EU countries must work towards greater self-reliance Opinion by Financial Times

The Financial Times has published an article arguing that there will be no “strategic autonomy” if poor nations continue to depend on their richer neighbours. Caliber.Az reprints the article.

Faced with the challenges of a volatile world, Emmanuel Macron’s push for European “strategic autonomy” is gaining ground across the EU. But autonomy is only possible if the bloc is internally strong. European growth is anaemic, the union’s internal market is still fractured and eastern and southern nations are overly dependent on financial help from their richer northern neighbours. These are weak foundations upon which to build “strategic autonomy.”

The EU’s funds play an important role — they are a way to ensure that countries are not left behind and a means to consolidate the body’s economic power. They have helped countries such as Ireland perform an economic miracle. But in the case of southern countries (such as Spain, where I’m from) the effects of the funds have not been long-lasting.

These countries have experienced periods of economic growth — but as soon as difficulties arise, they fall back on the generosity of others, as happened in the wake of the 2008 financial crisis and also during the start of the pandemic. Despite the regular injections of funds, Italy’s GDP per capita is similar to that of America’s poorest state, Mississippi. Spain, Portugal and Greece’s are well below it.

Southern politicians seem to have given up on making their countries self-reliant. Former Eurogroup president Jeroen Dijsselbloem recently pointed out that, in the discussion on European funds, there is always a step skipped — where is the money going to come from? In countries such as mine, that applies not just to European help, but to public expenditure as a whole. Relying on EU funds is so normalised that the Spanish government boasts of its “recipe for the economy”. The recipe is a simple one: an injection of €37 billion of EU funds and many billions more to come.

These funds have not had their desired effect in southern Europe because they are often badly spent. The EU focuses on structural economic reforms — but misses the need for accompanying ones in governance. Political clientelism in countries such as Spain continues to impact how funds are spent. And mountainous bureaucracy means that too much effort is spent on allocating the funds, rather than on understanding whether they are being well spent.

Many northern Europeans have become frustrated with their governments’ fiscal commitments to the south. But we in the south are frustrated too. Things are better than in the past, but we look with bewilderment at how funds are still sometimes wasted without EU oversight. In my own small hometown in rural Valladolid, which has received €2.2 million in funds, the local council are financing, among other projects, a festival of flowers and a festival of light. In the Canary Islands, they are using €1.3 million to build a sports facility for a women’s football team — an excellent social objective, but not necessarily an economically transformative one.

The only way to ensure funds are allocated to truly transformative projects is to ensure real time transparency, so that local populations can exert greater control. Currently, information is so scattered and complex that one specialised think-tank had to use smart tech “scraping bots” to make sense of it.

In our digital age, why hasn’t the European Commission insisted on member states setting up open portals with accurate information on the final beneficiaries of the fund allocation? And why hasn’t the Commission required members to document the ongoing results of their projects online in real time?

Strategic autonomy will remain a dream unless Europe delivers sustained economic growth. Such growth requires the elimination of the many barriers that still exist in the internal market. But it also requires all recipients of EU help to move towards greater fiscal self-reliance. Receiving EU funds should be an acknowledgment of necessity, not a badge of pride.