The European Union doesn’t have the right institutions to deal with the crises it has been facing ever since the 2008 financial crisis.
Whether it can withstand the next big storm coming with Donald Trump’s second term in the Oval Office remains to be seen. Consistent rule-enforcement and intelligent deal making must be part of it – and so is a more serious conversation about EU institutional reform.
By design the EU is fragmented as a foreign policy actor and always works on the basis of the lowest common denominator in matters of geopolitics.
In this field individual member states have been free-riding on or vetoing their way into getting perks, EU funds, or rewards by foreign backers in topics ranging from human rights to sanctions.
Often the EU is absent as a foreign policy actor due to the inability of its big member states to come to a common position: cue the war in Gaza and Middle Eastern matters in general. It will be extremely difficult for EU members to find common ground in addressing a hostile United States on which individual member states depend for their security.
Lame rule enforcement in Brussels weakens its international leverage
Back at home, the European Commission is the rules-proponent and drafter but also its enforcer. It is party and judge, and increasingly its own political player. This is not a recipe for good governance.
This is why we find ourselves in a situation where those famous tough EU rules get enforced selectively. Reports that the commission president has signalled that it doesn’t want to apply the freshly minted Digital Services in the face of plutocrat Elon Musk’s current meddling in domestic EU politics, supporting far-right parties via his social media platform X, raise eyebrows. But this is part of a long-standing pattern that even predates Ursula von der Leyen.
Contrast this to the strength and independence of the Brazilian supreme court which banned Twitter for forty days to make it comply with local rules following Musk’s reinstatement of far-right accounts that had been suspended following a court order in relation to attacks on the Brazilian Congress in 2023.
Since 2008 the EU has been improvising its way through the multiple economic, political, war-related and viral shocks hitting it – leading it to be dubbed by many as “emergency Europe”. Sometimes the EU has managed to achieve impressive outcomes, as in the way it went from complete Covid-19 related institutional meltdown in March 2020 to successful vaccination production, export and rollout.
But in the process of muddling its way forward, important features of what makes the EU strong in the first place get broken.
The EU’s waning strengths are a rules-based order that works through strong impartial supra-national enforcement and political commitment by member states to stick to the rules.
In recent years, Schengen rules on free moment inside the EU, the rule of law in many member states, and, for the purposes of this publication, the unshakeability of the EU’s customs union, have gone out the window.
As I have argued previously the fact that the commission has refrained from taking a tough line with the five countries that unilaterally banned imports from Ukraine last spring that were liberalized in short order to help the war-torn country cope with the Russian onslaught on its territory sets a dangerous precedent.
It weakens the EU’s credibility and position in international trade negotiations. It makes officials’ and politicians’ much-touted argument that Europe using the size and strength of access to its single market as leverage in all sorts of international endeavours – from fighting climate change to setting global standards – look very weak.
The return of US divide-and-conquer tactics
It also opens cracks into which predatory foreign powers out to divide and conquer in the EU will jump readily when they want to extract political, economic, trade or other policy concessions from individual member states.
This will sound familiar to those in the trade community in Europe having lived through the first Trump administration. Remember those White House calls in 2017 to individual capitals to do request separate trade agreements in an effort to “rebalance” bilateral trade between the US and member states?
Last time, member state governments pushed back on the Trump administration, forcing it to go and deal with the European Commission, who has exclusive competence in trade in the EU. We got EU-wide retaliation on steel tariffs and a dirty but politically not ineffective deal between Trump and then-commission president Jean-Claude Juncker.
But with the many far right governments now sitting in many capitals across Europe and acting as dominoes falling into line with the Trumpist US agenda, will they do so this time round? Will countries feeling more exposed than others to the Russian threat on the EU’s eastern flank resist US blackmail and coercion?
Those threats will go much farther than in 2017-2020, threatening potentially the very territorial integrity of EU member states and certainly putting the basic security of NATO members on the line.
Whilst not falling into panic mode, we definitely need to take the territorial annexation threats on Denmark, Canada etc, by the man who is only twelve days ahead of stepping into the White House, very seriously.
“[T]here’s little reason to believe that Trump – re-elected, re-emboldened, utterly validated in his “bullying works” approach to life and politics – is kidding about any of it,” notes The Bulwark’s Andrew Egger.
Strategizing ahead of Trump taking office – not a great start so far
The European Commission and many in the Brussels bubble are talking up the EU’s ability to handle a second Trump administration. The EU has indeed bolstered its legislative arsenal to counter malign economic activity, not least a yet untested anti-coercion instrument.
This author fears that the ACI may turn out to be a damp squib. Up to EU capitals to get their heads together on this.
Everyone is expecting the US to threaten or apply new tariffs on the EU as it seeks to fight back against what has become the US tech and other sectors’ biggest de facto regulatory agency.
The EU will try to do what it can to avert this, seeking deals and appeasement but also threatening its own retaliation. The US tariffs could either be universal or more targeted, likely at the EU’s auto sector and other areas of EU export prowess which include food products, machinery, pharmaceuticals and more.
Elvire Fabry and Arthur Leichthammer from the influential Jacques Delors Institute recommended just before Christmas that the commission develop a deterrence strategy towards the Trump administration on trade, showcasing that famous EU regulatory arsenal and recalling its ability to hurt US firms with its own tariffs.
In addition, serving as a carrot for a grander bargain, the EU should commit to buy more Liquefied Natural Gas from the United States as well as more weapons and work together on common China concerns, the two authors say.
All this happens to be in the EU’s very own security interest as Russia pushes on relentlessly with its war in Ukraine and is waiting on the weakening of NATO to go further in its strategy of sowing chaos and destruction.
The authors also recommend pursuing the EU’s trade diversification strategy – including by getting the EU-Mercosur deal signed and ratified.
Yours truly wonders how deep the EU will need to fall into a serious security crisis to finally get its act together and reform its institutions to become a more robust global player and rule enforcer. Hopefully this will not involve suffering through something worse than “merely” a global trade war. In the meantime the EU commission needs to show its willingness to fight said trade war intelligently.
With commission president Ursula von der Leyen calling in sick this very cold January, and lame duck governments in France and Germany, the EU isn’t off to a very good start.
