Eurosclerosis redux: Why shouldn’t we expect great changes in the EU?

(Michael Sauers, CC BY-NC)

Probably the most frequent question the EU pundits and journalists have asked recently is whether the EU will disintegrate. The answer is simple: It will not.

Certainly, it is not because of a lack of challenges or crises the EU is currently facing but because modern institutions have a strong incentive to survive. Even the odd EFTA still exists, admittedly in a rudimentary form including Lichtenstein, Iceland, Norway and Switzerland, and it does so only because it became part of the European Economic Area associated with the EU. But it remains a fact.

In 2007, one of leading EU scholars Daniel Kelemen (interestingly an American, as has been the majority of the academically influential EU experts for the last fifty years) identified five possible scenarios for the EU in crisis: dissolution, limited secession, atrophy, the growth of variable geometry and civil war. As an EU believer, Kelemen argued that the EU is “built to last”, so crises would be, by definition, only short-lived events that political elites of the EU can cope with. Thus, a probable development would be the growth of variable geometry, that is various areas of differentiated integration reflecting varying will of the member states to integrate. This is neither new nor surprising, as the EU has espoused such features since the beginning of the 1990s. Actually, it has even become one of the most defining aspects of the European integration, where opting-outs clauses (regarding the EU budget, Eurozone, Schengen, asylum policies) were officially negotiated and accepted. Alongside these formal opt-outs, practices of tolerating certain institutional exceptions followed. While, for instance, Denmark negotiated its way out of the Eurozone, Sweden did not but keeping its own currency has been tolerated by the European Commission, even though the Accession Treaty obliges Stockholm to adopt the common currency sooner or later.

Still, there is a sixth option which can be called ‘eurosclerosis’, that is stabilization of the current status quo. While in medicine sclerosis means the hardening of tissue, the term ‘eurosclerosis” was coined to describe economic stagnation in Europe on the one hand and the stagnation of the European integration in the 1970s on the other. In short, this is an EU’s inability to find consensus on key issues and therefore ensuing decision-making passivity. It ended with the Single European Act in 1986 which relaunched the single market project of the European Economic Community. The plethora of crises and challenges the EU is currently facing makes it quite likely that the bloc is on its way into a new eurosclerosis.

The highly diversified EU, with a large number of distinct members, various interests and growing Euroscepticism have produced a contradictory integration project, which, prone to largely self-made crises, becomes nevertheless stabilized by the sheer complexity of the EU law that binds the EU societies. As a result, the eurosclerotic Union finds itself in a persistent equilibrium between ongoing crises and the fall-back option of the status quo. This equilibrium is possible not only because the economies of the EU member states are intertwined and interdependent but mainly because the highly complex EU law has stabilizing effects.

Does Brexit really mean Brexit?

Whenever you talk to EU law experts, they react like they did not understand the question. From the legal point of view, Brexit changes nothing, as long as the body of the EU remains intact. And it does, because it’s not the EU law that changes with Brexit but the territory it applies to.

Therefore, an EU lawyer deals not with the impact of Brexit or the migration but with the legal development of the Single Market in the realms of digital rights, intellectual property or environmental protection. The major interesting legal issue here is what type of legal succession will the European Treaty have with regard to the UK. Given the legal complexity of the European integration, a clear-cut Brexit is almost impossible. For instance, only the renegotiating of the trade relations with other countries will take years to finalize, as the EU has signed numerous trade agreements with non-EU states, including free trade agreements. When the UK leaves the EU it will need to renegotiate these agreements with all the interested parties. And this is only a tiny share of the EU body of law.

As Adam Łazowski, law professor at the University of Westminster in London argues, the Article 50 of the Lisbon Treaty (describing the procedure of the withdrawal from the EU) is too vague to be of any help with these highly complex negotiations the EU and the UK are facing.  Against this background, it is rather unlikely London will be able to negotiate its withdrawal within two years, which is stipulated by Article 50 but highly unrealistic. Furthermore, as Łazowski points out, Article 50 states clearly that the Brexit agreement will be an internationally treaty, which means that it will require ratification by each EU member state, very much like the accession treaties but in reverse. The process is unlikely to be quick and efficient, and even after its ratification it will be a subject to litigation at the European Court of Justice which can drag the procedure forever. The current British Prime Minister Theresa May did not seem to fully grasp what was really happening when she says: “Brexit means Brexit.” Quite on the contrary, Brexit does not mean Brexit, as the EU law strongly favours the status quo.

Refugee pressure is the major problem of the EU

The most divisive problem will remain the migration crisis. It is not even because the interests of the EU member states are highly divergent but due to the fact that the EU has a limited legal regulatory density in this field, which is not subject to litigation at the European Court of Justice. When the EU law has been seriously broken in August 2015, as Germany’s chancellor Angela Merkel declared that there are no limits to the number of refugees Germany can accept coining her most famous phrase “we can handle this”, there was no reaction from the EU institutions. Rightly or wrongly, Germany effectively suspended the Dublin conventions regulating that the first EU country in which refugees enter is responsible for the processing of their asylum claims.

Moreover, there is one essential aspect of the migration-refugee crisis that make it more problematic for the EU’s future than Brexit does. The EU, and in particular Germany, trusts the efficiency of the EU-Turkey Agreement (stipulating that all irregular migrants arriving on the Greek islands are to be returned to Turkey) which is supposed to prevent further waves of migration. Berlin believes that this agreement has produced a dramatic decrease in the number of irregular migrants. However, some migration experts, for instance Thomas Spijkerboer, professor of Migration Law at the Vrije University in Amsterdam, point out that this is a common mistake. After the peak in refugee flow in October 2015, the number of refuge arrivals has gone down steadily. There was no further decreasing trend after March 2016, when the agreement was signed. As a result, Spijkerboer argues that there is no relation between the EU-Turkey Agreement and the number of migrants crossing the Aegean from Turkey to Greece. If a next refuge wave come to Europe, the EU-Turkey deal will likely be ineffective.

Furthermore, the EU-Turkey Agreement came at substantial democratic cost. It was signed without any participation of the European Parliament and without an opinion of the Court of Justice. In this context, one could argue that the agreement undermines constitutional values of the European Union and is also highly problematic to the human rights image of the EU. The international law prohibits “refoulement” (returning of persecution victims to the oppressors) and collective expulsion without processing their asylum applications, which the EU-Turkey agreement essentially sanctions.

This can suggest that with the migration policy there will be no major breakthrough which could overcome the current eurosclerosis. In contrast, the EU is likely to be busy with this challenge for some time, thus prolonging the current status quo and perhaps even generating a new legitimacy crisis over the violation of international law principles.

Germany as a welcomed rescuer?

The theory of hegemonic stability argues that with complex political orders (and the EU is certainly one) it needs a hegemonic state to make such a political order work. For the EU in the eyes of many commentators it can only be Germany with its economic and financial potential and the largest population in the EU, as well as its ability to put a stamp on the management of all the recent EU crises. But is Germany really up for the task?

For a number of political scientists Germany is not only a reluctant hegemon punching below its weigh but also a semi-hegemon interested mainly in its own interests. Hegemons are capable of effective swift and decisive action but Germany is rather well-known for its protracted decisions, indecisiveness and flip-flopping (e.g. changing positions on key issues such as the nuclear energy or military missions abroad). Even the economic structure of the EU is not fit for the task. As Douglas Webber of the INSEAD Business School in Paris points out the strongly export-orientated German economy, with its enduring trade surplus, deprives the country of the main hegemon feature –  being the “market of last resort”. Furthermore, German political elites are unhappy about offering bail-outs to EU countries in trouble, as the Greek crisis has clearly shown. This is the opposite to, for instance, how the US bailed out Mexico in the 1994 financial crisis.

Any way out of the eurosclerosis?

There are several tools the EU could use while facing eurosclerosis. First, the strengthening of the existing EU institutions (or rather creating new ones) can help. In the context of the refugee crisis, it is first and foremost FRONTEX, the EU external borders management agency, which could profit from additional funds, personnel, new surveillance technologies, both air and seaborne. It would be crucial to combine automated information gathering and surveillance drones both in the air and under water in order to fight smuggling, human trafficking and irregular migration in general. This could prove a better solution than counting on dubious agreements with Turkey or other countries of the region which put the EU in a position of violating its own human rights norms.

Second, new integration initiatives could be helpful provided they have a broad support among the member states. Currently, new cooperation in Common Security and Defence Policy of the EU (CSDP) could be such an initiate, as shown by the French-German proposal from June 2016. The UK has blocked the creation of proper headquarters for the CSDP for years, now with the Brexit, this initiative could be used as an opportunity to follow through with some institutional innovations in this area. Further CSDP integration will certainly fall short of a creation of larger joint military capabilities (the so-called European army) but could give a momentum in order to broaden cooperation within the EU and thus overcome the current psychology of crisis.

Third, there is some potential of finding a common position on the migration crisis. The Bratislava Summit of the EU in September 2016 introduced the notion of “flexible solidarity”, allowing a differentiated approach to the migration crisis. While some countries would accept more migrant influx, others would be obliged to invest more into the EU’s external border management. Still, no specific funding scheme has been agreed upon to carry out flexible solidarity projects. One possibility could be the introduction of EU refugee bonds that were proposed by Italy in April 2016 and swiftly rejected by Angela Merkel fearing backlash in her own party. Berlin reacts allergically to every term resembling “eurobonds”, suggesting (even slightly) the extension of German liability for public deficits of other EU countries. This is a key issue for Angela Merkel, as Germany is getting closer to the Bundestag elections and more pressure from the migration-skeptical Alternative for Germany is to expect. Still, the topic could be put on the table again, after the federal elections in Germany and the presidential elections in France, both in 2017. It is not only because Italy is unlikely to accept its growing financial burden of the refugee crisis but the EU refugee bonds have been increasingly discussed in the European Parliament.

Fourth, the election of Donald Trump could revitalize the European Union to some extent, in particular if the new US administration decide to introduce more protectionist measures in the US trade policy. While any protectionist policies are likely to hurt Europe, in particular Germany—the global export champion, the EU could look for ways to deepen trade relations with countries abandoned by the US. For instance, if the US pull the plug on the Trans-Pacific Partnership Agreement (trade agreement involving twelve of the Pacific Rim countries but China), it would hurt Japan, who is a big supporter of the TPP. This, however, might also be a chance for the EU to accelerate the current talks between the EU and Japan on its own Free Trade Agreement. The negotiations have been lasting for three years now and involved already sixteen rounds. Some experts expect the EU-Japan FTA to boost the European GDP more that the TTIP with the US might (0.8 per cent against 0.5 per cent).

Ireneusz Pawel Karolewski is an Associate Professor of Political Science, Willy Brandt Centre for German and European Studies, University of Wroclaw in Poland. He was Kosciuszko foundation fellow at Center for European Studies, Harvard University in 2014 and Visiting professor at the John F. Kennedy School of Government, Harvard University in 2015. His research interests are social and political theory, European Union governance and EU foreign policy.

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