Transcript: The future of Europe

This is an audio transcript of the Rachman Review podcast episode: ‘The future of Europe’

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Gideon Rachman
Hello and welcome to the Rachman Review. I’m Gideon Rachman, chief foreign affairs commentator of the Financial Times. Welcome to this, our first podcast of 2024. We’re starting the year by looking at the future of the European Union, which is facing crucial parliamentary elections in June. The EU ended 2023 in a reflective mood after the death of Jacques Delors, the man widely regarded as the father of the European single currency. My guest this week is Charles Grant, author of a much-acclaimed biography of Delors. As director of the Centre for European Reform here in London, he follows European politics very closely. Delors led the last great phase of European integration. So is the EU capable of another great leap forward?

Ursula von der Leyen in audio clip
Honourable members, when I stood here four years ago, I said that if we are united in the inside, nobody will divide us from the outside. And this was the thinking behind the geopolitical commission. Our Team Europe approach has enabled us to be more strategic, more assertive and more united. And that is more important than ever.

Gideon Rachman
That was Ursula von der Leyen, the current president of the European Commission, making the case for the EU to act as a geopolitical force. That feels more necessary than ever in the era of the Ukraine war. Like all commission presidents, von der Leyen’s often measured against Jacques Delors, who is still fondly remembered in Brussels as the most dynamic and successful European Commission president ever. So before turning to the future of the EU, I began my conversation with Charles Grant by looking back at the past. What did Delors represent and achieve?

Charles Grant
I think Delors made a real difference to the way the EU functions and to perceptions of the EU all around the world. I mean, the two things stand out when you look back at Delors’ career as commission president. The single market programme was really his idea as he persuaded the heads of government at the time. He took over the commission in 1985 to relaunch Europe around a single market programme and then make the constitutional changes required to implement the programme, which was basically abolishing the national veto over single market rules. That was a success, so that gave the EU some momentum. And he moved on to a second great thing, which was economic and monetary union, EMU in the jargon, and although the single currency, now called the euro, has had its trials and tribulations over the years, it has survived. And that was basically not entirely Delors’ idea, but the plan for EMU was really his idea and it wouldn’t have happened when it happened in the way it happened without Delors pushing it. So I think the single market and the single currency are two quite big achievements for Jacques Delors.

Gideon Rachman
Yeah. I mean, the book you wrote about him was, if I remember correctly, called The House that Jacques Built. Do you think that the EU today is still basically the house that Jacques built?

Charles Grant
I think a lot of the way the EU works today is very similar to how it worked when Jacques Delors was president for 10 years in the ’80s and ’90s. The basic institutional structure — commission, council, parliament — the balance of forces between the federalists trying to integrate and the intergovernmentalists trying to slow that integration — that basically isn’t gonna change. What has changed perhaps a little bit is that the EU has gradually integrated in recent years in some new areas, like health, borrowing in its own name for the rapid Recovery and Resilience Facility against the damage caused by Covid and doing more in defence. So I think the integration is the chipping away a little bit on the margins, but the fundamental balance is quite similar to how it was in Delors’ day, I think.

Gideon Rachman
Yeah. And Delors of course was, you know, somebody who believed very firmly in integration, in “ever closer union”. But something that happened after he left office was the massive enlargement of the EU. Has that basically changed the EU so fundamentally that the Delorsian vision no longer truly applies or not?

Charles Grant
Well, Delors was a bit ambivalent over enlargement. He wasn’t a massive enthusiast for it, but in a way, he paved the way for it. The reason why the EU enlarged was because lots of countries in central and eastern Europe wanted to join the European Union. They wanted to join because it was a success and it was really his stewardship at the top during his time as president that made the EU a successful and effective organisation that made others want to join it. So enlargement has really to some degree followed on from what he did as commission president.

It has also brought in lots of countries that have different visions of Europe, and we now see a kind of balance between the more integrationist countries and those with a somewhat more sceptical disposition towards further European unity. So I think my own view is that we’re not gonna see a fundamental change to the Delorsian system of balance between federalism and intergovernmentalism because the chances of another treaty change that would lead to much more integration are basically close to zero, because treaty change requires unanimity and there’s always gonna be several countries that don’t want to do that. So when Delors was around pushing forward integration, there were four treaty changes set off by what he did, starting in 1985. But that period of greater treaty change really came to an end with the Lisbon treaty, which was adopted in 2009 and I don’t think is gonna happen again. So there’ll be a little bit more integration here and there in minor areas, I think. But I doubt we’ll see a fundamental shift in the balance of power in Europe towards more integration any more.

Gideon Rachman
And Delors of course had a very difficult relationship with Margaret Thatcher. Initially, quite a successful relationship because they were both very committed to the single market. But she parted company with him very, very clearly over the single currency. And I think her famous statement, no, no, no, was about that single currency project. Do you think in a sense, inadvertently Delors really triggered the process that eventually led to Brexit?

Charles Grant
Well, he certainly became an important player in British politics. As you rightly say, he got on very well with Margaret Thatcher for his first three years as commission president. They agreed on the single market and quite a few other things too. They fell out not only over the single currency but also over social policy, because Delors said, let’s make the EU a social Europe and let’s have a social charter and workers’ rights. And he came to the Trades Union Congress at its annual conference and talked about those issues, which really upset her a lot.

And because he was indirectly linked to the fall of Mrs Thatcher, because, as you rightly say, she said no, no, no in response to his own ideas. And that provoked Geoffrey Howe to resign and bring down Thatcher. He’s always been a bête noire for British Eurosceptics, and he became a symbol for them. But he not only became a symbol for British Eurosceptics and gave them a target to aim at, he also played quite a role in converting the British Labour party to be pro-EU. People forget that in the mid-1980s, the Labour party was the anti-European party in Britain and the Conservative party was the pro-European party in Britain. Nobody remembers that these days. But his giving Europe a social dimension helped to convert the Labour party to be more pro-EU, which it remains to this day. I don’t think I’d really blame Delors for Brexit. I mean, Europe was integrating and doing more things, which annoyed British Eurosceptics. If he caused a bit more integration that would have been otherwise. So he has something to do with it. I think there are many reasons for Brexit which are nothing to do with Jacques Delors.

Gideon Rachman
Yeah. And looking forward now, Ursula von der Leyen, the current commission president, issued a statement shortly after Delors died, obviously praising him as a great European but also saying that she was very much his heir. Do you think, in any kind of meaningful sense other than that she has the same job, she is an heir to Delors?

Charles Grant
Well, she’s the most effective and successful commission president since Delors by quite a long way. They have some things in common. They’re both great opportunists, seizing the opportunity to push forward European integration when it appears to them. In her case, she exploited the Covid crisis and the war in Ukraine to get the EU to do more: more integrated defence policy, for example, doing more on health than it used to do, joint procurements of weapons and of medicines. So she’s a great exploiter of opportunities in the way that Delors was. Delors exploited his opportunities for the favourable conjuncture for integration in the 1980s. They do have quite a lot in common in that respect.

Also, they’re both upsetting the member states by pushing Europe too much, too fast for some of the member states’ taste. She in particular is so Atlanticist and quite tough on China and things like that, which really upsets quite a lot of the member states. He upset the member states who are less keen on European integration.

One difference is that although Delors was quite a centraliser within the European Commission who did try and run things along a fairly smooth centralising line, she’s a much more of a centraliser. She really takes all the decisions with her chief of staff and a couple of other close advisers much more than Delors did, and she excludes other commissioners and member state governments from some of the decisions she takes, which does upset some of the member state governments. So there is a bit of a pushback against her, but of course Delors had a similar pushback as he did more than they wanted him to do as well. So there’s quite a lot in common between von der Leyen and Jacques Delors, I believe.

Gideon Rachman
Yeah, and just as a footnote, I guess you mention a powerful chief of staff. I mean, Delors had one of those in Pascal Lamy, who later became a commissioner himself, and von der Leyen, very much so in the case of her chief of staff, Bjoern Seibert.

Charles Grant
They were both. Those figures are very important for the way the commission operates. I think, as I said, the Delors-Lamy regime was a bit less centralising than that of von der Leyen and Seibert. Other commissioners were consulted, like Leon Brittan in Delors’ day was a very important commissioner and Peter Sutherland in the earlier phase of Delors’ time at the top.

I think though if you talk to commissioners in von der Leyen’s commission, some of the most senior figures in it really say they’re not consulted on some decisions at all. But to be fair to her, she deals with a much more difficult environment. There are now 27 member states. The challenges she faces are different from those faced by Delors. Delors didn’t have to worry about the growth of the far right across Europe nearly as much as she does, didn’t have to worry about migration, this crisis that’s impossible to solve, really. So she faces much more difficult challenges, I think, than Jacques Delors did in many respects.

Gideon Rachman
And indeed, a third challenge, a war in Europe, right on the borders, in Ukraine. So looking forward to the future, I mean, you mentioned the rise of the far right. How much of a threat do you think that is to the EU? We have European parliamentary elections coming up this summer, and a lot of people seem to think that they could emerge as the single biggest bloc.

Charles Grant
Yeah, I think that they will certainly do quite well in the elections and the Liberals will do rather less well and the Greens will do rather less well. And the centre-left may not do particularly well and the centre-right will probably emerge as the largest party as usual, but perhaps with fewer MEPs than it has today. But the key thing will be a growth in support for the far right. It’s important to distinguish between the slightly more moderate far right, the so-called ECR, European Conservatives and Reformists, which is Meloni in Italy, the Sweden Democrats, the Finns party in Finland, Vox in Spain, the Law and Justice in Poland. They are tough on Russia, it’s important to note that. Though they are anti-immigration and anti-EU integration in many respects, they’re a part of the far right that could work with the centre-right if they had to, and they may well do.

But then there’s the Identity and Democracy grouping, a much more extreme far right, which is Marine Le Pen in France, it’s the Alternative für Deutschland in Germany, it’s the Freedom party in Austria, it’s Salvini’s party in Italy, the Lega. This part of the far right is sympathetic to Russia, much more extreme in a way than the ECR group. So I think what matters is the relative balance of strength between these two groups on the far right who don’t like or get on with each other at all well. I don’t think the far right will dominate the European parliament after the elections. I think the forces of moderation will still be predominant and run the parliament, but it will be harder for them to get legislation through than it is today.

The big picture is because of the growth of the far right, member state governments will be quite reluctant to go for further European integration, because that will only give red meat to the far right and could encourage the far right to do even better. So I think this is gonna be a brake on some of the further integration. There’ll be no talk of the new EU treaty and it does actually affect the enlargement process because some countries are saying, like France and Germany, for instance, if we enlarge the European Union to take in more countries, we have to reform the institutions and have more majority voting. But that requires more integration and treaty change. And I don’t think many member state governments will be prepared to do that. I think that there is a bit of a question mark as to how much the EU can really enlarge given the strength of the Eurosceptic forces across the European Union.

Gideon Rachman
So does that mean that, for example, what was hailed as a big breakthrough, the formal opening of negotiations with Ukraine, a kind of a sign of hope for the Ukrainians in a very tough period, that actually, that may not be worth as much as people think?

Charles Grant
Well, I personally hope very much that the EU does enlarge to Ukraine and indeed to the Balkans in the long run, because I think for strategic reasons, we have to take in these countries and give them a hug and keep them out of the cold, especially with threats like Vladimir Putin on the edge of Europe. But I am rather worried about it because some countries, as I said, don’t really want to enlarge unless they can get institutional reform through in terms of more majority votes. I think that’s highly unlikely to happen.

Then there are budgetary issues as well. If Ukraine joins the EU today, there will be much less money available for farm funds and regional policy funds for the existing member states. And when public opinion in these existing member states sees that enlargement is gonna mean they lose out the benefits of EU membership to quite a large degree, they may turn against enlargement. There has to be a referendum in France or a two-thirds majority vote in both houses of the French parliament to get enlargement through. That’s highly doubtful whether that can really happen.

A lot of countries have rule of law problems and I think some member states will block the accession of countries which don’t respect the rule of law. You just need one country to create problems for the enlargement process. And every step of the enlargement process, 27 countries have to vote in favour of opening a chapter with North Macedonia on judicial reform, for example. If Viktor Orbán or anybody else wants to be difficult, he can be difficult and he can stop everything happening in its tracks. So I am rather worried about enlargement happening. I hope it happens, but I think the geostrategic imperative will have to be very strong and it probably will require Putin to behave even worse than he’s behaving today to really make people think they have to let in more EU countries.

Gideon Rachman
Yeah, you mention Orbán there and I mean, he stepped out of the room tactically to allow the decision to at least open negotiations with Ukraine to begin. But he’s also making rather ominous noises about how he thinks that the EU is moving in his direction. The EU has had to release some of the funds they had blocked for Hungary on rule of law concerns. Do you think that Orbán has cause to be hopeful? I mean, particularly if Donald Trump were to be elected in the United States? Or maybe, things are moving the other way because Poland is no longer in the hands of the sort of soft far right, if you like.

Charles Grant
I think Orbán is a huge problem for the European Union and the people in Brussels I talked to who have to deal with Orbán say they think he may be changing his attitude somewhat because in the past he always seemed to be a transactional politician who had his price. If you wanted to get Orbán to do something, you could give him money or some other favour and he would comply. Now they’re wondering whether he really has a price anymore. Some people think that he actually would prefer just to disrupt the union from within, cause huge problems for everybody, emerge in the European elections as the effective leader of a new, much stronger far right in the European parliament, wait for Donald Trump to win the US elections. And then Orbán can be the force for change from within the European Union in working with Trump and other similar governments in the EU. So I think there’s a real problem there.

Gideon Rachman
So Orbán is a real problem. And as you said, von der Leyen can point to real progress in some areas of integration, one of which was I think that for the first time, the EU has begun to borrow in common, partly as a result of the pandemic. And many people felt that was the sort of missing bit of European monetary union. Do you think that they’ll still be able to continue with potentially expanding that or will actually Germany, for example, be a brake on that?

Charles Grant
I think the idea of having a second Recovery and Resilience Facility of this pan-European borrowing that stemmed from the Covid crisis is unlikely to be repeated any time soon because Germany now is, as the paymaster of Europe who contributes a huge amount to the funds of the European Union and is very reluctant to see further European-level borrowing. He wants people to tighten their belts and would much rather have a bit of austerity. This argument is as old as the European Union itself between those who want to spend more money in the south of Europe and the east of Europe and those who want to spend less in the north of Europe, like Germany and its frugal allies. I don’t think that’s gonna change anytime soon because the Germans are not in any mood to suddenly increase the budget. That’s one reason why I think Delors’ European Union will remain roughly the same as the future European Union and von der Leyen, whoever else is leading it in the future. Because integration isn’t just about treaty change, it’s also about spending more at the central level. And I think the appetite of the net contributors to the EU, like Germany and the Netherlands, for spending more money to EU level is very limited. So however enlargement is funded, if enlargement happens, it will have to be done within existing budgets to a large degree, and that means not bigger budgets for now, not unless there’s another crisis, not more borrowing at the EU level. And I think the Germans will win that argument in the foreseeable future.

Gideon Rachman
And we mentioned Trump a bit earlier. How much of a difference would it make for the EU who occupies the White House? Because I guess looking back at the history of the European Union, broadly speaking, almost every American administration has, if occasionally exasperated by the EU, regarded European integration as a positive thing. And now you might have a US president who’s actively hostile to the EU. Is that a big problem?

Charles Grant
I think it is a big problem because in the time I’ve been following the EU, all the US presidents have been favourable to integration, except perhaps George Bush Jr, who was rather ambivalent about it. Donald Trump is much less sympathetic to the EU than George Bush Jr certainly. I think the biggest short-term or immediate problem created by a Trump presidency would be for the European unity over Ukraine. So far, the EU has been very united on the Ukraine war, despite Viktor Orbán cavilling and holding up a few things. Essentially, the EU has agreed to a dozen rounds of sanctions against Russia and has kept politically to a strong line of support for Ukraine.

But if Trump gets back to the White House, then some countries — Orbán and maybe some others — will try and work with Trump, try and please Trump, curry favour with Trump by taking a rather different line towards Ukraine and Russia while other countries may worry that the Article 5 security guarantee of the Nato treaty would be devalued by Trump. Let’s remember the last time he was president, Trump did question the Article 5 guarantee that Nato gives to its members and has even threatened at one point to pull out of Nato. So if Trump messes around with Nato or devalues that security guarantee, some countries in Europe may think Russia’s a real threat. America may not protect us; we better reach an accommodation with Russia. So that European unity over Ukraine could be diminished by a Trump presidency. Having said that, the countries that matter most — Britain, France, Germany, hopefully Italy — are pretty strongly pro-Ukraine at the moment. I don’t think that’ll change if Trump gets back. But nevertheless, I do worry about European unity being maintained under a Trump presidency.

Gideon Rachman
You mentioned Britain. So let’s end on that point. Since we’re both sitting in the UK, Britain is out of the EU, and Keir Starmer, who’s likely to be the next prime minister, has said that even if Labour wins the election, he will not bring the UK back into the single market or the customs union. But do you think if Trump were to win, that might set the stage actually for a slightly more ambitious British and European Union approach to the EU-UK relationship?

Charles Grant
I think what the Labour party or the Labour government will hope for if it gets into office in a year’s time will be a much closer relationship to the EU is to want a unique bespoke relationship which would make the EU compromise on some of its principles, such as the integrity of the single market and no cherry picking and carving a bit of the single market without being in all of it. The EU at the moment says no to that. The EU says we’re not gonna compromise on those principles. The EU says we like the current deal, the Trade and Co-operation Agreement. There’s no reason to give special favours to the British, even if we might find Keir Starmer a more agreeable chap to deal with than Rishi Sunak or Boris Johnson.

But I do think in the long run, especially if Trump gets back, that would help to create a strategic environment in which both the EU and the UK were much more willing to find a way to get a closer relationship that is unique and bespoke and different from what the EU’s done with previous relationships with its neighbours. But that’ll take time. Even if Trump is around creating problems and upsetting people, a Labour government would have to restore trust with the European Union. There’s a lot of lack of trust in the British. You’d have to behave well for quite a long time. You’d have to do things, in my view, like align with EU rules on business regulation and possibly accept some sort of role for the Court of Justice and make a big offer to the EU in energy partnership, ’cause the UK has lots of cheap wind power that the EU needs, for example. The UK could offer help on security. If it offered a package of measures, things that the EU would welcome receiving from the UK, then that could change the way the EU perceives the UK and might make the EU compromise on its currently uncompromising line that the TCA is a good deal and it doesn’t wanna change it very much. I think a Trump presidency would certainly help create the right environment for a closer UK-EU relationship, but it’ll certainly take time. All these things will take several years. I don’t expect a radical shift in the UK-EU relationship for the first few years of the Starmer prime ministership.

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Gideon Rachman
That was Charles Grant of the Centre for European Reform ending this edition of the Rachman Review. Thanks for listening and please join us again next week and throughout 2024.

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