Objectives for the EU
I think there are four key challenges now facing the EU. First, Europe's economic problems cannot be solved with supply side reforms alone. Weak domestic demand in many cases, made worse by the constriction of the Stability and Growth Pact, should be tackled by setting up a counter cyclical European Recovery Fund and by developing ECOFIN as a real political counterpart to the European Central Bank.
Second, the EU's response to the global economy should be smarter than simply posing a choice between liberalisation and protectionism. It should seek to stabilise exchange rates and prevent speculative capital flows from destabilising healthy economies through a Tobin tax. It should press for an international clearing union to smooth trade imbalances by requiring countries to recycle their surpluses to maintain global demand. And it should take the lead in benchmarking social and environmental standards into world trade rules.
Third, the EU should give its social model a more distinctive European form. To deal with collapsing corporate provision, it should set up a European social fund into which companies should contribute a proportion of their profits to meet at least some of the spending needed to guarantee security in retirement as well as providing at least minimum standards for a European childcare guarantee.
Fourth, it must democratise EU politics so as to enable Europeans to feel involved in a common political debate about their future. Maybe a new Preseident of the European Council should lead on Europe-wide elections so that electors voted more as Europeans.