Sunday

27th Nov 2022

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.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

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.

Disclaimer

The views expressed in this opinion piece are the author's, not those of EUobserver.

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.

Enough talk, only rights can eliminate patriarchal violence

We're asking the EU to stop hiding behind pinkwashed slogans and finally walk the talk by providing all necessary legal tools to guarantee women their rights, say two Left MEPs, for International Day for the Elimination of Violence against Women.

How the gas lobby is fuelling the cost-of-living crisis

An investigation by COE reveals oil and gas lobbyists have enjoyed unprecedented access to EU decision-making. As a result, a series of critical decisions on tax, energy-infrastructure, and regulation put fossil-fuel industry profits above millions at risk of energy poverty.

News in Brief

  1. 'Pro-Kremlin group' in EU Parliament cyberattack
  2. Ukraine will decide on any peace talks, Borrell says
  3. Germany blocks sale of chip factory to Chinese subsidiary
  4. Strikes and protests over cost-of-living grip Greece, Belgium
  5. Liberal MEPs want Musk quizzed in parliament
  6. Bulgarian policeman shot dead at Turkish border
  7. 89 people allowed to disembark in Italy, aid group says
  8. UN chief tells world: Cooperate on climate or perish

Stakeholders' Highlights

  1. Nordic Council of MinistersCOP27: Food systems transformation for climate action
  2. Nordic Council of MinistersThe Nordic Region and the African Union urge the COP27 to talk about gender equality
  3. International Sustainable Finance CentreJoin CEE Sustainable Finance Summit, 15 – 19 May 2023, high-level event for finance & business
  4. Friedrich Naumann Foundation European DialogueGender x Geopolitics: Shaping an Inclusive Foreign Security Policy for Europe
  5. Obama FoundationThe Obama Foundation Opens Applications for its Leaders Program in Europe
  6. EFBWW – EFBH – FETBBA lot more needs to be done to better protect construction workers from asbestos

Latest News

  1. Sweden says 'no' to EU asylum relocation pledges
  2. The 'proof' problem with EU sanctions — and how to fix it
  3. The EU gas cap: will the bottle ever be 'uncorked'?
  4. Enough talk, only rights can eliminate patriarchal violence
  5. Swedish EU presidency: 'Ukraine, Ukraine, Ukraine'
  6. EU Commission to keep Hungary's EU funds in limbo
  7. 'No substance' price ceiling for gas leaves everyone disgruntled
  8. Paying consumers who save most energy could tame gas prices

Stakeholders' Highlights

  1. European Committee of the RegionsRe-Watch EURegions Week 2022
  2. UNESDA - Soft Drinks EuropeCall for EU action – SMEs in the beverage industry call for fairer access to recycled material
  3. Nordic Council of MinistersNordic prime ministers: “We will deepen co-operation on defence”
  4. EFBWW – EFBH – FETBBConstruction workers can check wages and working conditions in 36 countries
  5. Nordic Council of MinistersNordic and Canadian ministers join forces to combat harmful content online
  6. European Centre for Press and Media FreedomEuropean Anti-SLAPP Conference 2022

Join EUobserver

Support quality EU news

Join us