European Union Is Back in the Game

2 november 2017

Mark Entin - Editor-in-Chief of All Europe magazine, Professor at MGIMO-University

Ekaterina Entina - Associate Professor at National Research University Higher School of Economics.

Resume: On September 13, 2017, President of the European Commission Jean-Claude Juncker delivered his annual State of the Union address before the European Parliament in Strasbourg. The address prompted significant reaction both within the EU and far beyond its borders.

On September 13, 2017, President of the European Commission Jean-Claude Juncker delivered his annual State of the Union address before the European Parliament in Strasbourg [1]. The address prompted significant reaction both within the EU and far beyond its borders [2; 3; 4]. The Russian media too ran fairly reports on the event [5; 6; 7; 8; 9]. Nevertheless, Juncker’s speech did not receive the attention it deserved in the Russia information space. Leading analytical centres were content to offer a superficial and disparaging analysis [10]. A mistake.

The address draws a line under the previous era of the European Union’s development and appears to launch a major re-evaluation of its actions in the short and medium term. It also outlines the possibility of significant adjustments in the European Union’s domestic and foreign policies.

The speech offers a guideline description of the state of the union. It sketches specific tasks to be solved within the year, proposes an action plan for the medium term and explains the criteria for putting this plan into practice.

This is a de facto political manifesto that systemically expounds a multidimensional scenario of the European Union’s development, and many of its elements will certainly be put into practice. Consequently, the Russian establishment, diplomats, and the business and expert communities should study it very carefully.

Hot on the heels of the event, let us attempt to unpack the main points of Juncker’s speech. And let us start with an analysis of the colours Jean-Claude Juncker is using to paint the current state of the union.

The EU Crisis is in the Past

This is the leitmotif – the essence – of the address. The European Commission President needs this statement; it is the thread he will use to string all the other considerations and proposals he defends.

Of course, it is not quite true that the EU crisis is a thing of the past. The continental political elites and businesses will long be haunted by London’s attempts to force the EU to give up on certain provisions concerning the terms of the UK’s withdrawal from the union, regardless of how hard Prime Minister of the United Kingdom Theresa May is trying to convince Brussels that the European Union’s interests are paramount for her and that the union has absolutely nothing to fear [11; 12; 13].

The southern periphery of the European Union has not recovered from the economic slump nearly as well as its northern partners have. France and many other countries still have painful socioeconomic reforms to put into practice.

The consequences of the migration crisis are still there, and the European Union and its member states will have to live with them constantly. Manifestations of authoritarian leanings and extreme nationalism and the not-always coherent or adequate swing to the right in the political systems and society as a reaction to a cascade of crises across the continent are a reality that cannot be disregarded. Individual political leaders will continue to challenge the European Union’s domestic and foreign policies and prioritize their interests within the union [14].

Nevertheless, Jean-Claude Juncker has every reason to insist that the European Union has straightened itself out and use the past tense when speaking about the crisis that the union and its member states have experienced. He buttressed his stance with just a few arguments, but they are more than weighty and convincing. And, in essence, they suffice. The President of the European Commission reminded his audience that a year ago, the EU was in the throes of an existential crisis. Individual countries were moving further and further away from the solidarity that makes the union possible. Europe’s faith in, and support for, the European project had weakened critically. However, Juncker stressed that the energetic measures the European Union, its institutions and member states had taken had allowed it to reverse the situation.

The economic upswing that had finally spread to all the EU countries was of substantial help here. The European Union’s overall GDP growth rate reached 2 per cent, slightly higher in the Eurozone (2.2 per cent). In this regard, the European Union has even overtaken the United States, the eternal competitor it uses as a yardstick. Consequently, unemployment dropped to a nine-year low. Eight million jobs have been created in the European Union since mid- 2014, bringing the number of people in employment to 235 million, an all-time high for the union.

The investment package proposed by the European Commission is being successfully implemented, helping to attract 225 billion euros in investments. The money was used to finance infrastructure projects and provide loans to 445,000 small businesses. In our opinion, these are fabulous figures.

In addition, the European Union has succeeded in rehabilitating the financial system and improving the banking situation; consequently, banks have stepped up their lending once again. The budget deficit dropped from 6.6 per cent to 1.6 per cent. These are decidedly good things, too. Just a short while ago, they seemed impossible for the EU [i].

Jean-Claude Juncker, therefore, did not have to invent anything in order to deliver his triumphant reports. Moreover, he could have augmented his assessment of the state of the union with a section on further steps to be taken to neutralize the migration crisis. Given the data he quotes, Brussels has crushing arguments against the Eurosceptics in this regard as well. The new European Border and Coast Guard Agency is up and running. Its staff of over 1,700 patrol the crucial and most problematic sections of the union’s borders in addition to the 100,000 border guards that the member states have deployed along the union’s external perimeter.

The eastern corridor used by refugees to get to the European Union from Western Asia has been almost blocked off. Thanks to an agreement with Turkey, the number of illegal immigrants and refugees using that corridor to arrive in the European Union has dropped by 97 per cent (!). In summer 2017, the European Union managed to take almost total control of the southern corridor traversing the Central Mediterranean (i.e. from the shores of Libya). In August, the number of refugees using the corridor was down 81 per cent compared to the previous year.

At the same time, it is important to note that, for a number of tactical reasons, the President of the European Commission was excessively modest. He did not refer to the set of arguments on the stabilized political and social situation in the European Union, for example, even though this is the most important point. These arguments could make his assessment of the current state of the union even more convincing.

The crux of the matter is that the structural reforms carried out by the EU countries and the basic establishment of order in the social sphere, on the labour market, and in budgetary expenditures, all of which were required for the states to live within their means, could only bear fruit in the medium term. The population, on the other hand, took these reforms hard. And rightly so. The reforms resulted in layoffs, unemployment, falling wages, pensions and social benefits, the abolition of social programmes and a generally worse quality of life.

In essence, the ruling elites emerged from the economic crisis by shifting the burden onto working stiffs and the middle class. Hence the drastically rising protest sentiment, Euroscepticism, the popularity of the extreme right, the extreme left, populists and radicals. The ruling elites could simply have run of time. Power was slipping through their fingers.

They were lucky. They were tremendously lucky. They made it just in time. The socioeconomic and political model of the EU countries withstood the blow. It proved sufficiently reliable and stable. The elections in the Netherlands, France and then Germany gave the elites their confidence back. The popular vote demonstrated that the true dangers the European Union had faced were, indeed, in the past. Yes, the extreme left, and particularly the extreme right, did strengthen their positions and their influence, gaining larger representation in national parliaments, but none of this is crucial (more on that later).

If this is the way things are, then the European Union has succeeded, or nearly succeeded, in systemically overcoming its crisis. This is extremely important. This is the proper way to understand Jean-Claude Juncker’s metaphor “the wind is back in Europe's sails” and his conclusion that the European Union and its member states now have “a window of opportunity” they must use. Because, and politicians and experts have always stressed this, the European Union, like a bicycle, is stable only when it is moving forward dynamically. Overcoming the crisis is only half the battle. The European Union constantly faces a twofold task, the second component of which is to emerge from the crisis in a better shape. The President of the European Commission dedicated most of his address to the means of achieving this goal.

Key Areas of the EU’s Short-Term Activities

Minimum space was given in the address to listing the steps the European Commission and the European Union institutions will focus on. Only the most striking and advantageous steps are mentioned.

1. The union will still focus on promoting free trade following the model of Comprehensive Economic and Trade Agreement (CETA) with Canada. The European Union and Japan already have a political arrangement that is similar to the CETA. By the end of 2017, Brussels hopes to have achieved similar arrangements with Mexico and South American countries. Australia and New Zealand will be next. Jean-Claude Juncker addressed them with a great flourish during his speech, suggesting they proceed to negotiations. At the same time, the European Union will establish special supranational and coordinating bodies to suppress attempts by foreign state-run companies to buy up industrial and infrastructural facilities.

2. Unflagging attention will be devoted to improving the effectiveness and international competitive edge of Europe’s industrial manufacturing. The Industrial Policy Strategy developed by the European Commission and submitted for approval will serve these purposes.

3. The European Union will assume the global leading role in fighting climate change; it will position this work as a concern about preserving humanity’s shared heritage. The European Union will also work closely on reducing emissions in the transport sector.

4. The European Union will make it a priority to create a reliable set of instruments to counteract cyber-attacks faced by businesses on a dangerously regular basis. The European Commission reports that there are 4,000 cyber-attacks daily (!). For that purpose, a European Cybersecurity Agency will be established.

5. The European Union will continue to focus its unflagging attention on improving migration policy by supplementing steps already taken with a harsher stance towards deporting illegal economic migrants and people trying to pass themselves off as refugees. Europe will also show solidarity with Africa by using financial mechanisms, among other things. The European Union will make receiving refugees an organized, planned activity and focus on stimulating the kind of immigration the European Union is interested in.

In a broader sense, the European Union will work on completing its energy, defines and banking unions, the capital markets, and its single digital market. These are the priorities.

Such brevity in expounding current tasks that the European Union should handle first might appear bizarre and illogical: after all, the President of the European Commission delivers his annual state-of-the-union address precisely to explain the tasks the European Union’s supranational bodies will be tackling over the coming year, but this brevity may be explained by the following considerations.

On the morning of the speech, Jean-Claude Juncker forwarded a 100-page action plan with covering letters to heads of the European Union’s political bodies. These documents are public.

During the coming year, the European Commission largely intends to complete what its institutions have jointly chartered earlier. Jean-Claude Juncker believes that these tasks are about 80% per cent complete. Only about 20 per cent of what was planned is still left to be done.

Given today’s radically changed circumstances, it is of primary importance now to settle on a specific strategy for moving forward. Then current plans can be adjusted, planning horizons clarified, and the new scale of priorities understood. Accordingly, the address focused on justifying the European Union’s preferential strategy.

It is regarding this strategy that the President of the European Commission made a truly sensational statement and revealed something that may come as a true surprise even to those in the know.

The Inadequacy of the Most Recent Concepts of Differentiated Integration – The Counterclaims of New Europe

The essence of Jean-Claude Juncker’s proposals is to reject the plans discussed over the last few years, particularly in recent months – to abandon them as harmful, defeatist and inadequate.

To display courage and determination, to use the emerging “window of opportunities” to revise approaches to the concepts of differentiated integration. They had been proposed out of despair, weakness and hopelessness. They are far from being the best option.

Instead of elaborating them and putting them into practice, the European Union should set course for re-establishing its former policy of radical further integration across the board and realize it together, which has always been the strength and the allure of the European project.

Let us recall that a little over six months ago, on March 1, 2017, Jean-Claude Juncker presented the White Paper drawn by the European Commission describing five possible scenarios of the further evolution of the European Union. The trick was that three of them were a priori unacceptable to the Germany-headed union core: the inertia scenario (things remain as they are and the union responds to challenges as they appear); the regressive scenario (the current comprehensive integration is rolled back to a mere common market); and the selective scenario (all the EU member states take part in further integration, but integration applies to selected areas only). Another scenario was entirely unrealistic, since at that moment, there were no preconditions for united progress toward the heights of integration. Therefore, the smokescreen of diversity, plurality and freedom of choice concealed the demand to agree to differentiated integration when those unwilling or unprepared to move forward would not prevent others from doing so.

Ideas of differentiated integration became a new word in understanding the imperatives, prospects and “ceilings” of the European project. Many analysts [5; 6; 7; 8; 9], even those who know the European project very well, write about it frequently and profusely and know its turbulent development inside out, failed to comprehend fully why the Visegrad Group abhorred these plans, as did the entire “periphery” of the European Union. And many others besides.

In the past, the European project had always had an avant-garde that kept going forward boldly paving the way and showing its advantages to the others. After a while, the others would become ready to join the trailblazers. The most convincing examples are the Schengen area, the area of freedom, security and justice (AFSJ), then the currency union and the banking union. Differentiated integration breaks away from this tradition. Unlike multi-speed integration, variable-geometry integration, and everything that came before, differentiated integration does not imply that outsiders will eventually join the avant-garde. It does not set the landmarks for everyone. It does not imply that the outsiders will be able to catch up.

Differentiated integration means radically new rules of the game: if you wish, you may fit into the avant-garde and move forward with it; if you are unwilling or unable to do so, you can languish on the periphery. No one is forcing you. This is your sovereign choice. Just do not complain afterwards. The European Union will turn into a set of nesting dolls made up of two types of countries, with different sets of requirements for both types. One type will form the major league, while the others will form the minor league. The Eurozone, or a revamped Eurozone, will form the major league that will evolve towards a full-fledged political and security union and towards transferring to the supranational level those crucial sovereign powers that member states did not want, or did not dare, to part with before, including harmonizing tax laws and social policies.

Digging deeper, it turns out that by putting differentiated integration ideas forward, the core of the European Union, Euro-enthusiasts and everyone ready and willing to transition to a new level of European integration essentially delivered an ultimatum to others. Do not whine. Do not get in the way. Enough taking the law into your own hands. Stop breaching common policies. Abide by jointly approved decisions. Work hard alongside others. We are tired of your constant non-conformism. Either step into line, or stay behind the new stage of integration. There are no other options. We will not let you pull us back and throw spanners in the works.

It is not surprising that many greeted the ideas of differentiated integration with hostility, and the “many” were not limited to Warsaw, Prague, Sofia, Bucharest and Budapest. However, it was the leaders of those countries who stated harshly and unequivocally that they would not “greenlight” these ideas. The peoples of Eastern and Southeast Europe did not spend years fighting for membership in the European Union only to be confronted with such ideas.

At the same time, they did not confine themselves to rejection only. They put forward counterclaims against the European Union and its core. New Europe categorically demanded that Old Europe rectify the situation in the union, which was unacceptable in several ways. The European Union has adopted single technological standards that must be followed without exception. However, the same brands sell poorer quality goods on the markets of New Europe. The situation is particularly flagrant with foods and pharmaceuticals.

The unconditional prohibition of discrimination is the cornerstone of the European Union’s legal norms. Nevertheless, businesses that are EU residents bring Eastern Europeans to work in Western Europe for smaller wages. Eastern European countries have lower wages and pensions, and smaller savings, while it is suggested that they help and bail out those who are far wealthier. In general, the social policy gap is too great while the European Union does nothing or almost nothing to overcome it.

General Outlines of the “Solution Package” for Restoring Unity and Consolidating the European Union

In this context, the development path of the European Union that Juncker sketched out in his address and presented as a sixth scenario, appears more than significant. The former Prime Minister of Luxembourg is known as a genius when it comes to finding compromise solutions and ways out of difficult predicaments. Good services and mediation are his element, his forte. What Jean-Claude Juncker has proposed can be described as a large-scale comprehensive exchange – in diplomat-ese, a “solution package.”

He tells the political elite of the New Europe that yes, you are right. The European Union must solve the problems you point out. The whole of Europe will have uniform quality goods. National control bodies will be given all the necessary powers.

Wage discrimination should have ended, long ago. It humiliates the union and contradicts its founding principles. It is unthinkable that banks have been required to abide by the fiscal discipline rules and were brought under control, while the same was not done in regard to the labour market, where one of the four common market freedoms applies. We will correct that, we will set up a special EU body and charge it with making sure that freedom of movement on the labour market will be carried out in compliance with general rules. We will ensure that there are no more grounds to speak of “second-rate workers” in the European Union.

The social dumping problem is more difficult. As for national social security systems, they will continue to differ from each other for a long time to come. These are objective differences. However, the social dimension of the European Union should be stepped up, and if there is something it can do, it is to arrive at a common understanding of what social justice is and setting it down in a unified social standard.

The European Union can and will take all those steps to meet the legitimate wishes and expectations of New Europe. But those steps must be reciprocated. New Europe and everyone else left outside the European Union’s crucial integration projects has much hard work to do. They will have to meet Old Europe half way. The European Union is a union based on values, and the key one is the rule of law and adherence to democracy. Under no circumstances can the European Union allow deviations from the democratic standard shared by everyone in the union. Similarly, jointly adopted decisions, and particularly the rulings of the highest EU court – the Court of Justice of the European Union – must be strictly observed. This is a sacred duty of the member states. Exemptions or exceptions are unacceptable. Naturally, Juncker did not point fingers at any nation specifically in his address, but the references are clear and apparent.

Thus far, the “ready positions” at the start of harmonizing the participation of member states in some of the European Union’s integration projects are as follows: outside the Schengen Area, Bulgaria, Romania and Croatia are in a position that is critical for the European Union. Jean-Claude Juncker believes that the Schengen Area must be open to Bulgaria and Romania immediately in order to protect the European Union’s external border. The Schengen Area should be open to Croatia as soon as all the criteria are met.

In addition to the United Kingdom, which no longer counts, eight EU countries are not part of the Eurozone. However, for the common currency to unite and not drive the member states apart, all these countries should join. Six of them have undertaken a formal obligation to join and have the right to do so once they comply with the set criteria. All the necessary technical and financial support should be provided to them. For that purpose, the President of the European Commission proposed launching a special technical assistance programme, since the European Commission has got very good at running similar programmes. Eurozone candidates need this, as does the Eurozone itself, for the euro was always “meant to be the single currency of the entire European Union.”

The same applies to completing the Banking Union. All EU banks must follow the same rules. To reduce the risks and then subsequently share them, they should be transferred to the purview of a single regulator. This step will stabilize the entire financial system and reduce the risks that threaten it. Rehabilitating the financial system in every country will then pave the way for, and ensure access to, a common deposit insurance scheme. The European Stability Mechanism may then be transformed into a full-fledged Monetary Fund with the same functions as the International Monetary Fund (IMF), except it will be carrying them regionally and with far more efficiency.

Thus, in Jean-Claude Juncker’s vision, shared efforts, concessions and compromises combined with the intransigent insistence on compliance will make it possible to settle contradictions, consolidate the union and endow it with far greater unity. The next step will be common movement toward tighter union and deeper integration without any outsiders and without anyone lagging behind, which will produce a more confident and capable union. There will be no need for a special European minister of economy and finance, a special European parliament or a special budget. The question is, what will be required?

Back to the Traditional Course for Full Integration

The answer to the question posed at the end of the previous section can be found in the title of the current one. The main milestones outlined by Jean-Claude Juncker testify to the incredibly solid “scaffolding” he has erected in order to effect the renovation and completion of the European Union. We have already mentioned his proposals to establish a European Monetary Fund, a Cyber-Security Agency, a supra-national body monitoring employment equality, enhanced powers for national governments to suppress violations of quality standards, movement towards a more unified social policy and the completion of the Banking Union.

In addition, he proposed that the position of European Minister of Economy and Finance at the rank of a Vice President of the European Commission be established, and, apparently, that it be done as soon as possible. The European Commission already has a minister with a similar scale of responsibilities working successfully in a different area – the High Representative of the Union for Foreign Affairs and Security Policy. Maybe Jean-Claude Juncker envisions a similar position for the Minister of Economy and Finance. Initially, while the divide between the Eurozone and the European Union is being dismantled, the minister will be engaged in this work as the Eurogroup’s Minister of Economy and Finance. The minister’s main area of responsibility will be advancing structural reforms, monitoring investment programmes and providing aid to economically weak countries during crises. According to the understanding between President of France Emmanuel Macron and German Chancellor Angela Merkel, the need for such a minister is high. The Eurozone needs such an official, so it is reasonable to expect that a minister to fulfil these functions will soon appear.

Jean-Claude Juncker’s other ideas to strengthen the European Union as an institution are far more progressive. In his State of the Union address on September 13, he suggested merging the Presidents of the European Council and the European Commission and concentrating their powers in the hands of one person. Given his experience, he clearly speaks from solid knowledge. Two competing offices in the EU leadership complicate its functioning. Any two politicians holding these two offices do not find it easy to arrive at a consensus. Whether they want to or not, they are still playing a “tug-of-war.”

At the same time, merging these offices is fraught with a radical redistribution of power among the heads of state and government of the EU countries and the new head of the union’s executive branch, since in this case, the President of the European Council, currently a rather nominal figure whose mission is to seek compromise solutions and to coordinate stances of member states, will be able to lean on the tremendous administrative power wielded by the President of the European Commission and to use the freedom of manoeuvre that is recognized as due him.

The European Union’s political and business elites are hardly ready for such a shift of power from the intergovernmental to the supranational level. In today’s realities, the suggestion of a merger is a revolutionary idea. This is something for the future. However, in the political context of the European Union, it is important that these ideas have been made public.

Jean-Claude Juncker proposed taking major steps towards developing and passing the newest EU legislation, which that would take the union to a significantly higher integration orbit. And the proposal spans all areas. As for continuing to transform the European Union’s domestic market into a truly single market, Juncker suggested that the comprehensive taxation law should no longer be a taboo subject. Thus far, many countries that flourish thanks to tax dumping refuse flat out to part with their natural advantages.

Specifically, the President of the European Commission said that the European Union may introduce a single corporate tax and VAT tax. In addition, it may consider fair taxation for the digital industry and introduce a uniform tax on financial transactions. He believes that this may be possible by transitioning from unanimity to qualified majority voting without breaching the founding Treaties, i.e., bypassing the exceedingly complicated and cumbersome procedure of amending these Treaties. The Treaty of Lisbon already allows for this. A unanimous decision adopted by the European Council would be enough to use the flexibilities inherent in the Treaty.

As regards foreign policy, Jean-Claude Juncker suggested looking at the areas where the EU could also transition from unanimity to qualified majority voting. This would definitely be a very important and probably revolutionary step towards the creation of a Political Union. In the medium term, the European Union would span the entire Balkan area. A Defence Union could be completed by 2025.

The President of the European Commission also dwelled on certain points where integration in internal affairs may be promoted. Among the possible steps, he listed equipping the European Union with means for taking joint action to eliminate cross-border terrorist threats; introducing automatic transfer of information on terrorists and militants from EU intelligence agencies to national secret services and the police; and vesting the European Public Prosecutor with powers to prosecute cross-border terrorist crimes.

At the same time, having outlined a staggered programme to further unify the sovereignties of the member states, Jean-Claude Juncker proposed an exchange of sorts in this area, too. Its essence boils down to the following: yes, the European Union is rapidly moving along the path towards further integration. At the same time, it transfers excessive powers it had received or appropriated back to the national level. In addition, the union will abandon small-time topics and petty meddling in the affairs of national states and concentrate on carrying out large-scale projects and initiatives that have real significance.

So that the guarantees of meeting the states halfway would not be taken for empty promises, the President of the European Commission announced he would shortly convene a working group (“a Subsidiarity and Proportionality Task Force”) to draft proposals on returning certain prerogatives from the European Union back to national states. Along with other participants, the group will include members of the European Parliament and the national parliaments. Consequently, the working group will never become a smokescreen or a distraction.

Therefore, Jean-Claude Juncker succeeded in making a proposal package here as well, the kind of package that could, theoretically, satisfy both Euro-enthusiasts and Eurosceptics. He thereby attempted to disarm both those who advocate moving forward rapidly at any cost, disregarding the opposition of the still-unready outsiders and laggards, and those who believe that the European Union takes on too much and that member states should be given back more independence in determining their future.

Correlation with the new Balance of Power in the EU

It appears that the short, concise, and energetic address delivered by the President of the European Commission has everything, or nearly everything. It only fails to explain why member states and their political and business elites will suddenly change their attitude to the prospects of the European integration project and support his ambitious plans. Yesterday, they were opposed to it. They were not ready. They toyed with the ideas of differentiated integration. They harboured grudges against each other. They put counterclaims forward. Today, they will leave all their doubts and differences in the past and rush with gratitude to do all the right and rational things, proceeding from the primacy of common interests over individual interests.

It very much looks as if Jean-Claude Juncker is the first EU leader to invite others to recognize the new post-Brexit EU reality and submit approaches that fit this reality and are truly adequate to it to the European public for consideration.

It is not just the fact that the United Kingdom had its own opinion on every item on the EU agenda, or that it advocated dismantling everything that had been layered over the common market over time or had augmented it. Nor is it that the United Kingdom bluntly opposed both further integration of member states in certain areas and new transfers of powers to the supranational level, which is an indispensable condition for the further integration of the European Union and augmenting it with new dimensions.

It is the matter of the United Kingdom being a major power centre in the European Union, a leader to which many in the union, particularly in New Europe, looked for guidance on a number of issues. The United Kingdom was a counter force to Germany and France, to the Germany–France tandem. It was a role model, a country the European Union could not disregard due to its power and authority (a major, dynamically developing economy, the chief strategic partner of the United States, a nuclear power, a UN Security Council member, the keeper of the Commonwealth and a skilful global diplomatic strategist).

EU integration became multi-speed and tortuous solely due to the UK factor. The fact that some northern countries are not members of the Eurozone is not of crucial importance for the European Union since they are stable and do not posit a threat to economic stability. It is not quite that the European Union could not care less that the six Eastern and Southeast European countries are not members of the Eurozone, but rather that it is not a weighty issue. They can also be pressured into it by reminding them of those unconditional obligations they burdened themselves with when acceding to the European Union. The United Kingdom was the only real challenge to the Eurozone. London was against the euro being the European Union’s sole currency. London led the non-conformists. London “shielded” all the “slackers” and “outsiders,” provided them with a pretext to not hurry or avoid joining the Eurozone. Game over! This factor is no longer valid.

In a series of issues, such as the Schengen Area, cooperation within the AFSJ and the Common Foreign and Security Policy, the United Kingdom “split” the European Union into the core on the one side, and those who do not allow the core to subsume everyone else, to call them to order, to cajole them, to force or to bribe them (technical assistance and additional financing for joining the Eurozone will serve the purpose), on the other.

Brexit changes absolutely everything. Differentiated integration is no longer needed. This is a thing of the past. Leaders of the European Union’s leading states, as well as those on the periphery, still have not comprehended this – it has not yet sunk in. Juncker’s address nudges them towards reconsidering their values.

The address appears to be asking a question: why do we need differentiated integration? What tasks is it intended to solve? Who is it intended for? The address also contains an indirect answer: the situation in the European Union has changed dramatically. No one needs differentiated integration any longer. From now on, it will be easier to solve all the tasks the European Union faces through unity, and consolidation, and by following common rules.

Only by taking, all the interests, mutual claims and counterclaims into account, of course. This is what Jean-Claude Juncker’s proposed package is for. This is what it is intended to do.

Possible Thunderclouds on the Horizon

Following Juncker’s logic, the package he has proposed is the best option. Once the European Union and its member states agree with him and start putting it into practice, everything will just fall into place, and by the time the United Kingdom leaves the union, its member states will have become strong, empowered, flourishing, full of vital energy and ready for new achievements.

Such an idyllic picture! Our eyes are brimming with tears of ecstasy! Still, there is a thundercloud on the horizon. For some reason, Jean-Claude Juncker keeps insisting that the European Union needs to hurry, that the window of opportunity may slam shut. Why? Does he know something that no one else even suspects?

Or, on the contrary, is what he knows an open secret in the business world? Juncker has very close ties with that world since he spent 18 years tenure as Prime Minister of Luxembourg. The open secret is that a new global financial economic crisis could break out at any time, especially given the increasing geopolitical risks, and then people will not have the time of day for rosy projects.

Hard to say. The mouthpiece of the business community, the Financial Times, gives us a very valuable hint. Its authors tirelessly warn us that a crisis could break out at any moment, and it will be far more destructive than the previous one [16]. It would be a shame if their alarmist forecasts come true, but they normally know their stuff and have no desire to be cast as Cassandras, never to be believed.

Or is Jean-Claude Juncker making allowances for the results of the Bundestag elections again plunging the EU into uncertainty [17; 18; 19; 20; 21; 22]? A more or less stable consensus in German society has been broken. Eastern and western lands, young people and older people voted too differently. Classical political parties lost 14 per cent of their voters (!). The Social Democrats suffered crushing defeat and are now in the opposition. The Alternative for Germany party gained a large number of seats in parliament. The Bundestag has been fragmented. The general opinion on the ruling coalition whose outlines are easily visible is that it will be weak, motley and unstable. It will comprise political movements that are too different, and it will necessarily be involved primarily with the domestic agenda.

It is highly questionable whether the government will be able to carry out a clear, bold and promising policy and whether the government will be able to assume unconditional and effective leadership in the European Union during the difficult time. The President of the European Commission hopes that Germany will actively advance his ideas. Some of the most influential German politicians – Minister of Finance Wolfgang Schäuble, for instance – have already subscribed to them [4]. The new but familiar German Chancellor Angela Merkel stated that “Macron’s speech, as the address of Jean-Claude Juncker, President of the European Commission, will have a positive influence on the EU’s future” [23].

Or does Jean-Claude Juncker foresee the difficulties that France’s young and charismatic President Emmanuel Macron will face or, rather, is already facing? The French, disillusioned with a political establishment that deceived their expectations year in year out, pinned too ecstatic hopes on him. However, painting a beautiful future in speeches is one thing. Putting promises into practice is quite another. The reforms Macron started, and which his voters seemed to support, are already causing a vehement protest, pulling down his rating and weakening his position.

If a leader’s domestic political support is flagging, international actors begins to take his words with a grain of salt. The France–Germany tandem has always been the driving force behind European integration, and without its initiative and harmony, the European Union will not succeed.

Speaking at the Sorbonne on September 26, the President of France offered Europe’s youth a vision of the European Union that is no less ambitious than that of the President of the European Commission. Experts counted no fewer than 10 large-scale initiatives in Macron’s address [24]. In particular, he supported the speediest convergence in taxation and in the social sphere. He proposed establishing a European Asylum Agency, adopting a common defence strategy, forming a European Expeditionary Force, and many other things [24; 25; 26]. Responding to his proposals, Angela Merkel noted that there is a “high degree of correlation between the plans Germany and France have for the future of the European Union” [23].

Or is Juncker afraid of a sharply deteriorating international situation which might have a very negative effect on European Union? The European island of relative prosperity is surrounded by a crescent of wars, discord and political and economic instability. This crescent is a gun held to Europe’s head. The Euro-Atlantic link protecting the European Union has weakened. Something has snapped in U.S.–EU relations. It is unclear what Europe is to expect from China, which is rapidly transforming into a superpower of the first order. The global economy that used to be primarily a platform for cooperation is looking more and more like a battlefield.

So, is the President of the European Commission hinting at some or all of the abovementioned dangers? Hardly. The European Union is completing the resolution of its financial system and of the public sector of its member states. It has a powerful system of procedures and mechanisms for counteracting crisis phenomena at its disposal. So, it is approaching the global financial and economic crisis with guns blazing.

Ratings and support for leaders and political parties always go up and down. This is nothing new for Germany and France. Strong countries are strong because they strive for continuity in their domestic and foreign policies. For Berlin and Paris, and for the France–Germany tandem, the European project has always been and always will be a top priority.

The deterioration of the international situation cuts both ways. It does not so much create difficulties for the European Union as it pushes it towards bolstering its unity and independence in international affairs.

Or is Jean-Claude Juncker hinting that the European Union should hurry because such an outstanding President of the European Commission is already more than halfway through his tenure? Let us leave this joking thought to his enemies. The European Union has no shortage of politicians and commenters wishing to discredit him and to mock everything he says and does [ii].

Most likely, he means another thing. Two months after Brexit, in May 2019, another European Parliamentary election will be held. Leaders of the European Union and of Europe’s leading political parties have to arrive at that event with an unblemished record.

RIAC

References:

1. Jean-Claude Juncker’s State of the Union Address 2017. European Commission — Speech. Brussels, 13 September 2017. Available at http://europa.eu/rapid/press-release_SPEECH-17-3165_en.htm (Accessed on 02.10.2017).

2. Boffey, Daniel. Juncker says EU will ‘Move on’ from Brexit in State of Union Speech. European Commission President Says UK Departure is Tragic but isn’t Everything, and Eyes Expansion of Eurozone and Schengen. The Guardian, September 13, 2017. Available at https://www.theguardian.com/politics/2017/sep/13/jean-claude-juncker-plays-down-brexit-in-eu-state-of-union-speech (Accessed on 02.10/2017).

3. Crisp, James. Jean-Claude Juncker Unveils Vision for Bigger, more Powerful EU and Warns Britain will ‘Regret’ Brexit. The Telegraph, September 13, 2017. Available at http://www.telegraph.co.uk/news/2017/09/13/jean-claude-junker-claims-uk-will-regret-brexit-vows-create/ (Accessed on 02.10.2017).

4. Zalan, Eszter. EU countries Cool on Juncker’s Ideas. EU Observer, September 14, 2017. Available at https://euobserver.com/political/139014 (Accessed on 02.10.2017).

5. Juncker’s Project for Reforming the EU: Between Ambitions and Reality. EAdaily.ru, 18.09.2017. Available at https://eadaily.com/ru/news/2017/09/18/proekt-yunkera-po-reformirovaniyu-evrosoyuza-mezhdu-ambiciyami-i-realiyami (accessed on 02.10.2017).

6. Pudovkin, Evgeny. The European Union Does not Want to Change in Accordance with Juncker’s Plan. Proposals of the President of the European Commission Deemed Unrealistic and Excessively Ambitious. Nezavisimaya Gazeta: Diplomatic Courier, 15.09.2017. Available at http://www.ng.ru/world/2017-09-15/6_7074_unker.html (Accessed on 02.10.2017).

7. Pudovkin, Evgeny. Juncker Asked to Temper his Ambitions. President of the European Commission’s Proposals for further integration of the EU Labelled Unrealistic. Nezavisimaya Gazeta September 16, 2017, p. 6.

8. Pudovkin, Evgeny. Juncker Speaks against “Two-Speed Europe.” President of the European Commission Calls for Further Integration of the Union’s Countries. Nezavisimaya Gazeta. September 14, 2014, p. 7.

9. Stepanov, Georgy. “The Wind is Back in Europe’s Sails.” Jean-Claude Juncker Gets Ready to Re-Launch the Pan-European Project (in Russian) Kommersant.ru. 13.09.2017. Available at https://www.kommersant.ru/doc/3409773 (accessed on 02.10.2017).

10. Rahr, Alexander. Historic Speech of Jean-Claude Juncker: Feebleness of the EU. Valdai Discussion Club. 14.09.2017. Available at http://valdaiclub.com/a/highlights/historic-speech-juncker/ (Accessed on 02.10/2017).

11. May’s Italian Overture Deserves a Fair Hearing. Editorial. Financial Times. September 23–24, 2017, p. 8.

12. Parker, George; Barker, Alex. May’s Emollient Tone Accompanies Clear Evolution of Brexit Stance in Several Areas. UK Premier Tailored Her Florence Speech For EU Ears While Aiming To Keep Hardline Brexiters On Board. Financial Times. September 23–24, 2017, p. 3.

13. Parker, George; Barker, Alex; Wright, Robert. May’s Speech Wins Guarded EU Welcome. Financial Times. September 23–24, 2017, p. 1.

14. Masterov, Valery. Brussels Launches Stage II of its Penalties Procedure against “Warsaw.” Poland is Becoming a Greater Problem for the Old World than Brexit. Nezavisimaya Gazeta. September 14, 2017 p. 7.

15. Keohane, David; Murray, John. Investors bet on Revived Eurozone. Financial Times. September 23–24, 2017, p. 13.

16. Authers, John. The Next Crisis is Coming and Investors Need to Prepare. Financial Times, September 23–24, 2017, p. 18.

17. Paniyev, Yuri. Germany’s Political Landscape has Shifted. Angela Merkel has Won a Dangerous Victory. Nezavisimaya Gazeta, 26.09.2017. Available at http://www.ng.ru/world/2017-09-26/8_7081_frg.html (Accessed on 02.10.2017).

18. Oh là là, Germans! International Response to the Bundestag Elections from Washington, Moscow, Beijing, Paris, Athens, Kiev, London, Warsaw and Rome. IPG. International Politics and Society, 29.09.2017. Available at http://www.ipg-journal.io/regiony/mir/statja/show/oh-la-la-nemcy-362/ (Accessed on 02.10.2017).

19. Buck, Tobias. Discontent from Germany’s Eastern States Boosts AfD. The Electoral Success of the Rightwing Party has Exposed the Widening Gulf between the West and East of the Country. Financial Times, September 29, 2017. Available at https://www.ft.com/content/758344d0-a4fa-11e7-9e4f-7f5e6a7c98a2 (Accessed on 02.10.2017).

20. Kaffeeklatsch. Germany from Different Angles. Pessimism and Optimism on Germany after its Election. Its Tumultuous Vote Might Just do the Country More Good than Harm. The Economist, September 25, 2017. Available at https://www.economist.com/blogs/kaffeeklatsch/2017/09/germany-different-angles (accessed on 02.10.2017).

21. Stephens, Philip. The Lesson of the German Election. The Danger is not that Germany will be Overrun by the Far Right, but that it Will Turn Inwards. Financial Times, September 28, 2017. Available at https://www.ft.com/content/2997c97a-a2b0-11e7-b797-b61809486fe2 (Accessed on 02.10.2017).

22. Wolff, Guntram. A Jamaican Germany is good for Europe. It Could Bring Big Changes to Domestic Policy to Support Growth and Investment. Financial Times, September 29, 2017. Available at https://www.ft.com/content/8494a5e4-a451-11e7-8d56-98a09be71849 (Accessed on 02.10.2017).

23. Merkel has a positive view of Macron’s ideas on reforming the EU. Nezavisimaya Gazeta, 29.09.2017. Available at http://www.ng.ru/news/595725.html (Accessed on 02.10.2017).

24. Le plan de Macron pour l’Europe résumé en dix points. Le Scan politique. Le Figaro, 27.09.2017. Available at http://www.lefigaro.fr/politique/le-scan/2017/09/26/25001-20170926ARTFIG00105-ce-que-macron-va-proposer-pour-l-europe-dans-son-discours-a-la-sorbonne.php (Accessed on 02.10.2017).

25. Pudovkin, Evgeny. Macron Gave Europe Seven Years to Close Ranks. Citizens of EU Countries do not Support Further Integration. Nezavisimaya Gazeta, 27.09.2017. Available at http://www.ng.ru/world/2017-09-27/6_7082_france.html (Accessed on 02.10.2017).

25. Berretta, Emmanuel. Les 20 propositions ambitieuses de Macron aux Européens. À la Sorbonne, Emmanuel Macron a dévoilé ce qu'il attend de ses partenaires européens: une Europe qui achève de construire sa souveraineté. Ambitieux. Le Point, 27.09.2017. Available at http://www.lepoint.fr/politique/emmanuel-berretta/les-20-propositions-ambitieuses-de-macron-aux-europeens-26-09-2017-2160083_1897.php# (Accessed on 02.10.2017).

26. Christos Katsioulis. On the Real State of the European Union. An Abridged Draft of Juncker’s Address with Comments. IPG. International Politics and Society, 20.09.2017. Available at http://www.ipg-journal.io/rubriki/evropeiskaja-integracija/statja/show/o-realnom-sostojanii-evropeiskogo-sojuza-356/?type=98&cHash=587a8ecf8e1d89bbc7cffd9294c991f8 (Accessed on 02.10.2017).

i. The situation in the European Union appears to be even better than Juncker states. According to the Financial Times, even such an “ill person” of Europe as Italy is generating stunning economic trends. This year, the stock of Italian companies is up 17 per cent, and 42 per cent for the whole of last year (!). GDP growth in the Eurozone is over 2.3 per cent [15].

i i . Here is a sample satirical take on his address, “Dear friends! You and I largely believe in the expediency and significance of what we are doing here. This is why I am grateful for the opportunity to speak to you here, and not someplace else. I am in high spirits, because things cannot possibly be worse than in 2016…” [27].

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