Money, Money Everywhere: Why Does the EU Get Such a Bad Rap?
Posted by hkarner - 24. Januar 2017
Source: DER SPIEGEL
Has the EU really lost touch with its citizens? Is it unable to improve people’s lives? Yes and no. Across Europe, EU money flows from Brussels into thousands of projects and ideas. Why does nobody notice?
On the search for an alternative narrative of Europe, there are plenty of places to start: A giant, next-generation bio-product mill is being built deep in the forests of Äänekoski, Finland. A new, state-of-the-art trauma center is under construction on the outskirts of Birmingham. On the Greek island of Crete, resourceful entrepreneurs are replacing pig fat with olive oil to make better sausage for the world. Near Barcelona, pharmaceutical researchers are experimenting with plasma and proteins to develop drugs to treat genetic defects. Off the coast of Suffolk, England, German wind turbines are going up in the North Sea.
Thousands of small companies in the Netherlands receive low-interest loans, thousands of homes in France are being renovated to make them more environmentally friendly, thousands of jobs are created by such measures. Portugal is getting a 4G mobile network, a large printing company in Heidelberg is getting cheap R&D funding to expand its digital portfolio, Spanish ports are linking up with the railway network, contaminated wasteland in Belgium is being converted to clean building sites, and many Polish dairy farmers will have the opportunity to work with more modern machinery in the future.
Such are the outlines of the other European story. It is rich and colorful, but it is also so discordant and diverse that it is almost impossible to create a single, compelling narrative. The bits of good news go largely unnoticed.
Making things even more difficult is the fact that some of the worst storytellers happen to be located in Brussels and the European capitals. Year in and year out, they fill entire libraries with books full of laws, papers, projects, programs and reports, but the texts are usually so incomprehensible, so blighted by footnotes, cross-references and legalese that no one can understand what has happened thus far. And no one can say what is happening now, either. And when it comes to figuring out what the future will bring, we are especially clueless.
Such is the situation in Europe at the beginning of 2017. March will see the 60th anniversary of the signing of the Treaty of Rome, which marked the beginning of the European adventure. But in many places, the prevailing mood is that there is nothing to celebrate. Project Europe has been running on fumes for years, and now it seems as if majorities in society and the media believe that the European Union belongs in the dustbin of history. That the entire anemic episode has come to an end, those eternal Brussels congresses where elitist Eurocrats engage in nothing but myopic navel-gazing. That, at least, is the well-practiced cliché.
But the examples mentioned at the beginning, the hospital in Birmingham, the sausage factory in Crete, the wind farm in Suffolk, the pharmaceutical research facility in Barcelona, the environmentally friendly houses in France – all that and more would not exist without Europe, without the European Commission, with the European Investment Bank (EIB), and without the „Juncker Plan,“ the unofficial title of the „Investment Offensive for Europe“ launched two years ago by European Commission President Jean-Claude Juncker. The Juncker Plan is an attempt to use smart lending to trigger additional investments worth many times the original sum, with an ultimate goal of 315 billion euros, distributed among thousands of projects throughout the EU. This article’s aim was to take a closer look at the Juncker Plan.
The idea was simply that of examining whether the European Commission’s strategy to provide a beneficial jolt of liquidity into the European economy is working. The plan was to find out whether the funds are truly being disbursed, whether the companies in the glossy brochures actually exist and whether the stories about them are true. The research involved traveling to the construction site in Birmingham, to the Cretan sausage factory, to Barcelona and the French region of Picardy, and to Munich and Luxembourg. And yes, it’s true, the companies and the projects all exist, and while they may not amount to a huge jolt, they do inspire hope. Loans are being disbursed and the money is being transformed into machines, buildings, software and jobs. In other words, Europe is alive. Europe is humming along.
But during the course of the research, we discovered something else. It’s more of a feeling really: that Europe’s institutions are the last to profit from these success stories, if they profit at all; that hardly anyone makes the connection between the wind farm in Suffolk and the European Commission, between the sausage factory and the Juncker Plan, between the hospital and EIB loans, between Polish dairy farmers and European ideals.
It became apparent that although this Europe is working tirelessly everywhere to achieve its goals, its successes remain invisible, while in the 28 member states (soon to be 27, without the British), a bright spotlight is shone on every failure. The sad thought emerged that this EU, which has become part of our everyday lives, an indispensable player in even the most remote corners of the continent, has nevertheless remained a remote, unpopular entity.
Brexit supplied spectacular evidence to support this notion. Wales, for example, is one of the biggest beneficiaries of European support. A great deal of money has been sent to the British region so that museums could be operated and festival halls built. The EU helped rebuild roads and pedestrian zones, create educational and sports facilities, and build bicycle and hiking paths. But the majority of Welsh voter supported Brexit, more even than the nationwide average. Some 52.5 percent of the Welsh, 854,572 people, voted to withdraw from the ridiculed, despised and hated European Union.
These numbers alone made it seem pointless to simply dissect the Juncker Plan and write, for example, that within two years this bold program has helped 290,000 companies in 27 countries receive loans and provided 100,000 people with new jobs. It seemed pointless, because such information apparently goes in one European ear and promptly goes out the other. When Europe does something, the common response is: So what? How is that my concern? What do I have to do with Birmingham? Or sausage in Crete?
Europe is the forest that people are unable to see for all the trees. Spend half an hour on the European Commission’s website searching for funding opportunities, and you’ll end up feeling thoroughly confused. There is no branch of politics and no segment of society without a corresponding subsidy program.
There are funds to promote civil society and others to address asylum issues. The European Commission promotes foreign trade and competitiveness. „Creative Europe“ supports artists, filmmakers and other cultural workers. „Galileo“ funds a navigation system supported by 30 European satellites; „Copernicus“ provides money for the collection of geodata; „Erasmus“ promotes the exchange of students and trainees. There are funding programs for honorary positions, for nuclear safety, for cultivating the rule of law, for urban areas, for villages and for underdeveloped regions. There is something for almost everything. And yet its effect seems to be nothing.
Supposedly so out of touch with its citizens, Europe is in fact on every market square and every street corner, and yet most passersby consistently overlook it. There are currently 1,175 small and large EU programs underway in Barcelona alone, a huge number, and the story isn’t all that different in Lyon, Liverpool, Milan, Prague, Rotterdam, Lisbon, Seville, Cologne, Vienna and Warsaw.
In the German state of Saxony, where enthusiasm for Europe wanes by the year, there are 5,753 entries on the catalog of projects funded by the EU. The list includes hairdressers, small software companies, law firms, youth workshops, kindergartens, English tutors, naturopaths, employment agencies, clubs, associations, businesses and government agencies. The EU, it would seem, is doing its best not to forget even a single citizen of Saxony with its largesse.
The subsidies are for 110 euros (117 dollars) or 2,585 euros or even 253,000 euros, and there are loans galore. The money goes to cities and towns like Dresden and Leipzig, Werdau and Chemnitz, Radebeul, Zwickau, Pirna and Schkeuditz, Hoyerswerda, Grimma and Glauchau. But even as the money flows and Europe extends its helping hand, surveys show that only 33 percent of Saxony residents believe that Germany’s membership in the EU is „generally advantageous,“ down from 52 percent only six years ago. How is this possible?
Are the bailout packages for Greece, Ireland and other countries to blame? Have these bailout packages had any effect on people in Germany? Is anyone in Germany worse off because of Europe? In fact, aren’t many people better off? Could it be that people’s heads are still full of old fairytales about standardized cucumbers? Or has Europe simply replaced the enemy that was missing in our highly polarized world?
There is apparently a collective emotional barrier against thinking money from Brussels is a good thing, against thinking that that Europe is a good thing, against recognizing the values of the EU as our own. Europe is held responsible for everything bad. There is hardly any place where Europe is able to gain a foothold.
Explaining this phenomenon is relatively simple in Birmingham. At the end of last year, Roger Stedman, medical director of the Midland Metropolitan Hospital, and Toby Lewis, the hospital’s CEO, were sitting together in a mobile office unit with a view of the imposing construction site. Over instant coffee, the two Englishmen wondered why anyone would come to see them to talk about Europe.
The new facility will be one of Europe’s biggest trauma centers, with 670 beds and 15 operating rooms — at a total cost of £340 million (€392 million). Of that total, £107 million is a loan from the European Investment Bank (EIB), the EU’s bank. In Brussels, the hospital deal is seen as part of the Juncker Plan and the „Investment Offensive.“ But that’s not how they see it in Birmingham. „It’s a loan at market prices,“ says hospital director Stedman. „We could have financed it differently. It’s a business deal, not a gift from the EU.“
That’s quite a harsh response. One might expect that the hospital officials in Birmingham would at least find a few friendly words for their biggest creditor, that they might show some gratitude to the EU for assuming such a large risk. It would be logical, and certainly polite, for them to praise the cooperation with Europe, and it would hardly be surprising if they were to repeat their praise at every press conference and in every local newspaper. They could say that Europe is making a large contribution to this hospital and that, in fact, German, Italian, Polish, Portuguese, Czech and Belgian taxpayers are vouching for a loan so that a nice hospital can be built in England. But these English builders aren’t doing that.
In fact, Europe’s presence is virtually ignored in Birmingham when it comes to the construction of the Midland Metropolitan Hospital. The EU’s role as a loan provider is kept silent, even by those who have good reason to say something nice. Even more surprising is the fact that, in the course of our conversation, Dr. Stedman and CEO Lewis reveal themselves to be pro-EU and anti-Brexit. They don’t say so explicitly, but their words suggest that they would much rather have seen Britain remain in the EU, if only for fear of personnel shortages. Tens of thousands of EU citizens work in the British healthcare sector, says Lewis. Without them, he adds, the entire industry faces collapse. But praise for the EU? Forget it.
The EU story in Crete is different, even if the result is largely the same. High above the beautiful expansive beaches of Rethymno is the Creta Farms sausage factory, and the people who run it can hardly be beat when it comes to enthusiasm for Europe. The company has developed chemical and technical processes to extract fat from pork and replace it with olive oil. After the procedure, the sausage is easier to digest, and yet it still tastes good, at least better and stronger than many a competing product.
Last Chance Loan
For about a year, the Greeks have been supplying the Australian market with products under the brand name „Oliving,“ a play on the words olive and living, and they have already captured a 3 percent market share in the low-fat segment. They have to expand quickly to satisfy demand, which is where the EU came into play, in the form of the Juncker Plan.
Creta Farms became part of the European Investment Offensive when it was granted a 15 million euro loan. Without the money, says company president Manos Domazakis, a slim, melancholy man, the company would have run into difficulties and would not have been able to fill its orders — and roughly 700 jobs would have been in jeopardy. And in Rethymno, Crete, 700 jobs is a huge number.
Experts from Brussels and Luxembourg flew to Crete, inspected all the books and had company officials explain the business down to the last detail, including the process of putting olive oil in the sausage, the marketing and the sales potential. They visited the pig production facility, the largest in Greece, with 45,000 animals processed annually, and they toured the sausage factory, passing commercial kitchens, fermenters and packing stations. They also looked to see whether the company had any other potential sources of financing. But there were none.
That’s because Crete is still part of Greece, where banks are tip-toeing along the precipice of a financial and government crisis and have no interest whatsoever in granting new loans. The Greek stock market is also as good as dead and private investors prefer to look for projects in calmer waters outside of Greece. For Creta Farms, says President Domazakis, Europe was the one last chance to secure fresh funding.
The visitors from the north were sober, competent and professional, says Domazakis, who runs the family business together with his brother. They are truly grateful to the EU and its investment bank. In fact, the Domazakis brothers would be the perfect examples of the benefits offered by European Union membership, and not just in Crete. But during a drive along the coast, Domazakis lowers his voice and says that not everyone is pleased about the Juncker loan.
Envious competitors have badmouthed Creta Farms as „traitors“ for allegedly receiving special treatment. Domestic banks were also upset over the foreign money from Brussels and Luxembourg, and about the symbolic message it sends when a Greek company is unable to secure financing in Greece. In other words, the fans of Europe from Rethymno, the employees of Creta Farms, all of them grateful beneficiaries who would certainly like to tell their story, now prefer to remain silent. Saying good things about the EU only creates bad blood. It’s almost as if the EU were cursed.
No matter where you look, the various agencies of the European Union can do what they want, but they won’t get any recognition. Instead, people merely seek out and find the old prejudices, including the claim, disguised as economics, that the EU, with all its programs, ultimately only interferes with European markets.
The people at the European Investment Bank ought to have a response to that. A visit to the EIB in the cold European district of Luxembourg reveals sober, competent, professional men and women who could all have been part of the group to visit Creta Farms. And they explain, quite plausibly, that the EIB does everything it can to help as effectively as possible, but without interfering and getting in anyone’s way.
No one wants an uber-state, one which, in addition to the nation-state apparatus, bursts into domestic markets as an unwanted actor. That is why Europe tries to identify investment gaps, determine „additionality,“ recognize structural problems and understand market failures — prior to granting loans and providing assistance. And if a member state doesn’t want any help, because it believes the help is misguided, no help is provided.
In contrast, the national governments like to take what they can get without asking permission and go back for seconds if they can — before turning around to badmouth the European Union. Many national governments are not ashamed to actively block compromises at meetings in Brussels, only to return home and deride the EU for its inability to compromise. The same story has been going on for 10 or 15 years: The same governments that play a key role in shaping Europe’s fate as members of the European Council in Brussels talk about the EU as a foreign power over which they have no influence when speaking to a domestic audience. It is an untenable situation.
This mendacity on the part of governments destroys all the minor successes, of which there are so many. The meetings where experts from 40 cities discuss ways to fight corruption in the awarding of public contracts. Or how best to handle difficult adolescents. Or how to bring the disabled into the working world. The European Union spends a lot of time exploring how to create jobs, how to train people properly, how not to leave the unemployed behind and how to give young people hope.
„Power_m“ is a Munich-based project that successfully advises the unemployed. Also in Munich, „Amiga“ helps highly qualified immigrants find jobs. „Guide“ helps women start businesses and „BIWAQ“ addresses the problems of disadvantaged neighborhoods. The programs cost as much as 10 million euros each and the EU pays 50, 60 or 70 percent of these costs, depending on the project. Europe is present, not just in Brussels but in Munich’s Giesing district, in Berg am Laim, Ramersdorf, at the Innsbrucker Ring or on a country road near Tegernsee. Europe helps. Everywhere.
Attention When Something Goes Wrong
When 10 educators from Munich visit kindergartens in Scotland to learn how the Scots treat disabled children, Brussels pays some of the cost. When Munich and Vienna organize a trainee exchange program, Brussels pays some of the cost. The EU provides 31,255 euros for the „Save Earth Life for Youth“ program, 72,634 euros for „Mobility of Trainees in the Baking, Confection and Butcher Professions,“ 34,524 euros for a program called „Fit for Work,“ and 2,600 euros for „Alpha+ Improving Reading and Writing.“
Sometimes there is also a panel discussion on the topic „The EU and the Media.“ At one such discussion, Josef Schmid, the deputy mayor of Munich, once said that it was certainly the media’s job to uncover abuses. But, he added, it is worth asking how a kind of European allegiance is supposed to develop if Europe only gets attention when something goes wrong.
The same questions are asked in the Europe division of the Munich Department of Labor and Economy. Its deputy manager, Anton Tropper, 34, is friendly and matter-of-fact — and is indisputably a dedicated European. Tropper was born in Graz, Austria, worked in Brussels, and has now been living in Munich for the last four years. The city is so well-connected to Europe that it could fill thick annual reports on the topic of the EU alone.
In the course of a major project called „Smarter Together,“ Neuaubing-Westkreuz, a Munich neighborhood that has somehow remained stuck in the 1950s, has recently turned into an idea laboratory. Researchers and IT firms have descended on the neighborhood to introduce bike and car sharing to residents and to interconnect everything and everyone. Through all kinds of renovations and urbanistic tricks, carbon dioxide emissions are to be reduced by 20 percent while renewables are to become 20 percent of the energy mix. Energy efficiency is to rise by 20 percent. As a result, quality of life will improve across the board. And the EU is paying about €7 million to find out whether this approach can work, so that other cities and neighborhoods can learn from it. Two other „smart cities,“ Lyon and Vienna, are also part of the experiment.
‚Days of Glossy Brochures Are Over‘
What might sound like a classic top-down project is in fact more of a large-scale field experiment with constant citizen participation. The residents of Neuaubing and Westkreuz receive home visits and free consultation, and there are frequent meetings, which are supposedly even well-attended. At any rate, Europe feels very much alive out in the western section of Munich. „We need to go to the people,“ says Anton Tropper, and by „we“ he ultimately means Europe. „The days of glossy brochures are over.“
He’s right. No one can hear the laudatory speeches about the EU anymore. After all the acrimony over bailout packages and central bank policy, after the total failure of the community in the refugee crisis, after the forays of Hungary and Poland into non-constitutionality, after the crooked deals with Turkey, and after all the years of ongoing inability to bring about reforms, it’s finally time to put a stop the devotionals.
The good old appeals have never sounded more hollow than they do today. The big speeches have all been given. We no longer need a top-down but a bottom-up Europe. We need interaction, because enthusiasm can only spring from interaction. The German-French friendship, once the world’s biggest „traditional enmity,“ is the European model for this type of interaction.
To gain new supporters, the EU probably needs to concentrate less on spreading money around Europe and more on sending people around the continent. Enthusiasm is generated when educators from Bavaria meet teachers from Scotland; when trainees from Munich go to Vienna for an internship; when bakers from Paris visit bakers in Budapest; when Swedes explain to Germans how they help refugees; and when envoys from 40 cities get together to discuss how best to help young people.
Europe is when Germans and British install wind turbines together, when Italians, Dutch and Poles get together and think about dairy cows, when people from Lyon argue with people from Munich-Westkreuz over clever ways to use bikes. That’s Europe. And when that happens, the European narrative is a positive one.