About the Brussels Economic Forum 2017
The 17th Brussels Economic Forum focused on some of the biggest issues of the day: migration, inequality and the very future of Europe. But while the challenges remain substantial, this year’s event conveyed an air of optimism both on the podium and among delegates during the coffee breaks.
The European Union has a rare chance to reform its economic architecture, by creating a common stabilisation fund and a euro area finance minister, the Governor of the Bank of France, François Villeroy de Galhau said during the annual Tommaso Padoa-Schioppa lecture.
The recent election of pro-European centrist Emmanuel Macron in France and the German elections in September provided, “a unique window of opportunity” to align euro area reform efforts. “Nothing should be taken for granted, but much is open. We should not let this opportunity pass us by,” he said.
Elaborating on the ideas pushed by Mr Macron during his presidential campaign, Mr Villeroy de Galhau called for a common stabilisation fund equivalent to 1-2% of euro area GDP, financed by borrowing.
“This common stabilisation fund would be used under precise rules to reduce macroeconomic imbalances in the euro area, by supporting, through loans, member states’ counter-cyclical policies when they are faced with asymmetric economic shocks,” he said.
The ECB governing council member also called for a euro area “finance minister”, even if it requires modifying the existing treaties. “This finance minister would embody and bring to fruition the shared commitment of our member states.” The minister would be both the EU economic commissioner and the president of the Eurogroup, and democratically accountable to the European Parliament
George Soros, the hedge fund manager and philanthropist founder of the Open Society Foundations gave a similarly guarded but broadly upbeat message in his keynote speech.
The Union faces three existential threats: the refugee crisis; territorial disintegration as exemplified by Brexit; and the lack of an economic growth policy. However, he also said he saw a momentum developing that could tackle these threats.
Reform of the EU was vital. He proposed that Europe adopts a multi-track, rather than multi-speed approach, and that it abandons the idea of ‘ever closer union”.
Regarding the top-down political process, elections in the Netherlands and France this year offer hope. He said he sees many spontaneous bottom-up initiatives in Germany, the UK, Poland and Hungary and, significantly, they are mainly supported by young people.
“I have learned that democracy cannot be imposed from the outside; it needs to be asserted and defended by the people themselves,” he said, adding that the EU is cumbersome and slow-moving, dragged down by countries like Poland and Hungary that challenge its core values.
“The EU needs new rules to maintain its values. It can be done, but it will require resolute action by the member states and the active engagement of civil society. Let’s get engaged!”
Inequality, the focus of the first panel session of the day, is a driving force behind populism and extreme politics. While it is present across the whole of the EU it will most effectively be tacked at member state level, said European Commission Vice-President Valdis Dombrovskis.
The European Commission, Mr Dombrovskis said, was mainly addressing inequalities through recommendations for national economic and social policies. But he warned that the EU’s powers in the area were limited compared to those of EU national governments.
Now Europe is recovering, it’s time to build a better euro. The European Union must use its recovery to press ahead with its long overdue economic reforms, EU Economic and Financial Affairs Commissioner Pierre Moscovici told the Forum.
Mr Moscovici’s message was echoed by finance ministers and other panelists. They agreed that there is a unique opportunity to enjoy both the economic upturn and the political turnaround in Europe to complete the euro area reform process.
The topic of migration was hotly debated first in a one-on-one interview by the Financial Times’ Brussels bureau chief, Alex Barker with Polish deputy premier Mateusz Morawiecki, and then by a panel of politicians and experts.
Mr Morawiecki was asked tough questions about Poland’s sometimes contradictory approach to migration, while Elizabeth Collett, director of the Migration Policy Institute Europe warned that the temporary agreement reached last year to stem the flow of refugees into the EU instead of being used as breathing space, had turned into a collective sigh of relief, as though the problem was over.
“It’s a case of the crisis is over, long live the crisis,” she said.