EU reform, migration and the economy

The European Union makes up one-fifth of the world’s economy. Part of its success is that EU citizens see themselves as better off economically within the bloc than outside.

But that perception is being challenged.

At this week’s EU summit in Brussels – more than 60 years after the EU’s foundation – reform was tabled as a necessary adjustment to meet the challenges of our time.

On the financial side, reform is largely driven by French President Emmanuel Macron who says now is a golden opportunity to make changes to ensure the future success of the bloc. He is pushing for a more financially flexible EU.

But divisions have been growing as well over the bloc’s policy on refugees. On the opening day, a breakthrough of sorts was achieved: a boost in funding to address the issue which has threatened the very solidarity of the bloc. The leaders agreed to increase funding for Turkey and freed up 500 million euros ($581m) in funding for North Africa.

They agreed that “controlled centres” should be set up in member states on a voluntary basis for “rapid and secure” processing to distinguish between irregular (undocumented) migrants and refugees eligible for asylum. 

“If it’s being framed as a solution to the migration crisis, it’s the biggest exaggeration you could possibly imagine,” reports Al Jazeera’s Laurence Lee from Brussels. “It’s a sort of political fix to stop the bloc from falling apart … It’s all about keeping people out.”

John Springford, the deputy director of the Centre for European Reform, says “bringing in more people definitely helps” EU countries economically.

“What’s really important is that those people are quickly integrated into the labour market, into society, so that they find jobs quickly and they start being productive helpful members of society.”

Asked about tariffs imposed by the Trump administration and their effect on the EU, Springford says, “If the trade war escalates, and the US imposes tariffs on cars … the EU is quite vulnerable to that. It’s difficult to say how the EU should respond. On the one hand, if they say, ‘Trump just imposed tariffs on us and we are not going to respond,’ it may well embolden Trump to go further and particularly the trade balance between US and EU does not improve. 

“But on the other hand, if they do escalate the trade war, then it might become a kind of fight to the death and we might see some severe restrictions on transatlantic trade which won’t help anyone … I think the EU has no easy options.”

Also on this episode of Counting the Cost:

Harley Davidson vs Trump: The US president’s trade spat with the EU has forced Harley Davidson to shift gear overseas. New EU tariffs will raise the average cost for each bike by about $2,000, so it’s shifting some production outside the US. And with that move, it just became the poster child for the breakdown in US trade relations with the EU.

Illegal logging: Activists accuse timber companies of endangering the world’s second-largest rainforest in the Democratic Republic of Congo. Jules Caron, a campaigner at Global Witness, talks to Counting the Cost.

Mexico’s digital divide: One of the main issues in Mexico’s presidential campaign has been its underperforming economy. Mexico is traditionally seen as a commodities and manufacturing giant. It has the largest proven silver reserves in the world and the 10th-largest oil reserves. But according to Bloomberg, some 40 percent of the population still face entrenched poverty and more than half of the population is not connected online. Carlos Cardenas from IHS Markit discusses Mexico’s digital divide.

Bahrain’s economic woes: Kuwait, UAE and Saudi Arabia are teaming up to offer financial aid to neighbouring Bahrain.