POLICYBRIEF ISSUE 3 | SEPTEMBER 2018 ONE SIZE DOES NOT FIT ALL: EUROPEAN INTEGRATION BY DIFFERENTIATION Maria Demertzis A BARE-BONES PLUS CLUBS EUROPE Deputy Director, Bruegel Common court system Jean Pisani-Ferry Mercator Senior Fellow at Club 1 Club 2 Club 3 Club 4 Bruegel Economic Migration, Security Other and Monetary Asylum and and foreign policies André Sapir Union Schengen policy Senior Fellow, Bruegel Common base (treaty, Council, Commission, Parliament) Thomas Wieser Non-resident Fellow, Source: Bruegel Bruegel THE ISSUE Guntram Wolff Reforming the governance of the European Union has become urgent for three reasons: Director, Bruegel to better deal with politically-sensitive topics, to manage greater external challenges and because future EU enlargement will increase the diversity of the bloc’s member- ship. The answer to disagreement typically has been qualified majority voting, but on sensitive topics, the EU has increasingly moved to unanimity and heavy European Council involvement, which has often not delivered results. The alternative answer has been a Europe of multiple speeds of integration with one shared goal for all, increasing political tensions. A different approach is now needed to move Europe forward. POLICY CHALLENGE Two options would be a Europe of concentric circles and a Europe of ‘clubs’, but the former would cement tensions between the inner and the outer circles, while the latter would lead to unclear structures and an end to cohesion. However, a governance model could combine the two approaches. The model would be based on a strong ‘bare-bones EU’ formed by the single market, trade and accompanying policies, the European institutions, treaties, rule of law and a commitment to fundamental EU values. Three policy areas would be completely moved into ‘clubs’ while remaining based on the bare-bones legal and institutional structure: economic and monetary union; Schengen and asylum policy; and foreign and security policy and neighbourhood policy. Club membership would be optional but once in, countries would have to accept the rules and there would be high hurdles to leaving. Finally, a ring of friends would surround the bare-bones EU, based on very close economic relationships and some multilateral discussion elements, but no formal votes. 2 POLICY BRIEF ONE SIZE DOES NOT FIT ALL: EUROPEAN INTEGRATION BY DIFFERENTIATION 1 INTRODUCTION a dangerous global environment, The strong global anchor of which the Europe’s ability to remain in charge European Union has been part since its of its destiny might be compromised inception – rules-based multilateralism by a failure to manage these issues – is unravelling. A multipolar regime is effectively. This has made it more emerging faster than anybody antici- urgent to reform the EU to meet the pated. Will it be an international order? challenges of tomorrow. Ad-hoc Will it have rules, and if so who will solutions to the challenge of write them? Because of its size, Europe heterogeneity do not appear to be is bound to be one of its poles, but will enough, especially in a context of Europe be strong enough to shape its enlargement and deeper internal own future or will its future be deter- divisions. mined by others? In other words, will the EU be a sovereign player commen- 2 THE LEGACY surate with its size? These are questions Since the outset, the EU was conceived Europe must urgently answer. and designed as a single undertaking As if these global questions were in which all member countries would not hard enough, they arise at a eventually participate in full in all time when the EU is having doubts policies, though in some cases after about its own future. This is not just a transition period. Accordingly, the because of Brexit. Strong political acquis was regarded as indivisible forces in other member states, and participation in it was considered including the six original members, irreversible. For decades, indivisibility are questioning the direction, even and irreversibility provided extremely the principle of European integration. powerful lock-in mechanisms. Some basic tenets of EU treaties no Now, and as the EU has increased longer command consensus. Internal its membership, this unitary model is unravelling has become a real threat. being questioned by increasingly deep At one level this coexistence of divisions over the aims of European external and internal questioning integration. is paradoxical, because a strong, The unitary model is also brought united European stance is even more into question by the stalemate in required in a world in which global the accession process. Some current rules and institutions threaten to fall members have no appetite for enlarging apart. But at another level, it is logical: the EU to countries where the economic sovereignty starts at home, and the and institutional level is such that their same isolationist forces that undermine participation in the EU could hamper the global multilateral order undermine deep integration and the strengthening the European multilateral order. This of the common regulatory framework, is the tension the EU must solve. If it could be the source of significant labour fails, it could lose its raison d’être. If it migration and could further dilute the succeeds, it could find a new purpose. incumbents’ institutional power within The issue of EU heterogeneity is the EU. The result is that, without an not new. In their contribution to the alternative multilateral framework for ‘Monitoring European Integration’ integration, these weak countries are left series, Dewatripont et al (1995) in a limbo. This is detrimental to their discussed exactly this problem. development and their stability. Some Similarly, the European Commission’s might even turn their backs on the EU March 2017 white paper on the future and look for alternative alliances. The 1. See: https://ec.europa.eu/ of Europe1 offered different scenarios, traditional answer to such challenges has commission/white-pa- motivated by the inability to establish been two-fold: multi-speed integration per-future-europe-reflec- consensus. But we emphasise the and majority rule. tions-and-scenarios-eu27_ en. urgency of the issue and how, in 3 POLICY BRIEF ONE SIZE DOES NOT FIT ALL: EUROPEAN INTEGRATION BY DIFFERENTIATION 2.1 MULTI-SPEED INTEGRATION 27 members and half a dozen would-be First, it has been to stay the course but members converge on the same goal is buy time: to continue to call for an ever at odds with the large and increasing closer and ever wider union, in which all divergence of political pathways. The members eventually transfer sovereignty set of overlapping policy preferences to a federal level, while envisaging long has shrunk, followed inevitably by transition periods with the possibility for stasis and ineffectiveness. member states and applicants to proceed at different speeds, depending on their 2.2 MAJORITY RULE preferences and readiness. This brings us to the second answer to The strategy followed for currency the challenge of diversity. Historically, unification epitomises this multi-speed a way to deal with the stasis resulting approach – while also illustrating that from narrow overlapping policy pref- it has reached its limits. Twenty years erences in the areas where the EU has after it was launched in 1999, two of the been bestowed with policy competence then-15 EU members are still not part has been voting by majority in the of the euro (excluding the UK). Clearly, Council. This has been, for example, this reflects some loosening of the the basis for the common trade policy indivisibility principle on the part of (a field in which diversity was strong) the EU. Although all member countries and for the spectacular success of the were nominally committed to joining internal market. Those outvoted would the euro, some (Denmark and the UK) accept the majority decision; but the benefitted from a formal derogation. winners also knew that they could be And as membership was based on outvoted in a coming decision. objective criteria some (Sweden) were For decades, this approach has able to abstain from participating in worked well for the mainly economic the common currency by not fulfilling issues of market integration. There was one requirement. Some members have a strong enough consensus on what the also obtained opt-outs from justice fundamental goal was for all to abide cooperation and other areas. by the decisions taken. But we are now Such management by exception is forced to deal with policy areas and not sufficient anymore, because the priorities far removed from the mere European Union has become much economic sphere. Many of the present more diverse than it was in 1999. policy challenges are in areas that Enlargement has contributed to this touch on questions of constitutional evolution. Moreover, as security has rules and prerogatives, national become more relevant, rifts have sovereignty or national identity. This emerged because member states makes it nearly impossible to find do not necessarily have the same solutions among 27 member countries perceptions of threats, do not devote all resenting being outvoted or left the same resources to defence and out. Moreover, regular democratic security, and do not view the use of procedures tend to be substituted by military force the same way. Finally, intergovernmental negotiations. migration from third countries and the different political approaches to 2.3 INCREASING INEFFECTIVENESS address the asylum and refugee issue The limits to the traditional ways of have further exposed the depth of overcoming obstacles are apparent in differences. four major fields in which the EU has Such diversity has contributed to been confronted by the challenge of a growing mistrust between member heterogeneity: asylum, the euro, for- states and in the European institutions. eign and security policy, and external This in turn has made the goal of an economic relations: ever-closer, federal union look more distant than ever.