The world has changed. The globalization is going through its first crisis. It took its expansion in the Nineties with the end of the Cold War and the climate of peace which resulted from it. Thanks to major innovations, people, goods and data could circulate at a low cost. Countries progressively lifted their trade barriers. Tourism known a very large development and we saw a capital flows liberalization. China, thanks to the reforms initiated in the Eighties started to make up its time with developed countries. Its adhesion to the World Trade Organization and ten years after, the launch of the Yuan internationalization gave to the world economy a new dimension.

European countries, knowingly or not, responded to that historical evolution with a strengthening of their economic and political relations. The Unique Market, and then the euro with a set of common rules adopted year after year built themselves in the same time that the Union was enlarging itself through the welcoming of the former Eastern European countries. Facing such a world transformation, every State had understood that alone, it couldn’t have enough influence on the international scene to weight and to protect its own interests.

But that could last only if the people and goods travel safety was assured and the peace guaranteed. The Covid-19 pandemic has hurt the whole world. In the past, heavy local crisis, as in the Middle-East or in Asia with borders tensions had occurred but no one had directly opposed several great powers. It is not any more the case with the war in Ukraine which has put an end to a peace period which has lasted more than 70 years.

If the European project wants to keep its role, which, in such an environment, is even more essential, the State-members must agree to make it evolving in order to be adapted to the new situation of the world and to achieve its mission which is to protect to the best theirs values and their interests, in the euro zone as in the whole Union. It is necessary to look at the reality. That will mean sovereignty abandons. But in the current world, this concept has it still a lot of sense? Isn’t it a mirage? Each country depends from outside for its commodities supply, from the financial markets for its debt emissions and from foreign customers to make its plants working and to fill its hotels.

The first of the reforms is about the euro zone and its operating rules. The European Central Bank must keep its independency but its mandate must evolve. It was focused on the price stability because it was conceived at a time when inflation can only have its origin from internal unbalances. The current situation shows that it is not any more the case. So, which has not been the case until now, an ultra-restrictive monetary policy to fight against an external phenomenon would have very damaging consequences. The ECB must act, and it has just been done with the 0.75% increase of its rates. But it must also, to reinforce the soundness of the common money, soften the spreads between the rates paid by each State. That possibility must be included in its mandate. At last, the so-called “Maastricht criteria” which do not make any sense because no State complies any more with them, must be revised. The inclusion of the current accounts balance and of the household financial saving rate in the evaluation of the situation of a country would be justified because these two numbers give a determining vision of the solvability of a country.

The second reform to put in place urgently is about the rule of the unanimity. This concept doesn’t exist in a democracy where it is the majority which has the decision power. It can be demanded that it is a qualified one, as in France for the organic laws, but the principle must be applied now to the State-members. That is all the more important that these ones number strongly increased since the creation of the European Economic Community and it is going to increase again with the candidatures of the countries belonging to the former Yugoslavia and of Ukraine. The differences of size, as between Malte and Germany for instance, are so big that to give the same weight to these two countries in the economic decisions and the diplomatic choices, doesn’t make any sense and interferes with the positions and decisions to be taken, which weakens the Union in the current environment.

That reform will also allow to put at last an end to the fiscal practices of countries like Luxemburg with its “mailbox companies” whose only function is to catching the profits and to allowing the holding companies to being exonerated of taxes or like Ireland with the strategies consisting in locating the profits in the country which has a low tax rate thanks to artificial transfer prices between subsidiaries.  

We will have, at last, to abandon that ideology of the free and non-biased competition which has penalized public services, as we see today in energy and to give back to the States their intervention rights through public orders in favor of the support to the re-localization of industrial activities and to the creation of as shortest as possible supply chains. Figures show that the opening to competition has neither provoked a significant improvement of the related services nor offered prices reductions to consumers. Regarding public orders, they have profited as to American and Chinese competitors as to European enterprises. These industrial policy tools had been determining in the past. Their abandon is not without connections with the weakening of the production activity in France.

At last, it is urgent to reform the European energy policy. The current crisis has shown the absurdity of the connection between power and natural gas prices. The hostility regarding nuclear power has been attenuated by the inscription of this power production mode in the new “taxonomy”. We must go farer and progressively reduce the rules which force France to resale the electricity produced in nuclear power plants with a price inferior to market one to distributors which take from it substantial profits. There is no “nuclear guaranteed income”. Highly competitive production costs are the result of an exceptional economic and industrial success which has allowed during near forty years to offering to French enterprises and household highly competitive electricity. To deprive EDF of the benefits of that success which would allow it to maintaining and to renewing its production apparel is a nonsense. There too, Europe must go farer and recognize, at a time when ambitious objectives of reduction of the fossil fuels utilization are adopted, the essential role of the nuclear production. At last in the current environment of extreme market volatility, Brussels must allow the States to protecting power producers from potential bankruptcy due to losses on the derivatives markets with the indisputable financial supports.

To update the euro zone rules, to reform the Union governance in order it is able to play its role in the today new world and to give back to the States the intervention tools which will allow them to strengthening their production apparel and the safety of their supply of essential goods, that is the today priority agenda. Faster it will be put into practice, stronger the European Union will emerge from the current crisis.