The Commission doesn’t want to give anti-EU forces additional ammunition with tough criticism. Accentuate the positive and deal with the negatives later — that was the approach the European Commission took Wednesday in announcing its latest annual assessments of the EU member countries’ economic situation.
All too aware of the mounting political forces hostile to European integration, the Commission tip-toed around “imbalances” it identified in a dozen countries when delivering its “European Semester Winter Package,” while praising the bloc as a whole for “making headway” with “the ‘virtuous triangle’ of boosting investment, pursuing structural reforms and ensuring responsible fiscal policies.”
The French and the Italians, who are living beyond their means, and the Germans and the Dutch, whose trade surpluses are too large for their neighbors’ liking, all got off with only a verbal warning to adopt appropriate policies.
It’s not the first time the Commission has shown such leniency but this time it may have better reasons for doing so.
Unpopular economic policies ordered from the unloved Brussels bureaucracy would give extra ammunition to parties running on anti-EU tickets in looming elections in Germany, France, the Netherlands and possibly Italy. A win by Euroskeptics in any of them would do far more damage to the EU than tolerating the imbalances just a little while longer.
In France, where far-right leader Marine Le Pen is advancing in the polls, the Commission detected “excessive” imbalances and called for greater reform efforts, “notably to increase the efficiency of public spending and taxation, to reform the minimum wage and the unemployment benefit system, and to improve the education system and the business environment.”
The biggest problem the Commission spots is Italy, which has hardly grown in a decade.
While the Commission acknowledged some improvements Paris has made, they are not sufficient to lower the country’s debt levels, which Brussels has projected will rise to 97 percent of GDP by 2018. And this could spiral even higher as investors who fear a Le Pen presidency are already driving up the country’s borrowing cost.
Le Pen has promised voters that she will “restore our freedom and control over our destiny by giving the French people back their sovereignty” — a message that could have gotten additional bang in case the Commission had decided to put France under intense monitoring or even impose fines.
Germany, too, was scolded, but for its large current-account surplus. “Recent economic developments do not point to a correction of these imbalances,” the Commission warned as its projection only shows a slow decline from a record 8.7 percent of GDP to 8 percent next year.