Blog Carsten Brzeski

Eurozone: Between ambitions and reality

Friday’s first EU summit without a political leader from the EU did not fall short on pathos, only on results.

Last Friday’s special meeting of EU leaders was not a big game changer for the future of the EU and the Eurozone. Almost three months after the Brexit vote, European leaders met for the first time officially to discuss the future of the EU. An EU without the UK. Ahead of the meeting, there had clearly been no lack of pathos. German Chancellor Merkel had been on a European roadshow some weeks ago and had the obligatory pre-European summit meeting with French President Hollande earlier last week. Both Hollande and Merkel demonstrated their determination to strengthen the EU. At the same time, EU Council President Donald Tusk talked about a “brutally honest assessment of the situation”. The outcome of Friday’s summit, unfortunately, did not meet the ambitions created earlier.

Although European Commission President Juncker had kick-started a possible concrete discussion earlier last week with his State of the European Union speech, the special summit in Bratislava only came up with a plan and a roadmap but dodged divisive issues and serious policy proposals. The most outspoken formulations in the official declaration after the summit were on illegal migration and security. The rest remained rather vague. The idea is now to round off this “Bratislava process” in March 2017 at the celebrations of the 60th anniversary of the Rome Treaties. However, whoever might think that the EU might have an exact plan on its future in March should be cautious. As Friday’s declaration said, leaders then want “to set out orientations for our common future together”. Orientations do not necessarily mean a plan.

When ECB President Draghi talks about ‘tasking the committees’, market participants can be very sure that this eventually leads to some results. When European leaders present roadmaps and plans, it is far from certain that anything will ever be implemented. Just think of the series of presidential reports on the future of the monetary union. Even though the 27 European leaders demonstrated their symbolic willingness to strengthen the EU and the Eurozone, not only after the Brexit, it is doubtful whether the meeting in Rome in March 2017 – which falls between the Dutch and French elections – will really present a big leap in European integration.