Reshaping the Path: Tackling the European Integration Dilemma

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  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.
  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.”
  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 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.” 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. 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 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.
  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 areas where they agree to work together. Never before have I seen so much fragmentation and so little commonality in our Union.”   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 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. 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 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.”
  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.”
  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 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.
  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 how to integrate better. While tackling issues ranging from its debt crisis to the refugee crisis, the EU has been committed to urging member states to transfer more powers and functions to the Union. In this way, it is trying to resolve its institutional shortcomings through deepening integration in order to achieve the goal of resolving the crises and enhancing EU identity. However, the economic, political and social reality has demonstrated that its plan cannot be effectively implemented. This has led to the escalation of various challenges into a systematic economic, political and social crisis. Since the United Kingdom voted to leave, the European Union has begun to reflect on integration in an effort to figure out a more pragmatic plan. A multi-speed approach to integration has become the directional choice.
  A more rational and practical perception of integration
  Over the course of integration, the European Union has undergone major crises ranging from the “empty chair crisis,” the “currency crisis” to the “constitutional crisis.” Despite these twists and turns, integration continues to deepen and expand. This has not only promoted the perception that “crisis unites the European Union,” but also reinforced the idea that integration is irreversible. All these have led to a supernational approach to crisis management. However, the current crises of the EU are intertwined. On the one hand, this has curbed the supernational development in which member states transfer powers and functions to the EU. On the other hand, the EU’s powers and functions have proved to be inadequate to tackle the crises effectively. The interaction of these two factors has led to the deadlock of integration. The EU is now turning to more pragmatic approaches and reflecting on long-term objectives and the practical path of integration.   “More Europe,” which refers to member states transferring more powers and functions to the European Union, is no longer the priority of integration. The EU has shifted from emphasizing “more Europe” to stressing cooperative achievements in tackling its debt crisis, refugee crisis and Brexit. After a meeting of Germany, France, Italy and Spain after the debt crisis, the German Chancellor Angela Merkel remarked, “The lesson of this crisis is more Europe, not less Europe. More Europe means that we must give up more powers to Europe.” Then Germany’s Foreign Minister Guido Westerwelle, who led the Future of Europe Group, went further and put forward the goal of a “United States of Europe,” which included transferring more economic sovereignty, empowering the European parliament to play a bigger role, establishing European troops and strengthening the common foreign and security policy. In the face of the refugee crisis and Brexit, the EU has given up the goal of “more Europe.” The document entitled A Strong Europe in a World of Uncertainties released by French and German foreign ministers after Brexit demonstrated that “Neither a simple call for more Europe nor a phase of mere reflection can be an adequate answer. To prevent the silent creeping erosion of our European project we have to be more focused on essentials and on meeting the concrete expectations of our citizens.” Germany’s Finance Minister Wolfgang Sch?uble urged that member states should be more practical and made it clear that Germany needs “better Europe” rather than “more Europe.” At the Versailles Conference in February 2017, a “multi-speed Europe” replaced “more Europe” as a directional choice of the European Union.
  Focusing on solutions to the crises and cooperative achievements has become the priority of integration. Since the Bratislava Declaration and Roadmap was published after Brexit, the European Union has begun to reflect on its integration. The Roadmap took migration and external borders, internal and external security, and economic and social development as the EU’s priorities and formulated corresponding concrete measures, rather than referring to “more Europe” to enhance solidarity. This demonstrated a practical stance on integration. The White Paper on the Future of Europe published later by the European Commission quoted Robert Schuman’s vision of Europe 60 years ago in its foreword: “Europe will not be made all at once, or according to a single plan. It will be built through concrete achievements which first create de facto solidarity.” The Paper also tried to go beyond the dispute of “more Europe,” demonstrating a more flexible and pragmatic stance.   Sub-regional division and coalition of the willing
  The disputes among member states over the roots of the crises and the approach to addressing them have accelerated further division among sub-regions across the European Union, and catalyzed a new model of “coalition of the willing.” Over the past six decades of integration, member states have often formed informal coalitions of the willing on different issues in the decision-making process based on different historical, cultural and interest preferences. Currently, the differentiation of interests and values within the Union has shown new features. The increasingly prominent sub-regional division, the concert of major powers, the strengthening sense of responsibility of the founding members, and the cooperation within coalitions of the willing, all provide stability to some degree.
  Sub-regional division mainly refers to the tendency of southern European countries, also known as the Club Med, to enhance cooperation. The seven southern European countries enjoy the tradition of acting in concert, but they lack a shared identity and a cooperation mechanism. The common identity of net debtor and the refugee and migration challenges have become a catalyst for their sense of identity and cooperation. In September 2016, the first informal summit of southern European countries was held in Athens, which focused on major concerns such as austerity and growth, regional security and peace, and migration/refugee issues. Greece said that the aim of the meeting was “to boost cooperation and coordination so they can leave their mark on the European agenda.” After that, the southern European countries held the second and third summits in Lisbon and Madrid respectively. They not only discussed their concerns but also expressed their common stance on the future of integration. A cooperation mechanism is taking shape.
  The model of a new concert of Europe is also emerging. France and Germany were the two major drivers of European integration. In recent years, there has been imbalance between their powers leading to dysfunction of leadership. Brexit, however, once again motivated the identity and sense of responsibility of these major powers and founding states. Cooperation among them has demonstrated solidarity and dominated debates over the future of Europe. The concert of powers comes in two forms. First, there is one among the three founding states of France, Germany and Italy. The three countries held a conference in Berlin shortly after Brexit, publishing a joint statement which reinstated their commitment to the EU’s unity and set the tone for the EU’s future development. In August 2016, they met again in Ventotene Island of Italy and determined the EU’s priorities. Second, there is also coordination among the four parties of Germany, France, Italy and Spain. Throughout the EU’s history, these four states have rarely felt a need to flaunt their weight. But the current crises have provided them with the opportunity to work together. In 2012, these four states held a summit to tackle the EU’s growth crisis. They announced a growth program of 130 billion euro and noted that tackling the EU’s debt crisis required “more Europe.” The configuration of a “concert of four parties” began to emerge. On March 6, 2016, the leaders of these four countries met in Versailles prior to commemorating the 60th anniversary of the Treaty of Rome. They made a joint statement, which put forward the “multi-speed Europe” plan to reform integration and declared their political will to function as the core of integration after Brexit.   Moreover, the refugee crisis has strengthened the cooperation within different coalitions of the willing. The V4 states, all opposed to the refugee allocation plan, put forward the principle of flexible unity. The Netherlands and other countries proposed a “mini Schengen.” Germany led a coalition of the willing and promoted cooperation with Turkey and Africa. These are all examples of differentiated actions of different cliques within the EU.
  “Multi-speed Europe”: a directional choice
  The European Union’s multiple crises have revealed not only the interest divisions among the member states but also their differences over values and objectives of integration. These have seriously undermined the culture of compromise and consensus in the integration process and forced the EU to make a choice between unity and efficiency. As the practical outlook on integration, sub-regionalization within the Union, and the pattern of coalition of the willing become more prominent, a “multi-speed Europe” is bound to dominate debates over the EU’s future and become a directional choice of integration.
  The idea of a “multi-speed Europe,” or differentiated integration, has long been embedded in the institutional design and practice of integration. The “enhanced cooperation” in the EU Treaty and the “permanent structured cooperation” in the common security and defense policy are both institutional designs of a multi-speed Europe. In practice, the eurozone and the Schengen Agreement are two typical examples: the former is “multi-speed” within the EU framework, while the latter started from intergovermental “multi-speed” outside the EU. The debt crisis has enhanced the practice of multi-speed Europe, with the Euro Plus Pact and the Fiscal Compact both intergovernmental examples.
  The debate over a multi-speed Europe has been always following crises and reforms in the integration process. Each time the EU is confronted with crises and reforms, the debate would become part of the political agenda. In 1973, then German Chancellor Willy Brandt implied “differentiated integration” when addressing the European Parliament following the European Community’s first expansion, the rising inter-governmental force and the increasing diversity. After the monetary crisis in 1994, Wolfgang Sch?uble put forward the idea of a “hard core” of willing and able member states that pursues further integration in specific policy areas. The concepts of “avant-garde” and “pioneer group” respectively proposed by Jacques Delors and Jacques Chirac around 2000 were also intended to promote integration through a multi-speed approach. However, the European Union has never reached consensus on a multi-speed Europe. Both eurosceptics and euro-enthusiasts are doubtful about it. Eurosceptics are afraid that a multi-speed Europe could be a backdoor for a “European Federation” while euro-enthusiasts are afraid that it will endanger the solidarity of the European Union. As a consequence, enhancing cooperation within a multi-speed framework has failed to bear substantive fruits.   Due to the multiple crises, the debate over a multi-speed Europe has totally different features. The integration impasse is promoting the consensus of a multi-speed Europe, which has become a directional choice for integration. Although some Central and Eastern European countries have explicitly opposed the idea, the consensus within the EU continues to strengthen. The European Council’s incorporation of “differentiated integration” into its conclusions in June 2014 symbolized that a multi-speed Europe became a strategic vision for the European Union. Merkel remarked after the Malta Summit in February 2017, “We certainly learned from the history of the last years, that there will be as well a European Union with different speeds, that not all will participate every time in all steps of integration.” In the White Paper on the Future of Europe proposed by the President of European Commission in March 2017, five scenarios were put forward. Among them, the scenario of a more flexible integration was preferred. Prior to the Rome Summit the same month, France hosted a meeting with Germany, Italy and Spain. These four states all believed that a multi-speed Europe could boost people’s confidence in the EU’s collective action. Unlike the previous goal of achieving an ever closer union by a “pioneer group” leading a multi-speed Europe, the multi-speed Europe proposed now aims to demonstrate the added value of cooperation in the hope that more flexible cooperation may promote the value of the European Union, enhance the EU’s solidarity and prevent it from disintegrating.
  Uncertain Prospects of European Integration
  The White Paper on the Future of Europe goes beyond the debate of “more Europe or less Europe” and aims to steer the debate on the future of the Union, which is the very indication that the European integration is facing uncertain prospects. Five scenarios were proposed: The first is “carrying on,” which means the EU sticks to its course and focuses on implementing and upgrading its current reform agenda. Priorities are regularly updated, problems are tackled as they arise and new legislation is rolled out accordingly. By 2025, the EU will have achieved incremental progress toward an economic and monetary union and the single market, and on Schengen, anti-terrorism and foreign policy cooperation. The second is “nothing but the single market,” which means the EU is recentered on the single market. Cooperation on new issues of common concern is often managed bilaterally. The EU also significantly reduces regulatory burden. But an EU that has market competition without social protection will face a risk of a “race to the bottom,” and the EU’s capacity of collective action will be weakened. The third scenario is “those who want more do more,” where the EU proceeds following the model of “carrying on,” but different “coalitions of the willing” work on specific policy areas such as defense, internal security, taxation or social matters under the framework of the Treaty. The fourth is “doing less more efficiently,” where the EU focuses its attention and limited resources on a reduced number of areas. As a result, the EU is able to act more quickly and more decisively in its chosen priority areas. For these policies, stronger tools would be given to the EU to directly implement and enforce collective decisions, as it does today in competition policy or for banking supervision. Elsewhere, the EU stops acting or does less. The fifth is “doing much more together,” where all member states jointly deepen integration. As a result, decisions are agreed faster at the European level and are rapidly enforced.   Among these scenarios, “nothing but the single market” and “doing much more together” are too extreme to be achieved in reality. In the “nothing but the single market” scenario, the free movement of commodities and goods would be guaranteed. However, the free movement of people and services would not be fully guaranteed due to the absence of common rules. Member states taking back powers and functions means that the European Union would disintegrate into nation states and exist in name only. All parties would lose, and the Union would not achieve the goal of integration. Brexit did not trigger a domino effect as predicted, as no other member states have the tradition of “European exceptionalism” as the UK does. In addition, they have concerns over the uncertainties following leaving the EU. After Brexit, the failure of extreme Eurosceptic parties in Austrian and Dutch elections shows that rational voices favoring unity are regaining popularity. On the other hand, the “doing much more together” scenario cannot be achieved in the current political and social climate either. The division among member states on unity stands in the way of “together.” while Eurosceptics also pose barriers to “doing much more.” Major EU powers’ commitment to a multi-speed Europe demonstrates that they have come to realize that a divided European Union can no longer “do more together.”
  The future of integration hinges on various factors. The other three scenarios and their corresponding paths can be achieved in reality. Besides, they are not incompatible with each other. Given the multiple crises and deep-rooted dilemma facing the European Union, elites believe that the “carrying on” scenario cannot tackle the challenges. The EU’s founding states and major powers have all been shouldering responsibility to seek new impetus for integration through a multi-speed Europe, in an effort to increase the added value of cooperation and enhance the EU’s solidarity. The consensus on a multi-speed Europe is taking shape in the European Union. In addition, the pragmatic outlook on European integration and the establishment of various coalitions of the willing further raise the possibility of the multi-speed Europe scenario.
  However, realizing the scenario in practice will be much difficult. There is no clear roadmap regarding how to organize a coalition of the willing on this issue and identify the areas to deepen cooperation. A multi-speed Europe not only needs to strike an effective balance between efficiency and unity, but also needs to establish a mechanism for resolving disputes arising from the multiple speeds. As most Central and Eastern European countries and some southern European countries strongly oppose a multi-speed Europe, the concert of powers still risks triggering a new political crisis. To be specific, it may exacerbate the conflict between the core and the periphery, the tension between the intergovernmental model and supernational institutions, and other states’ concerns that the Union is dominated by the major powers. These may endanger the EU’s unity and the solidarity among member states.
  The smooth promotion of a multi-speed Europe depends on strategic coordination among major powers in the European Union. France, Germany and Italy, which are the central forces of promoting a multi-speed Europe, are experiencing great pressures from anti-establishment forces and eurosceptics. Their integration strategy is exposed with substantial adjustment. In the future, if the France-Germany axis cannot be revitalized, and the sense of responsibility of founding states is not enough to hold the Union together, the European Union will have no choice but explore the possibility of “doing less more efficiently” in the scenario of “carrying on.”
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