Frugality exposes a Europe in need of optimism and reform

The geopolitical grouping known as the “frugal four” – Austria, Denmark, Sweden and the Netherlands – has emerged as a key power centre in this year’s negotiations on the size of the next EU budget and the shape of the bloc’s recovery fund.

In May, the group grew from four to five when Finland became an informal member. Together, they make up almost one-sixth of the European Union’s gross domestic product, roughly on a par with France and just behind Germany. The group’s leaders, including Austria’s Sebastian Kurz, Denmark’s Mette Frederiksen, and Mark Rutte of the Netherlands, are becoming power players in the EU. They have reclaimed many domestic voters inclined to the populist right, while limiting the influence in the EU of the “Club Med” southern European states and the Visegrád countries of central Europe.

However, for all their success, the group’s embrace of the “frugal” banner now risks becoming a trap – both for members of the group and the rest of the EU. For public opinion in these countries is not very frugal, according to an October opinion poll commissioned by the European Council on Foreign Relations and to be released next week.

If Paris and Berlin are serious about rebuilding the EU, they need to stop hatching plans in a closed Franco-German format that leaves other states feeling powerless

Almost eight out of ten respondents in Austria, Denmark, Finland, the Netherlands, and Sweden did not subscribe to the view that “the EU is spending too much money”. Indeed, if frugality is measured by support for this opinion, then it is strongest in Germany – but, even there, only 26 per cent of respondents shared it. The poll also found that the vast majority of citizens in the frugal five think they benefit from being in the EU. They value the freedom to live and work in other countries; the benefits of the single market; cooperation on security, justice, and terrorism; and peace.

To be sure, respondents in the five states have some major concerns about Europe. Many see a risk of waste and corruption in how certain governments will use money from the EU recovery fund. Some 42 per cent fear that their country is losing influence in the post-Brexit EU, against 27 per cent who think it is on the rise.

The feeling that European integration is something being done to them, rather than a project their governments can shape, is particularly strong in Finland (48 per cent) and the Netherlands (43 per cent). I believe that characterising the five countries as frugal bean-counters is unnecessarily defensive and limits their ability to shape Europe’s future. Their leaders would do better if they repositioned around a more optimistic vision.

Rather than trying to keep the EU as small and cheap as possible, these five dynamic countries should argue for reinventing the bloc by focusing on digital innovation, green transformation, and security. Our polling also suggests that their citizens would applaud efforts to develop a high-profile mechanism to fight corruption and uphold the rule of law. In other words, the “frugal four” should become the “transformative five”.

If Paris and Berlin are serious about rebuilding the EU, they need to stop hatching plans in a closed Franco-German format that leaves other states feeling powerless. It is this sense of loss of control that leads to frugality and foot-dragging. French President Emmanuel Macron and German Chancellor Angela Merkel should pitch their recovery plans around Europe’s green and digital future rather than allowing talk of “Hamiltonian moments” and claims that covid-19 will force further financial integration of the bloc.

More importantly, they should develop and propose their ideas in ways that allow the transformative five to show their own citizens that they are helping to drive the train rather than being mere passengers.

One example is close Dutch-German defence cooperation, which leads the way towards more European integration in this field. Germany’s recent experience helps validate this approach. In the years since the financial crisis, Berlin has said “nein” to a lot of ideas that would have cost German taxpayers money.

But, in the pandemic, Germany played a leading role in developing the EU’s recovery plan. Its citizens seem to have responded positively: Germany is the only country we polled where a majority feels their country’s influence in the EU is increasing.

The welfare of the EU’s most vulnerable citizens depends on the self-confidence of its wealthiest member states. If citizens of prosperous states feel that they are being taken for a ride, they are more likely to act as a brake on ambitious European projects.

But, if they feel in control, they could become a motor driving European solidarity, helping the EU build back better.

This article was first published on 15 November in the Financial Times.