Following a strong mandate by the European Parliament’s plenary at the end of November, the new College of European Commissioners has now taken office. This transition comes at a crucially important moment for Europe, because addressing long-term challenges requires policy solutions taken today. These include prioritising the EU’s international leadership in fighting the climate crisis, keeping up with the pace of digitalization, and to strengthen the European social market economy model taking account global economic realities.
It is positive that these three aspects are a core part of the European Commission’s political guidelines for the incoming mandate 2019-2024. However, it will take much more than a vision or political declarations to achieve tangible outcomes that will ultimately make a real difference, and therefore all European stakeholders will be required to work hand in hand to achieve these goals.
The European Green Deal, published in December, is a flagship initiative of the Von der Leyen Commission and a bold commitment, as it reads the signs of the times by recognizing Europe’s conviction that climate change is an immediate crisis, and thus through this strategy shows our ambition to take a leadership role among the world’s largest economies that have committed to meet obligations that were jointly agreed at the Paris climate agreement in 2016.
The EU should indeed continue working on gradually reducing the dependence on fossils-based energy production, to promote renewable energy and the take up of energy efficiency solutions to meet the objective of net-zero greenhouse gas emissions by 2050. This should be at the core of the new EU industrial strategy that is expected by spring this year, and needs to be complemented by strong public and private investment deployed to support innovative technologies aimed at decarbonization that would allow the EU to meet this ambitious objective.
But evidently, the EU cannot carry the burden of the climate crisis on its own, and no own action will be enough to meet collective obligations. Therefore, in parallel, the EU is also required to work diplomatically at the international level with like-minded nations, to ensure that the largest polluters and other developing nations meet their obligations.
Digitalisation is shaping the world of tomorrow and the EU needs to be on the forefront of the changes it brings to position us ahead of other global competitors, reap the economic value added and equip the labour market with the skills required in the future. Keeping the pace of digitalization is also crucial because it can impact our security and the legitimacy of our democracy.
According to the International Digital Economy and Society Index, the EU on average lacks behind countries such as South Korea, Japan, the United States and Canada with respect to the size of their digital economy as a percentage of gross domestic product. Strong investment needs to go into accelerating digitalization to reap the potential of information technology, artificial intelligence and robotization in order to increase industrial productivity, improve public services, healthcare and the general quality of life. The EU’s prospective Eur9.2 billion Digital Europe Programme in the next EU budget is a good starting point, however this requires complementary funding at national level.
The EU would do well to position itself in establishing frameworks based on high ethical values in which digital companies operate, setting a blueprint and precedent for global standards, particularly in areas related to cybersecurity, privacy and flow of data. It is equally important that such frameworks are designed in a way that do not impede innovation or withhold emerging industries from flourishing.
Finally, in the coming years the EU needs to continue consolidating economic growth and ensure fairer distribution of wealth, which are the foundation of the European Social Market Economy model, which is undoubtedly proved to be the most just system in the world. Clearly, there are challenges ahead, with Europe’s ageing population putting pressure on social security systems and high unemployment persisting in certain areas increasing the risk of poverty. Also, certain policies that will be undertaken to address the climate crisis and digital transformation can impact several communities negatively and will require to make some adjustments that could be painful for some. For this reason, plans for a Just Transition Fund is a welcome development.
To ensure the long-term sustainability of our European Social Market Economy model therefore, the EU will require to work on further deepening the European Single Market to improve cross-border business and maintaining an ambitious trade strategy to improve market access for companies in third countries. This will in turn contribute towards growth and employment. The EU is required to adopt the remaining reforms to complete the Economic Monetary Union and the Banking Union to cushion future economic crises. Also, to invest in strong education systems and lifelong learning to secure skilled labour as required by a digital economy, and to remove any obstacles, discriminatory practices or prejudices in our society that prevent anyone from having a fair chance to succeed.
These are in my view the political priorities and policy solutions that Europe requires today to address current and future global challenges.
This article was first published on 12th January in the Sunday Times of Malta.