Sunday

24th Sep 2017

Opinion

Are we heading for a 'half-Europe'?

  • Wolski: non-euro states should not be left behind (Photo: YoungJ523)

Crisis rescue programs as well as the negotiations of the next seven-year EU budget must be viewed in a context broader than a purely economic one.

It is not just a problem of economic growth and fiscal discipline, on which nearly everything had already been said and in relation to which the only thing lacking is the will to take some final decisions.

Thank you for reading EUobserver!

Subscribe now and get 40% off for an annual subscription. Sale ends soon.

  1. €90 per year. Use discount code EUOBS40%
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

It is about the Union, whose ambitions are reduced or at best limited to the eurozone. It is about the collateral damage, the non-economical, political and constitutional effects of the crisis which is consuming the Union and which has an impact on its future and its unity.

Today, the European Union is weakened on the political level by at least five phenomena.

First, we observe with great concern the birth of a two-level solidarity within the Union: one for those inside and the other for those outside the eurozone.

But the sovereign debt and banking crisis affect all EU countries, not just the Euro-17.

This happens through the mechanisms of the EU single market: the free movement of goods, services and capital. Banks from the Central and Eastern Europe, which are not members of the euro area, are to a large extent (about 70 percent in Poland), held by banks from the eurozone, and the effects of the crisis are transmitted directly, not only through trade.

By using the crisis as an excuse, the European "club of scrooges" is pressuring for a reduction of the EU budget, which as it stands amounts only to 1 percent of GDP.

At the same time, generous resources, on a scale of 3-5 percent of GDP, are allocated to rescue programs reserved for the eurozone.

The report by centre-left Portuguese MEP Elisa Ferreira adopted by the European Parliament during the June plenary session provides for the establishment of a separate "growth budget" of up to 1 percent of GDP, aimed only at the members of this area.

The recent French proposal would further drain the existing structural funds by €55 billion, to the detriment of European solidarity.

Ideas to create a Parliamentary Assembly for the eurozone parallel to the European Parliament are gaining ground, for example in the recent report by centre-left French MEP Pervenche Beres on the European Semester.

Institutional cleavage

The already-existing Eurogroup meetings and the separate summits restricted to members of the euro area confirm the emergence of an institutional cleavage within the Union.

It is not surprising that Poland, as a signatory of the fiscal compact, was determined to fight for a seat at the table of those summits.

Second, we now see double standards and macroeconomic conditions being applied to the EU member states: large and small countries, eurozone members and countries outside the zone are treated differently.

The EU penalises small deviations in macroeconomic discipline by threatening to freeze EU funds, while in the case of a major breach of discipline it grants generous aid - just compare the recent treatment of Hungary and Spain.

A possible "European redemption fund," voted as a proposal of the European Parliament, aiming at pooling the part of the eurozone debt which exceeds 60 percent of the GDP, could result in lower cost of debt servicing for the latter.

At the same time the same proposal may mean higher cost of debt servicing for other countries.

Having two macroeconomic standards may impinge economic growth and economic convergence for both groups of countries, creating a growing economic disparity, which is not without concerns about the integrity of the single market.

It could also lead the non-eurozone away from the possibility of joining the euro and further away from advancing the project of European integration.

Two-speed EU no longer taboo

Third, the phenomenon of a two-speed Europe not only becomes a fact of increasing likelihood, but it is is more and more politically acknowledged and approved.

Those who so far have been defending the unity of the EU are silent now. This threatens the integrity of the Union, and countries like Poland are being relegated to the second circle of European integration.

Fourth, the community method of decision-making processes, based on the European Commission and European Parliament and as such defended by Poland, is becoming increasingly eroded.

The intergovernmental fiscal compact and the recent Council decisions on the Schengen area are examples. The intergovernmental method and national egoisms prevail on the European community mechanisms.

Fifth, the position of the European Union on the international stage is weakened by the crisis.

This reflects negatively, and not only from a financial point of view, on the neighbourhood policy of the EU, including the Eastern Partnership which Poland has co-initiated.

If any of the member states should leave the EU, or even the eurozone, Europe would face a challenges in terms of geopolitical security, which must not be underestimated or fogotten.

Measuring the damage

How in this situation can we measure the collateral, political damage to the European project? What is the cost of shrinking Europe or the cost of a half-Europe?

Economically we have to measure it in the hundreds of billions of euros. Politically, it is a threat to the integrity of the construction of Europe, adherence to which was a beacon of light in the dark time of Communism in Poland, and which has let Europe itself enjoy decades of security and prosperity after World War II.

The threat is also one to the sustainability of the re-unification of the continent, of burying once and for all the divisions crated by the Yalta conference og 1945.

We need to strive for solutions which would serve the whole European Union, and not just a part of it.

Let us weigh the political consequences of the decisions taken under the pressure of the economic and financial crisis. The damage resulting from the rupture of the Union may be larger and more far-reaching than the economic and financial implications.

If the excesses of states and banks - not the fact of having the euro as a currency - lie at the origins of the crisis, it is illogical to make belonging to the eurozone and being (for now) outside of it, a criterion for dividing EU member states into two categories.

The mechanisms and institutional arrangements designed for the eurozone as a response to the crisis should be open to all EU countries.

Jacek Saryusz-Wolski is a Polish centre-right MEP. This comment was initially published in the Rzeczpospolita newspaper.

Merkel speaks out for two-speed Europe

German Chancellor Merkel has said she will push ahead with plans for a political union, including more powers to Brussels and a two-speed Europe if necessary.

News in Brief

  1. EU to hail 'aspirations' of former Soviet states
  2. UK says credit downgrade was wrong
  3. Dutch state appeals ban on taking air-polluting measures
  4. May proposes 2-year transition period after Brexit
  5. May to call on EU's 'sense of responsibility'
  6. Catalonia has 'contingency plans' for independence vote
  7. Last German polls confirm Merkel's lead
  8. EU to step up sanctions on North Korea

Stakeholders' Highlights

  1. EU2017EEEU Finance Ministers Agreed to Develop New Digital Taxation Rules
  2. Mission of China to the EUGermany Stands Ready to Deepen Cooperation With China
  3. World VisionFirst Ever Young People Consultation to Discuss the Much Needed Peace in Europe
  4. European Jewish CongressGermany First Country to Adopt Working Definition of Antisemitism
  5. EU2017EEFour Tax Initiatives to Modernise the EU's Tax System
  6. Dialogue PlatformResponsibility in Practice: Gulen & Islamic Thought
  7. Counter BalanceHuman Rights Concerns Over EIB Loan to the Trans Anatolian Pipeline Project
  8. Mission of China to the EUChina Leads the Global Clean Energy Transition
  9. CES - Silicones EuropeFrom Baking Moulds to Oven Mitts, Silicones Are a Key Ingredient in Kitchens
  10. Martens CentreFor a New Europeanism: How to Put the Motto "Unity in Diversity" Into Practice
  11. Access MBAGet Ahead With an MBA Degree. Top MBA Event in Brussels
  12. Idealist QuarterlyIdealist Quarterly Event: Building Fearless Democracies With Gerald Hensel

Stakeholders' Highlights

  1. Mission of China to the EUPresident Xi Urges Bigger Global Role for Emerging Economies
  2. EU2017EEAre We Socially Insured in the Future of Work?
  3. European Jewish CongressFrench Authorities to Root Out "Societal Antisemitism" After Jewish Family Assaulted
  4. European Federation of Local Energy CompaniesClean Energy for All? On 10.10 Top-Level Speakers Present the Clean Energy Package
  5. UNICEFUp to Three Quarters of Children Face Abuse & Exploitation on Mediterranean Migration Routes
  6. Swedish EnterprisesEurope Under Challenge; Recipe for a Competitive EU
  7. European Public Health AllianceCall to International Action to Break Deadlock on Chronic Diseases Crisis
  8. CES - Silicones EuropePropelling the construction revolution with silicones
  9. EU2017EEEU 2018 Budget: A Case of Three Paradoxes
  10. ACCAUS 'Dash for Gas' Could Disrupt Global Gas Markets
  11. Swedish Enterprises“No Time to Lose” Film & Debate on How Business & Politics Can Fight Climate Change
  12. European Free AllianceSave The Date!! 26.09 - Coppieters Awards To... Carme Forcadell