Talking Europe hosts Italian former prime minister Enrico Letta, who is now president of the Jacques Delors Institute. Letta has been tasked by the European institutions to produce a report on the future of the EU single market, which is due to be discussed by the bloc’s leaders next spring. He argues that the single market is under pressure from inside and outside, and that common solutions need to be found. He also calls for a “tailor-made” Stability and Growth Pact to take account of nuances between EU member states, as well as the impact of the crises that the EU has faced in the last three years.
Letta gives a staunch defence of the EU’s single market, which enshrines four liberties – freedom of movement of people, goods, capital and services.
“The single market is the jewel of the European Union,” he says. “But today it faces an external threat from the big powers in the world, and an internal threat. And the internal threat is the fragmentation of the single market. Take telecoms, for instance. Telecoms are one of the most important subjects for EU competitiveness. But the single market is fragmented into 27, so we do not have big champions on the same level as the biggest American or Chinese companies. That’s a problem in today’s world. So we have to debate how to avoid this fragmentation and reinforce the single market.” Letta reminds us that the EU will “in the next decade include countries like Ukraine and the western Balkans, so the single market will be wider.”
The former Italian premier warns about fragmentation if EU member states rely too much on national subsidies to back their industries. “In the Covid period we had to raise the use of state aid. But a future European Union cannot be only based on national subsidies, because that will bring fragmentation. The ‘small’ countries of Europe are very much against the use of state aid by the biggest countries. Europe is divided and we need to find common solutions.”
We also touch on the current negotiations over flexibility in the EU’s Stability and Growth Pact. If EU member states do not reach a compromise, the old criteria could be re-applied on January 1, 2024: budget deficits would have to be kept under 3 percent of GDP and public debt below 60 percent in relation to GDP.
“The Commission President Ursula von der Leyen and Commissioner Gentiloni are working very well on that to try to find a compromise,” Letta affirms. “I hope that they will. Otherwise January will be an unstable month; a month of uncertainty. I think we need more of a tailor-made Stability pact, because there are so many differences [between member states]. And that is not because of ‘bad behaviour’ by indebted countries. We have had a lot of crises: Covid, recession, the war in Ukraine.”
Asked about the migration crisis, Letta says: “If you look at the many crises that we have had, in the last 15 years since the financial crisis, we learned the lessons and we changed our toolbox. But on migration, we do not have a new toolbox. We still have very poor tools, and that is why it is absolutely urgent to have political will from member states. And I have to say, very frankly, if we are not able to find unanimity with 27, maybe it’s better to go further with less than 27 countries. Otherwise we risk giving a veto to countries that have a completely different approach to migration and integration.”
“The experience of the last 10 years brings me to be pessimistic,” he goes on to say. “At the same time, we can’t continue without a toolbox on one of the key issues for our relationship with voters. The risk of a rise in anti-Europeanism is close to us,” he concludes.
Produced by Sophie Samaille, Juliette Laurain, Agnès Le Cossec and Isabelle Romero.