Europe disintegrates yet deepens

Brexit has become a reality in 2020. For the first time, a Member State has left the European Union (EU). This is a break in the trend of post-war European integration. But it does not mean the end of integration. European integration has two dimensions: widening (i.e. allowing more countries to join the process) and deepening (i.e. transferring more competences to the European level). The remaining Member States will continue to take steps to further deepen European integration, for example with the completion of the banking union. As in the past, this deepening will be a muddling through process.

An irreversible process…

After the Second World War, European integration was conceived as an irreversible evolution towards an “ever closer union”. Through economic cooperation and integration, European countries would become so interdependent that a war would be impossible. Originally, the EU (or rather its predecessors like the European Community for Steel and Coal and European Economic Community) was an instrument to safeguard peace through economic cooperation. Economic integration would ultimately lead to political integration.

The road to the “ever closer union” has always been very bumpy. The journey towards a common market is not a swift trip down a motorway. Rather, it is a continuous swing between the removal of barriers and the introduction of new ones. 30 years and several currency crises separated the initial plans to introduce a single currency and the launch of the euro, for example. But the integration efforts have always prevailed in the end.

The major enlargement of the EU in 2004 to the East raised doubts about the ambition of an “ever closer union”. The Treaty of Lisbon (2007), an update of the basic treaties on integration, introduced the possibility for a Member State to leave the EU. During the euro crisis, almost 10 years ago now, the survival of the euro was a dime on its side. Greece was on the doorstep of an exit and that undermined financial markets’ confidence in the continued existence of the euro. However, the dime finally turned to the integration side with the establishment of the banking union. The EU’s political leaders stepped in to save integration efforts and deepened the union.

... turns anyway

Today, Brexit proves that EU integration is in fact reversible. If a new existential crisis were to emerge in the EU today, it seems less certain that the dime would once again tilt to the integration side. It is true that at this moment there are no countries that want to follow the British. In this respect, European integration is in a better shape than could have been feared at the start of the Brexit saga. However, populist parties, often with Euro-critical or downright anti-EU positions, are working to reduce the decision-making power of the political forces that defend European integration. The political fragmentation in Germany and the precarious popularity of the French President prevent the traditional lever of the Franco-German axis from doing its job regarding integration. In some countries, basic principles of the EU are even under pressure, such as democracy, freedom and the rule of law.

At the same time, however, there are signs that a certain sense of urgency for a further deepening of the EU is growing. For example, in early November 2019, the German Minister of Finance called for the debate on a genuine European deposit guarantee to be unblocked, and ECB officials have repeatedly called for a more active fiscal policy. The French position in the debate on enlargement to the Balkans gives further deepening of the EU a clear priority over enlargement. On the other hand, the daily political agenda shows that concrete progress in deepening remains a muddling through process. A number of crucial issues will have to be decided in 2020, such as the completion of the banking union and the adoption of the Multiannual Financial Framework 2021-2027. In taking these decisions, politicians can make clear that Europe is not only disintegrating. It is also deepening.

 

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