The negative outcomes of the French and Dutch referendums have made the ratification process of the European Constitutional Treaty very difficult for two clear reasons: firstly, the no votes prevailed in two of the founding countries of the European Community, particularly in France, and it is well known that without France there can be no further development in the European integration process; secondly, the no votes strongly point out (in Holland nearly two-thirds of the voters opposed the ratification) a great disappointment with the results of EU performance, particularly after the start of the monetary Union. From here we probably need to start again, if we want to relaunch the integration process on a federal basis, which is still essential if Europe wants to be able to play an active role in the promotion of peace and prosperity worldwide. On the other hand, the figures show that the euro generates more employment than the dollar: inhabitants being approximately equal, the number of employees from 2000 to 2004 increased by more than 4 million in the euro area, and by 2.3 million in the US. It is nonetheless clear that the economic performance has been particularly disappointing in recent years.
In Europe it is widely held that, in the current phase of moderate but prolonged stagnation, a coordinated investment plan should be promoted to close the infrastructural gap existing in many EU countries stemming from the restrictive policies necessary to respect first the Maastricht parameters and then the Stability and Growth Pact obligations; moreover an expenditure plan must be undertaken in order to strengthen European productivity competitiveness on the basis of the decisions made by the European Council in Lisbon in March 2000.
This plan should roughly consist of:
a) investments to complete the European network in the telecommunications, energy and transport sectors, taking into account the connection needs related to enlargement;
b) a plan of research and development and higher education expenditure, to strengthen the competitiveness of European production;
c) public and private investments in advanced technologies and to foster the creation of European champions in key sectors;
d) the financing of a series of projects to improve the living standards of EU citizens (sustainable mobility, water purification, renewable energy, new clean energy sources, etc.);
e) investments to ensure the preservation and promotion of the cultural heritage and natural resources.
Such a plan would lead to a strong acceleration towards the achievement of the objectives fixed by the Lisbon Strategy, which so far seems very difficult. This is due to the fact that the national accounts must comply with the Maastricht parameters and, although the recent adjustments to the Stability and Growth Pact allow greater flexibility, they are not able to support a budget expansion to finance the Lisbon Strategy. On the other hand, the European budget is not only limited but also many resources are absorbed in agricultural expenditure, and the disastrous outcome of the European Council in Brussels has clearly shown that a radical reform of its breakdown is not feasible.
In this situation the only serious way out to implement the Lisbon Strategy is connected to the recourse to a Union bond issue, that is, EU bonds guaranteed by the European budget (and by the national budgets) to finance the Lisbon Agenda. Considering the EU world reputation and the euro's current strength, these bonds could be issued at a low interest rate and would contribute to the strengthening of the European financial market absorbing some liquidity excess actually present, and could support the financing of the European development plan by attracting a large share of the world savings which currently is, without good alternatives, placed in the US market despite the progressive depreciation of the dollar.
The French and Dutch no votes force Europe to make a choice that cannot be postponed: the stop to the ratification process requires a turnaround in the economy to restore trust in the EU to the European citizen; on the other hand, the euro's strength could be exploited to attract external capital in order to support the financing of a European growth plan. Hic Rhodus, hic salta: Union bonds could represent the essential tool to implement the Lisbon Strategy and to relaunch growth; if that happened the integration process towards a federal completion could be relaunched. This would mean enforcing the golden rule not at a national level, but at a European level so that the investments needed for the implementation of the Lisbon Agenda can be financed by the issue of Union bonds, while forcing at the same time every Member State to guarantee respect for the Stability and Growth Pact obligations.
Thus the infrastructure investments could be financed by the European Investment Bank in partnership with private investors. In regard to R&D and higher education expenditure, and the other investments envisaged by the Lisbon Agenda to foster European productivity competitiveness and to boost growth, the Member States of the eurozone should appoint a "Minister for Lisbon" charged with first working out and then attending to the implementation of a "Plan for Lisbon", which, after European Council approval, could be co-financed by a "European Agency for Lisbon" by Union bond issues. However, part of the debt would be charged to individual national accounts, as it happens with Structural Funds, whereas the debt burden would be only partially charged to the national accounts as the interest on Union bonds would be covered by the EU budget.
To restart the process leading to overcome definitively the democratic deficit, which would characterise the EU even after the final approval of the Constitutional Treaty, the European economy needs to be boosted through a big bond issue aimed at growth. However, the renewal of the unification process in the political field is also inevitable if we want to proceed towards a multi-polar world, able on the one hand to foster peace exploiting all the available soft power resources of Europe, thus avoiding a further resort to military force, and on the other hand to assure the EU the necessary power to manage the European economy successfully, to plan the growth of those countries where Europe exerts an influence, and to negotiate on the same level with the US and the other regional areas a sustainable world economic growth plan.