The Decisive Choices for the EU’s Future

In many countries, the European elections are important mainly because they allow the governing and opposition parties to measure the balance of power without immediate domestic consequences. In Italy, this approach to voting in the 8-9 June election has been aggravated by the choice of some political leaders – including Prime Minister Giorgia Meloni – to run for election to the European Parliament in an attempt to bring their voters to the ballot, without intention of accepting the seat.

Yet, like never before, the European Union finds itself in a dilemma in terms of policies that directly affect the lives of its citizens, including: whether to speed up or slow down the ecological transition; whether to pursue strategic autonomy – which means less trade with other countries – or to still have faith in globalization; whether and how much to increase military spending; how to manage the promise of expansion made to a country at war, Ukraine, and others that could be attacked by Russia; how to create a system of rules that protects European citizens and businesses in the face of the rise of artificial intelligence.

All these issues are at the center of the analyses conducted and events held by the Institute for European Policymaking, the Bocconi think tank founded by Mario Monti.

However, it is not always easy to understand the positions of the Member States’ political parties when it comes to various dossiers, and whether they really represent constituents’ views.

In a recent IEP@BU webinar, Research Fellow Laurenz Günther presented his paper analyzing the responses of more than 27,000 European citizens and almost 1,000 MPs. The data from 2009 reveals the "representation gap" that has favored the rise of populist parties in recent years.

According to the findings of Günther’s analysis, traditional parties hold more progressive positions than their potential voters on issues such as immigration and on cultural issues generally, while they lean a little more right-wing on economic issues.

Many have predicted that populists are doomed to fail, but Günther explains that his research indicates that they “have the potential to dominate European politics in the long run”.

The Most Urgent Choices 

In the short term, however, there are other dividing lines in European politics, in addition to the one between populist or sovereigntist parties and traditional parties that dominated the previous elections in 2019.

One concerns the relationship with China. In a series of studies, the IEP@BU looked into the advancement of Chinese electric cars into the European market, which prompted the outgoing Commission president – Ursula von der Leyen – to open an investigation into public subsidies provided by Beijing because they could possibly be violating European law.

However, in his recent Policy Brief, Daniel Gros explains that the price differences between Chinese electric cars and similar European ones depend more on industrial factors than on subsidies. A European tariff to eliminate the price differential with Chinese competitors would be equivalent to a €10,000 surcharge per car, with a loss of €20 billion to European consumers.

The relationship with China is complex, as European companies depend on Chinese supply for crucial intermediate goods. Germany is one of the countries most in dialogue with Beijing, importing 22% of the materials needed by the IT and electronics sector. For more on German and Italian dependence on China, here is Samina Sultan’s Policy Brief.

The two areas in which European institutions will have to make the most difficult decisions will be security and climate policies. In an analysis published by IEP@BU, Francesco Nicoli explains that the polls reveal great support among Europeans for the integration of military spending and defense in general, but citizens remain very skeptical of unambitious solutions and downward compromises.

The Commission led by Ursula Von der Leyen, however, has managed to start the process with just a small, quasi-symbolic commitment to a joint military investment of €1.5 billion.

A sign of greater ambition on the issue will be a Commission leader strictly devoted to defense.

During the 2019-2024 legislature, the Green Deal was at the heart of commitments made by European institutions and Member States, before the geopolitical context caused security issues to take precedence over climate issues.

Even if there is no drastic change in public opinion on the environment, as Silvia Pianta explains, it will be more difficult in the coming years to implement ambitious climate policies, even though it is increasingly urgent.

A Policy Brief for the IEP@BU by Carlo Altomonte and Giorgio Presidente offers a possible strategy for pursuing climate goals in a less favorable environment than in the past; by shifting green subsidies from the national to the European level, productivity would increase by 30%.

On the digital front, the European Union has approved new rules in recent months that are already having an impact on large platforms. In an article for IEP@BU, Francesco Decarolis warns that the effects of these changes can increase competition or create biases that are difficult to predict: much depends on who has access to the data that algorithms need, especially those used to train artificial intelligence.

Unfortunately, the EU seems destined to limit itself to making the rules – without much innovation – at least until it escapes the "middle technology trap", as it is called in the report organized by the three universities in the European Policy Analysis Group, of which IEP@BU is a member.

Twenty years ago, the leading companies for research and development in the United States were Ford, Pfizer and General Motors. Today, they are all software companies: Alphabet, Meta and Microsoft. Twenty years ago in Europe – on the other hand – it was Mercedes-Benz, Siemens and Volkswagen, and today it is Volkswagen, Mercedes-Benz and Bosch, none of which are at the frontier of digital innovation.

It will be very difficult to find resources, both financial and political, to push the European Union to make significant progress on all these fronts simultaneously, which require massive investment and imply inevitable resistance from those who suffer the consequences of change. In order to prioritize and choose where to invest more immediately, voters must make their voices heard in the 8-9 June election.