Reshaping the Path: Tackling the European Integration Dilemma

China International Studies (English) - - Contents - Jin Ling

The European Union’s recent multiple crises are interconnected and deeply rooted in its institutional dilemma, the interest and value gaps among its members, and emerging political and social identity crisis. The EU has to make a critical choice about its future path, which hinges on various uncertainties and the concert of powers.

Although the history of European integration is one driven by crises, the internal and external crises facing the European Union (EU) over the last decade, from the debt crisis, the refugee crisis to Brexit, are unprecedented in both scale and nature. The underlying dilemma of European integration has been so thoroughly revealed that the European Union cannot continue with its past integration mode but embark on reshaping the path. Currently, a multi-speed approach to European integration has become the new priority path. But its implementation still faces a series of political and institutional challenges.

Deep-rooted Dilemma of European Integration

The European Union’s multiple crises are interconnected. The resulting full-blown political and social crisis embodies the EU’S institutional deficiency and dilemma of integration. With a governance system consisting of multiple layers, the EU is confronted with many challenges: the mismatch between authority and responsibility, the absence of solidarity and common ground due to divergent interests and values among different member states, and the lack of identity due to social fragmentation. These have made crisis the “new normal” in the European Union.

Jin Ling is Associate Research Fellow at the Department for European Studies, China Institute of International Studies (CIIS).

Institutional deficiency from division of power

The source of the European Union’s powers is a treaty-based transfer of sovereign powers, to which its ability to act is subject. With the deepening of integration, the EU’S powers have expanded and now involve economic, social, internal and judicial dimensions and external relations, but the core powers are still in the hands of the member states. The single market and the common currency are not accompanied by common financial, budgetary and economic policies. The Schengen Area has achieved free movement of people, but common protection of the external border, an efficient information system of the Schengen Area, effective housekeeping and judicial cooperation, and a common policy on immigration and asylum have all yet to be put in place. In view of the institutional deficiency, the euro and Schengen agreements are widely regarded as a “bold but premature” policy design with inconsistent rules and fragile mechanisms, and there are concerns that “systemic crisis will make the whole political process collapse.”1

Effective EU governance depends on coordination and cooperation among the member states, but the process is slow and inefficient and there is a huge governance deficit due to the division of powers. When the debt crisis happened, there was no response mechanism in the European Union as a whole. Putting aside the “non-bailout” principle in the Treaty, the limited budgetary resources of the European Union could do nothing effective. Intergovernmental methods became the main way to deal with the crisis. Member states, based on their own values and interests and bound by domestic politics, caused the deterioration of the crisis and its expansion to the EU’S nucleus.

Although different from the debt crisis in nature, the refugee crisis also revealed the institutional defects of the European Union. On the one hand, as the refugee issue is increasingly intertwined with the security threat and

1 Kiran K. Phull and John B. Sutcliffe, “Crossroads Of Integration? The Future of Schengen in the Wake of the Arab Spring,” in Finn Laursen, The European Union and the Eurozone Crisis: Policy Challenges and Strategic Choices, Ashagate Publishing, 2013, pp.177-179.

identity, the member states, given the sensitivity of national sovereignty and pressured by xenophobia feelings of far-right extremists, have taken a stance more uncompromising toward refugees. On the other hand, integration, especially the free movement of people within the Schengen Area, means the refugee issue has gone beyond national borders and sovereignty and necessitated a response from the European Union as a whole. Here comes the dilemma: The European Union lacks a response mechanism and the ability to safeguard border security, and the member states lack an intention to compromise. The refugee allocation plan has thus been mired in a stalemate and the refugee issue has in the end turned into a full-scale political, social and security crisis, which is one driving force behind Brexit.

The governance deficit has aggravated the European Union’s legitimacy crisis. The EU’S legitimacy largely comes from its functions. That is, people consider it the most suitable organization for meeting their needs and providing effective services and added value. Functional legitimacy is the pillar of the EU’S long held policy of “permissive consensus.”2 However, the governance deficit caused by the institutional defects, coupled with the EU’S dual governance system, means member states, out of domestic political needs, would pass the buck onto Brussels, magnifying the functional deficiency of the Union.3 The debt crisis and the refugee crisis have considerably shaken the legitimacy on which the EU has been built. According to the latest opinion survey by the Pew Research Center, people disagrees with the EU most on economic and refugee issues. On the refugee issue, 98 percent of Greeks, 88 percent of Swedish people and 77 percent of Italians expressed their disapproval with the EU policy. In the Netherlands, where the highest approval rate was recorded, there were still only 31 percent of people in favor of the EU policy. On the economic issue, only 6 percent

2 Svetlozar A. Andreev, “The EU ‘Crisis of Legitimacy’ Revisited: Concepts, Causes, and Possible Consequences for the European Politics and Citizens,” Political Perspectives EPRU 2007 Issue 2 (7), http:// www.politicalperspectives.org.uk/wp-content/uploads/2010/08/epru-2007-s1-07.pdf.

3 The President of the European Commission has called on member states to abandon the politics of “blaming Brussels.” See European Commission: “White Paper on the Future of Europe,” March 1, 2017, http://europa.eu/rapid/attachment/ip-17-385/en/white%20paper%20on%20the%20future%20of%20 Europe.pdf.

of Greeks, 22 percent of Italians, and 27 percent of French people supported the EU’S economic policies. These statistics show people’s feeling that the EU has failed to deal with their concerns and immediate interests.4

Absence of solidarity and common ground

The process of integration pursues unity in diversity, while the culture of compromise, solidarity and common ground is the fundamental principle that drives integration. However, following the multiple crises, the divergence of interests and values among member states have been expanding and the European Union is facing an unprecedented crisis of solidarity and common ground. In September 2016, in his State of the Union speech, the President of the European Commission Jean-claude Juncker said, “Never before have I seen such little common ground between our Member States. So few

4 “Euroscepticism: The EU’S New Normal,” Euobserver, June 9, 2016, https://euobserver.com/ opinion/133747.

areas where they agree to work together. Never before have I seen so much fragmentation and so little commonality in our Union.”5

When the integration process was smooth, although different countries benefited unevenly from it, there was a dynamic balance between all the members. And cooperation based on the greatest common factor was in a large degree considered win-win among the member countries. The compromise and cooperation between Germany and France basically represented the common ground of interests between northern and southern European countries. The special position of the United Kingdom not only ensured a balance between the eurozone and non-eurozone regions, but also eased the worries of small countries in the EU about French and German dominance. However, the overlapping multiple crises have not only disturbed the internal power balance, but also changed to some extent the opinions of member states on the added value of integration. The European Union has transformed into a community of responsibility from one of interests, and the conflicts of interests and values among different parties are thus intensified, shrinking the room for compromise and common ground.

The debt crisis has changed the power balance between France and Germany. The austerity policies advocated by Germany were the focus of contention between southern and northern European countries. Southern European countries represented by Greece believed that the policies of Germany in dealing with the debt crisis lacked the spirit of solidarity and that Germany had not reflected on its economic development mode, averted its responsibility for the imbalance in the eurozone and made other

The overlapping multiple crises have not only disturbed the internal power balance, but also changed to some extent the opinions of member states on the added value of integration. 5 “State of the Union Address 2016: Towards a better Europe - a Europe that protects, empowers and defends,” European Commission, September 2016, http://europa.eu/rapid/press-release_speech-16-3043_ en.htm.

countries shoulder the high cost of reforms. The austerity policies proposed by Germany were considered by those countries a German Model imposed on them, which would not solve the crisis but only exacerbate the economic and employment situation. If the debt crisis worsened the economic divisions in the European Union, the refugee crisis reflected the divergence of values between the Visegrád Group (V4) and the old EU member states.6 The V4 countries refused to accept the refugee allocation plan, which shows not only the divergence that had existed on the issues of solidarity and sovereignty transfer, but also the conflicts on some fundamental issues such as religious tolerance, responsibility of refugee relief, and national identity. The older members of the European Union accused the newer members from Central and Eastern Europe as lacking solidarity and threatened to impose punishments with the Structural Funds. The V4 countries believed that the spirit of solidarity advocated by Germany and other countries represented a kind of moral hijacking, regarding the policy of openness as moral imperialism which totally ignores its implications for the EU’S overall economy, society and politics. In the face of divergence, the EU for the first time adopted the method of qualified majority voting to implement the refugee allocation plan forcefully. This brought not only difficulty in implementation but also increased the mistrust among members.

Identity crisis of political and social fragmentation

A more profound dilemma confronting the European Union is the identity crisis caused by political and social disparities. The fragmentation of party politics, the rising tide of populism and the predominance of “referendum politics” are the result of “the politics of fear and rage” and demonstrate the

6 On February 15, 1991, Hungary, Poland and Czechoslovakia held a meeting at the Visegrád castle, Hungary. Presidents and Prime Ministers from the three countries discussed the situation they faced, and decided to work closely with each other in their effort to abandon the Warsaw Pact and the Council for Mutual Economic Assistance, exchange experience in the establishment of multi-party parliamentary democracy and the transition to the market economy, coordinate on joining the European Community and strengthen cooperation among themselves. They agreed to set up a regional cooperation organization and issued a statement. In December 1992, after the independence of the Czech Republic and Slovakia, the member states changed from three to four.

political dysfunction created by identity crisis. Four referendums were held in 2016 across Europe: the Netherlands vetoed the free trade agreement between Ukraine and the European Union, the United Kingdom voted to leave the EU, Hungary rejected the EU’S refugee quota plan, and Italy frustrated its constitutional reform. Although varying in terms of issues, these referendums had a lot in common. They all demonstrated the contradictions that exist between political parties, between the establishment and anti-establishment forces, between openness and isolationism, between ordinary citizens and the elite, and between different generations. The European Union has no consensus on the role of integration in safeguarding peace and prosperity. “Many Europeans consider the Union as either too distant or too interfering in their day-to-day lives. Others question its added-value and ask how Europe improves their standard of living.”7

People’s identification with the European Union’s role in upholding peace on the continent is waning. On the one hand, living in peace for over six decades, Europeans have come to take peace for granted rather than crediting it to the European Union. They are more concerned about the EU’S practical contribution to economic growth, employment and tackling the refugee crisis. On the other hand, against the backdrop of the Ukraine crisis, turbulence to its southern border and frequent terrorist attacks, the EU’S model of achieving peace through expansion has been disputed and even deemed as “the source of conflict.”8

The consensus of the role of integration in achieving prosperity and development is also faltering. As a proactive driver of open market, integration has promoted innovation and development. However, disparity has also occurred. There have been winners and losers in the free market competition. The regional, class and generational differentiations revealed in the Brexit referendum is a case in point. The European Union, on its part, has no social security mechanism. Moreover, some policies have even

7 European Commission, “White Paper on the Future of Europe.” 8 Ulrich Speck, “EU Faces Tough Choices in the Neighbourhood,” Euobserver, https://euobserver.com/ opinion/128728.

restricted the member states’ self-protection abilities. As a result, there has been a return of nationalist sentiments among ordinary citizens, who are suspicious of the open and free economic model advocated by integration and globalization, which they believe only benefits the elite.

Europe used to be confident and optimistic that its economic, political and integration model was the bulwark for ensuring peace and prosperity before the outbreak of its debt crisis, so it had tried to export its model to enhance its influence. Against the backdrop that emerging economies are rising while the European Union is beset by crises, people are increasingly suspicious of the free market economy, democratic politics and integration model advocated by the EU. They believe that the EU has not only failed to guarantee peace and development, it has even become a problem itself. They have lost confidence in the role of integration in upholding peace, prosperity and security. An opinion poll in December 2016 found that 82 percent of interviewees believed the integrated European economy lacked enough social security; over 50 percent believed that national political systems have not taken their interests into consideration; 56 percent believed that the future generation would find their lives harder; and 21 out of the 28 EU countries believed globalization undermines national identity.9

Against the backdrop that emerging economies are rising while the European Union is beset by crises, people believe that the EU has not only failed to guarantee peace and development, it has even become a problem itself.

Reshaping Perceptions and Pattern of European Integration

Confronted with the institutional dilemma, the interest and value gaps among member states and identity crisis, the European Union has to decide

9 European Commission, “Future of Europe,” Special Eurobarometer 451, December 2016, http:// ec.europa.eu/commfrontoffice/publicopinion/index.cfm/survey/getsurveydetail/yearfrom/1974/ yearto/2016/surveyky/2131.

British Prime Minister Theresa May addresses a news conference at the EU summit in Brussels, Belgium, June 23, 2017, where she sets out the UK’S opening offer on the rights of EU citizens after its exit from the Union.

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