1. the New Political Cycle in Brussels: What to Expect?

1. THE NEW POLITICAL CYCLE IN BRUSSELS: WHAT TO EXPECT? José Ignacio Torreblanca & Pawel Zerka1, European Council of Foreign Relations 1.1. ABSTRACT The new Commission has set an ambitious agenda for itself, both at home and abroad. At home, it seeks to reconnect with its citizens and isolate or marginalize the populist forces that have so profoundly challenged the European integration project in the last decade. Also, the new Commission seeks to redress Europe’s digital backwardness vis-à-vis the US and China, which is considered to be one of the major weaknesses threat- ening the European economy. It aims to ensure that basic progress is made in ensuring Europe’s successful transition to a green economy. Regulation-wise, the Commission has doubled down on the commitment of Jean Claude Juncker’s Commission to reduce red- tape, by setting an ambitious, though difficult to deliver, goal of removing two old regu- lations for each new one introduced. Abroad, the Commission wants to take on the challenge posed by the rise of protectionism, unilateralism and nationalism by stepping up its foreign policy and security capabilities, as well as by taking a more strategic look at the geopolitical dimension of elements such as trade, the euro, investments and markets. Europe’s growth and welfare has so far been based on the existence of an open and rules-based multilateral order. But this order is now increasingly put under strain by the return of great-power competition and the corrosive actions of the current leaders of the US, China and Russia. Most elements on which globalization is sustained (trade, investment, currency exchanges, technology, migration) are currently weaponized and turned into elements of geopolitical competition. 1 José Ignacio Torreblanca is the Head of the European Council of Foreign Relations (ECFR) Madrid Office, Pawel Zerka is the Program Coordinator, European Power at ECFR. 47 THE EURO IN 2020 The new Commission has a clear mandate: to win citizens back, to ensure a successful transition to a digital and green economy, and to redress Europe’s diminishing weight and role in the world. Importantly, the external and the internal dimensions of this agenda should be treated as two sides of the same coin. But it remains to be seen whether Ursula von der Leyen and her team will be able to assert their leadership in the EU in the context of growing political fragmentation in the Council, in the European Parliament, and within Member States themselves. Two events, in particular, will serve as a testing ground for its leadership, and for the relationship between the Commission, the Parliament, and the Council. As negotiations on the EU’s multi-annual budget (MFF) enter a decisive stage and the UK leaves the block and starts a new round of negotiations with the EU, the EU’s largest Member States are seeking to strengthen their position within the EU’s internal power struggles. Still, for the time being, it looks like Brussels in general will be strengthened in this new political cycle of the EU – to the frustration of those Member States that are more used to the intergovernmental method. Keywords: European Commission; Geopolitics; Public opinion; Multilateralism; New Green Deal; Digital Revolution; European Sovereignty. 1.2. INTRODUCTION The new Commission has set an ambitious agenda for itself, both at home and abroad. At home, it seeks to reconnect with its citizens and isolate or marginalize the populist forces that have so profoundly challenged the European integration project in the last decade. Also, the new Commission seeks to redress Europe’s digital backwardness vis-à-vis the US and China, which is considered to be one of the major weaknesses threat- ening the European economy. It aims to ensure that basic progress is made in ensuring Europe’s successful transition to a green economy. Regulation-wise, the Commission has doubled down on the commitment of Jean Claude Juncker’s Commission to reduce red- tape, by setting an ambitious, though difficult to deliver, goal of removing two old regu- lations for each new one introduced. Abroad, the Commission wants to take on the challenge posed by the rise of protectionism, unilateralism and nationalism by stepping up its foreign policy and security capabilities, but also by taking a more strategic look at the geopolitical dimension of elements such as trade, the euro, investments and markets. Europe’s growth and welfare has so far been based on the existence of an open and rules-based multilateral order. But this order is now severely imperiled by the return of great-power competition and the corrosive and combined actions of the current leaders of the US, China and Russia. The majority of elements on which globalization is sustained (trade, investment, currency exchanges, technology, migration) are currently weaponized and turned into elements of geopolitical competition. Therefore, the new Commission has a clear mandate: to win citizens back, to ensure a successful transition to a digital and green economy, and to redress Europe’s diminishing 48 THE NEW POLITICAL CYCLE IN BRUSSELS: WHAT TO EXPECT? weight and role in the world. It is no doubt a huge challenge, but will it be achieved? Let us look at how the domestic and international challenges facing the new Commission could play out. 1.3. A GEOPOLITICAL COMMISSION When assuming office back in 2014, President Juncker announced that his Commis- sion would be a “political” one. By this, he meant that the Commission should stop being considered as just a technocratic body in charge of merely guarding the Treaties and finding technical or legislative solutions to answer the needs and calls of the Member States gathering at the Council, as the European Commission had mostly been acting after Delors left. And indeed, it was political, especially as Juncker’s energetic Vice-Pres- ident – the Socialist Frans Timmermans – took up the fight on EU values with Poland and Hungary and unleashed the sanctions process envisaged under EU Treaty article 7. With this, the Commission not only brought the fight against populist and illiberal forces within the EU to the forefront of the Commission’s actions, but also made sure that the 2019 elections would take place under the more emotional theme of EU democratic values and the fight against nationalism and populism. Watching the poor results of the anti-EU forces and the increased mobilization of voters, which resulted in the EP elections’ turnout reversing its historic downward trend, one could say that politicization did the trick and, at least partly, managed to reconcile some citizens with the EU project and, most importantly, with its institutions. The new Commission will no doubt take further steps down the road of politicization and politics. This will be particularly felt on the external relations front as the EU feels deeply challenged by current geopolitical developments. For the majority of the EU’s history, the main challenges Europeans have dealt with have originated at home. Their prosperity has hinged more on their capacity to reconcile with each other, overcome the past, open their borders, bring down their barriers to the free movement of goods, capital, services and people and set up a common currency, than in their ability to relate with the rest of the world. In fact, in the past century, the European Community has often been accused of being a protectionist force undermining free trade regimes such as the GATT with its high tariffs and exports subsidies. Until very recently, the EU did not contribute a lot to sustaining the multilateral economic order that it benefitted so much from, as exemplified by the accusation of “Fortress Europe” which besieged it until the nineties, when a process of reform and opening up was launched under the Single European Act’s drive to complete the single market and make the four freedoms of movement (goods, capital, workers and services) a reality. The situation is quite different now, when a great deal of the problems which the EU suffers have their origin in dynamics taking place beyond its borders and its control. Take climate change, which is one of the priorities the new EU Commission has set for itself. Even if the EU manages to successfully achieve its goals of decarbonization and the transition to a clean economy, that effort will be wasted in terms of combating global 49 THE EURO IN 2020 warming if the US, China, India and other economies do not come onboard or do not fulfill their emissions reduction commitments. This means that (much as is happening in the digital realm, where the EU has effectively become, almost without noticing, a regulatory superpower able to set up global standards for privacy rules and very successfully export its competition rules to the large multinational firms dominating the digital market) the EU has to very carefully weigh up how best to use its internal market rules and regulation potential to design the incentives needed to bring other countries to the table, and also the penalties which it will be able to impose (carbon taxes, limits to trade or investment) for those not willing to play along and align the policies to achieve the goals of the Paris Declaration. Both European security and Europe’s prosperity are now under threat from unilateralism and protectionism. In as much as Trump’s foreign policy is systematically undermining the transatlantic collective security defense system established by the NATO Treaty and its article 5 and introducing risk and tensions in issues of vital importance for Europe (e.g. the Iran nuclear deal and, the Israeli-Palestinian conflict), his policies are also undermining key multilateral economic institutions, most importantly, the WTO, but also a wide range of treaties ranging from arms control to climate change.

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