Bruegel is a think tank, set up in 2005, which, by providing economic analyses, wants to make a contribution to the Europe-political discussion in Brussels. The work of the institute is financed by the Member States and other sponsors; hence the (informal) influence of the think tank on the policy-makers in Brussels is relatively high. In the past, critical tones by Bruegel on the economic and social policy of the EU were rather thin on the ground; on the contrary, the organisation always underlined the advantages of internal market, free trade and globalisation.

Wise economists get even with the Commission Barroso 1
Even more surprising now is a new initiative of the economic experts. Whilst the politicians discuss whether the new Commission - as scheduled - will be able to assume office at the beginning of November or whether a “Transitory Commission“ will be necessary, the Bruegel experts, under the leadership of André Sapir, have already submitted a 100-page paper outlining their demands to the new Commission. And they are not to be sneered at. Even if Commission President Barroso and the other commissioners are not directly mentioned by name, it is quite apparent that the paper is a politico-economic reckoning with a failed Commission and a European Union, which runs the risk of becoming insignificant.

Citizens will hold Commission responsible for failed liberalisation
According to the report, the future Commission will be confronted with enormous challenges both economically and politically. The political risk would be that the Commission would be held responsible for the liberalisation agenda of the past years and that at a time, where one could observe a Europe-wide retreat in the national states and a clear unease with the EU.

Commission President should explain Europe better and restructure the Commission
Bruegel has also a lot to say to the future Commission President. In future, he should explain better what the EU actually stood for. The organisation of the Commission does not escape criticism either. Even though Bruegel comes out in favour of every Member State having its own Commissioner, the experts recommend restructuring the departments. The economic and the financial departments for example should be combined to strengthen the Commission towards the Member States.

The crisis shakes the belief of the citizens in open markets and competition
The section on EU economic policy is also worth reading. The Bruegel economists expect a return of mass unemployment in Europe as well as a significant worsening of public finances. The crisis would shake the confidence of the citizens in open markets and pose a risk to the public support for the internal market. The true winner of the crisis would be the European Central Bank, whilst the efficiency of European economic policy would clearly be called into question. The recommendations by Bruegel remind of demands, which the AK directed at European policy for years: a rethinking of the so-called Maastricht criteria and the current handling of the Stability and Growth Pact.

The self-regulating belief of past Commissions has failed
Downright “monumental challenges” are recognized by Bruegel in the financial market and financial services sector. Here, major and difficult to reverse progress on the way to a uniform European financial system had been made over the past decade; there were, however, no public institutions in place to control this financial system. The reason: past Commissions had – for ideological reasons and/or under the pressure of the financial lobbies – put blind faith into the self-regulating powers of the market.

Will flexicurity strategy of the Commission soon reach the end of the line?
Also interesting are the considerations by Bruegel on European employment policy. Here, there would only be a minimum consensus among the Member States and between the social partners. The crisis could reduce the much-lauded “flexicurity strategy” of the Commission to political absurdity. It is a well known fact that the Commission invested a lot of political energy to sell this strategy to the Member States and the social partners with the aim of combining more flexibility - in particular for employers - with more security for employees. Not without reason, Bruegel sees the danger that not only the flexibility aspect will lose relevance, as the crisis affects all industries. The security aspect of the concept will also lose in credibility as higher debt and increasing deficits would hardly give the Member States scope to sustain or develop the securities for employees in case of job losses (unemployment benefit, active labour market policy).


Further information:

Study: Memos to the new Commission