Lithuanian perspectives and priority objectives within the EU Policy Framework: a view from abroad

1. Lithuanian perspectives and priority objectives within the EU Policy Framework: a view from abroad alan mayhew Vilnius April 2010 Prof. Alan Mayhew University of Sussex

2. Key EU policy challenges are economic • Aims of the EU are to raise social welfare of its citizens and increase security by spreading its fundamental values throughout the world • These aims only achievable with a dynamic and growing economy • Foreign policy challenges can only be adequately met from a position of strength • Economic challenges are: • Short term recovery from the crisis • Medium and longer term structural reforms alan mayhew Vilnius April 2010

3. EU economic policy challenges • recovery from the financial and economic crises • reducing significantly the level of public debt • stabilising the Monetary Union • reinforcing the EU's internal market after the recession and reforming financial regulation • reinforcing convergence and solidarity • increasing productivity to allow the European Union to cope with severe structural problems such as ageing, global competitiveness and maintaining social welfare systems • ensuring energy security and tackling climate change • the future financing of the European Union and the future of the common agricultural policy and cohesion policy. alan mayhew Vilnius April 2010

4. Recovery from the financial and economic crises and reducing debt levels • The recovery has started but is weak and fragile • Fiscal policy has to be tightened to tackle unsustainable public deficits but should not kill off the nascent recovery • High public and private debt has to be run down over the medium-term (not a major problem in Lithuania), which will hold back growth in the near future • Policies need to be put in place to guard against future booms and busts alan mayhew Vilnius April 2010

5. Stabilising the Monetary Union • Monetary union fundamental to the future of the EU • Problems caused by lack of fiscal discipline in Greece and development of speculative bubbles in Spain • Urgent need for greater fiscal coordination • Increased surveillance and auditing powers for the European Commission • Lithuania to support measures to avoid crises in the future alan mayhew Vilnius April 2010

6. Reinforcing the internal market • Internal market, the crucial backbone of the European Union, has been badly affected by the crisis – bailout of the banks, GM-Magna story in Germany • Need to relaunch the internal market to strengthen competition and state aid policy, fully implement services directive • New Cecchini Report • Liberal policies in the EU have fallen into public disrepute; relaunch accompanied by social guarantees • But functioning internal market and four freedoms vital for Lithuania alan mayhew Vilnius April 2010

7. Reinforcing solidarity and convergence • The financial and economic crisis demonstrated lack of solidarity and triumph of national policy • Solidarity key value of the Union in the Lisbon Treaty • Important both in economic and foreign policy (energy policy, security from third country threats) • Convergence also a matter of solidarity • Convergence important for rational decision-making in the European Union • Lithuania to argue strongly for more solidarity and greater convergence alan mayhew Vilnius April 2010

8. Ensuring energy security and tackling climate change • Key area for medium-term policy in the Union • Energy security for Lithuania ( and elsewhere) requires: • Solidarity in energy policy • Investment in new energy sources and in networking energy in the EU • Increasing energy efficiency • Climate change policy will probably aim at 30-20-20 rather than 20-20-20 • Danger of border carbon adjustments distorting international trade and the internal market alan mayhew Vilnius April 2010

9. Future financing of the European Union • Budget review brought little agreement between the member states • Member states unlikely to agree to a larger budget for the period 2014-2020 • Financing new EU policies (foreign policy, justice and home affairs, climate change, neighbourhood) may come at cost of CAP and cohesion policy • Lithuania to argue for clear objectives for financing and efficiency in meeting those objectives • Concentration of cohesion spending • Efficiency in agricultural support • Funding for the development of the neighbourhood alan mayhew Vilnius April 2010

10. EU Foreign policy • Making the Lisbon Treaty work • Creating the European External Action Service (EEAS) • Supporting Eastern Europe through neighbourhood policy, eastern partnership and the perspective of accession • Dealing with migration • Lithuania has obvious interests in EU foreign policy • Neighbourhood • Policy towards Russia • Ensuring that Lithuania is well represented in the EEAS alan mayhew Vilnius April 2010

11. Europe 2020 – increasing competitiveness of the EU economy – the Lisbon agenda • Lisbon Agenda 2000-2010 recognised relative economic decline of EU in world • Aim to improve competitiveness through structural change • Generally considered to have failed because: • Lack of prioritisation of measures in individual member states • Governance inadequate relying on open method of coordination – peer pressure • worst performing member states on the Lisbon scale are those in difficulty in the monetary union-Greece, Spain and Portugal alan mayhew Vilnius April 2010

12. Europe 2020 – structural reform programme for the coming decade • Three broad priorities • developing an economy based on knowledge and innovation • promoting a more efficient green and more competitive economy • fostering a high employment economy delivering social and territorial cohesion • Five headline targets • 75% of the population aged 20 to 64 should be employed • 3% of the EU's GDP should be invested in R and D • the 20/20/20 climate/energy targets should be met • the share of early school leavers should be under 10% and at least 40% of the younger generation should have a tertiary degree • 20 million less people should be at risk of poverty alan mayhew Vilnius April 2010

13. Europe 2020- institutional governance • Most measures are member state responsibility so no essential change possible to create member state legal obligations • EU policies ( including CAP and cohesion) to aim at implementation of Europe 2020 objectives • National Europe 2020 programmes to be monitored by Commission • European Council to control Europe 2020 alan mayhew Vilnius April 2010

14. Europe 2020-issues • Is Europe 2020 essentially a program for old EU-15 member states? • Is convergence given sufficient importance in Europe 2020? • Are there negative externalities in Europe 2020 which need to be taken into account? • Does the external volet of Europe 2020 introduced the danger of more protectionism? • Is there a risk that Europe 2020 weakens the stability and growth pact? • Can the open method of coordination be made more effective? alan mayhew Vilnius April 2010

15. Lithuania’s EU strategy in response to the EU policy challenges • Generally the rule for small EU states is that deeper EU integration is to be supported, as are the development of the internal market and of the four basic freedoms • Human resources in Lithuania are limited by size; therefore need to concentrate on achieving national priorities • Lithuania cannot effectively achieve these priorities on its own; need for flexible coalitions of member states. alan mayhew Vilnius April 2010

16. Lithuania’s national priorities • Closing the development gap • Increasing investment, domestic and foreign, and using EU cohesion policy funds to develop infrastructure • Promoting higher educational and training attainment to meet demands in 2020 • Supporting the development of the internal market and maintaining free movement • Promoting structural reform • Ensuring energy security • Joining the Eurozone • Supporting the development of Eastern Europe and maintaining constructive relations with Russia alan mayhew Vilnius April 2010

17. Realising Lithuania’s EU policy objectives • Maintaining support across the political spectrum and in the population for policy objectives • Looking for partners within the EU in flexible alliances to achieve Lithuanian ends • These alliances may be with other new member states but not exclusively so • Lithuanian presidency of the EU in 2013 is an opportunity to make progress towards objectives • Success demands early preparation. alan mayhew Vilnius April 2010