By Adrien Boudet

“The European Union is currently facing a Machiavellian moment in History” according to Thomas Gomart, the director of the French Institute of Foreign Affairs (IFRI)[1]. Indeed, the European Union is being challenged by other powers in several sectors, notably the economic one, and seems to be ignoring this reality as it is busy promoting worldwide cooperation, notably regarding the transition towards sustainability. In Gomart’s opinion, the EU must acknowledge that its model is being threatened and, hence, take the appropriate steps to protect itself and be ready to face these competitors (US, China, Russia etc.) instead of naively trying to cooperate with them since they probably have no wish to do so. However, tackling climate change requires a true cooperation in order to succeed. In this regard, instead of the Machiavellian competition, Kant’s legacy[2] stresses the need for international cooperation on several international topics. As of today, the environment is undoubtedly one of them. Therefore, what should the EU choose between Machiavelli’s pragmatic realpolitik and Kant’s cooperating idealism?

Realpolitik or idealism: the UE with the world or against it?

The Corporate Sustainability Due Diligence Directive (CSDDD) is a perfect case study of this tension between the need for cooperation to tackle climate change and the need for the EU to avoid any naiveness that would hamper its competitiveness vis-à-vis other powers. « Europe has to find its place in the ongoing competition between the U.S. and Chinese systems, and it needs a strong, competitive economy in order to hold its own on the world stage” reads the letter sent by the German Ministries of Finance and Justice to other Member States, justifying its opposition to the CSDDD. Indeed, the final CSDDD text[3] notably mentions rules regarding the “civil liability of companies for damages caused to a natural or legal person, under the condition that the company intentionally or negligently failed to prevent and mitigate potential adverse impacts or to bring actual impacts to an end and minimise their extent and as a result of such a failure a damage was caused to the natural or legal person[4].” One might fear that such provisions will weaken EU companies whereas there are no equivalent requirements for US or Chinese companies of comparable size. This provision leads to the question of how the EU can use its influence on a market if its companies are forced to withdraw from it eventually. This is even more striking as the US adopted two years ago the Inflation Reduction Act, implementing more subsidies for its own companies and, hence, strengthening their competitiveness towards European ones. As Machiavelli stressed: “anyone who holds as real and true what should undoubtedly be, but unfortunately is not, is heading for inevitable ruin.”

On the contrary, Kant would argue that the EU must “act as though its every actions were to become a universal law”. In this regard, setting up environmental and social standards for big companies and their suppliers, as intended by the CSDDD, is indeed something the EU should do since other regions are likely to follow its example thanks to its “soft power[5]”. Elaborating further on this idea, how could the UE present itself as the leader of the environment and human rights if not setting the right example with its own companies? This is one of the main critics raised by southern countries when being asked to transition quickly by western ones which did not pay attention to climate harm during their industrial revolution. Moreover, since climate change must be tackled as soon as possible, big European companies must continue to be ambitious despite (legitimate) competitiveness’ concerns.

The danger of playing realpolitik within the EU

Whether the EU must follow a realpolitikal approach when competing with foreign companies is beyond question. Nonetheless, the CSDDD reveals the danger of a situation where member states tend to follow Machiavelli’s lessons against one another. Indeed, the difficulties in adopting this text are partly due to the fact that some member states are pursuing a domestic agenda rather than a European one. In this regard, one might think that France’s push to exclude the financial sector’s downstream part from due diligence requirements was inspired more by the wish to attract financial companies after Brexit rather than considering the financial sector’s specificities (which is again a legitimate concern though). More recently, the German liberal party’s attempt to block the text in the Council is also probably more linked to their domestic situation (it reaches around 5% of the share of the votes ahead of the June EU elections) rather than their wish to see Europe becoming a geopolitical player. This is probably the most worrying trend. The EU is already being challenged on many aspects by other powers and critics within member states are rising, as shown by the latest polls and elections.

In the end, maybe the EU does not have to choose between Machiavelli and Kant eventually but it should rather find a balance between them. Concretely, the EU must continue to promote its ideals and values (with laws like the CSDDD) through its strengths, such as its economic power – the implementation of a border carbon adjustment mechanism is an interesting example in this regard. At the same time, the EU cannot afford to be naïve and should emancipate itself from other powers by being ready to reciprocate these powers in case they threaten its companies. This is not by being less ambitious regarding the environment and human rights that the EU will defeat populism, but rather by showing that promoting these values is not antinomic with the protection of its own citizen and companies.

“Europeans must improve their comprehension of world affairs if they wish to defend their interests vis-à-vis States intending to exploit their divisions to impose their own values”[6]. CSDDD illustrates it. Maybe it is time to behave as Kantians inside the EU and as Machiavellians when it comes to facing our main competitors, and not the other way around?