Jasmine Faudone & Federica Fazio (Dublin City University)

Panel 2: Solidarity and Security

Day 2 of the PROSPER launch event continued with a panel on Prosperity and Solidarity.

Prof. Derek Hand, Executive Dean of the Faculty of Humanities and Social Science at DCU, welcomed the participants and introduced the speakers of this second panel.

Dr. Sune Kligne, from the University of Copenhagen discussed the contribution his team would give to PROSPECT with a reflection paper on “Transnational Solidarity in An Economy that Works for People in the EU”.

This contribution will essentially focus on 5 key points:

1) offering a transnational solidarity perspective, which is about how to support stability, welfare and good economy through solidarity in the EU. 

2) understanding the difference between European solidarity and member-state solidarity. The Scandinavian countries offer a very good example of this. 

3) bringing in experiences from the Nordic countries regarding the welfare system.

4) providing expertise on the CFSP at this time of uncertainty.

5) contribute in terms of comparative law and legal methods.

He explained the Nordic model, characterized by high living standards, a low income disparity, and a competitive and strong economy. This model relies on a partnership between employees, trade unions and the government. Directive 2022/2041 (the AMW Directive) infringes on Denmark’s right to keep this model in place. The Advocate General seems to be of the opinion that it should be annulled in full because it is incompatible with Article 153.5 TFEU and does with the principle of conferral laid down in Article 5.2 TEU.

Moving back to the topic of transnational solidarity, he stressed that the question is solidarity with whom? Denmark has more solidary with Sweden because they have the same system, and this is why they did not put much thought on the fact that Italy or Spain might struggling before challenging the AMW Directive. 

They intend to review their system in light of the promise of PROSPER.

The second speaker was Prof. Paul Dermine from the Université Libre de Bruxelles (ULB). His presentation focused on “The Challenge of Inequality in the EU Economy”.

He explained that the ULB team will focus on equality and the challenge of inequality in EU. Equality is a central concept in EU polity as it is mentioned in Art.2 TEU. It is a general principle of constitutional law and an EU founding principle, but also a transversal principle that informs all policies. 

Based on expertise available in the team and on what other partners will focus on, the ULB team has selected 3 main themes it will contribute on:

1) the EU pillar of social rights and its implementation.

Topics covered will include: wage policy, the “brain drain” phenomenon , which is the democratic exodus which is a byproduct of the EU integration process and the opening of borders, and what initiatives can be pushed forward by the EU to limit and incentivize the return of educated people to their home countries.

2) the territorial dimension of equality, with a focus on cohesion policy and how its transformation will impact territorial equality, as well as the emerging EU industrial policy and what it entails for territorial equality.

3) concepts and instruments that create potential challenges to equality, in particular the concepts of European debt and of conditionality.

They are planning to host a PROSPER event, titled “The EU’s cohesion in turbulent times – pushing or challenging Europeanization”. Prof. Dermine explained that the concept of Europeanization, intended as the evolution of relations between the member states and integration dynamics, will be at its core. The objective will be to highlight some dual dynamics. New forms of insecurity have emerged, leading to the adoption of far-reaching policy initiatives, which have initiated new integrating dynamics. However, at the same time, the EU is experiencing centrifugal forces which are potentially harming its cohesion and the ability of the member states to act collectively.

Prof. Natasza Styczyńska from the Jagiellonian University (JU) Krakow discussed “Cohesion Policy in an Enlarging EU”.

Her team will contribute with a research paper on cohesion funds in Central and Eastern Europe.

She highlighted that they would also be interested in exploring the links with issues of institutional trust, satisfaction with governance and democracy in general. The fields of contestation of EU polices, as well as gender and democracy, and enlargement would also be of interest to them. Additionally, they would be happy to host an event in Krakow.

Prof. Styczyńsk’s colleague, Dr. Paulina Lenik explained that she has a background in econometrics and intends to measure cohesion.

Cohesion, like trust, can be measured in NUTS 3 (districts harmonized across data sets) levels

It is their intention to focus on regions rather than countries, incorporate specific payments of cohesion funds (which are macro data), rather than aggregates of funds.

They will also look at potential links with political trust and satisfaction with democracy and at instrumentalized attitudes to democracy. 

She pointed out that getting the data for candidate countries might be more challenging, while for the member states it is possible to use the European Social survey on NUTS.

 

Finally, Prof. Laure Clément-Wilz from Université Paris-Est Créteil (UPEC) indicated the contribution her team could give on the “Strategic Autonomy of the EU through Defensive Practices and Protection of European Values”

The Framework of UPEC’s contribution will be “Which Strategic Autonomy for 2025?”

Her presentation looked at the evolution of Strategic Autonomy (SA). The concept of economic sovereignty was replaced by that of SA in 2021 after the Covid-19 pandemic. Then after Russia invaded Ukraine in 2022, the economic and military dimension started to be associated; the EU has adopted economic sanctions but they have been coupled with decisions to finance weapons and reduce energy dependency.

Chinese aggressive commercial policies also play and will continue to play a role.

She explained that SA postulates a need to strengthen the power of the Union on the international stage, reduce dependence on third countries, invest in sectors/themes like defense or diplomacy, and promote and protect EU values. SA has become a broad concept, and a number of legal instruments have been adopted. There is a need to legally understand these tools and how to implement them.

In light of this, what the UPEC team will contribute is a conceptual and theoretical discussion about SA and a technical analysis of the EU legal instruments of SA, specifically focusing on ways to reconcile SA with the EU Green Deal and look the EU normative power and in the broader geopolitical context.

They intend to host an event, whose focus will be either digital sovereignty or the tax aspects of the EU Green Deal. The methodology will be both conceptual and technical.

During the Q&A some of the participants in the consortium highlighted the need to discuss concepts, such as conditionally or SA, and how to apply them. A common definition is given because if the interpretation is different it might backfire. During the session, the need for a minimum wage in the EU and what the CJEU might decide on the Danish annulment action were further discussed. As was conditionality and its conceptualization as a tool to promote state equality.

 

The second day of the PROSPER kick-off was concluded by an excellent keynote speech delivered by Mrs. Mairead McGuinnes, former Commissioner for Financial Stability, Financial Services and Capital Markets Union. Commission McGuinness speech was very practical and enriching, showing some concrete examples from her experience both in the European Commission and in the European Parliament. The Commissioner started her speech by underlying the importance of listening and engagement in politics. She referred the lack of engagement in politics, both at the national and European level, when discussing crucial issues. On the contrary, she has noticed from her experience that the discussions around the Common Agricultural policy are often very engaging, as it is financed by the common budget. Hence, she has noticed a very high level of engagement as massive fund are involved. Moving to the retail investment strategy, she talked about the ban of inducements. In her view, there is no need to keep a piece of legislation that does not work. Regarding the financial system, she questioned her role in the financial system at first, due to her agricultural background. She used this concrete example from her experienced, to say that the Banking Union and Capital Markets Union are for the few. European citizens will never ask to a Member of the European Parliament about those topics, at least not directly. However, they will be interested in practical issues affecting their daily life. This means that the sector calls for simplification to reach the citizens. She noticed that there is no freedom of movement of capitals, as barriers were never removed. For example. two banks left Ireland. Within the national Parliament the main question was if Ireland needed its own banks. She was sceptical about this approach, as the financial sector calls for more harmonization. ‘Can we be stronger together, or do we want to be weaker on our own?’ she wondered.  She underlined that it takes a big crisis to move forward, especially looking at the EU recent history. For instance, the EU MSs joined forces to face the COVID pandemic, and the lesson we take from the Russia energy crisis is diversification of suppliers. She called for complexity and attention to the details, when approaching the current European crisis, as many are linked, and the world is more complicated that it used to be. For example, the finance industry will have to deal with climate change and the risk it poses to industry, such as insurance companies. Industries should be aware of their supply chain, and every single step of it, including the level of pollution. The question of the EU Budget remains crucial and open, as the EU does not collect taxes. She thinks that in the non-distant future, allocation of EU fund should go to security and defence. For instance, she mentioned her biggest delight was that Digital Operation Resilience Act, on Security and Defence of the Digital system. In conclusion, she said that scholars have a crucial role in helping politics. They can help politicians to grasp complexity and to raise their level of attention. It would be nice to see people understanding the importance of strengthening Europe rather than killing it. 

 

Following the keynote speech, Prof. Federico Fabbrini, PI of the PROSPER Network, introduced Valerio Scollo, who is a partner at GSK Stockmann. Mr. Scollo gave a presentation on “Capital Markets Union and Competitiveness of the EU”.

He started his presenation by saying that the follwing sentence in the Draghi report particularly struck his attention: “The gap largely reflects the greater a capacity of the US financial system to transform households savings into high-yielding investments.”

At GSK Stockmann, his team of 35 lawyers works on yield bonds. He explained that yield bonds are riskier than normal bond. He then explained the concept of subordination. As counterintuitive as it might sound, the holding company is subordinate to credit from the credit company. In the event of a restructure with a group, the holding company consolidates and gets to the holding company and then the latter can leverage to get money on the capital market. The way to do this is by getting guarantees from the credit company. The Prospective regulation, however, has caused a change in this practice, which has led to too much disclosure of the guarantors. 

He concluded his presentation by highlighting that the capital markets in Europe since 2007 have been less and less open to retail investments.

 

Prof. Fabbrini then introduced Dr. Christy Ann Petit, Assistant Professor of EU Law at Dublin City University and Deputy Director of the Brexit Institute.

Dr. Petit’s intervention revolved around 4 key points: 

1) how to bridge REBUILD and PROSPER. She asked former Commissioner McGuinness if she sees the NGEU as a turning point.

2) approach to EU law-making. In light of what Commissioner McGuinness said about her experience in the European Commission, she asked whether we should look more at the outcomes of the legislative process and emphasize less the process itself.

3) competitiveness. She pointed out that competitiveness is short-term and asked the Commissioner how to reconciliate it with longer-term trends and objectives.

4) Financial literacy.

Commissioner McGuiness replied on:

1) The NextGenEU indeed marked a turning point. However, it has not been fully assed yet. We need to wait for the overall outcome.

2) Simplification is extremely difficult. The process is not simple but could be better dealt with if we looked at the outcome of the legislation process. The system for evaluating MEPs does not help as it tends to favor quantity over quality of amendments.

3) Competitiveness is the new green. The Inflation Reduction Act introduced by the Biden administration had some negative implications on Europe. The current Trump administration could adopt policies that re even more detrimental to Europe.

What we need is pragmatism in Europe. We need a sense of urgency from the European Parliament and the Council. We need strong leadership. Council conclusions are worth nothing until someone works on implementing them

4) The Belgian presidency lead on the topic of improving financial literacy. There was involvement because there was a general understanding that it would benefits society at large.

Following a productive Q&A session, Prof. Fabbrini concluded the session summarizing what was said into 3 key words: Achievement, Challenges, Opportunities. The EU has indeed done achieved a lot. Ww now we need to move from a confederation to a federation to strengthen our abilities to respond to external challenges.

 

Panel 3: Prosperity and Resilience

On Friday 24 January, the kick-off PROSPER Conference was concluded with a panel on Prosperity and Resilience, chaired by Dr. Gëzim Visoka, Associate Dean of Research, Faculty of Humanities and Social Sciences and Associate Professor of Peace and Conflict Studies at DCU. 

The first panelist, Dr. Ian Cooper (Dublin City University), presented the genesis of the PROSPER project and its core idea: an economy that works for people. This vision of economy follows the European Commission priorities, announced by Ursula Von der Leyen when Russia invaded Ukraine.  An economy that works for people has been defined by the PROSPER network as ‘an economy that benefits ordinary citizens in practical, concrete ways.’ An economy that works for people is a European social market economy, supporting small business, deepening economy and monetary Union, and strengthening the European Social Pillar. It is an economy of fair taxes, building a Union of equality. The core idea is that the economy works for people, and not vice versa. It combines social policy and macro-economic policy, and this duality is reflected in the PROSPER structure. The project combines prosperity (declined as sustainability, solidarity and security) and resilience (meant as growth, competitiveness and innovation). From a social perspective, the idea of an economy that works for people encompasses three traditional policies: the traditional Social policy, The Social Economy, and ‘Human-Centered’ Economy Policy. From an economic point of view, and economy that works for people encompasses the EMU and Economic Governance, the Fiscal Policy, and Strategic Autonomy. The question to be answered during the three years of the PROSPER project is: Is the idea of an economy that works for people still valuable or is it outdated, coming from 2019 and all the crises EU has faced in the last years? 

The panel moved to the second panelist, Prof. Ana Belén Macho Pérez (Universitat Pompeu Fabra Barcelona), who presented the contribution and the goals of the University Pompeu Fabra. Their team counts many senior academics, and early career researchers, focused on Tax Policy, Tax Fairness and the Sustainability of EU Public Finances. It also counts many experts from the European Institutions.

Their contributions to PROSPER regards mostly public spending and public revenue, in terms of quality and quantity. On the expenditure side, the University Pompeu Fabra will focus on the Multi-Annual Financial Framework 2021-2027, the EU Budget instruments, and the NGEU Model. On the revenue side, the focus will be the EU Resources Decision, the new EU taxes and tax fairness, and public debt. Their general goal in PROSPER is to analyse how the transformation of the EU public finance post-NGEU can contribute to strengthen prosperity and resilience in the EU. Their goals in the PROSPER are structured around a double axis: 1. On the expenditure and revenue side; 2. On the economic resilience and sustainability perspective. Finally, their goals are linked to the EU strategic goals, such as green and digital transition, social cohesion, defence, provisions of genuine EU public goods. 

The third panelist, Prof. Lina Papadopoulou (Aristotle University of Thessaloniki), presented the contribution of the University of Thessaloniki. Their focus will be the Future of Social Europe and the European Pillar of Social Rights, in line with the contributions of ULB, Copenaghen University and Jagiellonian University. The team is composed by constitutional lawyers, experts of EU Law and political scientists. In their analysis, the European Social Pillar is linked to economic growth and social cohesion and to the spread of populism. They started from Greece and Southern Europe experience of economic crisis, and how it was faced. The Greek economic crisis led to the spread of populism, Euroscepticism and the fair right gaining consensus, due to the restrictive and extraordinary measures taken to face the economic crisis. The Greece experience shows that the economic crises was managed thinking mostly of budgetary stabilization, rather than the citizens, and resulting in social disruptions. Hence, they will focus on the Social Pillar policy area, in particular the social dimension of the European Semester and institutional developments. They will focus the EPSR, moving from the European Commission 2017-2019 idea of social economy and its twenty principles. Concerning the implementation of the Social Pillar, they will analyze implementing legislation, on the EU semester strategy, and on the implementation supported by the EU Funding Mechanisms (such as the EU Social Fund). In terms of actors involved in the EU Social Pillar implementation, they will adopt a multi-level governance approach, considering the involvement of the MSs and the regions. The idea behind an economy that works for people is that nobody should be left behind. This concept would benefit not only the people, the citizens, but also democracy, avoiding the spread of populism. 

The panel concluded with the contribution of Prof. Laszlo Bruszt (Central European University), presenting the focus of the CEU in PROSPER. Their contribution will be Safeguarding Fundamental European Values in EU Economic Governance. Their research shows the link between EU Economic Governance, Rule of Law and Enlargement. He underlined the fact that Economic Governance implementation is still separated from Democracy and Rule of Law. He prospected two possible scenarios for the future. In the first scenario a further enlargement would not happen, due to some MSs resistance. In this case, the consequence will be that the Western Balkans countries left behind by the EU will undermine Democracy and Rule of Law. In the second scenario, enlargement – for some reasons – happens but under the same economic governance strategy. In this case, the raise of Euroscepticism from both sides of Europe is expected. Hence, the CEU contribution will answer the following questions: what could change in the EU Economic governance to avoid this outcome? How to combine sustainable economic growth and enlargement with the key question of democracy and rule of law respect? There are positive externalities of EU rules implementation – like the access to new resources and opportunities, e.g. State Aid Regulation. However, there are also negative externalities, such as marginalization of less developed countries. He concluded saying that it is crucial to increase opportunities and positive externalities, and to reduce the negative ones. 

 

Jasmine Faudone and Federica  Fazio are both PhD candidates at the School of Law and Government of Dublin City University.

The views expressed in this blog post are the position of the author and not necessarily those of the Jean Monnet Network PROSPER.