To Keep Your Balance, Keep Moving

25 september 2016

Will the European Union Fall Apart or Stay Firm?

Tatiana Romanova is Associate Professor at the European Studies Department, Saint-Petersburg State University; and Head of Jean Monnet Centre of Excellence, Russia.

Resume: Neither crises nor criticism mean that the EU will fall apart. It will maintain its stability even though it will be engaged not even in major repairs but in patching up and papering over the cracks. Brussels will focus on consolidating what has been achieved, which will require pinpoint harmonization in particular spheres.

Two leadership models have historically evolved in the EU. The European Commission (EC) provides the first model. It was the most influential institution at the start of European integration (1950s), as well as during the presidency of Jacques Delors (1980s), when a common internal market emerged and the transition towards a single currency began. Its main asset was technocracy as well as the reputation and charisma of the EC president. The second leadership model is embodied in the Franco-German tandem, where Paris exercised political leadership while Germany guaranteed sustained economic growth. In this context, the consensus between Paris and Berlin responded to the demands of all other EU members. The main asset of this model was its capability to accommodate different interests, combined with crisis management experience.

Leadership and Solidarity Crisis

None of these models is viable today. At present, the EU is dominated by one state, Germany. Based on its economic achievements, Berlin is also laying claim to political leadership. A contributing factor here is the vacuum of leadership potential in EU institutions and the weakness of national leaders in the Old World. Despite the ambitions of its current president, Jean-Claude Juncker, the EC effectively plays the role of Berlin’s secretary while France acts as its tried and true armor bearer (in the four-state Normandy format, François Hollande creates the illusion that the Franco-German tandem is still at the helm). The Germanization of the EU, which has spilled over from a currency and economic union into other integration areas, naturally irks EU members. Angela Merkel’s pledge to provide refuge to all those in need has aroused strong opposition in the majority of EU countries, especially those that became full members this century in the hope of an easy and carefree life and which did not expect to have to deal with the problems of third countries.

The Germanization of leadership does not mean that all decisions are beneficial solely to Berlin. Solidarity within the EU does exist, even though it regularly comes under rhetorical diatribes from outside players, downgrading it as the lowest common denominator or as a ceremonial (not substantive) end in itself.

Solidarity does not mean that EU member countries are willing to forsake their interests, for example, in the regulation of the financial sector or intellectual property, family law, immigration or the granting of asylum. Therefore, the EU will evidently see a rise in flexible collaboration, i.e., collaboration whereby not all countries assume equal obligations with regard to integration.

A case in point is the UK. It not only stays outside of currency integration, the Schengen agreements and full-scale police collaboration, but it is also planning to downgrade the level of its cooperation following the June 2016 referendum in which the majority of Britons voted for Brexit. By all appearances, negotiations on specific exit terms will drag on indefinitely, as evidenced, among other things, by statements coming from the British political elite. It is up to London to officially launch the withdrawal process and it is in no hurry. It is not ruled out that additional approval may be required from the UK Parliament, where the majority is against the exit.

The greatest danger to the EU and its solidarity is posed not by Brexit but by the current uncertainty that can last for years. What’s more, if Great Britain leaves the EU, the latter’s internal unity could even strengthen. The undecided Central European countries would lose a true Euro-skeptic while the integration core, the old members, would seek to make the exit an extremely unpleasant option, which would be impossible for countries that cannot match the UK’s global economic and political weight. Nevertheless, at present, the kingdom’s quick and complete exit from the EU is unlikely.

EU solidarity is also open to interpretation. For example, Germany finds it hard to accept the fact that its support for the development of Central European countries and their position on Russia were not balanced by the new members’ consent to take in refugees. Central European countries, however, are wondering what happened to solidarity when Angela Merkel stated that the EU was open to refugees without consulting others. Italy is frustrated by the fact that the abandonment of the South Stream project for natural gas supplies from Russia led to the promotion of the second line of Nord Stream (i.e., the consolidation of gas supplies to the EU via Germany, which turns the latter into a convenient gas hub). Greece also has quite a few gripes over the draconian measures that were taken against it to stabilize the eurozone.

Lately, Russia and its policy have been actively used as a bogeyman, i.e., as an external threat factor, to strengthen solidarity. This provides an additional mobilization incentive in the EU that is necessary for making particular decisions. Specifically, it was used to push through decisions on association with Ukraine in the course of the Dutch referendum and the anti-Brexit campaign. This move works as a distraction from leadership and solidarity issues in favor of the external threat factor, making it possible to consolidate the Union in the short term but not deal with long-term problems. EU countries use contact with Moscow more for tactical purposes, to bargain for better terms in exchange for the demonstration of European solidarity, not for abandoning this solidarity in principle. Nor should the EU be expected to change its position on anti-Russia sanctions any time soon following the results of the Brexit referendum.

The Economic Crisis

The economic crisis in the EU is of a complex nature. In 2008, a banking crisis erupted in the Old World, which required the additional capitalization of financial institutions (de-facto infusion of public funds). Greece was especially hard hit (it was saved from default in 2010, 2011–2012 and 2015) and Ireland, Cyprus, Spain, and Portugal were also affected. France and Italy ended up on the brink. The year 2013 was marked by a new economic crisis resulting from a decline in production and rising unemployment. In 2015, another Greek bailout gave a warning that the single currency was not yet out of the woods.

There are several reasons for the eurozone crisis. The first is the abandonment by members of the single currency zone of a monetary instrument to influence the market, coupled with the preservation of freedom of action in formulating their own fiscal policy, labor costs and social policy.

The second problem is the lack of harmonization among eurozone members in competition, labor productivity and labor costs, and the insufficient synchronization of their economic cycles. One manifestation of this problem is the decision to admit Greece to the eurozone. The euro also stymied the industrial development of Italy, Spain and Portugal, whose economies were driven by low labor costs.

Single currency problems were compounded by the massive social security system, conservatism of the Old World and insufficient collaboration between research institutions and the business sector. As a result, the EU loses competition with the U.S. in the postindustrial economy and compensates for this with pinpricks such as lawsuits against Microsoft or Google.

The reluctance of all the countries, even in a critical situation, to delegate additional powers to a supranational level certainly makes it more difficult to overcome the crisis. Another impediment is the EU’s top-heavy bureaucratic machine. It spends a lot of time to streamline mountains of regulations that it has generated and to watch the behavior of all member countries in spheres that have already been coordinated. There is no time left to put forward any new initiatives.

The GDP growth is uneven. After a long period of decline, Ireland set new records (6.9 percent, 4.5 percent and 3.5 percent in 2015, 2016 and 2017, respectively).

At the same time, eurozone members have maintained stable GDP growth. They have demonstrated their ability, in a difficult situation, to come to terms and deepen bilateral ties to save the integration project, including the euro. This happened every time their crisis situations came to a head (for example, in Greece). All these steps showed that there is an understanding that the disintegration of the EU or the eurozone is fraught with far greater problems. In fact, the historical course of events has strengthened confidence in the currency union. The euro has not become a high-risk investment currency; the euro economy lost technological competition with the United States and industrial competition with China. Nevertheless, the conservatism and stability of the single currency, like a solid pension security system, continue to serve as the EU’s key appeal, including in the foreign policy area.

Crisis of Values and Normative Leadership

The essence of the crisis of leadership in the EU is that while preaching the values of democracy, human rights and the rule of law in the world, Brussels is not always successful in securing them at the national level among member states. What’s more, the EU’s willingness to ensure respect for particular values depends on what impact this will have on its interests. Finally, following the recent string of terror attacks, now there is also talk about how the values of democracy, human rights and the rule of law prevent the EU from guaranteeing security to its citizens.

National failures are exemplified by amendments to foundational laws passed in Hungary and Poland to benefit ruling elites. Another example is the problem of stateless persons in the Baltic countries, which the EU prefers to ignore. We can also recall the rising popularity of ultra-right parties that often reject tolerance and openness towards people from other countries, ethnic groups and religions.

There are numerous reasons for the crisis of values in the EU. The principal one is the lack of established democratic standards in some of the new EU member countries. Having proclaimed values as its core, the EU has not put in place viable tools to oversee its members. The rising popularity of rightist forces is related to the changing context and new problems (such as immigration), where traditional political parties are unable to propose credible solutions that address the concerns of their fellow citizens.

Another problem is that while promoting a deontological approach towards values for its partners (all or nothing; values contrary to all interests and the logic of events), the EU itself favors a relativist approach, i.e., a selective application of norms. Both the Dutch and German cases demonstrate the desire of the EU and its members to decide when to apply democratic laws and norms and when not. The 2015 Greek referendum on whether to remain in the eurozone is noteworthy as well. It exemplifies a utilitarian approach towards democracy and the popular vote, and using it to secure preferential EU membership terms (in this case, retaining the single currency).

The EU continues to lay claim to the role of judge for third countries. As a result, the EU’s own normative power is declining, since it is clearly directed more outward than inward. Essentially, it is turning into soft power, as the rhetoric of human rights violations, democracy and the rule of law is becoming a foreign policy tool, whereas normative power is supposed to influence others by its own example, through socialization into values.

The EU’s value crisis is compounded by the fact that Brussels constantly has to choose between conflicting values. The most recent case in point is the issue of refugees and the trouble they cause. Should priority be given to guaranteeing EU citizens’ rights (including the right to privacy and security) or to humanitarian logic and the accommodation of refugees? Can citizens take action against refugees who cause trouble or should they patiently wait for police to arrive as they observe atrocities committed by newcomers? Is it necessary to guarantee freedom of information for EU citizens (including information about disturbances triggered by immigrants) or should this information be suppressed for the sake of public calm? Such questions arise every day and the EU’s response to them is not always consistent.

Finally, the crisis of values and normative leadership also manifests itself in the EU’s foreign policy. A case in point is Ukraine, as well as the entire perimeter of the southern Mediterranean, where the promotion of democratic norms, human rights and the rule of law has led to civil wars, inefficient government institutions and even the de facto disintegration of states. Another example is the freezing of sanctions against Belarus where the situation with the opposition has not changed in any way. Both cases illustrate the inconsistency of the EU’s position.

A conflict of values is unlikely to result in the breakup of the European Union. Nevertheless, it will constantly provoke challenges to the EU both at home and abroad. Member countries will use EU norms in increasingly utilitarian ways while the states outside of the EU (in particular Russia) will highlight the weakness of this fundamental EU principle and challenge Brussels. Moscow, which challenges the West’s right to a unilateral interpretation of values, of good and evil, will remain the target of choice for the EU’s normative exercises. Paradoxically, Moscow challenges not values as such but its own inequality in situations where they are applied to specific present-day realities. Meanwhile, ISIS and other terrorists seek to undermine these values and drastically revise them. However, the reluctance of the West to abandon its exclusive right to interpret values makes Western-Russian collaboration in fighting fundamental threats difficult to achieve.

Immigration Crisis and Terrorism

The flood of refugees and the growing terrorist threat are closely interconnected. The flow of refugees to the EU began to rise sharply in 2011, and between 2014 and 2015 the number of people seeking to resettle in the EU effectively doubled. Most of this inflow comes from Syria, Afghanistan, and Iraq, where hostilities broke out in 2014-2015 or even earlier while state institutions degraded. None of the EU states nor the EU as a whole were prepared for this turn of events.

The main flow of immigrants moves either through Turkey and then Greece, or through the Mediterranean to Italy, whose economy is also plagued by serious problems. The pressure on its budget, as well as on government agencies responsible for helping refugees, has also increased sharply. This has aggravated the issue of distributing the refugee burden in the EU, where the Schengen agreements, which eliminate internal borders between member states while strengthening and harmonizing control on external borders, have been in effect since the 1990s. (The issue arose during the 2011 Arab Spring, when a flow of refugees entered the EU via Italy. The problem recurred in Greece in 2014. In 2016, it came to a head on the Apennine Peninsula again.) According to the current rules (Dublin Regulation), asylum should be granted in the country of first entry to the Schengen zone. However, countries located on the periphery, especially in the south, bear a disproportionate burden both in terms of protecting the Schengen borders and accepting refugees.

As a result, Greece started to allow refugees to cross its territory to Balkan countries that are not EU members, from where refugees again “first entered” Schengen territory (through Hungary and Slovenia). Italy also threatened to start issuing Schengen visas to refugees, enabling them to move to an EU country of their choice. Also, refugees are not always willing to apply for asylum in Greece, where social guarantees are still Spartan. This leads to what is known as “asylum shopping,” the practice by asylum seekers of applying for asylum in several states or seeking to apply in a particular state after transiting other states.

The fact that after all their trials and tribulations, facing death in pursuit of a better life, refugees lack social restraints common to Old World residents creates additional problems. They readily engage in theft, violence and public disturbance. The situation is compounded by pressure from human rights organizations that call for helping people who have suffered as a result of war and humanitarian disaster. Finally, there are conflicting rights that have to be upheld (EU citizens’ rights to security vs. refugees’ rights), as well as the unilateral invitation to refugees that Angela Merkel issued, counting on EU solidarity that failed to materialize. So far the EU has failed to reach a consensus on the distribution of refugees while asylum seekers continue to come, oftentimes drowning before they reach European shores. The only tangible shift has been the EU’s intention to create a border control agency, but it will take months or even years to be put into practice.

Finally, the situation escalated following a series of Muslim-orchestrated terror attacks in France and Belgium in 2015 and 2016. The issue of the immigration of Muslims, who poorly integrate in the Old World, was compounded by the threat that they posed to the security of the entire population. There were also lapses in domestic security and the almost complete lack of collaboration between relevant agencies both in Belgium and between EU countries.

Seeking solution to deal with the flood of refugees and prevent terrorist attacks, EU countries began to restore old pre-Schengen borders, closing themselves off from their integration partners. This undermined the main symbol of European integration, i.e., the free movement of people, which triggered talk of disintegration.

The Russian factor was also visibly present in this crisis, above all the claims that Russia’s military operations in Syria had caused the flow of refugees to EU territory, which is out of tune with reality in terms of timing and cause and effect. Furthermore, Moscow stood accused of facilitating the transit of refugees from Syria to Finland and Norway through its territory (airports).

Moscow retaliated with a campaign centered on two points. First, the refugee issue illustrates the unacceptability of interfering in the internal affairs of states and regime change. Second, the inability of the EU and its members to meet a basic public need, i.e., security, and the unacceptability of prioritizing human rights rhetoric over security needs. These developments also essentially became the focus of an information war between Moscow and Brussels, which is weakening the opponents, whereas essentially they are natural allies in the face of the deluge of refugees and terrorism.

The flood of refugees and terror attacks are the most serious problems for the EU, bordering on existential. At the same time, the situation is not nearly as apocalyptic as it is portrayed in the Russian media. The worst outcome—the restoration of internal borders, which has, to a certain degree, already happened—is bound to inconvenience EU citizens and guests; it will also increase the cost of goods and services that have to be moved across the border. The EU’s international reputation will also decline somewhat. Nevertheless, the EU is unlikely to fall apart for this reason. What awaits Brussels is a long search for consensus on integration measures that will come later than they should to effectively address the issues of refugees and terrorism.

Legitimacy Crisis

The issue of the EU’s legitimacy is as old as the Union itself. Its essence—citizens’ refusal to recognize the legitimacy of a particular event or regulation—is related to the increasing delegation of powers from the national to supranational level (i.e., to the EU) whereby member countries lose control over various spheres. The problem was aggravated by the founding of the European Union in 1992 and is further exacerbated by the tendency of national governments to blame all problems on Brussels and attribute all achievements to themselves. Finally, the EU’s legitimacy is undermined by economic crises, which affect the living standards of EU residents, normative leadership problems, the flood of refugees, and the threat of new terror attacks.

The legitimacy crisis has already led to numerous attempts to make the decision-making process in the EU more transparent, get citizens involved in consultations and in determining the paths of its development, and clarify the separation of powers between the EU and its member countries. However, these moves produced only limited results. The legitimacy crisis manifests itself today primarily in the growing public skepticism with regard to integration. This is evidenced by the low turnout in the 2014 European Parliament election (on average about 40 percent in the EU and less than 20 percent in some countries) and the growing number of MEPs from ultra-right parties who are skeptical about integration. What are the possible implications of the legitimacy crisis? The disintegration of the EU is unlikely. Nevertheless, after the UK, some other members may demand a revision of the terms of their membership in the EU. The trend towards consolidation of EU achievements can be balanced by making integration somewhat more flexible. However, the change would be mostly rhetorical and declarative in nature. These initiatives will have little impact on decisions that have already been made. More likely, they will clarify the guarantees that are already in place and calm the public. It is also obvious that progress on certain directives and regulations in the European Parliament and the Council may slow down and horse-trading between member countries will intensity.

It is noteworthy that the Russian factor was actively exploited both in the Dutch and UK referendums. In the former case, the proponents of the association agreement with Ukraine claimed that a “no” vote can only benefit Russia but not the Dutch people. The campaign against Brexit was also based on the argument that EU problems and the weakening and disintegration of the EU could only benefit Russia. Thus, the Russian (i.e. external threat) factor is used as an argument for recognizing the legitimacy of the present state of affairs. It is the same desire to use an external threat for the sake of consolidation that was previously noted with regard to the leadership and solidarity crisis. Paradoxically, this trend is characteristic of both Russia and the EU.

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The European Union is far from ideal. The criticism of the EU stems from unfulfilled (and often overly optimistic) expectations both about the Union itself and about collaboration with it. However, what Dag Hammarskjöld said about the UN, which “was not created in order to bring us to heaven, but in order to save us from hell,” is fully applicable to the EU. Neither crises nor criticism mean that the EU will fall apart. It will maintain its stability even though it will be engaged, not in building a new house and not even in major repairs but in patching up and papering over the cracks. Brussels will focus on consolidating what has been achieved, which will require pinpoint harmonization in particular spheres (strengthening macroeconomic coordination, collaboration in the immigration sphere, closer cooperation between security services, and so on). In some instances, like the eurozone crisis, the EU will have to hit rock bottom before it can begin recovering.

At the same time, all these difficulties seriously impair the EU’s ability to resolve international issues. Its principal tools, namely, its economic appeal and values-based leadership, have been discredited. The increasing rivalry between Russia and the West in the security sphere makes EU member countries (especially Poland and the Baltic countries) more interested in NATO than the EU. Thus, the EU is being pushed back not only by its own crises but also by the international situation in general. Russia’s game of upping the ante in the security sphere is bringing NATO out of the shadows. Meanwhile, Moscow’s appeals to the EU’s economic interests and its attempts to play up to the business community with the aim of breaking transatlantic unity are not yielding any tangible results in this context.

There is a well-known metaphor comparing the EU to riding a bicycle: To keep your balance, you must keep moving. To ensure integration, it needs new targets and goals and deeper collaboration among all members. However, European integration has become an objective reality and the same goes for European states. So the EU does not have to prove its raison d’être by constantly moving towards a new goal but, rather, promote consolidation and a joint search for ways to respond to existing challenges.

The EU’s challenges are similar to those faced by all modern states, specifically the crisis in the current model of relations between society and the state. This is precisely what is being called into question by ISIS and terrorism at large. However, a return to the nation state in Europe would be a step backward, an attempt to drive a horse-drawn carriage into an age of space technology and aircraft.

Flexible collaboration, i.e., collaboration in which only some EU countries are involved, may intensify. However, in the majority of cases there will only be a semblance of it (as in the case of Denmark, the Schengen or Brexit); some bureaucratic or media guarantees will be adopted that will change nothing in substance. These pseudo changes are part of normal politics in the modern world, not an EU invention, nor something extraordinary. As a result, flexible collaboration will manifest itself mainly in rhetoric and pointed gestures.

It is wrong to underestimate the EU’s ability to consolidate, especially when it or its members are faced with an obvious threat from the outside. This role today is played by the flow of refugees and immigrants and the terrorist threat. EU politicians are also trying to cast Russia as the same kind of threat, since this helps consolidate internal unity and ignore certain complexities in domestic politics. Sometimes, the EU gets caught up in witch hunts and looks for a Russian hand in everything. This leads to a transformation similar to the one that is happening in Russia: foreign policy begins to trump domestic policy, to which Brussels is more accustomed. The EU’s ability to consolidate is significantly weaker in the absence of an external enemy. At the same time, however, external threats distract the EU from its leadership, legitimacy and economic development crises and normative domination problems. This kind of consolidation only delays essential reforms.

This article is a shortened version of the paper written for the Valdai International Discussion Club. The original copy is available at: http://valdaiclub.com/

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