Chapter 7: Future of European Integration

Crises in European Integration

Crises have always been present in the history of the EU. Crises can originate outside of the EU, from the international environment or from the domestic politics of the EU member states. Crises are not just mean moments of uncertainty but can invoke heightened conflicts, tensions, and contradictions amongst European actors reflecting the open-ended and ambiguous nature of the finalité politique of the Union. For instance, the Eurozone crisis or as mostly referred as sovereign debt crisis that broke out in Greece in 2009 is fundamentally due to weak and unstable integration of peripheral countries in the Eurozone. It was triggered by the speculative mortgage lending by the US financial institutions in 2007. Crises can have beneficial effects of lesson-drawing and have the potential to deepen the process of European integration through change of policies and institutions. Crises imply moments of opportunity for the EU to restructure or even to transform itself towards political union in line with the mainstream “progressive” narrative.

Major crises can be traced back to the foundational period, proceeding through the enlargement and deepening crises of the 1960s followed by a number of exogenous crises before the relaunch of European integration in the late 1980s. The post-Maastricht period marked a new and transformative context for the integration process in which crises of deepening and widening eventually culminated into the most consequential constitutional crisis of the EU. Maastricht was a continuation of the processes of completion (particularly the EMU) and deepening (on institutional reforms, CFSP and JHA matters), however, a series of ratification crises were followed from the reform process. The Danes refused to ratify the new treaty in a 1992 referendum followed by French voters’ narrow approval of it in the same year. In fact, the Danish referendum demonstrated the heightened public controversy over European political integration. In order to prevent the Danish ratification crisis to turn into a threatening crisis for the EU as a whole, the Edinburgh Summit of December 1992 granted opt-outs to Denmark in core state powers along with the certain exceptions in European citizenship. Opt-outs are a way of ensuring that when a given country does not wish to join the others in a particular field of EU policy, it can opt-out, thus avoiding an overall stalemate.

In December 2011, all EU member states but the UK and the Czech Republic signed the “Fiscal Compact” to coordinate their budget policies and impose penalties on rule-breakers. Arguably, the approval of treaty by the Czech Republic in 2014 reinforced the “outsider” status of the UK and has fuelled the uncertainty and controversy over the role of the country in the future of Europe.

The EU struggled to overcome the Eurozone crisis which emerged in late 2009 with divisions emerged between the northern creditor and southern debtor member states of the Euro. The influx of refugees in 2015 created a further major challenge at the EU’s external borders and for the internal ‘Schengen’ free movement regime.

Brexit, the ‘rule of law’ and illiberal challenges in Poland and Hungary, and growing instability around Europe arising from geo-political contestation with a resurgent Russia, increasing authoritarian rule in Turkey and the instability of the Middle East and North Africa have compounded matters. Finally, the Trump Presidency has brought a new sense of uncertainty against the global liberal economic and political order which the EU is an integral part of. The crises have created significant existential challenges for the EU.

The New Context of EU Multiple Crises

During the past years, two core EU policy regimes, the Euro and Schengen, have come under extraordinary pressure and an important EU member state, the UK, is about to leave. These events challenge the mainstream view of crises as opportunity and threaten the EU with a risk of disintegration, such as the reduction of its membership or the renationalization of its policies.

Crises have had constraining impact on the domestic politics of the EU member countries. The effects were immediate in electoral politics: In the first round of crisis elections, eight incumbent governments lost power though elections and two governments were replaced with technocratic governments.

Politicization refers to the increasing contestation of the scope, level, or character of regional integration, mass publics have come to pay more attention to political decision-making within EU framework and at the same time seem more critical of the policies. This increasing contentiousness has been called the ‘politicization of European integration European integration has no longer been an elite-driven process under the “permissive consensus” of citizens rather national elites have come to be increasingly bound up with the constraining effects of public opinion. The EU is no longer insulated from domestic politics; domestic politics is no longer insulated from Europe. The more the EU opens itself up to domestic politics of the member states the higher the public contestation it is subject to, and the impact of identity politics.

Crisis-Driven Politicization of European Integration

With the onset of the Eurozone’s sovereign debt crisis, Europe’s fragile democracy has turned into a more salient and critical issue in national politics of the member states than before.

Europe’s democracy (and the EU’s own legitimacy) has been at risk as national publics in several member countries have become increasingly dissatisfied not only with the EU but also with their incumbent governments. This growing political tension, in turn, has generated a rise of populist challenger parties both in the national and European electoral arena.

The key features of the crisis-driven politicization are given as follows:

• Politicization has not remained solely at the national level; it has become multi-levelled; at the bottom or national politics in the member states; bottom-up effects for all EU actors and effects for EU governance and its interinstitutional dynamics at the top.
• Politicization has become more nation and region specific or differentiated;
• Yet, “national politics” is still the crucial arena for the politicization of the EU.
• The substantive content of politicization was broadened to cover the EU’s governing authority, its governing activities and key dilemmas of governance-democratic accountability and democratic legitimacy.
• Politicization has had differential effects and consequences for the Euro crisis and for the Schengen crisis.

National-level politicization can be identified with the increasingly divisive and polarized debates, divided electorates, and volatile party politics. Politicization has influenced the overall EU institutional dynamics too. There has been much debate about the role of the EU institutions in managing the euro crisis and the reform process.

The sovereign debt crisis displayed weaknesses of the economic governance of the EU. The EU responded to this problem by taking vital measures to strengthen its governance and to take the necessary initiatives to enable sustainable economic growth, job creation, financial stability and sound public finances. Main pillars of these efforts are the legislative basis to strengthen the Stability and Growth Pact. These legislative pillars are the SixPack, the Two-Pack, and the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union. Stability and Growth Pact (SGP) is a set of rules designed to ensure that countries in the EU implement sound public finances and coordinate their fiscal policies with the aim of achieving the wellfunctioning of the Economic and Monetary Union.

Comparing the Euro Crisis and the Schengen Crisis

Whereas the Euro crisis has produced more integration, the Schengen crisis has not, and the Brexit referendum has initiated a process of disintegration. The European response to the euro crisis, slow and piecemeal as it may have been, has nonetheless led to a substantial consolidation of European economic governance Crisis management and crisis prevention at the European level has led to a series of measures designed to embed member state economic, budgetary and financial policies in a stronger regulatory framework.

Immigration is a national competence for all EU members, though the Schengen area has a shared regime for asylum seekers. The crisis unfolded in August 2015 when the German government formally suspended the Dublin regulation for Syrian refugees in order to admit them directly, and then partially reversed course three weeks later by temporarily reinstating border controls with Austria. These events set off a chain reaction of unilateral moves in which Schengen member states closed borders, turned back asylum-seekers, and refused to implement a relocation scheme for refugees. Indeed, in the course of the crisis, both the initial German and the broader EU approach –as mainly represented by the European Commission –shifted from rather liberal to more restrictive initiatives and measures, and from a rather internal to an external dimension of crisis management.

Schengen states’ different exposures to the migratory pressures in the refugee crisis influenced their national preferences: there was no common agreement on how to avoid a breakdown of the Common European Asylum System (CEAS), known as the Dublin system.

Germany played a differentiated leadership role in the crisis context, acting as a reluctant hegemon during the Eurozone crisis but as a destabilizing and contested leader in the Schengen crisis. The failure of the latter can be explained by the politicized dynamics of the German mainstream party politics by the challenge of the AfD. Such national politicization of EU and immigration was not specific to Germany, rather it has been indicative of the rise of identity politics and of a new transnational cultural cleavage across Europe.

More than the Eurozone crisis, this contribution argues that the EU’s refugee and migrant crisis constitutes a postfunctionalist moment in European integration which brings together conflicts over sovereignty, identity, and solidarity to the fore in many EU member countries.

Overall, the distinctiveness of the Schengen and refugee crisis derives from its politicized dynamics at the national level inhibiting EU wide joint action. The presence and political influence of Eurosceptic and anti-immigration parties has thus been one of the reasons for explaining the EU’s failed management of the crisis.

Debating the Future of the EU: Key Areas of Tensions

Despite the predominance of the new intergovernmentalism in post-crisis EU governance and institutional order, the EU is now confronted with a fractured and fractious European politics and a more fragile democracy than in the past. The first tension is between the EU collectivity and its member states., the future of the EU will be far more overtly political than in the past and debates will be shaped not only by varying options of Europeanization, including models of differentiated integration and also by renewed calls for renationalization, allowing member states retain or even claim back their powers. The second tension is between a functionalist EU or the Union as a problem-solving entity and a federal EU or the Union as a political union. European integration has been caught up in constraining dissensus, declining public support for the European project and a transnational cultural cleavage that is reshaping European political life during the last decade.

The third tension is the classical tension between states and market which has gained renewed urgency in the new crisis phase. The fourth tension is between an ‘ever closer union’ and the various forms of ‘differentiated integration. The last tension relates to the EU and its wider international environment. The blurring of the distinction between external security and internal security on the one hand, and between hard power and soft power on the other, underlines how important the unstable and disorderly neighborhood has become to Europe.