THE STATE OF THE EUROPEAN UNION Towards a new legislative term

are irreproachable. It has reacted without detriment to its unity, quite the opposite. Solidarity with Ukraine is proving – and will continue to be – exemplary. The debate, however, is whether all that will lead to a new European order, or a new Cold War. The EU response to the Ukraine invasion has built on a concept presented by Fed- erica Mogherini as High Representative of the Union for Foreign Affairs and Security Policy in 2014-2015 in a document on European security and defence: “strategic au- tonomy” as a vital component of the Union. But it has not stopped there; strategic autonomy has extended, as an absolute necessity, to other major challenges facing the European Union. The energy transition towards a low-carbon economy, the technological challenge implicit in the digital transformation, or the industrial competition and uncertainty embodied by China – which the EU describes as a “systemic rival” – are just some examples of the need for autonomy. But this autonomy is not to be confused with in- dependence or nationalistic protectionism, which exist in Europe and which we already saw when the COVID-19 pandemic broke out. Alongside the developments in this global and increasingly fragmented world, the Union cannot overlook what we might call “domestic” policies: in the economic, social and institutional spheres. Let’s take a look at them. Following a period of liberalisation of the state aid and fiscal rules laid down in the treaties, the Union is debating – the Council has yet to reach a unanimous decision – how to adjust those deficit and debt rules without breaking them. No less important is monetary policy managed by the European Central Bank, which currently amounts to interest rate hikes, supposedly to stem the inflation af- flicting us. There has to be a delicate balance between interest rates and growth that prevents a return to the days when monetary restriction wreaked havoc on Europe’s economy and its people during the Great Recession. Social Europe remains a weak spot of EU policy. The prime instrument of European social policy, the European Pillar of Social Rights (EPSR), weathered the pandemic; in fact, it grew in stature over that period. Yet the EU still has a long way to go in this respect, and despite the resilience of the labour market the risk of poverty and social exclusion remains high. A critical aspect of European social policy – and of the need for reforms – is the migration phenomenon and the right to asylum. The Pact on Migration and Asylum, a longstanding aspiration of the Mediterranean countries, may well be the most signifi- cant achievement of the Spanish presidency. We are committed to it. In this and previ- ous reports, we have championed the defence of migrant and asylum seekers’ rights, and solidarity among countries. One of the consequences of the absence of a European Union migration policy is the catastrophic death toll in the Mediterranean, which has become a watery grave for many seeking to make it to Europe from Africa. THE STATE OF THE EUROPEAN UNION