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The Neglected Issue that Will Define Europe’s Future

Although the European Union already has much on its plate, from the war in Ukraine to challenges from populists within its own ranks, it urgently needs to reach an agreement on new budget rules to compensate for the lack of a fully federal fiscal union. The future of the monetary union is at stake.

DIJON – Among all the big tests facing the European Union at the close of 2023, the most important will get the least attention. With European leaders working toward an agreement on new fiscal rules governing member-state budgets, nothing less than the sustainability of Europe’s monetary union is at stake.

Compared to this dry matter, other major issues on the agenda at this month’s EU Summit (December 14-15) will understandably seem more pressing. Senior officials in the EU, the United States, and Ukraine are warning that Ukraine’s ability to continue defending itself against Russia may be jeopardized if European governments and the US Congress fail to approve new military-aid packages by the end of the year.

While a Ukrainian defeat would erode the EU’s credibility and potentially jeopardize its security, European leaders also must address threats from within.