After months of ongoing negotiations with Greece and the onset of the migrant crisis – to mention but two of summer 2015’s most hotly debated political topics – it’s a miracle that the EU has entered 2016 with an intact number of members and largely unscathed (though perhaps more thoroughly despised), institutions and leaders. Yet the events of the past six months and looming prospect of Brexit suggest that the union, though it may hold for now, is in dire need of change if it wants to stop living life on the edge and actually achieve its very raison d’être in the months and years to come.
The negotiations with Greece didn’t result in Grexit, the grand finale dreaded by some and secretly wished by others, but certainly put on quite a show with the constant meetings between European heads of state and finance ministers, a referendum cast aside as quickly as it was called, a fracturing government and resigning prime minister for Greece, and the return of the now familiar Greek/German, North/South discourse in governments and newspapers. Half a year later, the turmoil is over – but calm has a price: for not only is the new bailout worryingly similar to the agreements that had been concluded with Greece previously, it has now come with a new loss of sovereignty for Greece. And while few would argue that the reforms required of the Greek administration are superfluous, seeing an independent nation-state surrender part of its sovereignty to unelected bodies after months of pressure by financial institutions leaves one a little uncomfortable. Once the prodigal son of the Eurozone, Greece has now been reduced to the status of irresponsible child – and punished accordingly – in a Europe were individual states’ ability to represent their population have become irreconcilable.
An unhappy union
But the union still holds, and, isn’t that what matters the most? Only for a union, it’s a peculiar one – for if the marriage licence is still valid, behaviour within the union has set it on the path to divorce, with each individual state turning a blind eye on its partners and refusing to recognize any reality but its own. And while the states go on bickering, a large proportion of the half million illegal migrants arrived in Europe over the course of 2015 (see data provided by Frontex) are left living in uncertainty.
In 2015, the European Commission suggested relocating 40,000 asylum seekers from Greece and Italy to other European countries on the basis of quotas that would take into account individual states’ population, GDP, unemployment and previous asylum bids. The plan was opposed by eastern European countries and Spain, and abandoned. Instead, most countries initially agreed to relocate about 32,200 asylum-seekers over the next 2 years on a voluntary basis: a ridiculously small number compared to the new arrival each months.
By the summer, broken down, the reality of the situation was practically comical: while Germany took on 40% of asylum demands within the European Union, Bulgaria was busy building a thirty kilometres long fence at the border with Turkey; Hungary had fenced up its border with Serbia and deployed its army to ensure that no migrants could cross it; and Slovakia, in its unending generosity, had agreed to accept 200 Syrian asylum-seekers within its borders, provided they were spaced out over two years, and all Christians. In the United Kingdom, Cameron pledged himself to reduce net immigration to the tens of thousands; and Theresa May argued that this would not be met unless the principle of free movement guaranteed under the Schengen agreements was reviewed and jobless migrants sent back home. Above the tumult, Germany again and again assured that the principle of free movement would not be renegotiated. Only that was last year: 2016 has arrived, and the first barrier ever built between two Schengen members is soon to be completed, at the border between Austria and Slovenia. Finland and Sweden have recently announced plans to deport tens of thousands of migrants, and Germany too has toughened its immigration policy, after sharp criticism following a wave of sexual assaults in Cologne.
Six months since Grexit was avoided, 55,528 new illegal migrants since 1st January 2016 alone, (see International Organization for Migration) and as many triggers for a renewal of individual European nationalisms. Six months, a European Union that still holds, but one where individual states are too different and institutions too inadequate to find effective solutions to problems at all, or, in the case of Greece, without putting in place quasi-colonial economic arrangements. A European Union in which individual states, however, have too many interests (and problems) in common to allow the union to dissolve.
The end of ‘ever-closer union’?
So where is the EU headed? Is the notion of an ‘ever-closer union’ still valid, or is it turning out to have been ahead of the economic, political, social and cultural reality of the nations that make up the European Union today? What if it were both – not valid in the practical sense but necessary; difficult to reconcile with the reality of European states today but possible if we rethink the functioning of European institutions?
To this day, the only existing European institution directly elected by European voters is the European Parliament – a legislative, supervisory body led by Martin Schulz that passes laws with the Council and based on European Commission proposals. The rest of the institutions governing Europe are either unelected, or group together heads of states and ministers elected within the framework of intra-national politics. Mostly, they’re numerous, and the extent to which they share responsibility for policy-making and implementation is rather blurry in practice.
The European Council, headed by Donald Tusk and comprised of the heads of state of all member countries, defines the broad political direction and priorities of the European Union. These are further discussed by government ministers from member countries in the Council of the European Union, in charge of negotiating and adopting European laws and the European budget with the European Parliament; coordinating European countries’ policies; and developing Europe’s foreign and security policy. Within the Council, the Eurogroup, presided by Jeroen Dijsselbloem, serves as an informal body where ministers of the Eurozone member states discuss matters related to the shared currency.
A jumble of institutions
The Union’s executive is directed by the European Commission, which draws proposals for new legislation and implements the decisions of the Council of the European Union. Members include one team of commissioners from each member state, presided by Claude Juncker. The Court of Justice of the European Union ensures that European law is interpreted and applied uniformly across Europe and settles legal disputes between national governments and European institutions. It cannot, however, hold individual states accountable if they fail to commit to their obligations. Finally, the European Central Bank, under Mario Draghi, delivers authorisations to print euros and sets interest rates.
A lot of names, a lot of shared responsibilities; little direct accountability and representation; a system that mostly rests on intergovernmental cooperation within European institutions and, in doing so, institutionalises national barriers as individual heads of states and ministers act according to public opinion back at home; and, whenever something goes wrong, a monetary union dominated by unelected financial bodies welded to neo-classical principles. A lot of names, and a system that politicises economic issues; fails to allow democracy to be exercised at both a national and a supra-national level; requires a rigid application of agreements in a one-size fits all manner; and, despite refusing federalisation, can prove itself extremely intrusive.
Indeed, because most European institutions are, truly, forums for intergovernmental cooperation through heads of states and ministers elected on the basis of a national campaign, questions such as the Greek debt crisis are constantly embroiled in nationalist political discourse, with Greek voters’ right to exercise democracy pitted against that of other, typically German, voters. Not only that, but when it came to how Germany handled the Greek question in the Council and through the Eurogroup, the battle over the Greek question had as much to do with how the SPD and CDU were perceived by national electors than with the actual geostrategic and economic consequences for Greece.
If the above example isn’t enough to convince some, consider the fact that the German Bundestag and Federal Constitutional Court of Germany are able to exert direct pressure on European mechanisms such as the European Stability Mechanism (ESM): following the failure of a European Constitution project in 2005, Germany declared that, if the European Union were to be a union of sovereign states rather than a federal democratic state, steps had to be taken to ensure that the Bundestag would not have to surrender sovereignty in any measure. Hence, in June 2009, Germany’s ratification of the Lisbon Treaty was accompanied by a new law stating that any new procedure resulting in what the Court would see as a transfer of sovereignty would have to be accompanied by a democratic control procedure through the intermediary of the Bundestag. In 2011, then, the Court validated Germany’s participation in the bilateral loans to Greece, but forbade the creation of any obligations that would rely on a European budget put in place by the Council. Today, the Bundestag has to approve any new aid granted by the ESM. As a result, budgetary integration in Europe remains purely consultative, and economic decisions are inevitably politicised with regard to national interests and according to a precise hierarchy of countries within the European Union.
As for the countries at the bottom at that hierarchy – the current form of existing European institutions means that for those that require financial assistance, Europe no longer materialises itself as an accountable, democratic, legitimate body in which they share an interest, but becomes an ill-identified, illegitimate body of technocrats imposing decisions upon a population left with little choice as institutions such as the ECB and IMF dominate the process. While this does not entirely negate the practical utility of the Union for countries in need of financial assistance, it does suggest that Europe’s economic ambitions are overblown in relation to the European mechanisms for democracy currently available. And because the current European institutions are inter-governmental and responsibilities completely diluted between the multiplicity of existing European bodies, it is difficult to identify any basis for sovereignty at the European level and/or for supra-national democracy. This risks creating situations in which the effective exercise of democracy in one member state can become dependent upon disregarding the population’s right to exercise democracy in another.
Last but not least, though it may seem paradoxical because the system is not federal and hence falls short of a fully integrated monetary and fiscal policy with free financial transfers between states, the current institutional system leads to rigidity and intrusiveness. Because they are not directly elected and represent diverging national interests, some of the Eurozone’s institutions, including the ECB, interfere with national decisions in a way that is seen as infringing upon the sovereignty of member-states such as Greece. Furthermore, because monetary sovereignty is shared without fully integrated economies and a shared budget, the stability and existence of the Eurozone is largely dependent upon the rigid respect of the European Stability and Growth Pact. This leads to situations where countries in need of more flexibility are at risk of being singled out and punished, and to unwillingness to share risks with countries such as Greece.
In the case of the ECB’s program of quantitative easing, such unwillingness resulted in a decision stipulating that 80% of the bonds bought would sit in national central banks’ balance sheets, which effectively amounted to admitting that the euro does not function as a risk-sharing mechanism. A more centralised system could allow more room to manoeuver without jeopardizing the stability of the entire monetary system – provided that it does not remove incentives for member countries to redress inadequacies in their economic and political system because the centralised system will absorb the consequences.
A new way forward?
But is such a system achievable today? It is important to remember that the European Union was created with very clear goals in mind – fostering stability in Europe by deterring aggression between France and Germany, formalizing an existing economic interdependence between multiple European nations, and acting as a counterweight to the growing economic power of nations such as the United States and, later, China. It is important, too, to stress that a European Union is, more than ever, a necessity: the Eiffel Europe Group estimated that in 20 to 30 years, no single European country would be part of the G8, and that France or Germany would represent less than 1% of the world population. By contrast, today, the Eurozone is about as large as the United States, and its GDP greater than China’s. But it is true, too, that the basis for an ever-closer union seems flimsy and is constantly eaten away by nationalisms enflamed by current events – the migrant crisis, what is portrayed as the growing threat of terrorism… So could the solution be, as antithetical as it sounds, a very clear dissociation of the aims to be achieved by the European Union and the mechanisms they have access to, and those of individual member states? Could we start building the institutions of a European state before we see the basis for a European nation?
Groups including the Eiffel Europe Group or the Glienicker Gruppe believe that European monetary union should be seen as the basis for a bigger project. They see current European institutions as insufficiently democratic, and suggest that they do not offer adequate mechanisms for renewed creative, scientific and entrepreneurial dynamics in Europe. In order to redress these issues, they suggest creating a political community for the euro, that would include new instruments to dampen the impacts of the economic conjuncture and help the more fragile populations (e.g. unemployment benefits at the European level, new policies to encourage mobility, partial harmonisation of the job marketplace…); measures to redress inequalities and valorise human capital through education and innovation at the European level; long-term investment by the European Union in areas such as renewable energies; the creation of an elected European executive body with an autonomous budget financed by independent resources (e.g. taxes on companies or environmental taxes); fiscal harmonisation and common borrowing for common projects to take advantage of the greater collective debt capacity afforded by a closer union; and, finally, a European Court of Justice with the capacity to sanction any member’s failure to meet their obligations.
The barriers to progress
While the idea may sound appealing, it does come with a few issues. To begin with, such measures imply devolving much sovereignty to supra-national institutions, when it has become apparent in the last months that countries within the European Union are unwilling to overlook domestic concerns and public opinion even when dealing with supra-national matters. Moreover, while a closer monetary, budgetary and fiscal union could promote stability in the long-run, depending on the form it takes, a closer union could be seen by certain member states as an opportunity to avoid redressing their economies without having to face the consequences. A closer monetary and fiscal union will also be ill-advised for countries with very different economic contexts. Given that member-states of the European Union have extremely varied political systems too, setting up a European legislative power independent of these systems begs the question – which institution(s) will act as the middle man, and do we not risk simply replacing intra-governmental institutions with other intra-governmental institutions? Finally, in a world where nations form the basis of sovereignty, through what procedures could European citizens elect European representatives truly removed from national interests and committed purely to supra-national, European interests?
Going back to basics
Maybe what Europe really needs, on top of new institutions, is a break. A long, hard look at itself in the mirror to redefine what a European Union really is about. If the stimulus for ever closer union – and closer union will become vital in the next few years and decades – is not going to come from internal European issues, perhaps Europe’s situation with regards to the rest of the world will be convincing enough. If current institutions can put in place a set of specific goals for Europe based on the existing common ground, and create a body with the power to enforce and legislate a closer union with a view to these specific goals, perhaps then Europe can truly begin to be more about cooperation, growth, innovation and common interests and less about hurt national prides. At the same time, while a closer union designed to share risks, decisions and budgets for specific goals and leaving each country responsible for the benefits it can obtain from it will, on the long-term, have positive impacts on all member countries, minimize risks and allow restructuring and adjustments to take place in individual member states without endangering the rest of the union, on the short-term, some countries will have to be willing to take the lead, to spend more, to do more, and to drag the others up to their level. Maybe an ever-closer union isn’t for everyone. Maybe, as well as figuring out what the next step for a closer union will be, we also need to figure out a mechanism for countries to exit the euro – Yanis Varoufakis recently revealed that such a plan had in fact been drafted by Greece during negotiations, with projects for a system of electronic payment that would have allowed the creation of a parallel currency.
Maybe Europe needs a reality check and a new direction before we can move on to reforming its institutions. Only then, step by step, will it become possible to create truly European bodies elected for European purposes; and only through such bodies can a truly European political conscience emerge.