EU’s recovery sets a new course towards Green Economy and Digitalisation for the World

Veteran diplomats and international relations experts at the recent forum have projected the European Union (EU) can quickly recover from the Covid-19 pandemic and impacts, citing strong foundations the grouping has_and it could set a new social and economic course for other countries to follow

At the recent forum, Europe’s Recovery and Responsibility in the World-A Dialogue with European and Thai Partners, jointly organized by Konrad Adenauer Foundation and German-Southeast Asian Center of Excellence for Public Policy and Good Governance (CPG), Thammasat University’s Faculty of Law, Europe’s recovery and its implications to the rest of the world and Asean were lively discussed among the invited diplomats and some 50 participants.

Dr. Giuseppe Busini, Deputy Head of Mission, Delegation of the European Union to Thailand briefed about the EU efforts to recover from the Covid-19 crisis while shifting towards a long-term sustainable economy and society, saying that in July the EU reached the deal on its long- term budget called the 2021-2027 multiannual financial framework (MFF), coupled with the recovery fund worth €750 billion.

Altogether, the overall budget would be hugely around €1.8 trillion. These, he revealed, will principally focus on Green Economy and Digitalisation.

Dr. Busini said the EU is working on striking an approval with unanimity by the EU members. Hungary and Poland, which have been questioned hard about “the rule of law” (concerning judiciary power and separation of powers) in the countries in order to be subject to the funding, are going against other members in endorsing the budget, prompting difficulties for the whole EU in pushing the budget through.

Dr. Busini, however, said the grouping remains confident that the solutions could still be found as the grouping always has “room for compromise” plus “capable hands”, citing the action by Germany’s Chancellor Angela Merkel, whom he dubbed as “a very good deal maker”.

H. E. Georg Schmidt, Ambassador of the Federal Republic of Germany to Thailand, said following a lot of discussions concerning the MFF, it’s a huge step forwards for the EU (to have managed to settle the deal in principle).

The Ambassador said if people in Europe feel that in the moment of the largest economic crisis after 1945, the EU is not able to mobilise much more resource if it hadn’t found a common answer to that the countries would be in a much deeper crisis than they are.

But the grouping has found it, he said, adding it has managed to find a compromise as the end of the day the EU members know that they have to do it together. As such, Hungary and Poland’s issue would acquire a compromise too, he remarked. (Over the weekend, the BBC reported that the compromise on the rule of law conditionality was reached with the two countries as such the condition would rather be applied to future spending.)

“The EU is something very unique, it’s not going to be a nation-state, but it’s much more than just a loose association, which is very different from Asean. (This is) because we have decided to pool sovereignty with all consequences, all difficulties. And it’s much better to do this way. If we are on our own, we are too small to live in this world,” said the Ambassador, H.E. Schmidt.

Whether the fund would make the EU stronger, socially or economically, the Ambassador said, depends on whether the fund is used wisely.

Policymakers, he said, have huge responsibilities as they borrow a lot of money and are distorting the market. The question now is whether things should go back (to normal) or re-build better.

Covid-19, he added, should not be allowed to distract policymakers from climate change, also citing it’s one of the biggest security risks. So, they have to do what they can do best, promoting digitalisation as well as green economy, which is hugely important.

Germany, he said, is going to spend €1.66 billion in the next ten years on overhauling the railway network, seen as important to help tackle climate change.

H. E. Kasit Piromya, a former Minister of Foreign Affairs of Thailand, said he was quite optimistic that the EU can recover because of immense human resources, research and development, and close coordination between the public and private sector, and its academic world is excellent in that sense.

If the EU sets to go for digitalisation and green economy, the whole European institutions can move in that direction, he projected.

The lesson to learn from the EU’s move for countries like Thailand and Asean, he remarked, is that they should stop keeping on populist policies or measures, giving out money to people. This must be stopped, and they should come out with long-term recovery strategies and plans, he suggested.

The ex-Ambassador noted that export led economy which is instrumental for the economic development here is no longer valid. The countries need to look for new non-export led economic models, and green energy or alternative energy demonstrate domestic oreinted models, and that’s where the EU know-how could come in.

H.E. Kasit said Thailand or Asean would no longer need financial assistance supporting infrastructure, but rather intellectual capacity, expertise, academic exchange, joint research and development, or know-how.

Dr. Busini said it’s critical that future recovery should be green economy and digitalisation. To work with the fund set by the EU, country members must present their plans or reforms as after the pandemic it’s not just building back, but bulding back better, he said.

The pandemic, he pointed, is an opportunity for countries to recover socially and economically and become more sustainable.

However, it’s not just public financing. Economic recovery also depends on trades, which should adhere to multilateralism, Dr. Busini noted. Asean is seen as a crucial strategic region for the EU and the EU and Asean should work together, he remarked.

Germany and the Netherlands recently published new strategies for the Indo-Pacific, after France did in 2018, raising the possibility that the EU as a whole may soon have a common strategy for the region.