The Merzoni plan would take Europe backwards, not forwards
EU leaders will gather for a castle retreat with Mario Draghi, who will call for Europe to federate. But the German and Italian leaders are coming to the castle with a pact to weaken the EU.
A centuries-old castle in rural Belgium founded as a bailiwick of the Knights of Teutonic Order will be the site of a EU leaders retreat tomorrow that, like so many summits before it, is being billed as a ‘make-or-break moment for the EU’. It should be an opportunity for EU leaders to properly take stock of the escalating American threat against Europe following the pre-empted and embarrassing short Council gathering in Brussels on 22 January. Former ECB chief and Italian prime minister Mario Draghi will be there tomorrow to try to fill the EU’s leadership vacuum, fresh from his impassioned call for turning the EU confederation into a proper federation in order to meet the threats posed by America, Russia and China.
But the new right-wing Atlanticist “power couple” of Gemany’s Friedrich Merz and Italy’s Giorgia Meloni are coming to this castle determined to talk about only one thing: dismantling EU laws. They have decided that the way to deal with Europe’s weak position in the face of Russian threats, American extortion and Chinese encroachment is to deregulate. They have a long list of EU laws they want to tear up - which coincidentally happens to largely overlap with the laws the White House is demanding the EU scrap. Funny that.
The Merzoni power couple are not interested in talking about ways to urgently free Europe from American control. Over the past weeks they have shot down a swathe of measures suggested by France to quickly decouple Europe as much as possible from America in order to limit Trump’s ability to extort the continent. Merzoni shot down President Macron’s call for a ‘buy European’ clause for new EU funding to buy weapons. They shot down Macron’s call for new joint debt to secure Europe’s position. They shot down efforts to move away from US tech in case Trump decides to switch off the European economy. They’ve also shot down the idea to establish a preference for European companies in public procurement. These two Atlanticists do not want Europe to be liberated, because they still see no problem with American control and are desperately clinging on to the hope that the old order can be preserved.
Merzoni’s answer to any idea to reduce Europe’s dependence on the United States and make it independent and sovereign is nein and no. The only thing they can say yes to is dismantling EU law. They are arriving at the summit with an Italo-German “protocol” paper signed last month that outlines a strategy to improve Europe’s competitiveness by weakening the European Union and bringing power back to national capitals. It is the EU’s fault that Europe is weak, the protocol implies because it has established “regulatory barriers that hamper growth”. "We must build an authoritative, competitive Europe with its own strategic autonomy," Meloni said at a press conference announcing Italy’s pact with Germany at the Villa Doria Pamphili in Rome. "Italy and Germany have a special responsibility in this phase of history: the EU must choose whether to be the protagonist of its destiny".
How exactly dismantling EU law and returning power to national capitals helps Europe’s quest to become self-sufficient, which they both pay lip service to wanting, is not clear. They give a convoluted explanation of how eliminating bureaucratic barriers will help European companies innovate so maybe they can provide European alternatives to American platforms in future decades. The only thing they seem to have a sense of urgency for - the vague call for ‘competitiveness’ - is something that would deliver benefits in the 2030s, not now. The Merzoni protocol is, in short, a pact to hand the keys of Europe over to big corporations and industrialists, wresting power away from the EU Commission and Parliament and giving it to national leaders who are implementing a corporate agenda. These leaders are literally taking instruction from corporate interests, and they’re not even hiding it. “Give us your ten commandments,” Belgian Prime Minister Bart de Wever (allied with Meloni in her European Conservatives and Reformists group) told industry leaders at an event earlier this month.
What’s most worrying is that Merzoni and their conservative fellow-travellers aren’t just holding the EU back from solutions that would free this continent from its dependence on America. They are actually plotting to undermine the EU in a way that would make it even more dependent on the US and other global powers. Claude Forthomme says the Germany-Italy protocol is actually “a constitutional coup, extending right-wing pro-business power over the EU Commission and the European Parliament.” Academic Alberto Alemanno says with this paper Merzoni is “plotting a major European Council power grab of EU decision-making” in order to weaken the union in the name of competitiveness. “The media isn't reporting what's really on the table: national governments - led by Germany and Italy - are claiming the power to:
Hit pause on any EU law (if they call it burdensome)
Decide what Parliament is allowed to amend on any Commission’s proposal
Force withdrawal of laws they dislike
Subject the Commission President to periodic reporting to the EU Council.”
This is “little short of a revolution” says Alemanno, “a restoration of national power over the EU's ability to craft a common journey for the continent.” This despite the EU treaties (its constitution) specifically stating that “the European Council shall not exercise legislative functions”. “Will anyone notice that European democracy is being rewritten in a Belgian castle?” he asks.
Civil society is sounding the alarm, but the media isn’t paying much attention. Yesterday a coalition of NGOs including Transparency International and Corporate Europe Observatory released a joint declaration warning that President von der Leyen is colluding with Merz and Meloni to undermine the very institution she presides over, all in the name of satisfying the US government and American corporations.
According to the declaration, 40% of meetings held by Commissioners’ cabinet members over the past year were with individual companies (with US companies the most frequently represented), while business associations accounted for 29%. NGOs represented 16% of such meetings during the same period. They criticise a European Industry Summit taking place today where President von der Leyen and national leaders including Merz and De Wever are meeting with industry titans. “The timing gives industry a privileged opportunity to feed its demands directly into the EU heads of state summit,” the coalition said in a statement. They warn of a “systematic rollback” of climate and health safeguards through upcoming Omnibus legislative packages.
“We reject this corporate-led deregulation agenda,” they say. “Since 2024, the Antwerp Declaration has acted as a shadow roadmap for the European Union. What is framed as something that will boost the economy has increasingly become a vehicle for dismantling the EU’s democratic safeguards.”
As Eddy Wax noted in this morning’s Rapporteur newsletter: “The event shows where the bloc’s political centre of gravity now lies. What began two years ago as a blatant lobbying push for deregulation led by the chemicals industry has evolved into a star-studded fixture of the political calendar…What more do these captains of industry want? The answer is a lot. Leaders will carry their wishes with them to a follow-up gathering in a Flemish castle on Thursday.”
In other words, the EU has yet again become the most convenient scapegoat for Europe’s problems. Companies and foreign governments have been able to convince conservative Europeans that the reason Europe is struggling is not because it is divided into small nation-states and has been unable to complete the promised Single Market - the real message of Draghi’s 2024 Competitiveness Report. They say Europe’s problem is the EU, which has supposedly strangled European innovation with burdensome regulation.
And because the centre-right European Peoples Party of von der Leyen and Merz has run the EU for two decades now, there seems to be no one to lead the resistance. Macron is a lame duck after hobbling himself a snap legislative election in 2024 and losing control of parliament. Spain’s Pedro Sanchez (together with his ally Teresa Ribera, a vice president of the Commission) is the lone figure of opposition. But Spain remains a peripheral EU country at the best of times, and Sanchez has been ostracised on the EU stage because he would not toe the line on Trump appeasement. Mario Draghi, frequently referred to now as Europe’s Carney, has no political position at the moment and has no power to implement his ideas. We can fantasise about an alternative scenario where national leaders had been willing to appoint someone strong as Commission President, and a President Draghi right now was fighting against the Merzoni pact. That’s what Delors would have done. That’s what any strong Commission president who valued their own institution would be doing. Unfortunately, that is not the world we live in.
Perversely, President von der Leyen, Chancellor Merz and Prime Minister Meloni are all citing the Draghi report on competitiveness as having recommendation this deregulation and decentralisation. But that is precisely the opposite of what Draghi is recommending - both in his 2024 report and especially now. They have spent the last year twisting Draghi’s words to suit their agenda, forcing the former Italian prime minister to be more explicit in a speech at Belgium’s KU Leuven University last month. He said EU leaders’ current focus on responding to the challenges of today with trade deals and deregulation “is a holding strategy, not a destination”:
Individually, most EU countries are not even middle powers capable of navigating this new order by forming coalitions—each bringing distinctive assets to the table, whether raw materials, technological niches or strategic geography. But collectively, we have something greater: scale, wealth, political culture, and 75 years of building the institutions of a common project.
Of all those now caught between the US and China, Europeans alone have the option to become a genuine power themselves. So we must decide: do we remain merely a large market, subject to the priorities of others? Or do we take the steps necessary to become one power?
But let us be clear: grouping together small countries does not automatically produce a powerful bloc. This is the logic of confederation—the logic by which Europe still operates in defence, in foreign policy, in fiscal matters.
This model does not produce power. A group of states that coordinates remains a group of states—each with a veto, each with a separate calculus, each vulnerable to being picked off one by one. Power requires Europe to move from confederation to federation.
Where Europe has federated—on trade, on competition, on the single market, on monetary policy—we are respected as a power and negotiate as one. We see this today in the successful trade agreements being negotiated with India and Latin America.
Where we have not—on defence, on industrial policy, on foreign affairs—we are treated as a loose assembly of middle-sized states, to be divided and dealt with accordingly. And where trade and security intersect, our strengths cannot protect our weaknesses. A Europe unified on trade but fragmented on defence will find its commercial power leveraged against its security dependence—as is happening now.
Some will say that we should not act until our position is stronger, until we are more unified, until escalation is less costly. But this trade-off is illusory. It is only by moving that we create the conditions to act more decisively later. Unity does not precede action; it is forged by taking consequential decisions together, by the shared experience and solidarity they create, and by discovering that we can bear the result.
Consider Greenland. The decision to resist rather than accommodate required Europe to carry out a genuine strategic assessment—to map our leverage, identify our tools and think through the consequences of escalation. The willingness to act forced clarity about the capacity to act. And by standing together in the face of a direct threat, Europeans discovered a solidarity that had previously seemed out of reach. The shared resolve resonated with the public in ways that no summit communiqué could have achieved.
There has been confusion in the media lately that seems to think Merz’s empty words about a two-speed Europe, dividing the union into different configurations which make no sense (why is Poland in the core but Belgium is out? Somebody make it make sense), are somehow connected to Draghi’s rallying call. I have seen reports connecting Merz’s barely-sketched-out vision for a core Europe moving faster than the rest with Draghi’s call for federation. But it is wrong to think that Merz has signed up to Draghi’s vision, because if you look at what he is actually doing rather than his empty words, you see that he is actually working against Draghi.
But in Brussels we’ve come to learn what many in Germany already long knew: this is not a serious man. This is a man who does not mean half of what he says, and rarely acts on his words. He may talk a big game about recognising the dangerous turn in America and wanting to make Europe urgently independent, but then every action he takes undermines efforts to actually make Europe independent. Now that he’s teamed up with Meloni, a woman whose entire career has been based on vilifying the EU, we can see the direction he is headed. None of this will end well for Europe.