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European Law Monitor NewsGlobalisation: MEPs debate the challenges and opportunities

In a debate titled "The European interest: succeeding in the age of globalisation", MEPs debated with the Council and Commission the many facets of this phenomenon, the problems and the benefits it brings and the best ways to manage it in future. The debate was based on a Commission paper discussed by the Council on 19 October 2007 at the informal summit of Heads of state and government in Lisbon. MEPs will vote on a resolution on this topic Thursday 15 November 2007.


Opening the debate on behalf of the Council, Portugal's European affairs minister, Manuel Lobo Antunes, stressed that globalisation was not just an economic and technological phenomenon but essentially a political one. It had two sides: people were losing jobs and feeling threatened but "jobs are also being created, price levels are lower, trade in goods and services is growing".
The key was "to manage globalisation", to retain political control. He believed "Europe can lead and shape globalisation". The "new institutional set-up" provided by the reform treaty and the new cycle of the Lisbon strategy would underpin Europe's approach. However, he stressed that "reform must now speed up" and there must be a consistent strategy to deal with globalisation.  
The minister identified migration as a key issue, pointing out that "the Union's demographic growth is increasingly supported by migratory flows" which help make up for the low level of labour market flexibility within the EU.   He also said that the external dimension of the Lisbon strategy had been discussed recently by the Council, with a special emphasis on financial market instability and climate change.  
He believed that "Europe has the conditions and the duty to guide the process of globalisation" and said that the Lisbon summit of 13-14 December will adopt a declaration on globalisation, to show Europe's citizens that their leaders are determined and committed to "increasing the Union's ability to influence the agenda of globalisation".   Concluding, Mr Lobo Antunes said the Portuguese presidency sincerely believed that "Europe must have a constructive role to play in building a world which is fairer and better balanced".


In the words of Commission President José Manuel Barroso "globalisation impinges on all our lives" but should also be seen as "an opportunity for the EU to assert its values".
Certain key points could be identified:   "we have a responsibility to protect our citizens without being protectionist"; we must be "open but not naïve", in other words there must be "no free ride to those who do not respect certain principles"; in addition, Europe gains "from a rules-based system" and the EU's experience "leaves it uniquely well placed to provide a good basis for regulation at a global level".
Since the Lisbon strategy was revamped in 2005, "almost 6.5 million extra jobs have been created in the EU of 27", said Mr Barroso, and "eight million are expected to be created over the period 2007-2009".   Four priorities had been crucial: research and innovation, a better business environment, greater employability, and energy and climate change. These had given the strategy "a much sharper focus".   He particularly stressed research and innovation, thanking Parliament for its support on Galileo and the European Institute of Technology, and said the Commission favoured adding a fifth freedom to the four already in the treaties, namely "freedom of circulation of knowledge in the EU".
He acknowledged there must be a "greater focus on the social dimension" and hoped the Council would approve the "flexicurity" principles agreed between the social partners before the summer.   Looking to the future, the Commission president singled out "vigorous implementation of outstanding reforms, stronger emphasis on skills and education, concrete steps to convert Europe in low-carbon economy" as the next priorities.
However, he added that " We also need to do more to ensure that the Lisbon Strategy progresses at an even pace in all Member States. A slower pace of reform in one Member State has obvious knock-ons in the others."
In conclusion, said Mr Barroso "I really believe it is not only in the European interest … but that in the age of globalisation the world also needs a more committed Europe".

Political group speakers

"Globalisation is not an abstract concept, but a fact of everyday life", said Joseph DAUL (EPP-ED, FR). "Citizens look to us to find solutions", he insisted, to protect them from terrorism, the whims of financial markets, skyrocketing grain prices, and cheap but potentially dangerous imported goods.
"Globalisation must be fair, smoothing out differences among countries and improving the welfare of the poorest", he continued, stressing that the exploitation of children cannot be tolerated. "The opening up of Europe is a motor of global investment", said Mr Daul adding that the take-up of EU standards "can help to improve quality control worldwide", although the EU must also ensure that "Brazil, China and India deliver on their responsibilities". To take advantage of new opportunities, the EU needs to step up R&D investment and help small and medium-sized enterprises to play their role as drivers of growth. But it must also help its citizens adjust to change, for example by facilitating life-long learning. And with oil at 100 dollars a barrel, the EU clearly needs a common energy policy to ensure secure supplies of clean, efficient energy and this must include the option of civilian nuclear power, he said. The "EU must protect without being protectionist", Mr Daul concluded.
The title of the debate made it all too clear that Parliament, the Council and the Commission need to discuss their role in this process, said Martin SCHULZ (PES, DE). Negotiations to prepare today's resolution had brought out not just different perspectives on globalisation's risks and opportunities, but a veritable "rift" between the EPP-ED and Socialist groups, he continued.
Whilst Mr Schulz agreed with some of what the Commission President had said, Commissioners must acknowledge that a common economic policy needs to be based on social policy, including the yardstick of equality of rights around the world, said Mr Schulz. The "economy first", understood as deregulation to maximise profit and boost growth at the expense of social security, "might please the right", but it is the "wrong approach", he stressed.
The European Commission is clearly "not a Socialist El Dorado", continued Mr Schulz, but its centre-right politicians should nonetheless bring forward proposals to "rein in" international financial capitalists and the "Wild West capitalism that is threatening whole economies". "If we don't legislate, our electorate will hold it against us", Mr Schulz concluded.
"We have just heard the language of the past", said Graham WATSON (ALDE, UK). "India, China and Brazil have caught the wave of opportunity", while "too much of Europe fears the wave crashing over it" he continued. If Europe sits on its hands because national leaders • citing citizens´ concerns • contest the EU's agenda, we will miss the chance to shape globalisation in Europe's collective interests, he warned. "It is not citizens we need to convince, it is Member States. Survey after survey has shown that most of our citizens see the European Union, not national government, as best placed to manage globalisation" he continued.
"The division in our politics is no longer between left and right over economic policy but between those who respond to global challenges by pulling up the drawbridge and those who advocate the open society".
If the EU is to use its critical mass to enable Europeans to shape globalisation, then "Where are your policies? Your timetable"? Mr Watson asked Mr Barroso, adding that this communication was "rich in rhetoric, but rather poor in proposals". Mr Watson looked to forthcoming single market review for ideas on growth and jobs, and to the legal migration policy, hoping it encompasses the concerns of countries of origin. MEPs also await urgent action on cutting energy use and fighting cross-border crime, he added. "If we are creating a global market we need a new global social contract, reconciling the competing demands of flexibility and fairness", he said. That includes "fashioning a fair deal for developing countries in Doha, clinching a contract on carbon emissions in Bali, and building an international approach to financial markets, focusing on regulatory co-operation, convergence of standards and equivalence of rules." "And we must look forward, with Victor Hugo, to the day when the only battlefields are those of markets open for business and the human spirit open for ideas", he concluded.
Mirosław Mariusz PIOTROWSKI (UEN, PL) began by stating that "globalisation is an irreversible phenomenon and [that] this is something that certain EU Member States should bear in mind and respond accordingly ..[..].. The Union's action should not harm the economy of its Member States."   Mr Piotrowski then referred to the political sphere where he pointed out that "action should not lead to the demise of national identities."   He concluded by referring to the 'layer-upon-layer' of bureaucracy which he sees as part of the EU, saying that "we somehow cannot see the truth before our eyes."
Referring to the Commission's paper, Jean LAMBERT (Greens/EFA, UK) began by stating that "I think that what we have seen is an absolute failure of imagination given the situation that we face."   She commented on the paper's claim that we are facing a third industrial revolution, pointing out that "we need to take the lessons of the past industrial revolutions."   She agreed that it is true that we need to rebalance the trade, social and environmental dimensions of globalisation, but added that "we're still talking as if it's the quantity that matters, not quality."   Ms Lambert welcomed the Commission's conference on this issue next week and went on to say that the guidelines in this area need to be revisited and revised.   She concluded by stating that Lisbon and Gothenburg still need to be integrated - "that's the challenge.   This document doesn't face up to it and I'm not convinced the Parliament does either."
Jiří MAÅ TÁLKA (GUE/NGL, CZ) criticised the joint motion on globalisation. "I'd like first and foremost to express my disappointment over the joint motion for a resolution. The motion doesn't reflect European interests at all, it doesn't even reflect the interests of the majority of citizens of the EU." It would offer the people nothing at all, they would simply be told: "Globalisation - like it or lump it." Something against its adverse effects must be done, said Mr MAÅ TÁLKA. His group would place its focus on poverty reduction: "The resources available to us have to be used to give people the right to properly paid work and minimum wage", among other things.
Godfrey BLOOM (IND/DEM, UK) criticised the French President Sarkozy's speech yesterday in the EP and said that "it was all humbug". He accused Sarkozy of hypocrisy: "He stood for free trade. But of course if other countries were for protectionism, so was he. He stood four square for democracy. The people were entitled to have their views heard. But then, it would seem, ignored, as the people of France and Holland have been ignored." The French could not have another referendum "because that might lead to an English referendum, and of course we all know the British would reject the new Constitution. Oh, sorry, Treaty." Referring to President Sarkozy, Mr Bloom also said: "He is a European first, but a Frenchman through and through; he is a Frenchman first, but a European through and through - ok, with a bit of Hungarian goulash thrown in."
Dimitar STOYANOV (ITS, BU) said he "would like to remind the Commission and Council that globalisation is a process that does not exist per se" and that "European policy will determine whether globalisation will evolve or not." He went on to criticise the Commission: "Does the Commission want to develop or slow down the process? The single market is no guarantee for the development of Europe." Referring to the Council which had stressed the importance of global competitiveness, Mr STOYANOV said there were many European countries that could not even work within the single market. "I anticipate that the Lisbon strategy will fail in Bulgaria because, as we have said time and again, our country was not ready to join the EU."
Jana BOBOŠÍKOVÁ (NA, CZ) said that "we need to make sure that Europe's position in the world is as strong as possible." This means, among other things, concluding WTO talks, reducing farm subsides, and having a more robust policy towards China. "To succeed, we need to cut back regulation in SMEs." The Barroso Commission had promised just this but had got "stuck in the rut." Furthermore, "the Union must speak with one voice or face ridicule." Referring to Mr. Schultz's comments about wild-west capitalism, Mr BOBOŠÍKOVÁ pointed out that "this is communist rhetoric, communists treated financial markets in this way and we know what happened to the Communist countries."

British and Irish speakers

Timothy KIRKHOPE (EPP-ED, Yorkshire, Conservatives, UK) said that to survive and prosper, Europe needs to face up to the challenges of globalisation. Fulfilling the Lisbon Agenda is central to Europe´s future prosperity and we need to make sure that a deal is finally secured in the World Trade talks. Reform of the common agricultural policy   - not only a fair deal for EU farmers but also for those in the developing world. We must, he said, push further and faster on the deregulation agenda, freeing business and industry to compete on competitive terms with China and India, and we must make real progress supporting Chancellor Merkel´s efforts to create a transatlantic common market.
Welcoming the Commission President's recent statement on globalisation, he quoted that "protectionism cannot make Europe wealthier; protectionism would impoverish, not protect, our citizens." This is a crucial statement and one that all European governments should heed now.
Seán Ó NEACHTAIN (UEN, North West, Fine Fáil, IE), speaking in Irish, said that he believed that the EU had gone too far in its concessions in the WTO. The EU, he said, had offered 46 percent reduction in import tariffs.   "We should keep our food production at home", he said. The US, he said, had not conceded anything, "look a the recently published Farm Bill".   EU average tariffs were now only 4 percent where in Asia and South America there were as high as 30 percent.   India and China must open their markets to competition.
Jim ALLISTER (NI, Northern Ireland, Ulster Unionist, UK) stated that for an increasing number of constituents globalisation means desolation, as factory after factory pulls out and moves East. He reported that two week ago, in Limavady in his own constituency, Seagate Technology announced its closure with 960 job losses, leaving that small town reeling. It is not just the lure of cheap labour, but our crippling burden of regulation on European industry that is devastating our manufacturing, he said.
Two immediate steps would help: a lowering of the threshold for the European Globalisation Adjustment Fund. One thousand job losses in Paris is bad, but in a small town like Limavady it is catastrophic. So the threshold should be lower for smaller economies. Secondly, the EU needs to loosen its state aid prohibitions so that things like modest industrial derating might help keep manufacturing afloat. Concluding Mr Allister invited the Commission to respond positively on those two specifics.
While Jill EVANS (Greens/EFA, Wales, Plaid Cymru, UK) agreed that there is potential for the EU to take a very positive role, to date economic globalisation has led to the acceleration of environmental degradation, poor conditions for workers and growing social imbalances. On a local level it has come to mean job insecurity and worse, the loss of jobs in manufacturing and services, which Ms Evans saw at first hand in her own community in Wales with the closure of the Burberry factory which meant the loss of hundreds of jobs in a very poor area, a convergence area. The EU can help by making sure it improves labour and social standards across the world, including the cost of climate change in the market price to avoid environmental dumping. The effects of globalisation make social protection even more important for workers and for communities.
Concluding, Ms Evans agreed that the way forward is to support small business and provide long-term sustainable jobs, high quality jobs, and she hoped that the proposal for a small act will help to achieve this in the long term.
Sarah LUDFORD (ALDE, London, Liberal Democrats, UK) said that the EU can only achieve its objective by being active and organised on the world stage and this is particularly true of migration. Migration, she said, deserves to be a priority on the EU agenda, on a par with climate change and energy. We see the pressure from outside; we see the social tensions and indeed the racism from inside the EU. But still there is no comprehensive EU policy on legal as well as illegal immigration, and on integration.
Concluding Ms Ludford said that we should not forget the potential of global communications and especially the Internet to promote human rights. Globalisation and the Internet and other global communications are a very potent force for good. That is also part of globalisation.
Robert STURDY (EPP-ED, Eastern, Conservatives, UK) said that we must look upon China and India as an opportunity for Europe. On unemployment, while he acknowledged that it is difficult to keep employment, Mr Sturdy   said that   if we do not allow ourselves to be part of a global market, then we will get nowhere. He believed that there is a huge opportunity here which we should embrace. We must, he said, look at such things as free trade agreements. Morocco at the moment has signed a free trade agreement with the United States, he reported. Concluding, Mr Sturdy asked the Commission to allow business and industry to get on with doing what they are supposed to do. But, he warned, be very careful about the legislation you put in place which damages European opportunities.
Sharon BOWLES (ALDE, South East, Liberal Democrats, UK) said that the   EU has unique power at supranational level to shape things and to challenge excesses. In July, in the Financial Times it said: ´Brussels is the regulatory capital of the world and cannot be ignored from Washington to Tokyo´. So, she said, if we have got it, let us use it, but judiciously. "What is the purpose of a competitiveness agenda if it is not to maintain our position in the world? What is the purpose of a single market if we fail to get it properly completed? Stop the faint-hearted excuses. The EU is absolutely about meeting the challenges. We just need to get on with it before natural selection catches up."
Gary TITLEY (PES, North West, Labour, UK) said that what is needed is a global Europe which sets a completely new agenda for globalisation, resting on the principles of openness, fairness, and the importance of cooperation between Member States. We know, he said, what the challenges are and, in his view, climate change and migration are the two biggest, but we need to maintain high growth and jobs. He highlighted issues such as an effective social agenda, terrorism and crime and promoting security beyond our borders and dealing with poverty. We need, he said, a radical and fundamental shift, not only in our policies, but in our entire thinking in the European Union. Action is needed and delivering on promises and fulfilling all the potential that the EU has.
Stephen HUGHES (PES, North East, Labour, UK) said the employment guidelines have become virtually invisible, hiding the very wide variability in Member State performance against the range of indicators and targets they are supposed to meet under the employment strategy on youth unemployment, integration of older workers • a range of factors. In some Member States, he said, spending on lifelong learning and active labour market measures has actually not improved but declined over the last five years, This, he said, is disastrous for the Lisbon process overall.
On flexicurity, Mr Hughes said that the work of the Committee on Employment and Social Affairs makes it clear that both employment security and job security are important. So, he said, we will do our best to help produce a good set of principles on flexicurity but they must then lead to an amendment to the guidelines. President Barroso said earlier: 'if it ain´t broke, don´t fix it.' Well, it is broken and it needs fixing.
Philip BUSHILL-MATTHEWS (EPP-ED, West Midlands, Conservatives, UK) said that development of knowledge economy by promoting employability, strengthening skills, and in that way success for Europe in the age of globalisation can mean success for individuals, success for people, which is what the EU should be very much more about.
He drew attention to the 25% reduction in simplification of existing EU legislation. Let us, he said, see some real delivery on this across the board, sooner rather than later, as this will particularly benefit SMEs. In this context, he encouraged a wholesale review of the Working Time Directive, where much more lateral thinking is required of us all, he said..
Adding an external dimension to the single market is all very well, he said, but let us get the internal dimension first, completing our own single market before we develop grand ambitions outside. He agreed that this is not just for our economic progress but also because this will deliver social progress.

Council and Commission responses

Replying to the debate on behalf of the Council, Mr Lobo Antunes said that if one point could be agreed, it was surely that "globalisation is here to stay".   The question then was how to turn it to Europe's best advantage.   "Globalisation must serve humankind, not vice-versa", he said.
Of the measures needed, one was to reform the social model, "not to weaken it but to adjust it", he emphasised.   On the environment, Europe had already proved its worth as a "pioneer" and must do so again at the Bali conference on climate change in December.   As to the external dimension of the Lisbon strategy, Europe must "invite others to share our values" and to agree standards on the economy, environment and social systems.   Only in this way could we achieve of the goal of ensuring that "globalisation serves humankind".
Responding for the Commission, Enterprise and Industry Commissioner Günter Verheugen told the House that the purpose of his institution's paper had been to "get people thinking" not to plan everything for the next three years. The reactions to the paper would be incorporated into the plans to be proposed to the December summit.
There must, he argued, be a greater focus on the links between different policy areas such as competitiveness, energy and environment, to ensure an integrated approach.   He singled out a number of issues: the need for fair competition with non-EU countries; the social dimension, which he stressed must not be seen as a form of charity; the shortage of skilled or qualified staff; and the turbulence on the financial markets, which he argued was due to inbuilt structural defects in the financial system.
He also stressed that it was sometimes hard to reach agreement on what the "European interest" was with regard to globalisation: was it lower prices in one country or higher employment levels in another, for example?
In conclusion, he returned to the timetable for decision-making. The Commission would now make proposals to the Lisbon summit in December, with a view to their adoption by the spring European Council in March, thereby "allowing Parliament sufficient opportunities to express its views before the final decisions next year".
Following on the debate, Parliament will vote on a resolution Thursday 15 November.

Further information:

The European Interest: Succeeding in the age of globalisation
Briefing article : The European interest: succeeding in the age of globalisation