26th Oct 2016


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.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

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.


Europe ready to tackle Greek debt relief

The Greek government has built and broadened alliances in EU institutions and member-states that acknowledge the need to restructure the debt and deliver another economic model for the eurozone.

Stakeholders' Highlights

  1. EU-China ForumDebating the Future of the EU-China Relations on 28 November in Prague
  2. COMECEMigrants: From Fear to Compassion
  3. Birdlife EuropeBusiness as Usual - Juncker Snubs Environment and Protects Broken CAP
  4. EFADraft Bill for a 2nd Scottish Independence Referendum
  5. UNICEFCalls on European Council to Address Plight of Refugee and Migrant Children
  6. ECTAJoin us on 9-10 November in Brussels and Discover the new EU Digital Landscape
  7. Access NowCan you Hear me now? Verizon’s Opportunity to Stand for Global Users
  8. Belgrade Security ForumMeaningful Dialogue Missing Not Only in the Balkans, but Throughout Europe
  9. EuropecheEU Fishing Sector Celebrates Sustainably Sourced Seafood in EU Parliament
  10. World VisionWomen and Girls Urge EU Leadership to Help end Gender-based Violence
  11. Belgrade Security ForumGet the Latest News and Updates on the Belgrade Security Forum @BelSecForum
  12. Crowdsourcing Week EuropeMaster Crowdsourcing, Crowdfunding and Innovation! Conference 21 November - 10% Discount Code CSWEU16

Stakeholders' Highlights

  1. EJCEU Parliament's Roadmap for Relations with Iran a Massive Missed Opportunity
  2. Nordic Council of MinistersFish Skin on Bare Skin: Turning Fish Waste into Sustainable Fashion
  3. CEDECOpportunities From the Creation of Synergies at Local Level in the Energy Transition
  4. ACCAFinTech Boom Needs Strong Guidance to Navigate Regulatory Hurdles
  5. Counter BalanceWhy the Investment Plan for Europe Does not Drive the Sustainable Energy Transition
  6. Nordic Council of MinistersThe Nordic Region Seeks to Make Its Voice Heard in the World
  7. Taipei EU OfficeCountries Voice Support for Taiwan's Participation in ICAO
  8. GoogleDid You Know Europe's Largest Dinosaur Gallery Is in Brussels? Check It Out Now
  9. IPHRHuman Rights in Uzbekistan After Karimov - Joint Statement
  10. CISPECloud Infrastructure Providers Unveil Data Protection Code of Conduct