State of the Union, Schuman report on Europe 2023

By Marie B

One year after war irrupted on the continent once more, the European Union has shown remarkable resilience: the adoption of sanctions against Russia, the financial, humanitarian and military support given to Ukraine and the diversification of its energy supply sources have confirmed, once again, that Europe is increasingly adept at responding to crises.
Of course, it is too early to claim victory. Its room for manoeuvre remains limited and its responses must take account of the mistakes of previous decades that have now been highlighted by the reality of the present situation: a lack of investment in its collective defence, a certain naivety in the choice of its dependencies and an excessive faith in the positive political effects of free trade.
And yet the European Union's ability to implement effective coordinated responses and its determination to fight for the freedom of a country under attack has been unwavering, to the extent that the followers of a noxious "every-man-for-himself" attitude have been won over, making it even more attractive for others to join this ambitious project.
Faced with a succession of unprecedented shocks worldwide and caught in the stand-off between America and China, the European model of economic growth, despite the disruptive impact of inflation, is being called upon to renew itself, with a view to strategic autonomy.
This is why the Schuman Report on Europe - the State of the Union 2023 is an essential guide. Through its original analyses of the risks posed and opportunities presented by this crucial moment it constitutes a compass for navigating the complex reality which the European Union now faces. With a wealth of new maps and a unique set of commented statistics, it guides readers who want to understand the main issues at stake, likewise those wishing to contribute to reflection on the construction of tomorrow's Europe.



ABOUT THE AUTHOR


Managing Director of the Robert Schuman Foundation, former auditor of the 56th national session of the Institute of Higher National Defence Studies (IHEDN), Pascale Joannin is the editor of the Schuman Report on Europe, the State of the Union, Marie B Editions, and co-editor of the Permanent Atlas of the European Union, Marie B Editions (5th edition), 2021. She is the author of L'Europe, une chance pour la femme, a Robert Schuman Foundation Note, n° 22, 2004. She has published numerous studies on European issues.

• Language: English
• Publisher: Marie B
• Release date: May 2, 2023
• ISBN: 9782492763410

Book preview

Cover pictureTitle page: A Robert Schuman Foundation Publication, State of the Union (Schuman Report on Europe 2023), by Éditions Marie B

The State of the Union 2023 Schuman Report on Europe is a collective work created on the initiative of the Robert Schuman Foundation in line with Article 9 of law 57-298 of 11th March 1957 and article L.113-2 paragraph 3 of the Intellectual Property Code.

Original French texts translated into English by Helen Levy

Layout: Nord Compo

Cover design: Nord Compo

Cover image: Wirestock/Alamy photo

Kyiv railway station, Ukraine

Copyright: Éditions Marie B, Lignes de repères collection

ISBN: 978-2-49276-3-410

This digital document has been produced by Nord Compo.

Contents

Title Page

Copyright

Summary of maps

Contributed to this book

Preface

The European Union’s New Life (Jean-Dominique Giuliani)

1. The Challenges

With war next door, Moldova accelerates towards the EU (Maia Sandu)

Defence and security issues for the future of Europe in the light of the war in Ukraine (Amiral Christophe Lucas)

The EU’s preventive diplomacy – practice makes (not yet) perfect (Željana Zovko)

European integration after the conference on the future of Europe (Dubravka Šuica)

EU 36: clearing the horizon (Alexandre Adam)

The European economic model tested by the Russian invasion of Ukraine (Odile Renaud-Basso)

Global order: Europe has its assets (Mathilde Lemoine)

Between inflation and growth: for an ECB at the service of European power and strategic autonomy (Nicolas Goetzmann)

New political equations in Europe one year before the European elections (Pascale Joannin)

2. The Solutions

A new security order for Europe (Pierre Vimont)

European Recovery Plan: consequences, risks and opportunities (José Manuel Fernandes)

The European institutions dealing with crises (Charles Fries)

The European Political Community: what objectives, what outlook? (Laurence Boone)

Identity, history and european integration (Alain Lamassoure)

The new European space policy (Paraskevi (Evi) Papantoniou)

The European response to the IRA must be an all-out scientific and technological offensive: an Apollo 2.0 (André Loesekrug-Pietri)

Common European Defence: legitimate ambition or wishful thinking? (Francisco Juan Gómez Martos)

Contrasting political situations leading to new coalitions (Corinne Deloy)

3. The European Union through Statistics (Olivier Lenoir)

Part I. The weight of the European Union in the world

Partie II. Political Economy

Part III. Ecological transition and the energy crisis

Summary of maps

1957-2023: the building of Europe

Territories of Europe

Women’s Europe

1. The Challenges

Military expenditure in the world

World Security: EU sanctions, intervention and participation

Major concerns of Europeans

The EU and the energy crisis

The origin of electricity in Europe

The main free trade areas

Inflation

Political colour of prime ministers and number of parties in coalitions

Populisms

2 The Solutions

The EU budget 2023

European and national identities

The Space Sector

The Rise of New Space

R&D Expenditure

European Unicorns

Ultra-marine space

Nuclear Power

Political Europe in 2023

3. The European Union through Statistics

Growth projections (economic recovery) at world level

Extra-EU trade

Intra-EU trade

The Population of the Union

Internal migration

External migration

Public debt

Digitisation of Europe

Environmental Performance Index of Member States

Contributed to this book

Texts

Alexandre Adam

Maître des requêtes at the Conseil d'Etat, Alexandre Adam was deputy European advisor, then European advisor to the President of the Republic (2020-2022). A former diplomat, he was posted to the Legal Affairs Directorate of the Ministry of Europe and Foreign Affairs, to the Permanent Representation of France to the European Union and to the French Embassy in Germany.

Laurence Boone

Laurence Boone has a PhD in applied econometrics from the London Business School and has been Secretary of State for Europe since July 2022. Chief Economist of Barclays Capital France (2004-2011), then Chief Economist and Managing Director of Bank of America Merrill Lynch Global Research (2011-2014), she became Sherpa and special advisor for multilateral and European economic and financial affairs to the President of the Republic in 2014. Former Chief Economist of the AXA Group, she was Chief Economist and Deputy Secretary-General of the OECD (2018-2022).

Corinne Deloy

A graduate of Sciences Po and holder of a DEA in political sociology from the University of Paris I – Panthéon Sorbonne, Corinne Deloy formerly worked as a journalist at the Nouvel Observateur and was Secretary General of the Foundation for Political Innovation (Fondapol). She is a researcher at the Centre de recherches internationales de Sciences Po (CERI) and editor of the European Elections Monitor (EEM) of the Robert Schuman Foundation.

José Manuel Fernandes

Member of the European Parliament (EPP, PT) since 2009, José Manuel Fernandes is coordinator of the European People's Party in the Committee on Budgets and chairman of the delegation for relations with the Federative Republic of Brazil. He is also head of the Partido Social Democrata (PSD) delegation in the European Parliament. He participated in the negotiations of the new Multiannual Financial Framework 2021-2027 (MFF), the Recovery and Resilience Facility and the InvestEU programme. He is also permanent co-rapporteur for the new EU own resources.

Charles Fries

Since May 2020, Charles Fries has been Deputy Secretary General for Peace, Security and Defence in the European External Action Service. He has served as Ambassador of France to Turkey (2015-2020), Morocco (2012-2015) and the Czech Republic (2006-2009). Secretary General for European Affairs (2011-2012), he was diplomatic adviser to the Prime Minister (2009-2012), adviser for European Affairs to the President of the Republic (2002-2006) and adviser for European Affairs to the Minister of Foreign Affairs (1993-1995). A former student of the École Nationale d'Administration (ENA-1989).

Jean-Dominique Giuliani

Chairman of the Robert Schuman Foundation, Jean-Dominique Giuliani was the director of cabinet for the President of the Senate, René Monory, and director at SOFRES. A former special advisor to the European Commission and member of the Supervisory Board of Arte, he co-edits the Permanent Atlas of the European Union, Éditions Marie B (5th edition), 2021. He is the author of Européen, sans complexes, Éditions Marie B, 2022 and of La Grande bascule, Éditions de l'école de Guerre, 2019.

Nicolas Goetzmann

Head of macroeconomic research and strategy at Financière de la Cité, an asset management company, Nicolas Goetzmann is a regular columnist for French newspapers (Les Echos, Le Monde). Previously, he worked for a news website, first as an economics editor covering macroeconomics, European institutions and international trade, then as editor-in-chief. From 2000 to 2013, he worked in the private banking sector as a portfolio manager and advisor to high-net-worth individuals in Luxembourg, Geneva and Paris.

Francisco Juan Gómez Martos

Francisco Juan Gómez Martos is a PhD of Political Science, economist and former EU official. He was formerly a professor at the Autonomous University of Madrid (Faculty of Economics) and a visiting professor at the Adam Mickiewicz University in Poznan (Faculty of Political Science and Journalism). He is the author of several academic publications in European journals and numerous articles published in the newspaper El País. He has published numerous studies for the Foundation.

Pascale Joannin

Managing Director of the Robert Schuman Foundation, former auditor of the 56th national session of the Institute of Higher National Defence Studies (IHEDN), Pascale Joannin is the editor of the Schuman Report on Europe, the State of the Union, Marie B Editions, and co-editor of the Permanent Atlas of the European Union, Marie B Editions (5th edition), 2021. She is the author of L'Europe, une chance pour la femme, a Robert Schuman Foundation Note, no 22, 2004. She has published numerous studies on European issues.

Alain Lamassoure

A graduate of Sciences Po Paris and ENA, Alain Lamassoure began his career as an adviser to the Court of Auditors. Minister for European Affairs (1993-1995), Minister for the Budget and Spokesman for the French government (1995-1997), he was a member of the French National Assembly from 1986 to 1995 and a member of the European Parliament (EPP, FR) from 1989 to 1993 and from 1999 to 2019. He chaired the Committee on Budgets (2009-2014) and the special committees on tax rescissions (TAX 1 and 2) and was rapporteur on the Common Consolidated Corporate Tax Base (CCCTB). He chairs the Scientific Committee of the Foundation and the Steering Committee of the Observatory for History Teaching in Europe.

Mathilde Lemoine

Group Chief Economist of Edmond de Rothschild, Mathilde Lemoine is a specialist in international macroeconomics and public policy. She was an advisor to the Prime Minister in 2005-2006 after having been a technical advisor to several French ministers of the Economy and Finance. From 2007 to 2015, she was Director of Economic Research and Market Strategy at a major international bank. In 2013, she was appointed member of the Haut Conseil des Finances Publiques (HCFP). Co-author of a textbook on International Economics and Finance (by Boeck éditions) and of numerous publications, she is an editorial writer for the daily newspapers Les Echos, Expansión (Spain) and L'Agefi (Switzerland).

André Loesekrug-Pietri

Chair and Scientific Director of the Joint European Disruptive Initiative (JEDI), the European ARPA, André Loesekrug-Pietri first worked as assistant to the CEO of Aerospatiale-Airbus. He then spent 15 years in private equity, including 10 years in Asia. In 2017, he was a special advisor to the French Minister of Defence. A graduate of HEC Paris and Harvard Kennedy School and an alumnus of Sup'Aéro, he is a reservist (RC) in the French Air Force. He is a member of the Innovation Council of the Munich Security Conference and the Future Fund of the Saarland.

Christophe Lucas

Vice-Admiral Christophe Lucas joined the Naval Academy in 1988 and is a specialist pilot. He has served in naval aviation and on surface ships. He has participated in numerous operations and commanded an anti-submarine frigate. He has also held positions in human resources, international relations and operations. He commanded the Force Maritime des Fusiliers Marines et Commandos, then served as the coordinating authority for the French Navy's international relations, before being appointed Deputy Director General for International Relations and Strategy (DGRIS) in 2022.

Paraskevi Papantoniou

Paraskevi (Evi) Papantoniou is Director for Space (ff) in the European Commission's Directorate-General for Industry, Defence and Space (DG DEFIS). She is responsible for the space policy and the Copernicus and Galileo/EGNOS programmes, as well as for measures in support of the aerospace ecosystem, and for relations with the European Space Agency (ESA) and the European Union Space Programme Agency (EUSPA). She was previously Head of Unit in the Directorate-General for the Internal Market, Industry, Entrepreneurship and SMEs (DG GROW). A competition lawyer, she has worked at the European Court of Justice in Luxembourg.

Odile Renaud-Basso

As President of the EBRD since November 2020, Odile Renaud-Basso is the first woman to head a multilateral development bank. She was previously Director General of the French Treasury from 2016 to 2020. Prior to this position, she was Deputy Director of the Prime Minister's Office from 2012 to 2013, then Deputy Director General of the Caisse des Dépôts et Consignations from 2013 to 2016. She is a graduate of the Institut d'études Politiques de Paris (Sciences Po) and of the École Nationale d'Administration (ENA).

Maia Sandu

President of the Republic of Moldova since November 2020, Maia Sandu started her political career in 2012, when she became Minister of Education. In 2015, she launched a political movement fighting corruption in Moldova. In 2019, she briefly served as Prime Minister. Under her leadership, Moldova became a candidate country for the European Union in June 2022. Before entering politics, Maia Sandu worked at the Moldovan Ministry of Economy, the World Bank, Chisinau and Washington D.C. She studied at the Moldovan Academy of Economic Studies and graduated from Harvard University's John F. Kennedy School of Government in 2010.

Dubravka Šuica

Since December 2019, Dubravka Šuica has been Vice President of the European Commission responsible for democracy and demography. She was the first female mayor of Dubrovnik (2001-2009) and received the World Mayor Award in 2006. She entered politics as a member of the Croatian Democratic Union (HDZ) and was a Member of Parliament (2000-2011). For ten years she was Vice President of the Congress of Local and Regional Authorities of the Council of Europe. From 2013 to 2019, she was a Member of the European Parliament (EPP, HR), Vice-Chair of the Committee on Foreign Affairs. Since 2012, she has been Vice-President for Women of the European People's Party.

Pierre Vimont

Pierre Vimont holds a law degree, is a graduate of Sciences Po and a former student of ENA. He joined the French diplomatic service in 1977. In 1999, he was appointed Ambassador, Permanent Representative of France to the European Union. Director of the cabinet of three foreign ministers, he was then appointed Ambassador of France to the United States from 2007 to 2010 and became Executive Secretary General of the European External Action Service (2010-2015). Since then, he has been entrusted with various missions by the French authorities.

Željana Zovko

A Croatian diplomat and politician, Željana Zovko is a Member of the European Parliament (EPP, HR). She is Vice-President of the EPP Group in the European Parliament and Vice-Chair of the Foreign Affairs Committee. She is also EPP Vice-Coordinator for Foreign Affairs and Vice-Chair of the Delegation for relations with Bosnia and Herzegovina and Kosovo. She is also a member of the Committee on Culture and Education and the Subcommittee on Security and Defence, and a member of the Delegation for relations with the United States and the Delegation to the Euro-Latin American Parliamentary Assembly.

Statistics

Olivier Lenoir

A graduate of the Ecole Normale Supérieure with a degree in economics and diplomacy, Olivier Lenoir is currently a strategy analyst in the digital sector in Warsaw, with the Orange Group. His European career has also led him to work at the International Labour Office, the Human Rights Defender and La Sapienza University in Rome.

Maps

Pascal Orcier

A former student of the ENS in Lyon, Pascal Orcier is an associate professor and PhD in geography, a specialist in the Baltic States, a cartographer, and a teacher of European classes at the Beaussier high school in La Seyne-sur-Mer (83) and preparatory classes at the Stanislas high school in Cannes (06).

Preface

The European Union’s New Life

Jean-Dominique GIULIANI

European integration was launched in 1950, five years after the end of the conflict in Europe. The context was very particular. For all the states on the continent, it was a matter of survival and reconstruction, of urgency to redress desperate situations and to overcome the trauma of the worst of the conflict.

The current context has obviously nothing to do with these challenges.

Over the years and with the passing of the treaties, the Community, now the Union, has adapted by enlarging. Ten treaties have changed its institutions, policies, and resources. The European Union is still not a State, but it has taken on some of its attributes in the areas of its exclusive competences (customs union, competition, currency, protection of the oceans, trade) but also in the area of shared competences, or even competences reserved for the States. Indeed, the latter are increasingly calling on the European dimension to resolve difficulties that they cannot solve alone. This was the case during the Covid pandemic. Today, it is the demand for policy to consolidate European industry. More and more sectors are concerned by these demands on the part of the States, which, moreover, often match citizens’ expectations.

The old recurrent quarrel between federalists and sovereigntists has largely been superseded. The Union is more intergovernmental than most sovereigntists ever dreamed of; it is more federalist than most federalists ever hoped for. Developments in the Union have proved both sides right. The states are increasingly turning to the Union’s institutions – nothing is possible at European level without the agreement of the states.

Although the principles on which European cooperation was founded remain largely inspired by the same method, that of Schuman and Monnet, its face and attributes no longer have much in common with the original creation. Its transformation is accelerating in line with the rapid upheavals of a changing world.

It is therefore truly a new life in a new context that the European Union has already embarked upon.

It has enabled Europe to remain firmly in the history books despite a tragic 20th century that has punctuated a long journey through division and conflict.

Seventy-three years of European integration, i.e. organised cooperation between the continent’s nations, have given the Member States the hope of recovering their wealth through stability and the development of peaceful relations amongst themselves.

The results are extraordinarily positive: peace, a prosperous internal market, organised solidarity, the world’s second reserve currency, shared and asserted values in the face of the hardening of power relations on the international scene. The Union’s gross domestic product represents 15% of the world’s GDP, a share only slightly lower than that of the United States, and a GDP per capita averaging over €40,000. The Union has become the world’s leading trading area, the world’s largest trader in services with 24.5% of the total, a prosperous external trade representing 16.2% of world trade and a particularly dynamic internal trade representing 61% of Member States’ trade overall.

At the turn of this century, one might say that the European venture had succeeded beyond all expectations. However, for some years now, the 21st century has been challenging it with two fundamental developments, together with events that are accentuating these.

The whole world has opened up to trade and this development is now shared widely. New players are enjoying growth and their demographics promise them a privileged place in the league table of world powers. And as the balance of power shifts, Europe faces new competition, especially from Asia. In addition, a nationalist revival, spurred on by states lacking ideologies, but which are intent on maintaining their autocratic regimes, is making its mark on the planet and is prompting withdrawal.

Europe no longer had any real enemies. It is now discovering new ones with Russia, which rejects its achievements and ideals; it must compete with others such as China; it is encountering provocative actors such as Türkiye or turbulent neighbours such as the United Kingdom; and it has some sound allies, but their interests sometimes differ.

At the same time, the European economy and society must adapt to a double digital and ecological revolution. Digitisation and its future quantum and artificial promises are a far more important revolution than the invention of the printing press. They are disrupting production processes, forcing the reinvention of a new form of marketing, and completely changing the way we communicate, and therefore also the way we exercise our rights and duties as citizens in democratic systems. This revolution is underway, but it has not yet finished producing new outcomes.

At the same time, Western public opinion is gradually becoming aware of the limits of an economic model based solely on the exploitation of resources and, above all, of its consequences for health, biological diversity, and natural areas. A powerful movement has arisen, particularly in Europe, supported by citizens’ demands, which is pushing European governments and authorities to declare that they will be the best in establishing an economic order that respects the environment. This has led to a number of regulations that Europeans are imposing on themselves, in the belief that they are setting an example. With this they run the risk of not taking sufficient account of and compensating for the destabilising impact of these measures on economic competition, i.e. growth, employment and, therefore, the social policies to which people are attached.

The accumulation of these new challenges for the European Union constitutes a vital challenge. It must adapt as quickly as possible and indeed it has begun to do so. In a totally new global context, its future depends on it.

The challenge of efficiency

Citizens expect European cooperation to prove its effectiveness. Reflexes are still national, but the European dimension naturally and quickly asserted itself. The Covid pandemic is a good example: national measures did not last more than two months, and a vigorous European response helped Europe to become the leading producer and donor of vaccines, then to build a strong financial response to the resulting economic situation, the famous €750 billion post-pandemic recovery plan. Europeans have been massively vaccinated, and the pandemic brought under control with growth surging as soon as restrictions were lifted. In retrospect, this was a success.

The European Union did not stop there and started to overhaul its economic support policies during the crisis. The General Block Exemption Regulation ¹ has allowed exceptions to the rules on competition and state aid control. The establishment of the Important Projects of Common European Interest (IPCEI) has opened the way to genuine industrial policy measures, making it possible to finance programmes in the field of batteries, hydrogen and electronic chips. Because this mechanism was exempt from prior European control the European Commission estimates that it was possible for the states to decide on 91% of the aid distributed to address the crisis. It indicates that under this scheme €672 billion of aid has been distributed by the Member States. The Commission now intends to go further by establishing a "temporary crisis and transition framework", a common aid fund for industries undergoing conversion, specific "anti-relocation" aid and authorising tax benefits, provided that all these actions contribute to promoting ecological transition.

Commissioner Thierry Breton has been creative in proposing an aid fund for the defence industry that will invest primarily in Europe, in launching a number of specifically European programmes to provide new generation electronic chips, to acquire clean space capabilities, to explore and anticipate quantum computing and to set up a sovereign wealth fund to fuel investment in the industries of the future. Its Clean Tech Act project aims to support industries deemed critical (solar, wind, etc.) to achieve the ecological transition.

These advances represent undeniable innovations in the nature and speed of response by the European authorities, even if their preparation did not obscure divergence between Europeans