Lannoo, Ka el
A icle
Edi o ial: A Challenging Junc u e o on de Leyen II
In e economics
Sugges ed Ci a ion: Lannoo, Ka el (2024) : Edi o ial: A Challenging Junc u e o on de Leyen II,
In e economics, ISSN 1613-964X, Sciendo, Wa saw, Vol. 59, Iss. 5, pp. 246-247,
h ps://doi.o g/10.2478/ie-2024-0049
This Ve sion is a ailable a :
h ps://hdl.handle.ne /10419/308217
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In e economics 2024 | 5
246
Edi o ial
In e economics, 2024, 59(5), 246-247
JEL: O43, O38, L51
DOI: 10.2478/ie-2024-0049
A Challenging Junc u e o on de
Leyen II
To ackle Eu ope’s economic decline, p epa e and ac i ely adap o a new wa e o enla gemen ,
and de end Eu ope’s geopoli ical posi ion, as a ule make , he Eu opean Commission will need
o deli e . Looking back a he pas i e yea s p o ides eassu ance ha p epa edness is in place:
beyond he planned p og ammes, he Eu opean Commission e ec i ely esponded o mul iple
c ises. Bu he pa h o wa d will be s eep.
The economic challenges a e undoub edly eno mous. The D aghi epo has laid hem ou e y
well. Eu ope’s weal h c ea ion is in ques ion: Eu ope does no in es o inno a e su icien ly, i
does no spend enough on R&D, and i lacks quali ied labou . I needs o p epa e o a apidly
ageing popula ion and in es mo e in de ence. The p oduc i i y gap be ween Eu ope and he US
is be ween 12% and 30%, depending on he measu e. And as he Le a Repo also laid ou well,
he EU is no enough o a single ma ke , i is oo agmen ed in inancial and digi al se ices, and
ene gy is oo expensi e.
The e ha e been many challenging junc u es o he EU, and he EU Commission, o e he pas
decades. Ten yea s ago, Jean-Claude Juncke spoke abou he “Commission o he las chance”.
Compe i i eness was al eady a co e conce n o e 20 yea s ago, as e idenced by he Lisbon dec-
la a ion o he Decembe 2000 Eu opean Council and he oubles in Ge many in 2001-03, when
he coun y was he “sick man” o Eu ope, leading Chancello Sch öde o enac he Ha z e o ms.
O e he pas i e yea s, he EU has demons a ed ha i can espond o unexpec ed e en s. In ad-
di ion o add essing he g een and digi al ansi ion, he EU Commission eac ed o he COVID-19
pandemic, o he ene gy c isis and o Russia’s illegal in asion in Uk aine. The EU adop ed he Sup-
po o mi iga e Unemploymen Risks in an Eme gency p og amme and Reco e y and Resilience
Facili y o p e en an economic down u n. I adop ed 14 packages o sanc ions agains Russia by
unanimi y among he o eign minis e s. In June 2022, he Eu opean Council ag eed o accep can-
dida e s a us o Uk aine and Moldo a, and opened accession nego ia ions in June 2024.
Wha is p oblema ic now is he sh inking o he cen e and he ise o he ex eme igh in he
Eu opean Pa liamen , and in many membe s a es, which will make any p og amme o ackle
Eu ope’s decline o ag eemen s on u he enla gemen di icul . Compa ed o 15 yea s ago, he
cen is s pa ies’ (EPP, S&D, Renew, G eens) sha e in he Eu opean Pa liamen has declined om
abou 85% o 65% o he sea s. Whe he hey a e b ibed by Russia, o o he o ces, a - igh
pa ies ha e a common in e es in adop ing populis policies o win o e o e s, be i wi h an i-
immig a ion o pu ely acis slogans, p o ec ionis policies, o i esponsible iscal measu es. Such
policies will ce ainly no imp o e Eu ope’s compe i i eness. Bu wha is compe i i eness and
how o explain i ?
Fo many, compe i i eness is sho hand o educing egula o y o e kill, o i is in e sely ela ed o
egula ion – i.e. he mo e ules, he lowe he p o i s. The EU is seen as he cause o his excessi e
egula ion; some ind i an unaccoun able bu eauc a ic mons e , he sou ce o unb idled ulemak-
ing o he digi al and g een ansi ion ou pacing co po a ions. The o igin o his misunde s anding
is he assimila ion o he compe i i eness o companies in o ha o coun ies, whe e i is en i ely
di e en . Fo a company, i is he bo om line, i s ma ke sha e and g ow h. Coun ies, on he o he
hand, can be compe i i e in a ious ways. The me ic is he wellbeing o he popula ion, o which
© The Au ho (s) 2024. Open Access: This a icle is dis ibu ed unde he e ms o he C ea i e Commons A ibu-
ion 4.0 In e na ional License (h ps://c ea i ecommons.o g/licenses/by/4.0/).
Open Access unding p o ided by ZBW – Leibniz In o ma ion Cen e o Economics.
ZBW – Leibniz In o ma ion Cen e o Economics 247
Edi o ial
Ka el Lannoo, Cen e o
Eu opean Policy S udies,
B ussels, Belgium.
di e en measu emen s exis ha do no ha e a consensus. Paul K ugman’s 1994 Fo eign A ai s
a icle Compe i i eness: A Dange ous Obsession emains opical. He a gued ha “compe i i e-
ness is a meaningless wo d when applied o na ional economies. And he obsession wi h com-
pe i i eness is bo h w ong and dange ous.” Al hough hese obse a ions we e made 30 yea s
ago mainly wi h espec o compe i i eness be ween he EU, he Uni ed S a es and Japan, i we
eplace “Japan” wi h “China”, i is applicable o he cu en global geoeconomics.
A he coun y le el, he mos o en-used indica o is g oss na ional p oduc (GNP), bu e en he e,
he e a e asso ed ways o measu e i (e.g. GNP in absolu e numbe s, o pe pe son, wo king
popula ion only, pe hou wo ked and a pu chasing powe pa i y – each p oduces e y di e en
esul s). In e na ional compa isons ha e he p oblem o adjus ing o exchange a e di e ences. A
coun y can be compe i i e while ha ing an eno mous ade de ici (e.g. he US) o being highly in-
deb ed (e.g. Japan). Bu he dis ibu ion o weal h and i s e olu ion a e also no able, whe e impo -
an di e ences emain in he EU and a he membe s a e le el (see he ECB’s household weal h
da a1 and Gini coe icien ). A median inc ease in household weal h could be mo e consequen ial
han absolu e GNP g ow h.
Hence, he use o compe i i eness as a man a o he on de Leyen II Commission is augh wi h
di icul ies. I is p obably no coincidence ha he D aghi epo , while being all abou he u u e o
Eu opean compe i i eness, does no de ine i . This is a se ious challenge o he new Commission
o use i as i s lei mo i . Acco ding o Jacques Pelkmans, “wi hou a de ini ion i becomes ha d and
somewha a bi a y o iden i y how his p oposed s a egy, i implemen ed, could be deemed as
ei he a success o a ailu e. The e is also no clea p io i y se ing anywhe e”.2
Mo ing o he geopoli ical ambi ions o he EU, his will be equally di icul . Fi e yea s ago al eady,
P esiden on de Leyen wan ed a geopoli ical Commission, which was well chosen in hindsigh ,
bu emains di icul , gi en he limi ed o subo dina e compe encies o he EU in o eign and se-
cu i y policy. The p oposed appoin men o a Commissione o De ence and Space (And ius Ku-
bilius) in a manda e sha ed wi h wo o he Commissione s and he Commission P esiden led o
NATO Sec e a y Gene al S ol enbe g’s wa ning agains duplica ion and compe i ion.3
The e is no single ma ke in he EU o he p ocu emen o de ence ma e ial; ins ead, his sec o is
e y agmen ed and uncompe i i e. The EU would i s ly need a ea y change o make a de ence
single ma ke possible, which would be e y di icul poli ically. The EU has ied o ci cum en his
wi h he Eu opean de ence indus y ein o cemen h ough common p ocu emen and Suppo
o Ammuni ion P oduc ion p og ammes, bu he budge o hese is no e en 1% o he na ional
de ence budge s o i s membe s a es, which amoun ed o €214 billion in 2022.4 The EU will hus
need o wa ch i s c edibili y when mo ing in he secu i y domain, and manage o keep pace wi h
NATO, which has enla ged subs an ially ecen ly wi h Finland and Sweden.
Ou p oposal o he on de Leyen II Commission is o ocus on deli e ing. A e he eno mous
legisla i e e o s o he pas i e yea s, he EU Commission should make su e ha all o hese
ules a e well implemen ed and en o ced. En o cemen emains a weak poin o he EU, wi h he
Single Ma ke Sco eboa d showing an inc easing numbe o in ingemen s. Deli e ing on he Sin-
gle Ma ke , as En ico Le a epea edly indica ed, should be he bes way o wa d o g ow h. De-
li e ing on enla gemen , and hus ex ending he Single Ma ke , should build on p e ious success
s o ies and con ibu e o he geopoli ical s abili y o he Eu opean con inen . Communica ing his
well o he Eu opean popula ion emains a challenge, bu gi en he achie emen s by P esiden on
de Leyen in he i s e m, his should be a ainable in he second e m.
1 h ps://www.ecb.eu opa.eu/p ess/p /da e/2024/h ml/ecb.p 240108~ae6 7e 287.en.h ml
2 h ps://www.ceps.eu/ceps-publica ions/a-c i ical- i s - esponse- o-ma io-d aghis-compe i i eness- epo /
3 h ps://www. .com/con en /2 12a312-6ac3-4 84-aae5-de6b247638 e
4 h ps://leg andcon inen .eu/ /2023/09/25/pou -un-ma che-unique-de-la-de ense-eu opeenne/
