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THE STATE OF THE EUROPEAN UNION
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or national arenas rather than at the European level. While emerging play-
ers the size of Russia and China and superpowers such as the United States
may have the luxury of taking a solo approach, this is not a viable option
for smaller countries such as those that make up Europe.
In spite of the resurgence of nationalism, the future of Europe and, by
extension, EU Member States, hinges upon a mutual willingness to take
the steps necessary to prosper in the age of globalism. The EU needs re-
forms. It is this route forward that must be taken up at the next European
Council meeting scheduled for June.
What kind of reforms? Those most urgently required fall into four fun-
damental areas addressed in the chapters and final recommendations of
this report. The first and most important is the reform of the euro needed
to give European countries the security and solidarity they lacked when the
worst financial crisis in our history hit in 2007-2008. Mid-term actions on
this issue must include (in spite of German resistance) the creation of some
type of Eurobond and short-term measures the institution of a fund or
budget line specifically earmarked for crisis management and two instru-
ments required for banking union: a common resolution fund and a
European deposit guarantee fund. The formula for Member State contri-
butions to this fund envisaged by the IMF is fairly realistic: 0.35 % of each
country’s GDP towards a collective reserve of 40 billon euros.
Economic reform must include the admittedly difficult tasks of achiev-
ing fiscal harmonisation, imposing direct taxation on multinational tech
companies and implementing stronger measures against tax havens (on
which progress has been made in the form of a Commission list of coun-
tries falling into that category).
The second area requiring attention is Social Europe, which has yet to
figure on the EU policy agenda. The establishment of a long-awaited har-
monised European minimum wage, a harmonised pension scheme and a
European Pillar of Social Rights is needed to guarantee the further legiti-
misation of the European project. The scope of what was discussed at the
Gothenburg summit must be substantially broadened.
In concert with this social pillar, the EU must develop a European asy-
lum policy (lacking to date) based on solidarity rather than national self-
interest. The refusal of the Visegrad countries to comply with the refugee
distribution policy devised by the Commission led to an asylum outsourc-
ing agreement with Turkey, an unsafe third country. Germany, which ad-
mitted a million asylum seekers in the space of a single year (2016), has
been the only country to demonstrate generosity on a meaningful scale.
The fourth and very important area of reform – security and defence
following the UK’s withdrawal from the Union – is an issue on which the