The Future of the European Union: After 60 Years of European-Style Integration, Time to Learn from Others

On March 25, 2017, the 27 European Union (EU) member leaders gathered in Rome to celebrate 60 years of European integration and progress.  What started in March of 1957 as the European Economic Community of six central European countries, has grown to an economic and political union of 28 countries spanning the entire continent.  The formation of the EU did not happen by a single event or treaty, but rather it has been a continuously increasing integration effort by the member states. The 1957 Treaty of Rome started the process that eventually established a common market, a common currency and a common foreign policy. Today, the EU is one of the most influential economic and political institutions in the world.  As a single market with 28 member-countries, the EU is one of the world’s largest economies. In 2016, EU-wide GDP growth was slightly higher than the U.S., at 1.7%, while combined GDP was $17 trillion, slightly less than the U.S.  The Euro currency, though relatively new, is the second most traded currency in the world.  And the EU Commission (the EU’s governing body) is one of the most effective institutions in regulating mergers and acquisitions, environmental protection, consumer rights and working conditions; with significant influence beyond its borders. And yet, today the EU is facing some of its greatest challenges. The EU-wide unemployment rate is stubbornly high, at 8.0%.  Worse than that, there is a high contrast of differences in the unemployment rates of individual countries (3-4% in Germany and the Czech Republic, versus 18-23% in Spain and Greece). This inequality between the prosperous north and the struggling south replicates itself in other areas a well, like personal and national wealth, investment and economic growth. The sovereign debt crisis and the continuing economic instability in Greece is threatening the sustainability to the Euro currency, while the recent decision of the UK to leave the EU (See also: Brexit and the EU) challenges the very existence of the common market. Many other geopolitical crises are directly impacting Europe, and putting a real pressure on the EU. The rise of terrorism, first with Al Qaida and then with ISIS, has led to an increase in terrorist attacks within the EU.  The protracted civil war in Syria eventually led thousands of refugees to try the unthinkable: flee en masse to Europe.  Over a million refugees (and migrants) entered the EU in 2015, fleeing war-torn Syria, Iraq and Libya, in a way that overwhelmed the EU’s capacity to control its borders. Russia invaded Ukraine (a country in the process of negotiating closer cooperation with the EU) and annexed part of its territory. With all that on its plate, the EU Commission approached the 60^th anniversary of the formation of the union with great ambition. On March 1, 2017, the European Commission released a “White Paper on The Future of the European Union.” This document outlines five different scenarios in which the EU can approach future integration. The question of Europe’s future has often been a binary choice, debating whether more or less integration is best. These plans are not concrete, but rather attempt to get the ‘conversation started’ among EU leaders for what kind of EU they want to see in the future.  Nonetheless, by 2025, the EU Commission hopes that the 27 remaining member states will be able to move forward together towards an ‘ever closer union.” Scenario 1: Carrying on (business as usual—no urgent need to change) The EU-27 would continue to implement and upgrade the current agenda through the current institutional framework and possibilities. Naturally, this scenario would also include strengthening the Euro, further defense cooperation in the fight against terrorism, improvement in border control and continuous improvements to strengthen environmental standards and sustainability, but no changes to current institutions, structures or processes. Scenario 2: Nothing but the Single Market (just a common market and nothing else) This approach focuses entirely on deepening the single market. This scenario will strengthen trade in goods, services and capital markets, which would lead to the single market becoming the main reason to be an EU member. This could create potential risks for the Euro, as divergence and limited cooperation increase vulnerabilities for the currency. Scenario 3: Those who want more do more (voluntary enhanced cooperation) This scenario would allow countries who want to work together on certain policies to voluntarily enhance their cooperation. Main policy areas could be defense, internal security, taxation or social matters. This strategy has proven to be successful in the past; consider the Schengen passport-free area and the Eurozone. Scenario 4: Doing less more efficiently (enumerated areas of competence) Under this plan, the EU-27 would focus on specific areas for improvements, while doing less in other areas. This would allow the EU to prioritize issues that need to be addressed quickly, such as cooperation on border management and systematic counter-terrorism measures. Scenario 5: Doing much more together (federalism) This is a scenario where the EU would decide to go further in all policy areas. In this scenario, member states would share more power and decision-making. Decisions would often be made on the basis of being beneficial for the whole union, at the European level, rather than at the national level serving the interests of the member states. Moving Forward European-Style: A Multispeed Europe Interestingly enough, especially with the UK exit from the EU, the current ‘European’ consensus is on something resembling scenario 3 (voluntary enhanced cooperation).  European national leaders, such as German Chancellor Angela Merkel, have mentioned support of different levels of cooperation within the EU. This ‘multispeed Europe’ approach seems to be the most supported scenario for moving forward. France and Germany (the twin engines of EU integration) agreed that there should be ways in which the different levels of ambition among member states of the EU can be addressed to better contribute to the success of the EU.  There is even a model advanced by a number of European luminaries for a ‘continental partnership’ (see: “Europe After Brexit: A proposal for a continental partnership”), where there is an inner circle (the EU) with deep political and economic integration (a federal EU) and an outer circle with less integration that focuses only on trade and the common market (and could include the UK, Ukraine and maybe even Turkey). EU Future Integration: Learning the Right Lessons EU integration during the past 60 years has been a remarkable accomplishment, despite the many obstacles it had to overcome. The EU is a truly unique undertaking, which has a lot to learn from other ‘integration’ efforts around the world. European thinking and efforts on ascertaining further future integration have always been very insular, looking only for a ‘European solution’ to their current problems. While Europeans are facing an existential moment in their path to an ‘ever closer union’ it might serve them best to draw inspiration and guidance from other parts of the world, like India and the United States. India shares many of Europe’s cultural, linguistic and racial diversities, while the U.S. represents a much more stable system of governance for a continent that is trying to achieve an ever-closer union. India as inspiration for the EU India and the EU are two very different unions with a remarkable similar temperament, with their many languages, religions and ethnic groups. India is what Pallavi Aiyar calls a ‘proto-European Union.’  According to Ms. Aiyar, “India has managed to stitch together a large region of diverse social and cultural fabric into a political and economic union”… just like the EU. Culturally, India has 22 ‘scheduled’ languages, while the EU has 24 official languages; a testament to the many different ethnic groups that make up both India and the EU. Administratively, India has 29 states (and 7 government administered territories), not unlike the EU which has 28/27 members-states. Politically, turnout in India is much higher for local elections, than for national elections (very much like the EU).  Although India’s parliament (Lok Sabha) does have two major political parties with somewhat of a ‘national appeal’, it also has over 30 local parties.  Euro-wide political parties are but a collection of local parties, with no real ‘European’ identity. Economically, India has high levels of income inequality among its states—no different than the EU.  Finally, India’s internal migrant population (4.5% of total population) is very similar to EU’s (2.7% of total population). Just like India “successfully created a strong, common identity out of seemingly fractured multiplicity,” says Ms. Aiyar, so can the EU.  Europeans should draw inspiration from India, which has managed to maintain national cohesion while preserving local cultural and linguistic identities. U.S. as a guide to political stability On the other hand, India’s system of governance is not the best for emulation. The EU’s political aspiration should be U.S. style federalism, but that has always been an anathema to Europeans who believe that to emulate the U.S. system of governance will lead to the extinction of any cultural/ethnic identity on the part of member states. Overall, the U.S. system of governance has four main components: three distinct centers of power/function at the federal level (executive, legislative and judiciary—the President, the Congress and the Supreme Court—all independent of each other, checking and balancing each other out), and independent State governments with their own unique spheres of jurisdiction (or ‘competence’). It would not be at all a stretch for the EU to adopt the U.S. system of governance, considering that it already has three out of the four components: a bicameral legislature (EU Parliament and the EU Council), an independent supreme court in the European Court of Justice, and independent member state governments. Currently the EU Council is where national governments participate in the EU legislative process, but it would not be unthinkable to propose turning the EU Council to a U.S. style Senate (where each member state is represented equally, and the members could come from member state legislatures). What is missing is the popularly elected, continentally unifying, executive leader, to bring the Union together and to finally allow it to have the kind of cohesive continental and global presence that it so much deserves. However, adopting a U.S.-style EU President will have to happen gradually, in order to allow people and national leaders time to adjust. In a process that takes (let’s say) 20 years (four 5-year terms), the EU could gradually enhance the democratic legitimacy of an EU-wide President. For example: First Term: EU Presidential candidates selected by EU member state governments, but will have to be confirmed by EU Parliament (and maybe EU Council that represents member-states legislatures). Second Term: EU Presidential candidates approved by EU Parliament (anyone who gets 10% support in the EU Parliament makes it to an EU-wide ballot), but election will be held by national legislative bodies (in proportion—like an electoral college). Third Term: EU Presidential candidates approved by Parliament (anyone who gets 10% support in the EU Parliament makes it to an EU-wide ballot), and elected directly by the people (preferably in two rounds). Fourth Term: Finally, EU Presidential candidates approved by European parties (through Euro-wide party conventions—no more ‘prescreening’ by EU political institutions), and elected directly by the people (preferably in two rounds). Overall, this EU President would still have a Commission that runs the EU bureaucracy, composed of nationals from all the EU member countries, but they will gradually become answerable to the people, and not the national governments. There is no doubt that this is a critical moment in the future of the EU.  Europeans need to do some serious soul-searching as to what kind of union they want.  Ultimately, the future of the EU will come down to the same thing it always does: the political will of national leaders. About the Authors: Nasos Mihalakas is an Assistant Professor of International Business, at SUNY Brockport’s School of Business Administration and Economics.  Frances Karas is an International Business Major at SUNY Brockport, class of 2017.