalitiesrepresentingUnionexternally. The comingmonthswillcontinuetowitness Rather thanrespondtothefrequentdemandfora‘singlevoice’ fortheEU,Lisbon Treaty hasincreased President oftheEuropeanCouncil,andwithcreationExternal Action Service(EEAS). Representative forForeign andSecurityPolicy/Vice-President oftheCommission(HR/VP)and capacity toaddresstheEU’s shortcomingsasaglobalactorwiththecreationofnewpositionsHigh up set policy As farasinternalcapabilitiesareconcerned,theLisbon Treaty was supposedtoprovide theinstitutional foreign EU new the Building priorities andapproaches tointernationalaffairs: Concerning Europe’s roleintheworld, two broadtrendsareidentifiable,which aredeterminingEU Europe intheworld this newstructure: While performanceremainstobeseen,itispossiblehighlight anumberofchallenges emergingfor EEAS oneofthemosttopicalandabsorbingissuesEUforeign affairsinthenexttwo years. A firstassessmentwillbecarriedoutby theHR/VPin2011-12,andamajorreview2014,making structure andthetopnominationsweremade,implementation phasewilloccurduring2011. With regardtotheEEAS,itisearlymake anassessment.In2010allthemajordecisionsonnew and China,sofar2010hasnotwitnessednewpolicy-shaping initiatives fromtheHR/VP. with theHR/VP. While reports areexpectedfrom Ashton’s teamonrelationswithcountriessuch asRussia regularly holdswiththem. The keyissueremainsthedegreeof coordinationandabilitytowork intandem needed guidelinesforcoordinationbetweeninstitutionsandmemberstatespriortothesummitsEU Europe, alsoasaconsequenceofenlargementfatigue. at theregionallevel anincreasinglydifferentiatedandoftenwaning power ofattraction innon-EU a growing marginalisationofEuropeandtheEUatgloballevel; for externalrelations; ambiguities inthe‘division oflabour’betweenthetwo, especiallyinthemanagementofresources the realclosureofinstitutionalgapbetweenCommission andtheCouncil,given the vis-à-vis vis-à-vis these countries,itdidproduce

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December 2010 Defence issueswillalsobeontheagenda. The Lisbon Treaty lays down theprovisions for Copenhagen climatenegotiations show), butitsown experience withmultilateralism suggeststhe The EU’s abilitytoacteffectively atthemultilateral level hasbeenweakening(astheDoha trade and in political,securityandeconomicissues. agenda, buttheriseofG-20willmakeitanitemfor internationalagendaover theyears tocome, principles ofinternationalinstitutionsareallsetforasubstantial review. This isnotanitemontheEU institutions financial andeconomiccrisis. The enlargement,functions,responsibilities,participation,newrulesand international in The trendfortheredefinitionofinternationalinstitutionshasbecomeincontestably clearsincethe Representation voice? European A not leadtoarevisionofsuch partnerships. allowing thirdcountriesaccesstoEuropeanmarkets. As mentionedabove, Van Rompuy’s firstattemptdid partners would requiremakingsomeofthoseconcessionstheEUhassofarbeenreluctanttomakeon to pursuethem,findingabalancebetweenbilateralism andmultilateralism. Furthermore,engaging The challenge isthereforetoidentifythekeyissuesandstrategies aswellthemostappropriatemeans global security, reformofthefinancialsystem). through multilateral institutions(forexample,energysecurityandefficiency, climatechange, regionaland dialogue which canalsoserve asthebasisfordevelopment ofsharedpositionstobecarriedout means (forinstanceenergy, trade, migration), andthosewhich itwants tostrengthenthroughapolitical The EUwillalsoneedtowork outahierarchy ofprioritiesandissuesitwants toaddressthroughbilateral conditions, andpolicy prioritiesthateach countryrepresents,given thediversity betweenthem. institutionalised andlegalisedformat,willhave tobeadaptedthedifferentinterests, specific challenges. The EU’s ‘blueprint’foragreementswiththirdcountries,which follows acommon meaningful andsubstantive relationshipsbasedonrealpolicy issuesandconcernsentailsmultifaceted Beyond thesummitrythatthesepoliciesentertain,transforming these‘specialpartnerships’into it fromidentifyingthecommoninterestsandpriorities,makingthesepartnershipsdevoid ofcontent. special relationswiththeUSandCanada.Butdiversity andfragmentation withintheEUhave prevented handful ofcountries(Brazil, China,India,Japan, Mexico,Russia,andSouth Africa) inadditiontothe EU model.Sofar, theUnionhasdeveloped orisnegotiating‘specialpartnerships’with morethana for astrongerEUisweakening,andcompetitiononthegroundfromemergingpowers isquestioningthe President oftheEuropeanCouncilandHR/VP. The contextisunfavourable astheexternaldemand A revisionofEUrelationswithitspartnersisanincreasinglyimportantitemontheagendaboth partners with Relations common militarycapabilities. on itslistofprioritiesandnationalbudgetarycutsmightprovide arationale forthedevelopment ofmore some countriesholdingthenextrotatingPresidencies(Hungary, Poland andDenmark)willputdefence bilateral andintergovernmental agreementbetweenFrance andBritainondefencematters.However, defence matters(seealsop.18). Alone thishasproved tobeaninsufficientincentive, inthelightof structured cooperation structured States showing signsofunwillingnesstoputfinancialresources tomatch theEEASpotential. the prospectsforbudgetarysustainabilityofanenhancedforeignpolicy service,withMember the evolution oftheEuropeanParliament’s newrole; efficiency andsecurity, peace,civil societydevelopment; global publicgoods,such astheenvironment, sustainabledevelopment, humanrights,energysupply, the strengtheningofholisticpolicies,integrating keythematicprioritieswhich reflectasupportfor the balancebetweenstrategic goalsandlong-termengagement; , which would allow someEUMemberStatestopursuefurtherintegration in permanent consequence ofitspower ofattraction. This isweakeningwithenlargementfatigueandbecauseofEU The EUhasbecomeincreasinglyengaged with non-EUEurope,especiallytotheEast,alsoasa Mediterranean the and Europe Wider EU todevelop astrongerroleinitsneighbourhood. for accession. There aremany signsindeedthat Ankara isincreasinglydisengaginganddiverging fromthe of commonconcernintheneighbourhood(Caucasus,Middle East)rather thanexclusively asacandidate Europe. Relationswith Turkey inparticularwillrequire astrengtheningofpoliticaldialogueover issues as enlargementwillremainundertheremitofCommission) tokeeptheentireregionanchored to have todeviseparallel strategies basedinitsforeignandsecuritypolicy (andthusthroughthe newEEAS, In theunlikelihoodthatprocessofaccessioncanbeaccelerated over the nextfewyears, theEUwill the region. between Belgrade andPrishtina)show thatthetimeisripetodemonstrate theEU’s commitmenttowards between SerbiaandCroatia,theUNResolutiononKosovo presentedby SerbiaandtheEUtostarttalks months of2010saw anumberofpositive changes intheregion(signsofabeginningreconciliation hostage toproblemsinsidetheregionandwaning ofpoliticalconsensusintheEU. The lastfew The challenge fortheEUwillbetorefineitstoolsensurethatthispoliticalminefieldisnotmade possible blockages andvetoes by EUMemberStates. economic crisis,andthepre-accessionaccessionpathsover thenextfewyears aremarredby The regionistaintedby problemsofunresolved statehood,recalcitrant nationalism,bilateral disputes, support forenlargementintheEUandSouthEastEuropeitselfatatimeofeconomiccrisis. EU willinthecurrentpoliticalclimatefaceaseriouschallenge inkeepingthemomentumandpolitical twelve monthsandjoininthevery nearfuture(possibly2013).Butbeyond Croatia(andIceland?),the will remainaninescapablepriority. Croatiaislikelytocloseaccessionnegotiationsduringthenext clouded EUpoliciestowards SouthEastEurope. Yet, thecommitmentshave beenmadeandenlargement The enlargementfatigueofthepastfive years, andtheoutspokenoppositionto Turkey’s accession,have servanda’ sunt ‘Pacta global politics;afterall,EUCommonForeign andSecurityPolicy was The EU’s performanceinitsregionhasalways beenthemostimportantmeasureofitsabilitytoinfluence Trend 2: The declineof ‘magnet’ Europe countries pushingfortheirvoices tobeheard. its marginalisationintheworld: negotiatingnewrulesandprincipleswillrequirecompromisewiththose multilateral systemwould beoneway ofbuildingconsensus.ButtheEUwillhave tocometermswith Linking EUrelationswithits‘specialpartners’andemergingpowers tostrategies forreformofthe co-write therulesofgame,andhow toensuretheparticipationofEUinthesestructures. imperative ofthinkingabouthow toparticipateinemergingstructuresforglobalgovernance, how to neighbourhood arealsotheonlygeographical areasofprioritymentionedintheLisbon Treaty. wider regionandtostrengtheningitscredibilityintheworld. SouthEastEuropeandtheEU’s the timeframe foraccession,willcontributegreatlytomaintainingtheEU’s power ofattraction inthe The challenges areinterconnected: asuccessfulenlargementstrategy intheyears tocome,regardlessof that theEUriskserodingoneofitsmajorassets:power ofattraction totheoutsideworld. accession policy, theinterdependencebetweenenlargementandbroaderEuropeanregionaresuch changes sincethe1990s,differentandspecificchallenges thatSouthEastEuropeposesto the Balkans. EnlargementtoCentral EuropeiscommonlyseenastheEU’s mostsuccessfulforeignpolicy. But de facto de born inthe1990s

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December 2010 Partnership), atleasttwo prioritiescanbeidentified: over thepastfewyears (EuropeanNeighbourhoodPolicy, theUnionforMediterranean, theEastern Mediterranean tooaresubjectedtocompetingvisionsandpriorities.Beyond thepolicy formatspromoted relations withEasternEurope,andleadstotheweakeningofEUleverage there.Relationswiththe The continuousinabilityintheUniontodeviseacommonstrategy towards Russiatrickles down toits that securityandconflictrisksarestillhighintheEU’s easternandsouthernneighbourhoods. Polish rotatingpresidenciesoftheEU.Furthermore,2008wars inGeorgiaandGazaunderlined this topicwillremainhighontheagendaatleastthroughout2011withsuccessive Hungarianand engagement, andtheinternaldrivers insupportofpoliciessuch astheEasternPartnership aresuch that reluctance tocommitany futureexpansioninEasternEurope.Butthelevel ofinterdependenceand pays off. countries’, thepreferenceseemstohave tiltedtowards thelatter, butitisunclear whether thisapproach tension intheEU’s neighbourhoodpoliciesbetween‘aringoffriends’andwellgoverned Devising astrategy todealwithcountriesthataremostimpermeableEUattraction. Iftherewas a non-EU countries. European spacewhich isbroaderthantheUnionaswellattractive andconvenient to This toowould entailsomeconcessionsontheEUsideandcreativity inconceptualisinga Putting somemeatontheboneof‘advanced status’countriesthatenjoy closerrelationswiththeEU. unable toprovide anew for theEU’s legitimacy crisis.First, theUnionlacks strategic orientation. The EUanditsmembershave been also amongpolitical,economic,cultural andintellectualelites.Onecanidentifyanumberofmainreasons The Europeanprojectisloosingattractiveness andsupportbothamongordinarycitizensincreasingly Trend 1:Legitimacy crisis the preparations forthe2014Europeanelections. legitimacy crisis:(i)theapplicationofCitizens’Initiative; (ii)theroleofnationalparliaments;and(iii) In theupcomingyears oneneedstoconcentrate onthreekeyprioritiescloselylinkedtotheEU’s Member Statesandwidenedthegapbetweennationalcapitals‘Brussels’. EU’s inabilitytoreactswiftly and effectively tothecurrenteurocrisishasincreasedpoliticaldistrustamong has particularlydrastic consequencesfortheEU,which isstillperceived asan elitistproject.Fourth, the an exclusively Europeanphenomenon.Butthelack ofconfidenceinnationalandEuropeanpolicy-makers public sphereandintheabilityofelectedpoliticianstomanagecomplexitymodernlife. This isnot the EUanditsmemberssufferfromacrisisofrepresentative democracy. Citizenshave lostfaithinthe debates aboutthefutureofEuropeanintegration andabouttheobjectives andcontentofEUpolicies. Third, cooperation. Second,citizensperceive ‘Brussels’asadistantapoliticalapparatus, which lacks resilient the In amuch-heralded efforttobringpeopleacrossEuropeclosertheEU,Lisbon Treaty introduced Initiative Citizens’ of Application governance following theentryintoforce of theLisbon Treaty inDecember2009: In thenearfuturethreemajortrendswillinfluenceandshapeissuesrelatedtoqualityofEU Quality of EUgovernance signatories ofaCitizens’Initiative. practice willtest boththerelevance oftheissue inquestionaswellthepatienceoforganisersand Council), andbecauseitwilltakeyears forasuccessfulCitizens’Initiative tobeimplemented. The future proposed by theCommissionissubstantially amendedorrejectedby theEU’s co-legislators(EPand does notmatch theexpectationsof organisersandsupportersofaninitiative, ifalegislative act organisers andsignatoriesofaCitizens’Initiative. This couldbethecaseifCommission’s response Second, thenewinstrumentmightbecomeasource ofmisunderstandingandfrustration onthesideof interest groups,which areabletosuccessfullyorganiseaCitizens’Initiative. or lobby groups.Policy-making mightthenfallpray toa‘tyranny ofminorities’backed by resourceful instrument. The Europeanpublicwillinsteadhave torelyonintermediaries,such asNGOs,trade unions, general willofEuropeancitizens.Itseemsrather unlikelythat‘ordinarycitizens’willemploy the First, someinitiatives mightmirrorsegmentalinterestspushedby awell-organisedminorityrather thana however, thereareanumberofrisksassociatedwiththeCitizens’Initiative. debate andenhancepeople’s awareness aboutthepotentialsandlimitsofEU. At thesametime, closer totheEUandeach other. The CIissupposedtocounterpublicapathy, stimulatetransnational a verdict onwhether thenewinstrumentwillactuallycontributetobringingpeopleacrossEurope At theendof2010Citizens’Initiative hasnotyet beenputintopractice. Itisthustooearlytodeliver “framework ofitspowers” and“forthepurposeofimplementing Treaties” (Article11 TEU). number ofMemberStatestoinvite theEuropeanCommissiontosubmitalegislative proposalwithinthe the needtoaccommodateincreasingheterogeneityinanEU27+. a continuousprocessofreaching anewinstitutionalequilibrium;and a growing gapbetweentheEUanditscitizensincreasingUnion’s legitimacy crisis; Citizens’ Initiative Citizens’ (CI). This instrumentallows morethanonemillioncitizensfroma“significant” raison d’être raison explaining thenecessitytocontinueoreven tofurtherenhance

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December 2010 and itsPresidentfurtherenhance thepoliticalsignificanceofParliament. importance ofEuropeanelections, butalsostrengthenthelegitimacy andpower baseoftheCommission Commission PresidentortheEU’s nextforeignpolicy chief. This procedurecouldnotonlyupgrade the By participatinginEPelectionscitizenswould (in)directlyinfluencetheappointmentofnext running forkeypostsinthenextEuropeanCommission. election campaigns.Inordertodoso,Europeanpolitical parties couldnominatetheirtopcandidates beabletodramatise andpersonalisetheir inanattempttocounterpublicapathy – political partieswill– One keyissuetolookatinviewofthepreparations forthe2014EPelectionsiswhether European manifests itselfinadecreasingturnoutatEPelections. role intheEU’s politicalsystem. As aconsequence,citizensdisassociatethemselves fromtheEUandthis the dialecticsofpoliticaldiscourse,andpersonalisation ofpoliticalconflictshave played aminimal European policy-making. This perception springsabove allfromthefactthatprincipleofopposition, as analienatedbureaucratic moloch, where citizensaretheobjectsbutnotsovereign subjectsof One keyreasonwhy voters increasinglyabstainfromEPelectionsrelatestotheperception oftheUnion elections was astrongsignthatmajorityofcitizenshave lostinterestintheEUasitstands. 2014 in be theEU’s nextmajorlegitimacy test. The recordlow turnoutof43%intheJune 2009European elections TheParliament EuropeanParliament (EP)electionsin2014,thepreparations ofwhich willhave tostartin2012,will European the of Preparation the nationalandEuropeanlevels. and when theyareactuallyusedinpractice, thuscreatingprecedentsandpromptingresponsesonboth The upcomingyears willbedecisive, asthepotentialimpactofboth‘cards’willbecomecleareronlyif cross-border cooperation. national parliamentsandeven domesticpoliticalpartieswould have tofurtherintensifytheir and cooperation betweennationalandEuropeanlegislators.Buttomakeuseoftheirnewprerogatives, At theEuropeanlevel, thestrongerroleofnationalparliamentscouldfostertransnational debates obstruct EUpolicy-making. could betemptedto(mis)usethenewpowers given tonationalparliamentsindirectlyinfluenceoreven with parliaments,which inturncouldrestricttheexecutive’s autonomy. Inothercases,somegovernments executive’s roomofmanoeuvre.Governments mightbeobligedtoconsultandcoordinatemoreclosely In addition,theenhancedroleofnationalparliamentscouldincertainMemberStates(further)limit bar even higher. current workload, andtheeightweeksallowed tofileacomplaintagainstanEUproposalwillraise the and have acriticalimpactonEUgovernments. Mostparliamentsarealready strugglingwiththeir about Europeanaffairs.However, thenewstipulationscouldalsooverburden nationalparliaments The increasedroleofparliamentsinEUpolicy-making hasthepotentialtoencourage nationaldebates procedure offersnationalparliamentsadirectway tomaketheirvoice hearddistinctfromtheirgovernments. scrutinise whether legislative proposalsabideby thesubsidiarityprinciple.For thefirsttime,new Lisbon Treaty introducestheso-called‘yellow’ and‘orange card’,which allows nationalparliamentsto The Lisbon Treaty extendstheinformationrightsandpowers ofnationalparliaments.Mostsignificantly, the parliaments national of Role for improvement. the Citizens’Initiative needstobewelcomedwithahealthy doseofrealismandwithcreative solutions Bearing inmindtherisksandopportunitiesassociatedwithnewinstrument,implementationof presenting hispoliticalguidelines forthenewCommissionandby accepting someoftheEP’s keyrequests the Parliament, which isalready extensively usingitsnewpowers provided by theLisbon Treaty. By Barroso IICommissiononecouldobserve acertain between thetwo supranational protagonists ofEuropeanintegration willdevelop. Inthefirstyear ofthe The upcomingyears willlargelydeterminethedirection inwhich theinter-institutional relationship from ‘supranational partnership’to‘institutionalantagonism’. Parliament institutional linkbetweentheCommissionandEP, astherelationshiphasinmany ways developed European the shifted towards theEuropeanCouncil. At thesametimewehave witnessedaweakening ofthe and Since thelate1990sCommissionhaslostmuch ofits strategic clout,aspower andinfluencehave Commission the between Relationship of the)EuropeanCounciltwo developments willbeparticularlysignificantintheupcomingyears: their roleintheframework ofthenewinstitutionalarchitecture. Inviewofthefuturerole(President office, President Van Rompuyandhisteamhave testedthesystem,exploringhow farthey canstretch European Council(POTEC) hasfurtherstrengthenedtheroleofEuropeanCouncil.Infirstyear in strategic initiatorandultimatedecision-taker. The introductionofan(s)electedfull-timePresidentthe formal EUinstitution. The EuropeanCouncilhasinthecourse ofthelastdecadesbecomeUnion’s Council European The Lisbon Treaty hasenhancedthepower positionoftheEuropeanCouncil,which hasnow becomea the) of (President the of Role overall development oftheEU’s newinstitutionalequilibrium. the Lisbon Treaty reforms.Concerningtheimmediatefuture,two issuesareparticularlyimportantforthe However, itisstill tooearlytodraw somedefiniteconclusionsconcerningthesystemicconsequencesof provided someindicationsofthedirectioninwhich theinstitutionalbalanceofpower ismoving. first year following theentryintoforce ofthenew Treaty andthechoice ofofficeholdershave already multi-hatted EUforeignpolicy ‘chief’, andlimitedtheroleofrotatingpresidency oftheCouncil. The the EuropeanCouncil,introducedanelectedsemi-permanentPresidentofCouncilanda The Lisbon Treaty hassubstantiallyincreasedtheEuropeanParliament’s powers, strengthenedtheroleof the newarchitecture shouldbefullytestedand(hopefully)somewhat stabilised. ‘consolidation period’likelytolastuntiltheendofMr Van Rompuy’s initialmandatein2012.Bythen, 2011/2012. In2010theEUwas stillinatransitional phase,which willnow befollowed by a can expectthattheEUwillstillbeinprocessofreaching anewinstitutionalequilibriumin the new Treaty hasshown thatthe ‘Lisbonarchitecture’ isno lesscomplexthanthepreviousone.One Making theEU’s newinstitutionalsystemwork isnoeasytask. The firstyear aftertheentryintoforce of Trend 2:Reaching anew institutionalequilibrium Presidents have regularweeklymeetingsandhave founda relationship betweenPresident Van RompuyandPresidentBarrosohasstarted inacollegialspirit.Both competences andpowers oftheEuropeanCouncilinrealmeconomicgovernance. However, onecanexpectthatMemberStateswillstruggletoreach aconsensusaboutthefuture have signalledthattheEuropeanCouncil’s “roleineconomiccoordination”shouldbeincreased. times ofcrisisonthehighestpoliticallevel. The EUheadsofstateandgovernment oftheeuroarea strategic guidance,guidethecoordinationofnationaleconomicpolicies,andprovide leadershipin has shown thattheEUlacks aclearlyidentifiableandstrongpoliticalauthority, which isabletooffer The role of the European Council in the framework of European economic governance: economic European of framework the in Council European the of role The The relationship between the President of the European Council and the Commission President: Commission the and Council European the of President the between relationship The rivalry oreven abattleofegosbetweenthetwo presidents. representation onthepresidentiallevel. Butdespitethispromisingstart,onecannotruleoutapotential rapprochement modus vivendi modus between theBrusselsExecutive and concerning theEU’s external The eurocrisis The

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December 2010 in returnleadtomorecasesofenhancedcooperation intheyears tocome. cooperation willprovide afirstopportunitytogetfamiliarwiththeinstrumentinpractice andthiscould cooperation concerningcommondivorce rulesforcouplesofmixednationality. The useofenhanced in practice until2010when theCommissionproposedaCouncilregulationimplementingenhanced Although enhancedcooperation was already introducedin1997,theinstrumenthadnever beenapplied rules andproceduresconcerningtheauthorisation,operation andthewideningofcooperation. tocooperate morecloselyonthebasisofaclearsetpreconditions, according totheLisbon Treaty – nine Enhanced cooperation isalastresortmechanism, which allows aminimumnumberofstates– Treaty andthenmodifiedby the Treaty ofNice,theConstitutional Treaty andeventually theLisbon Treaty. Permanent structured cooperation structured Permanent cooperation Enhanced specific instrumentsofflexibleintegration willbeparticularlyimportant: approach, which aimstoovercome concreteblockades inspecificpolicy areas. The application oftwo further increaseintheyears tocome.OnecanexpectthattheEUwillfollow afunctional-pragmatic The EUhasalready enteredthepathofdifferentiationanditislikelythatdegreeflexibilitywill countries canhelpovercome asituationofstalemateandimprove theway inwhich theUnionfunctions. policy, ormorerecentlywiththe Treaty ofPrüm,intensifiedcooperation amongasmallergroupof EU27+ wants toremaineffective. As inthepastwithcommoncurrency, theSchengen accords,social and shouldnotbeanendinitself.Nevertheless, amoredifferentiatedEuropewillbenecessityifthe path ofintegration callforahigherdegreeofdifferentiatedintegration. Differentiationisnomagicpotion The increasingheterogeneityamongEUcountriesanddiverging politicalobjectives concerningthefuture Trend 3:Needtoaccommodateincreasing heterogeneity inEU27+ Parliament willdevelop a‘strategic partnership’intheyears tocome. ties betweenbothinstitutions.Butitremainstobeseen,whether theCommissionandEuropean for anewinter-institutional agreementPresidentBarrosohastestifiedhiswillingnesstointensifypolitical structured cooperation willbeimplementedintheyears tocome. some MemberStatestofurtherintegrate intheareaofdefenceincreasechances thatpermanent the militaryforces ofparticipatingEUcountries.Risingconstraints onnationalbudgetsandthewishof cooperation withintheframework oftheEU. The instrument isthoughttofurtherintegrate anddevelop commitments tooneanotherwithaviewthemostdemandingmissions”establishcloserformsof those MemberStates“whose militarycapabilitiesfulfilhighercriteriaandwhich have mademorebinding and DefencePolicy (CSDP)introducedby theLisbon Treaty. Permanent structured cooperation allows permanent structured cooperation structured permanent is ageneral instrumentofdifferentiation,originallyintroducedinthe Amsterdam . is anovel instrumentofdifferentiationinthefieldCommonSecurity enhanced cooperation and cooperation enhanced example, Jacques Delorsandthesinglemarket.Leadershipcanpotentiallychange the politicalagenda. Decision-makers canassociatetheircareerwithanissuewhich was previouslylessprominentas,for Finally, uncertaintyalsoarisesfrompoliticalchoices and the personalitiesofkeyEuropeanfigures. parties willreacttotheriseofnationalismandpopulism. influence theriseofnationalistandpopulistspartiesmighthave onEUdevelopments andhow traditional Political developments intheMemberStatesaddtouncertainty:forexample,itisunclearwhat another moresubstantialdebateaboutchanging theUnion’s primarylaw. potential newroundoftreatynegotiationsmightnotbelimited toonepolicy areabutrather lead toyet substantial treatychanges inthecontextofareformEuropeaneconomicgovernance. However, a enlargement seemhighlyunlikely, onecanalready witnessareneweddebateaboutthepossibilityof new Citizens’Initiative mightprovide anewimpetustopolicy developments. While majorroundsofEU Institutionally, theimplementationofLisbon Treaty mightthrow upafewsurprises.For example,the its policy prioritiesoritsrelationswithkeypartners. or aterroristattack couldallchange analready fluidgloballandscape,possiblyleadingtheEUtoreshape EU canplay. An outbreakofconflict,mostlikelyinonetheworld’s troublespots,ariseinoilprices, agreements canbereached onclimatechange, trade orfinancialservicesregulationandwhat rolethe the EU’s foreignpolicy prioritiesintheyears tocome.Itremainsbeseenwhether meaningfulglobal A highdegreeofunpredictabilityininternationalpoliticsneedstobetakenintoaccountwhen assessing economic crisismightcontinuetodampeninflationandpricerises. prices andcommodities. While thelong-termtrendisforincreasingdemand(andthushigherprices), It isunclearwhat willhappentoinflationinthenextcoupleofyears. This isparticularlytrueforenergy/oil significant, especiallysinceeconomicdivergence withintheeurozoneisincreasing. as originallyfeared(asseeninGermany atthemoment).Butoverall thedownward risksseemmore grow fasterthanexpectedortheimpactofeconomiccrisisonlabourmarketmightnotbeasgreat and theriseofextremistpolitics. There aresomeupward risks,forexampleEuropeaneconomiescould Further economicturmoilcouldalsoaggravate thesocialsituation,leadingtowidespreadunrest in theeurozoneoreven aglobaldownturn, especiallyiftheChineseeconomy weretoslow down. are stilldownward risks:thebankingcrisiscouldresurface,therebefurtherpublicfinancetrouble In theeconomicfield,mostuncertaintiesarelinkedtofutureperformance.general, these are anumberofareaswhere change couldpotentiallybetriggered. such asswine fluisimpossibletoforesee.However, thechanges arenotallcompletelyrandom. There predict: forexamplethetimingofenvironmental/natural catastrophessuch asvolcanic ashorepidemics the EUislikelytoseesignificantchange inthecomingyears. Someofthechanges areimpossibleto increasingly have localimpacts,butthespeedofchange hasaccelerated. This impliesthattheagendafor The degreeofriskanduncertaintyseemstohave multipliedinrecentyears. Notonlydoglobalevents between GeorgiaandRussiain August, andthecollapseofLehmanBrothersinSeptember. repeatedly inrecentyears: 2008saw the‘No’toLisbon Treaty intheIrishreferendumJune, thewar risks anduncertaintieswhich couldaltertheagendafundamentally. This hasbeendemonstrated The keytrendsandpoliticalprioritiesforthenearfuturecouldbechallenged orreshapedby themany III. Analysisof likelihood of changesto theemerging agenda

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December 2010 the overall institutionalbalance,onemajorissuetofollow iswhether therelationship between the enlargements of2004and2007, andfutureoneswillfurtherincreasediversity withintheEU.Concerning by theLisbon Treaty, which stillneedtoseetheir smoothapplicationintopractice fulfilled,while thepast same time,thebackdrop ofEuropeanpolitics iscomplicatedby theinstitutionalinnovations introduced Parliament (withelectionsforthcomingin2014)couldchange thepictureinvery nearfuture. At the The increasingimportanceofnationalparliamentsandtheco-decisionpowers extendedtotheEuropean might drive Europeanintegration. that isvisibleatthenationalandEuropeanlevels, andthathinderstheformationofaleadershipwhich ubiquitous andcrucial,thelesscitizensareinterestedinits developments, reflectingalegitimacy crisis In institutionaltermsthechallenges are alsosignificant.Paradoxically, themoreEUhasbecome and becauseofthechallenges deriving fromproximity(security, organisedcrime, migration pressure). with neighbouringcountrieswillremainapressingissueifonly becauseofdemandsfromthesecountries in theperformanceofnewinstitutionalpositionscreatedby theLisbon Treaty. Enlargementandrelations this willbereflectedintheshapeEuropeanExternal Action Servicewilltake,initsimplementation,and principles, todeveloping relationswithpartners,moreoftengroundedinspecificinterests.Inpolicy terms, reflection onhow toreconcilepossibletensionsbetweenmultilateral positions,oftenbasedonEU points ofview, tosustainitsglobalrole. From amorestrategic pointofviewthis couldincludesome EU torenewandreshapemultilateral andbilateral strategies, fromboththepoliticalandeconomic In theinternationalsphere,decreasinginfluenceandimportanceofEuropeinworld willforce the of EUexpenditure:agricultureandcohesionpolicies. compound discussionsover what theEUbudgetshouldbefor, withastrongfocusonthelargestchapters The startofthedebateover thenextfewmonthsonnewMulti-AnnualFinancial Framework willalso about thefutureofEuropeaneconomicgovernance. by MemberStatesandinstitutionsonidentifyingmeanssolutions,creatingadegreeofuncertainty accompanied by theongoingdebateoneconomicgovernance, which currentlyseescompetingattempts reforming theStabilityandGrowth Pact andtheimplementationofEurope2020Strategy. This willbe remain highontheEuropeanpoliticalagenda,andwillbereflectedinpolicy termsinthedebateabout Broad trends,such astheimpactofeconomiccrisisonlabourmarketsandmigration patternswill bodiesthusbecomes morecrucialinamultileveland -influencing systemofgovernance. bid forinnovative solutions.Expertandnewinputfromdifferentstakeholdersinthe Europeandecision-making and interestgrouprepresentation,moving betweensub-state,national, Europeanandinternationallevels ina This meansthataddressingsuch issuesrequiresthesearch forasynergybetween differentlevels ofgovernance divisions betweeninternalandexternalaffairs.Climatechange istheprimeexampleofthistrend. compartmentalised buthave becomeincreasinglycomplexandmultifaceted,breakingdown old A secondgeneral consideration thatneedstobehighlightedispolicy issuesarenolonger a general trendofagradual marginalisationofEuropeontheglobalscene. undermine thedegreeandformsofEUengagementsolidaritywithrestworld, aggravating on thesystemofgovernance andontheabilitytorespondcrisescollectively. Internationally, itcould It isalsoseriouslytestingthesolidarityandpoliticaltrustbetweenEUMemberStates,withconsequences social cohesionwithintheMemberStates,andcouldhave furtherandunforeseenconsequences. between nationalandEuropeaninstitutions,interestgroupsconcerns. The crisisisalready jeopardising undermine themulti-level Europeangovernance set-upby amplifyingcontradictions anddivergences The financialandeconomiccrisishasbroughttotheforeanumberoftrendsthathave thepotentialto IV. Conclusions .This sectionis based onRosaBalfour, Janis A. Emmanouilidis, HansMartens,John Wyles, andFabian Zuleeg(2010), 1. Endnotes process willbeinquestion. effectively respondtothefundamentalchallenges theEuropeanintegration projectisfacing,thewhole eventually riskglobalirrelevance. Butthedangeriseven greater thanthat:ifwecannotaddressand answers tothesefundamentalquestions,Europemightonceagainslipback intorelative inactivity and mutual trustandcounterthegrowing gapbetweennationalcapitalsand‘Brussels’?Ifwedonotfind necessary tomeetthecommonobjectives which have beenset? Will EUgovernments beabletorestore narrowly definednationalinterestsandtransfer themeansandinstrumentstoEuropeanlevel deal withrapidly emergingglobalchallenges? DoMemberStateshave thepoliticalwilltoovercome further politicalintegration? Isthelegal/Treaty-based integration processflexibleandquick enoughto integration isindoubtonanumberoflevels: Canwesustaincontinuingeconomicintegration without at theEuropeanlevel arefallingshortofthechallenges weface. The whole processofEuropean instruments, reformedinstitutionsandnewpersonalities,itisalready apparentthatthemeansavailable Monetary Unionisstrugglingforsurvival. Even thoughthenew Treaty hasprovided theEUwithnovel with thesevere economic,socialandpoliticalconsequencesoftheglobalcrisis. The Economicand tested by bothpre-existingandunforeseenchallenges. The EUanditsmembersarenotonlyconfronted framework, which was finallydelivered throughtheLisbon Treaty afteralmosttenyears ofagony, isbeing To sumup,Europeis,onceagain,facingaperiodofuncertainty. The enhancedinstitutionalandlegal the years tocome. enhanced cooperation, differentiation,anddifferentspeedsofintegration willbehighontheagendain One keychallenge willremainthemanagementofheterogeneityandinstitutionalformulastodoso: ‘strategic partnership’. Commission andtheEuropeanParliament willdevelop from‘institutionalantagonism’toanewformof .The Reflection Group(2010), 3. EuropeanCommission(2010)‘Europe2020. A strategy forsmart,sustainableandinclusive growth’, COM(2010)2020, 2. .MarioMonti(2010) 4. the EuropeanCommissionJosé ManuelBarroso,Brussels. Brussels: 3March. Declaration for the Twenty-First Century? Twenty-First the for Declaration Group on the Future of the EU 2030 EU the of Future the on Group A new strategy for the Single Market - At the service of Europe’s economic and society and economic Europe’s of service the At - Market Single the for strategy new A Project Europe 2030. Challenges and Opportunities, a report to the European Council by the Reflection the by Council European the to report a Opportunities, and Challenges 2030. Europe Project , Brussels. , Brussels. , ReporttothePresidentof A Schuman Schuman A

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