Ana Palacio: European Institutions Have Not Yet Grasped the Magnitude of Global Change

Finales de noviembre. It is getting cold in Madrid, but the public debate is heated. A few metres from the Supreme Court and the National Audience, at the Club Financiero Génova, Agenda Pública gathers former Foreign Minister Ana Palacio and the Popular Party MEP Adrián Vázquez to talk, calmly, about the present and the future of the European project.

Both well acquainted with EU institutions, they share concern about the erosion of the rule of law in numerous member states. In the face of the “growing tendency to concentrate power in the executives” —in Palacio’s words—, Vázquez asks that the Commission not apply a “double standard” and not focus only on the “ugly ducklings,” but also act against abuses by governments formed by respected center-left or center-right political parties on whom institutional stability depends.

They also agree on the need to adapt European architecture to a globally unprecedented scenario. In Palacio’s view, “we need to tailor decision-making to an environment where problems require real-time responses.” “The combination of efficiency and respect for the rule of law must be reconsidered, because we cannot keep acting with the timings of the old globalization, when there was an international consensus that is no longer in place and in which Europe enjoyed a clear privilege,” she asserts.

Ana, you were a deputy in the fourth and fifth legislatures. How do you remember that Parliament and how has it changed compared to the current one?

Ana Palacio (A. P.): Frankly, memories interest me relatively little; what interests me is talking about the world today. The European Parliament has evolved from what it was then: an institution with many aspirations, but far fewer competencies.

Today, however, it is a chamber with fundamental powers, though not on equal footing. And yet, there is a constant I have witnessed since 1994: the Parliament often does not measure the consequences of its actions. In its pursuit of power, and to compete, it undermines the general interest. I am speaking of the institution, though obviously it is the political groups operating within it. That behavior has not changed.

Many things have indeed changed in these years. When I arrived, the Parliament was only beginning to handle the competences derived from Maastricht. Many current competences arrived later, through the Court of Justice’s jurisprudence. Only later did they consolidate in the Treaties. But the institutional dynamic, essentially, remains very similar.

I do retain a special memory of those early years. For Spaniards of my generation, Europe was a cause. Coming from Francoism, from that slogan “Spain is different,” what we wanted precisely was to stop being different and to be like everyone else. In the Parliament, you shared space with profiles very different from yours, and yet there was a sense of community. Spain was there, counted, participated. It was a strong sense of belonging, something that someone who did not live through the preceding era may not experience in the same way.

And how would you describe the current Parliament?

Adrián Vázquez (A. V.): The aspiration of then has become a reality today, with all the good and the bad that entails. During the first twenty years of the twenty-first century, Parliament remained stable thanks to the majority of the European People’s Party (EPP) and the Socialist Party. But European political instability is also reflected today in the European Parliament. In 2019, for the first time, it was necessary to bring in the liberals and the greens to politically legitimate the Von der Leyen Commission.

“In this legislature, for the first time, there exists a real alternative, the so‑called ‘Venezuelan majority’, which has already pushed through a first package of legislation”

In this legislature, for the first time, there exists a real alternative, the so‑called “Venezuelan majority,” which means adding the EPP votes to its right, and which has already pushed through a first legislative package. Parliament functions more and more like a national parliament, but with a notable limitation: if there is no stable legislative majority, there is no possibility of early elections. That generates rigidity. On top of that, there is a certain lack of institutional accountability. Sometimes, the contest becomes a contest to see who imposes more rather than who can build sensible agreements.

A. P.: That has always been the case. What has changed is the discourse about the European majority. I do not believe in sanitary cordons and I think that if you have elephant power, you cannot behave as a hinge. In this Parliament, the PP tries to occupy both roles and that creates tensions. But something similar occurs on the left: the Socialist Group dominates, especially pulling the Greens, often defending positions with a sort of presumed moral superiority — for example, on energy — which of course does not appear in any treaty.

But isn’t there also a challenge from the right? How do you explain the rise of openly anti-European forces?

A. P.: Of course there is. These forces emerge precisely due to the backsliding of the rule of law. Europe has three anchors — freedom, prosperity and the rule of law — all on the same level. The rule of law acts as the element that unites freedom and prosperity.

Today, for younger generations, many things that were absolutely normal for earlier generations — for example, buying a home if you had a full-time job and a certain job stability — are no longer guaranteed. And when that base of predictability disappears, frustration and disengagement arise.

I recently read a survey indicating that roughly 25% of young Spaniards, Italians and French would not mind living under autocracy if it guaranteed prosperity. In other words, they would be willing to give up freedoms in exchange for material security. That should worry us greatly.

Additionally, there is a geopolitical and intellectual backdrop. In a recent book by Dan Wang, two models are proposed today: an engineering model, the Chinese one, focused on doing, executing, producing, and a Western model trapped by legal hypertrophy. He argues that we do not have a true rule of law, but a rule of lawyers. And this phrase, which the renowned historian Niall Ferguson picked up on a popular podcast, talking about the United States, seems to support the idea: our decisions would be suffocated by layers and layers of lawyers and processes.

“The President of the Court of Justice has openly stated: there is a growing trend to concentrate power in the executives”

If we want to curb the retreat of the rule of law and recover it, we must address this context. Europe functioned for decades on a tacit but very strong agreement of respect among the three powers — legislative, executive and judicial — and that balance is breaking. The President of the Court of Justice has stated openly: there is a growing trend to concentrate power in the executives. And that manifests in different pathologies, depending on the country.

This danger was also seen in the eastern enlargement. It was said that we could not refuse the accession of countries coming from autocratic regimes, and that is understandable from a historical and moral standpoint. But that enlargement created institutional imbalances that are still noticeable today.

In Portugal —and something similar happened in Spain— it was decided not to delve deeply into the debate. Portugal did conduct a serious study on how the enlargement could affect cohesion and structural funds; Spain did not. That study was presented to the Portuguese Parliament, and yet the Parliament voted for enlargement unanimously. Those of us who had suffered dictatorships —Salazar in Portugal, Franco in Spain— felt we could not say no to countries emerging from autocratic governments and wanting to join the European family.

With this I mean that it is evident that accession has not yielded the same results in every case. And we return to the rule of law: Spain did not have to change a single law to join, neither on social nor administrative grounds. Spain, from various technocratic governments, had built a solid administrative network. There was no constitution or political rights, but there was a functional administrative law, property and commercial registries, procedures… Something that did not exist in many of those eastern countries. That institutional tradition is not improvised. Spain had been working on it since the Stabilization Plan of 1958.

Are we doomed to a permanent clash in this scenario of the blurring of the separation of powers and concentration of power in the executives? In this context, do we need more enlargement or deeper integration of the European project?

A. V.: The rule-of-law report emerged in 2020 precisely because of that authoritarian drift and the increasingly blurred separation of powers. It is not only a matter of Poland and Hungary — although they are the paradigmatic examples; there are already twelve Court of Justice rulings that have laid down jurisprudence on what rule of law is and is not in Europe.

If we take the European Parliament as an example, the legislative instability we face requires strong governments in the Council. That is the mandate of strong governments, while the previous one was clearly the Parliament’s mandate. That balance has been broken.

With the rule of law, the mere fact that we need country-by-country monitoring already indicates something is wrong. But there is another important element: if we look at the infringement procedures that the Commission initiates —which are numerous— we see a double standard. For some countries, it seems we are more permissive than for others. This happens because the Commission, after all, is a political Executive. And that is where I think the system begins to be in danger.

“There exists a double standard and I’m not talking only about Spain. Although the Spanish situation is clear: there have been serious violations of the rule of law in this legislature”

The same goes for parliamentary immunities. You may find yourself with a European deputy from a party that forms part of a government that systematically violates the rule of law. In those cases, the wrong question arises: “Which would you prefer, a government that violates the rule of law or one that does not?” That question should not exist. If we begin to manage immunities according to the party to which a deputy belongs rather than the facts alleged against him, the system stops functioning.

There exists a double standard and I’m not just talking about Spain. Although the Spanish situation is clear: there have been serious violations of the rule of law in this legislature. A Commission that needs to survive politically inside the Council will always find it easier to act against the “ugly duckling” than against governments formed by well-respected political parties, of center-left or center-right, on which its institutional stability depends.

That’s why I think the great battle now is to achieve — even if it causes a political crisis — that the Commission also acts against those respectable governments, responsible, pro-European, that belong to the traditional political families. Not only act against those who are seen as the bad, the peripheral or the uncomfortable. If we don’t break that pattern, the rule of law will keep weakening.
 

A. P.: At a recent round table I was the only one who told the moderator that he should not limit himself to mentioning the well-known “ugly ducklings.” The concentration of power in the Executive also occurs in other member states that he avoided citing for political reasons. No need to add anything else; everyone understood what I meant.

Regarding the debate on institutional balance, I agree that we are clearly living in a moment dominated by intergovernmental dynamics. Yet at the same time the Commission has accumulated significant powers that lack a solid legal basis. This has happened because the world has changed and institutions have had to react quickly. The decisive moment was the pandemic. During COVID-19, the Commission acted without an explicit legal basis but with tacit acceptance by the states, because it was the only way to tackle situations that were fracturing the internal market, such as obtaining vaccines, or refusing to treat patients merely because they had crossed a border. It was incompatible with the Union’s basic functioning.

“Von der Leyen has gained notable political presence and has participated in spaces traditionally reserved for heads of state and government”

In this period, the Commission has de facto expanded its role, especially in defense. Von der Leyen has gained a notable political presence and has participated in spaces traditionally reserved for heads of state and government. Her institutional evolution has been highly significant. The challenge now is how to fit that new prominence with the formal competences foreseen in the Treaties. In fields like industry, the Commission’s legitimacy rests on the single market, but in defense there is no real internal market: most products have one or two buyers at most, and rarely does its reach cover all twenty-seven armed forces.

My concern is that European institutions have not yet grasped the magnitude of the global shift. We find ourselves in an unprecedented situation and we need to adapt decision-making to an environment where problems require real-time responses. The combination of efficiency and respect for the rule of law must be reconsidered, because we cannot continue acting with the pacing of the old globalization, when there was an international consensus that is no longer valid and in which Europe enjoyed a clear privilege.

Mark Leonard has described this transformation very well. For years he argued that European regulatory power was envied and admired around the world. In the previous context it made sense, because European soft power worked. But today those conditions have disappeared. Still, we have conveyed to our citizens the idea that we still hold that competitive edge, when in fact the international environment no longer responds to that model.

Hace poco murió el ideólogo del soft power, Joseph S. Nye, ¿ha muerto el soft power?

A. P.: No, the soft power is not dead. It remains fundamental, and one of the big problems we face is that the current United States administration undervalues it, or outright dismisses it. It has thrown overboard a crucial part of its international influence.

The soft power continues to be a tool that Europe must firmly rely on. In a world structured around two major powers that tend to create zones of influence, there is a real opportunity for the European Union. Many countries affected by this redesign do not want to be boxed into any of those zones. They seek an alternative system, and that system is based on norms and the rule of law. There Europe can offer something different and the soft power still holds extraordinary value. Europeans are recognized for that know‑how, for negotiating, for overcoming disputes through agreements and rules.

A. V.: As Ivan Krastev noted in a recent interview, the problem with European elections is that Europe behaves like a group of vegetarians seated at a table full of carnivores. And, as he points out, what we need to be is omnivores. That image describes very well the mismatch between how Europe sees itself and the world in which it actually operates.

“Today the Commission functions like a government, just as national governments do, and acts essentially as a crisis-management institution”

This diagnosis aligns with what Mark Leonard has always recalled. And I also include the Commission among the group of governments that must take the lead. The Commission is no longer in its aspirational phase nor in the stage where it set major global agendas —such as the Green Deal at the start of the legislative term—. That cycle has passed. Today the Commission operates as a government, just as national governments do, and acts essentially as a crisis-management institution: first the pandemic, now defense, tomorrow another unforeseen issue.

In barely ten years, the Commission has gone from being an institution that set the global agenda to a government prepared to face crises that can erupt at any moment. That evolution is real. And if there is a movement of voters toward strong governments, we too must transform, because we live in a world where the United States and China are clear examples of governments that act quickly and flexibly in an unstable world.

The worrying part is that neither European citizenship nor a portion of the political class seems aware of the decade we are entering. If we cannot sustain European institutions in this context, in five, ten or fifteen years we could see a deep upheaval in the European project.

The priority now is for the system to survive this political wave. For that, responsibility is needed, but also a flexibility that I miss in many MEPs and in several national governments, which tend to shut themselves in and seek external enemies. That retreat fosters authoritarian dynamics and returns us, once again, to the debate on the rule of law, because erosion is directly linked to that identity closure.
 

A. P.: What we cannot do is address these topics from dogma. If we accept that our system rests on three pillars — prosperity, freedom and the rule of law —, when we speak of prosperity we are also talking about the welfare state. But a non-ideological welfare state. We must go to the ground, drop the rhetoric and analyze concrete problems. For example, housing for young people. We do not need narratives or theories; we need to see what works in practice.

We must abandon rhetoric, ideologies and be fully aware of what is changing around us. And, if everything is changing, we must change accordingly. There is no alternative.

One very clear example is Mercosur. We have been negotiating for almost thirty years, twenty-five officially. It is an agreement that is fundamental for Spain, as it concerns our natural area of relationship. Probably we have achieved the best possible text, with all guarantees. But if, instead of seeking the perfect agreement, we had opted for somewhat less ambitious rules — and, to be clear, also a broader view of what is at stake — the agreement would probably have been in force for years. That would have allowed us to influence earlier, move the agenda, defend multilateralism, human rights and our values from an active position. We would have been generating real effects for some time, instead of still waiting.

“We have approved regulations that harm our own companies in global competition, while we do not apply those standards to the products we import”

The same happens with our domestic legislation. We have been maximalists. We have approved regulations that harm our own companies in global competition, while we do not apply those standards to the products we import. This is unsustainable. We try to correct it by establishing border mechanisms, but if our regulatory system is so perfect that it then does not work in reality, we have a problem.

The world has changed and we no longer operate in the old environment. The rational attitude is to acknowledge it and ask what we must change ourselves. And yet, when attempting to take a modest step, such as Omnibus 1, Parliament blocks it. That reaction shows that part of the system still behaves as if nothing has changed, when everything before us indicates otherwise.

A. V.: It is blocked by thirty-one Socialist MEPs who decide not to respect the voting line agreed within the Von der Leyen majority, a majority we had negotiated precisely to give stability to the institutions. That rupture has forced the Popular Party to seek support in the so-called “Venezuelan majority.” Therein lies the problem of political responsibility.

I don’t want to turn this into a partisan debate, but it is evident that the Socialist Group —and, in general, the European social-democratic family— has not assumed its real situation, electorally or socially. They maintain a high moral stance that prevents them from seeing clearly the kind of challenge we face. Moreover, they are not capable of keeping a voting discipline that would guarantee institutional stability. They prefer to risk the continuity of the Commission and, with it, the strength of the Union as a global actor, rather than align with a necessary agreement.

Voting against Omnibus 1 may seem a minor gesture, but it represented a very important step toward adapting our legislative framework to the world ahead. However, it has been blocked from within the majority that says it wants to protect it.

What would the European Union have to do right now? If you were in Ursula von der Leyen’s shoes, what would be the number one priority?

A. P.: If I could decide, the first thing would be to bring together all the directorates-general and compel them to work together. Review everything from scratch and, above all, break internal administrative borders. I know the energy dossiers well, and it is evident that environmental policies clash head‑on with energy policies; each defends its own turf and that makes progress impossible. The first task would be precisely that: align them.

I would hold a joint meeting, an internal town hall, to tell them clearly: “The world has changed and what we have done so far, although it has been very valuable, is no longer enough.” The European Union has projected enormous regulatory power and, properly understood, that remains an asset. But we need to simplify, remove duplications, support our companies not with more subsidies, but by creating a framework that incentivizes research, innovation and the ability to compete.

Deep down, this echoes what the Draghi report says. And yet, according to the best trackers, only 14% of its recommendations are being implemented and more than a year has passed since its publication. We must identify what can be simplified and act accordingly. And, moreover, establish mechanisms to intervene when one directorate-general prioritizes its competences over resolution of

Energy is the clearest example, because it is a border territory where geopolitics, the internal market, climate and industry converge. It is the point where it becomes most evident that the current system is not aligned and that real coordination between policies is required.

A. V.: If I had to sum it up in a headline, I would say we need a roadmap for the system to survive the next crisis. We have built a system so rigid that it often turns against its own objectives.

Many thanks.