Comment

What sort of union is the European Union going to be?

Martin Westlake / May 2021

Image: Shutterstock

 

The popular impression of a monolithic European Union (EU) is misleading. Two practical examples – the euro and the Schengen area – illustrate the point. Despite the Treaties describing the euro as being the currency of the EU’s economic and monetary union (EMU), one country (Denmark) has an opt-in, another (Sweden) has a de facto, referendum-locked, opt out, and the euro is currently the official currency of only 19 out of the 27 member states. Though the remainder are obliged to join when circumstances permit, the economic damage done by the pandemic – particularly massive increases in public debt – has surely delayed the EMU process by years. At the same time, outside the EU, the euro is the sole currency of Montenegro and Kosovo, as well as of four European microstates and three overseas French territories. Nine countries, both within and outside the EU, and three currency unions peg their currencies to the euro.

As to Schengen, currently, 22 of the EU’s 27 member states participate in the (free movement) Area. While four of the remaining five are legally obliged to join the Area at some point, Ireland enjoys an opt-out. The four EFTA member states are all de facto members of the Area, as are Monaco, San Marino and the Vatican City. As these two examples show, even on pretty fundamental issues – monetary union and freedom of movement – the EU is much more flexible in its structure than the image it perhaps likes to project of an indivisible whole. The EU is more Venn diagram than a set of concentric circles.

Similarly, the impression given of a unidirectional, inexorable EU enlargement and integration process is also a little misleading. Brexit is undeniably a new departure, but other territories (Algeria in 1962, Greenland in 1985) have left the EU (or its predecessor). At the same time, the EU has said ‘no’ definitively to Morocco (1987) and ‘no, but’ variously to Greece and Turkey (1959), Spain (1962), the United Kingdom, Denmark, Ireland and Norway (1963 and 1967) and, most recently, a ‘not for the foreseeable future’ to Andorra, Monaco and San Marino (2012). The other way around, the people of Norway (1972, 1994) and Switzerland (1992) preferred not to join, while Iceland (2013) decided to suspend accession negotiations indefinitely. There is, in short, nothing intrinsically inexorable nor irreversible about the enlargement process and, as the EU is painfully aware, there is even now, since the Lisbon Treaty, an explicit provision to enable member states to leave the Union if they so wish.

In establishing their relationships with the EU, sovereign states will and, if they are truly sovereign, must always decide what is best for themselves according to their own democratic devices and traditions. Such calculations will take into account a country’s history, its traditions, its size, and its sense of self, of its identity and of its future. Such calculations explain why, for example, Switzerland is in the European Free Trade Area (EFTA) while Norway is in the European Economic Area (EEA) and Portugal is in the EU – all three countries having previously been in EFTA together. The post-Brexit UK’s relationship is fundamentally no different in that regard (also, of course, a founder EFTA member).

Considerations other than purely economic interests can weigh more heavily in the balance. For example, while it is now largely forgotten that Austria, Finland, Ireland, Malta, Portugal and Sweden were previously neutral countries, and Malta was, until recently, ‘non-aligned’, Switzerland’s neutrality is a self-imposed fundamental principle of its foreign policy, respected since the modern country came into being in 1815 (Switzerland only joined the United Nations in 2002 and, as recently as 1986, three quarters of Swiss voters rejected UN membership!).

Also, when countries decide what is best for themselves, there are always, inevitably, trade-offs to be made between competing interests and considerations. There are, for example, empirically demonstrable economic advantages to full EU membership. Many would argue that full membership also brings clear political advantages. But these advantages are potentially offset by perceived disadvantages in terms of democracy, autonomy and national identity. In turn, those disadvantages can be offset by opting for something less than full membership. However, anything less than full membership also comes with political, even constitutional, disadvantages (the ‘fax democracy’ of the EEA, for example).

Countries must then, in turn, devise strategies and tactics that seek to overcome those disadvantages. But what all less-than-full membership arrangements demonstrate is a simple fact: national economies do not wither and die if they do not enjoy full membership, although they risk paying an economic penalty in terms of growth rates over time. Moreover, as Anand Menon’s now famous anecdote about a Newcastle heckler during the 2016 Brexit referendum campaign (‘that’s your GDP, not ours’) colourfully illustrated, the distribution of wealth and other benefits created by EU membership within a country is potentially as important as the creation of wealth by countries as units in themselves.

Nevertheless, the impression of autonomy for those not in the EU will always to a certain extent be illusory because of the ubiquitous ‘Brussels effect’. The EU is a regulatory and trade giant. No country in the world can entirely escape the pull of its gravity. As the UK risks finding out, the bilateral trade deals it will make as alternatives to being an important partner in the EU’s own deals will amount to pretty much the same thing. Any advantages gained will be small, though they will surely be emphasised as symbolic demonstrations of the flexibility created by Brexit.

Behind this wilful divergence is a massive irony for both the EU and the UK. They will remain major trading partners and by far the best relationship for them both would therefore be the closest possible relationship, but both risk considering that to be impossible. For the UK, Brexit must be a success. Otherwise, what was the point of it? Maximum viable divergence is therefore an imperative because any arrangement that leaves the UK closer to the EU will merely highlight the disadvantages of anything other than full EU membership. For the EU, on the other hand, Brexit cannot be a success, because otherwise what would be the point of EU membership? In a hybrid version of prisoners’ dilemma, both sides therefore risk ending up with sub-optimal arrangements and a sub-optimal relationship. Only far-sighted statecraft and clear-sighted statesmanship can avert such an irony.

All of the foregoing should result in hard thinks on both sides of the Brexit divide. With the longstanding and frequently fraught negotiations finally over, the UK is gradually beginning to come to terms with the reality of what has happened – as is the EU. On 27 April 2021, Michel Barnier made his valedictory address to the European Parliament, on the eve of the Parliament’s formal approval of the EU-UK trade and cooperation agreement. ‘This,’ he said, ‘is a divorce. It’s a warning … And it’s a failure, a failure of the European Union. And we have to learn lessons from it.’ However, if the EU is honest with itself, Brexit is not the first such kind of failure.

I mean no disrespect to the countries involved, but what sort of Union is it that, at one and the same time, hopes gradually to bring the remaining six Western Balkan countries on board and has rule of law problems with several of its current, more recent, member states, but which has lost the United Kingdom and has never yet gained the membership of such longstanding and stable democracies as Iceland (arguably possessing the world’s oldest and longest-running parliament), Norway and Switzerland? Could it be that the latter are somehow ‘difficult’ precisely because they are longstanding, and therefore perhaps idiosyncratic, democracies?

In any case, in today’s increasingly challenging world there is an imperative for Europe – and not just the European Union – to be strong and solidaire. Sub-optimal relationships won’t do. Venn diagrams and complex arrangements will always be better than stand-offs and friction. As the Conference on the Future of Europe gets underway, it is now more than ever time for positive, constructive thinking and visionary leadership on all sides. All Europeans – and not just EU citizens – deserve nothing less.

 

Martin Westlake

Martin Westlake

May 2021

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