19th Feb 2019


Making the EU fit for 21st century challenges

  • Construction work at EU Parliament: Institutions must adapt, or lose relevance (Photo: europalr.europa.eu)

The EU is under massive stress: the euro and Greek crisis; the Ukraine conflict; the refugee crisis; potential Brexit; anti-EU populism in many EU countries; and, now, the Paris security crisis.

The proliferation of challenges has led to an improvised system of crisis management led by Berlin. But in order to make the EU capable of dealing with the new problems, the bloc needs to overhaul its institutions.

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  • EU Commission and Council chiefs: From two-speed to two-space Europe (Photo: Consillium)

In the east, Vladimir Putin's Russia is openly challenging EU support for those who want to escape the post-Soviet, Moscow-controlled system of corruption. It is using war, economic pressure, and propaganda.

In the south, autocratic and kleptocratic elites are violently fighting back against a rebellious middle class which feels betrayed in its hopes of a better future.

At the same time, the euro/Greek crisis has put the inner workings of the EU system into question. A joint currency without a joint state remains an experiment.

But while no country, so far, wants to leave the euro, all countries want to keep control of their own socio-economic policies. The result is muddling through, with considerable risk of failing.

Merkel factor

The German chancellor, Angela Merkel, has become Europe’s crisis-manager-in-chief. Berlin has become the centre of the EU - not Brussels, as generations of EU architects had planned.

Germany remains, all in all, an anchor of stability, and, most importantly, in Germany, there is a firm, almost all-party, consensus in favor of the EU. Merkel consistently seeks European solutions for cross-border problems.

Merkel's leadership was crucial for keeping Greece in the euro and for setting up mechanisms which, at least partly, serve as a safety net for the common currency.

She devised the Western response to Russian aggression in Ukraine.

She also keeps on fighting for a European solution to the refugee problem, trying to achieve a number of goals: keep the right to asylum in place; keep the Schengen system of open borders intact (a core achievement and a building block for the EU system of governance); strengthen joint external borders.

What emerges from recent years is that the EU is becoming a different beast than its founders had in mind.

Political EU

The EU is not on the verge of becoming a federal entity. But it has become much more political. It has become a platform where member states deal with core issues of national sovereignty: borders, asylum; security; budgets.

The old EU was built as a joint socio-economic structure, largely behind the backs of citizens. Governments delegated important powers to institutions in Brussels, which allowed bureaucrats to build the single market and to forge other joint policies, while maintaining an appearance of full sovereignty.

Whenever there was a public outcry against EU policies, governments were quick to blame Brussels. But the system mostly delivered, and EU capitals quietly appreciated its services.

This old contract is now broken.

Today, the EU is a joint political space. Governments jointly deal with important issues in plain sight of public opinion: the euro, economic policies, sanctions on Russia, refugees.

The bureaucratic model doesn’t work any more. Capitals cannot just delegate policies to Brussels, because the stakes are much higher. They must hammer out compromises in summits or see the EU project fail.

They don't want it to fail. But over the years, each country made its own, separate arrangements with the EU, based on its specific view of what the EU is or should be, what it does, and why membership is useful.

For some countries, economic benefits play a huge role, others feel better if their national governance is embedded in an overall European structure.

For some, security is a major priority, others seek influence by using the EU as an amplifier of national goals.

They all make their own cost-benefit calculation. But they find that the EU is, after all, rather useful than not.

UK exception

The only exception is an island: Great Britain.

The UK doesn't feel comfortable in a more political union, which is diminishing its independence, and is considering leaving. But like Grexit, Brexit, after years of internal British debate, is no longer seen in continental Europe as an existential threat to the Union. Britain is seen as already being half-out, as largely detached from joint policy-making.

While the EU is being challenged on many counts, we have also seen that it’s much stronger and robust than many would have thought.

One reason is that countries’ commitment to European integration has decades-long roots. Another is that EU institutions have evolved into an organism which permeates policy-making and administration in almost all fields and at almost all levels.

This underbelly of Europe, led and administered by an army of public servants in Brussels and capitals, a cosmopolitan elite educated in the spirit of cooperation, is barely visible. And yet it plays a crucial role, by keeping the EU together in a myriad of daily interactions.

This wide and deep Europe is not in crisis.

Strength, fragility

The crises may seem existential. But one should hardly be surprised if 28 member states do not immediately agree when it comes to hard decisions.

What is the best security policy towards Russia? Should one set core parameters of economic policies on a national level or give up large parts of sovereignty in that field? How much immigration is acceptable?

These are not easy questions.

But the EU has managed to find compromises on all the issues in recent years.

Twenty eight governments in the wider EU, and 19 in the eurozone have, again and again, gone beyond the lowest common denominator and united behind joint solutions. It often took time, a lot of heated debate, and many setbacks. But in the end, they always delivered.

In this process, the EU has emerged as an ever stronger actor, playing a stronger role in Europe. But it is also more fragile.

The way it operates today is problematic. Germany, too often, is the only country willing and capable to lead. But this leadership is too dependent on one personality - Merkel. Merkel’s leadership, while widely admired, has not been institutionalised and rests on improvisation.

Decisions are often made ad hoc, in reaction to unfolding events. There is a lack of longer-term planning. The system is based on informal relations, on coalitions of the willing.

The way the EU has been built requires a system in which Brussels plays a bigger role. Germany can lead, from time to time, on crisis management, but Europe must, ultimately, find a better balance of power between capitals and EU institutions.

External threats

Meanwhile, the external challenges are huge.

The geopolitical environment in which the EU operates today is tougher than in the past.

Russia has returned to the scene as an increasingly aggressive neighbour. Russia and China are both interested in a weak EU which doesn't form a bloc with global weight. Dealing with individual states puts them in a far stronger position.

The Levant is in flames. Millions of refugees are trying to escape from Syrian leader Bashar al-Assad’s ruthless violence and from the radical Islamists who now hold sway in large territories in the region.

All over the Middle East and North Africa, instability is growing as autocratic elites are less able to integrate the millions who enter the state-controlled labour market every year.

At the same time, the US is less willing to play the role of a strategic leader - a trend that might well continue under its next president. The EU must, increasingly, decide either to act by itself, or to see major security threats take their own course.

If member states want to shape a common future and not become a playground for other forces, they must develop a more political, stronger, and more coherent system of joint governance.

That requires an overhaul of the EU system as it stands today.

From federalism to pragmatism

The EU should give up the pretence that it’s on the way to becoming a federal unit, or "ever closer union".

The institutions in Brussels, partly shaped by analogy to national institutions, have a role to play, but a different one than the parallel institutions in member states.

The EU is probably going to remain an entity "sui generis,” a unique system of governance. It is not on the way to becoming a federal United States of Europe.

The EU, in all likelihood, will be led not by an EU government, but by member states, supported by Brussels. Admitting this and improving the current system along practical lines would be a starting point for reform.

In general, the EU should provide services to member states. It should be seen as a platform for coordination and as a hub for joint action. EU institutions should provide ideas and help shape policies.

They should also continue to oversee, or “guard,” policies which have been put in place by member states.

This is much less than what generations of federalists have fought for. But it is much more than any other joint system of sovereign states has ever achieved. And to make this system, as it exists today, storm-proof for the long term would already be a stunning achievement.

Giving up on the federalist fallacy would also take away ammunition from anti-EU movements.

It would make the silent majority in Europe, which doesn't want to give up the nation state, but which believes in the value of the EU, more comfortable. The EU debate needs less utopianism and more pragmatism.

From in/out to either/or

Another holy cow to slaughter is the concept of a "two-speed Europe.”

The kinetic metaphor envisages two groups moving toward the same, federal, goal at different rates. Instead, we should look to a two-space Europe, a Europe of two circles, which overlap in some areas, and which are both equally legitimate.

One space would be the single market.

The other one would be the circle of intensified political integration: on the euro; on coordinated economic and social policies; cooperation in justice and home affairs; energy policy; joint foreign and defence policies; joint borders; and joint asylum laws.

Technically speaking, a two-space EU won’t be easy to construct. It would require a reorganisation of the EU institutions. But the political advantages would be huge. Instead of herding all member states into one line, it would provide a choice.

It would also re-open the door of EU enlargement and change the nature of the UK referendum.

Ukraine and Turkey could much more easily become members of a depoliticised single market. The EU would regain leverage in its neighborhood and revitalise its soft power.

The British referendum could change from in/out to either/or. The UK could become a leader in the economic space, the single market, in which it feels at ease.

Having the single market as a separate, consolidated space would also decrease pressure on the euro.

Countries that leave the second space of deeper political integration could stay part of the single market. Leaving the euro would not be an all-or-nothing question any longer.

New agenda

The EU has its origins in WWII and in the Cold War. It has been built under the protection of a US security umbrella, with the goal to overcome nationalist antagonism and to support economic recovery.

German and European reunification gave it new purpose: to help transform central Europe and unite it with the West. Both goals have been achieved.

The question now is whether the EU can remain an engine of prosperity and unity and become, in addition, an actor on the global stage.

It needs to protect its achievements by strengthening the single market.

But being defensive is not enough. The EU also needs to reposition itself in order to deal with new geopolitical challenges.

If it doesn't prove, in a much more dangerous international environment, that the European way is superior to the national model of crisis management and security provision, the EU, as a system of joint governance of sovereign countries, will increasingly lose relevance and could, ultimately, fade away.

Ulrich Speck is a senior fellow at the Transatlantic Academy, in Washington

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