In a world marked by military and commercial conflicts with serious economic consequences, close cooperation between European states has never been so essential, but never have the institutions created for this purpose appeared so incapable of responding to these challenges. By invading Ukraine, Russia had disrupted the conditions of access to fossil fuels. By triggering a trade war, Washington was disrupting the supply chains of European companies. By transforming its economic model, China had allowed the birth of industrial groups taking advantage of the size of their domestic market and posing a threat to their European counterparts.

Since its creation, Europe has never been confronted with such situations. It is clear that its leaders have not been able to acquire the authority to be present on the world stage to defend the interests of the member states. We are witnessing a personalization of international relations and an embodiment of debates. Russia has Putin, the United States Trump and China Xi-Jinping. No leader in Europe has acquired the recognition and even less the mandate necessary to discuss with them on an equal footing.

The first reason is institutional. No one really knows who has the power between the President of the Commission, the President of the European Parliament and the President of the European Council. In reality, the complexity of this multi-layered system weakens the Union's international influence at a time when it is essential to participate and therefore to influence the negotiations. Jacques Delors did not have a real successor and this, along with the cumbersome decision-making processes, is a factor of weakness.

The poor performance of Europe's two largest economies is another. By abandoning nuclear power to protect its coal and by giving Russian gas a central role in its energy supplies, Germany has made a major mistake that penalises its economy with an energy cost that weighs on the purchasing power and competitiveness of its industry at a time when competition from Chinese producers is intensifying in sectors that had long been its strength, such as cars and capital goods. Not only is Germany's presence and exports to the country declining, but its companies are threatened in their own markets.

France is not in a better position. By financing the reductions in the burden on companies in the name of the "supply-side policy" through public debt, the State has worsened the situation of its public finances without any conclusive results, either on employment, where unemployment is stagnating at a high level, or on competitiveness with a growing deterioration in trade in manufactured goods. In addition, this policy has contributed, through the increase in inequality and the resulting unpopularity, to the creation of political instability that weighs on growth.

In the past, the countries of the south of the continent were mocked as members of "Club Med"! Today, the two economies that are holding up best and that are cited as examples are Italy and Spain. But their weight is not sufficient to counterbalance the depressive effects of the poor performance of France and Germany. This shift also illustrates the fall in the credibility of the European project. It is therefore not surprising that in many countries, populist movements, mostly Eurosceptic, enjoy increased support and are sometimes at the door of power.

To get out of this situation, governance must be reformed and simplified. The bureaucratic drift must be stopped. The concept of a single market was based on the idea that the rules should be the same everywhere to ensure fair competition. Harmonization, instead of leading to simplification, has led to a bureaucratic drift. Overcrowded teams of European officials have flooded countries with directives superimposed on local regulations. It is this trend that must be stopped, as the rules relating to public finances, competition and taxation must be revised. 

The Maastricht criteria with public deficits and debt below 3% and 60% of GDP have become obsolete and are no longer respected by almost all the main members of the euro zone. Arithmetically, these criteria favour countries with above-average inflation, which is in contradiction with the mandate assigned to the European Central Bank. They ignore military spending and do not take into account the level of financial savings in each country, which is nevertheless a decisive indicator of solvency. Reflection must therefore be carried out to determine new rules to achieve a budgetary union between the members of the euro zone concerning strategic spending such as defence and the fight against climate change. 

The European Union must also get out of the myth of pure and perfect competition, which would be the ideal solution to achieve the economic optimum. In the strategic sectors of energy and public transport, this policy has weakened traditional operators without any real effect in favour of consumers. The example of rail transport is revealing. The new competitors are only interested in the profitable main lines. The incumbent operator is seeing its revenues decrease and is forced to reduce its investments or even close less profitable routes, contributing to the decline of the regions concerned. These rules also deprive states, through public procurement, of major industrial policy tools that the United States and China, for example, do not hesitate to use

Finally, the presence of tax havens within the Union is unacceptable. They impoverish countries that are victims of the misappropriation of the revenues that are necessary to meet the challenges of tomorrow. They arouse the discontent of those who see their taxes increase. Companies take advantage of the low taxes in Ireland and Cyprus to locate their profits by charging transfer prices that bear no relation to their actual costs. In Luxembourg, thousands of "letterbox companies" are created by groups whose activity is elsewhere, the sole purpose of which is to open a bank account to collect, for example, the royalties collected for the use of patents and then, after paying a symbolic tax, to make these revenues available to the parent companies, which will thus make substantial savings.

All these practices are perfectly well known in Brussels, but the freedom enjoyed by the States in terms of direct taxation would, in principle, prevent them from intervening. We cannot set strict rules on public finances and allow mechanisms of misappropriation or even tax evasion to develop without reacting.

Building a fiscal union, going beyond the current Multiannual Framework, compatible with the monetary union is not impossible when we know that the zone has a large surplus of its current payments and that a consensus exists to provide the continent with a credible defense and to invest in order to reduce greenhouse gas emissions. The debate must focus on the sharing of these expenses and their inclusion in the budgetary criteria. The moral lessons given by the countries of the North, led by Germany, must stop, which should not prevent France from making substantial efforts to improve the management of its public spending.

Every breakdown has remedies. However, its causes must be identified and political leaders must have the courage to propose these remedies and the personal authority to have them adopted.