How United Is the European Union?

How United Is the European Union?

photo: Theophilos Papadopoulos

The European Union is not very united today. The refugee crisis that has brought about restrictions on the movement of people among members is the immediate threat to unity. The Greek debt crisis and other issues related to the use of the Euro are a second fundamental economic threat to unity. The forthcoming UK referendum on whether to leave the EU is another serious problem, although some of the most contentious issues facing the UK are related to intra-EU migration, and the Euro. These are all mainly economic problems, but an additional issue is how to respond to the aggressive policies of Mr. Putin’s Russia. Policies toward Russia are primarily about national security, but the common EU policies used so far have been restrictions on trade, banking and finance. Disagreement among members about these issues places the EU at a crossroads. Will the EU members accept greater unity or will they move toward greater flexibility and accept greater policy differences?

Official View of Union

The official view is that there is one Europe with a common set of goals, but members are moving toward those goals at different speeds. The common analogy is that trains are moving toward the same destination at different speeds. In the case of migration, many members have imposed restrictions that violate the Schengen agreement, but the deviations are interpreted as a temporary response to an extreme and extraordinary crisis that is not expected to recur. The rest of the official view is that there must be a common European response to the refugee crisis, and the leaders in Brussels will assign immigrant quotas to members to ensure that the burden is distributed equitably. Support for this view is strongest from the leaders of Germany and Sweden, although they are losing support from their countrymen. Sweden’s Prime Minister, Stefan Lofven stated that “My Europe does not build walls”, but months later Sweden imposed checks at the Danish border. The anti-immigrant Swedish Democratic Party has quickly become one of the largest political parties in Sweden (Reuters).

Alternative View of State of the Union

An alternative interpretation is that there is not a single unified Europe today. There is a consensus on some goals, such as the benefits from participating in a single market without trade barriers. On other goals, there is disagreement, as on labor migration in the case of the United Kingdom. In fact, many countries from Sweden in the north to Greece in the south have restrictions in place today that violate agreements. The source of the migration crisis does not look temporary. Some migrants who claim refugee status are fleeing from the wars in Syria and Iraq. However, a large percentage of the migrants (half or more?) are economic migrants fleeing from Africa and the Middle East (Caldwell). These economic migrants are part of a longer-term problem facing Europe. They originate primarily in Africa and the Middle East, which are regions with some of the lowest incomes and highest birthrates in the world. Many of their governments are failed states. The supply of migrants will not cease even if the violence in Syria and Iraq diminishes. There is a well-developed network that transports migrants for a fee, and the demand for these services comes from the large difference in incomes between the source countries and the receiving countries in the EU. Some EU leaders have announced that they will accept refugees, but not economic migrants. This point was stated explicitly last week by Donald Tusk, President of the European Council. However, these categories are not precisely defined, and it is not easy to objectively assign migrants to one of these categories.

Member Differences on Migration

On the migration issue, there are differences among EU governments. The German and Swedish governments have resisted any restrictions on migration, and they have supported imposing migrant quotas on member states. Other governments, especially in the Visegrad group of countries, have opposed quotas assigned from Brussels. The Slovak Prime Minister, Robert Fico, has said that Slovakia would go to court to challenge quotas for distributing asylum-seekers .Opposition to additional migration is strong in many countries, including Germany and Sweden and anti-immigration parties are gaining support across the EU. A common criticism is that elite leaders in Brussels and in national capitals are increasingly ignoring the concerns of their constituents. Actions by one EU member do affect other members. A fundamental criticism of unlimited migration is that it works satisfactorily during normal times, but it does not function well under crisis conditions. In particular, even well-developed systems of refugee integration, such as the one in Sweden, become dysfunctional if overwhelmed.

Brexit and Migration

The right of member countries to restrict migration from other members is a key issue for UK voters in their forthcoming referendum on whether to leave the EU. Prime Minister Cameron requested the right to withhold local benefits to migrants (“emergency brake”) for up to four years after their arrival, and he received approval from Donald Tusk and other EU officials. However, all member states and UK voters will have to approve the request. The alternative to the UK remaining in the EU under current conditions depends on how other members would react to Brexit. For example, Belgian Prime Minister, Charles Michel” described the possibility of the UK negotiating a new trade agreement with the EU as “dreaming in technicolor” (Wall Street Journal 2016c).

Source of Differences Among Members

Why are there strong differences about migration policy across EU members? At its inception in 1957, incomes of the six original members were rather similar. Italy was the poorest member, but income differences did not result in a strong incentive to migrate to other members. As the EU grew to 28 members, it added mostly poorer countries, and income gaps widened. Today differences in incomes per capita between richer countries, such as Germany/Netherlands and poorer countries such as Bulgaria/Romania are approximately as large as those between the US and Mexico. Furthermore, incomes in most of the official candidate countries, such as Albania are even lower, and their addition would result in a larger gap than the one between the US and Mexico With large differences in the standard of living and average wages, there are reasons to doubt that common policies would be best for all members. There are also fundamental differences in perspectives among member countries. Leaders in countries, such as Germany and Sweden view the refugee crisis mainly from a humanitarian point of view. Leaders in at least some of the Central and Eastern European countries look at it from the national security perspective.

Opt-Outs to Address Differences

The official response to the criticism that “one size does not fit all” is that differences across countries are taken into account, in fact. Differences among countries are sometimes accommodated by allowing a member to “opt-out” of a particular common policy. The UK and Denmark have opted out of using the Euro. In other cases, EU officials will waive a certain policy for a particular country for a specific time period. In other cases, members may be allowed to violate certain rules for an extended period with impunity. A conspicuous example is the Maastricht rule limiting the size of budget deficits and government debt ratios. Currently most members are violating Schengen rules by restricting migration, although temporary deviations are allowed in emergencies. Critics of this kind of flexibility describe it as ad hoc, arbitrary, and unpredictable. It replaces the consistent rule of law with the discretion of EU officials. It reinforces the criticism that elites in Brussels are reducing the sovereignty of the masses. Of course, part of the problem of lack of control and enforcement is that the EU is not a country. Some members want to move toward greater central control that nation states have, but other members do not. In the words of Hungary’s Viktor Orban, “We are echoing those who envision the EU as an alliance of free nations, not as a United States of Europe” (Wall Street Journal 2016b). Central control versus national sovereignty is a crucial issue in the UK referendum, and it is also an issue in all the member states.

Is Closer Integration the Road Toward a Better Functioning Union?

In a situation when some of the rules that had earlier been agreed to are being persistently violated by many member states, a key task is to return to being a rules-based union and regain trust among members. Until this can be achieved, it does not appear prudent to push for ever-closer integration. The EU appears to be consistently overtaken by events rather than proactively shaping them. Also it does not appear fruitful at this point to speculate about such issues as a common foreign policy, common defense policy, or common representation at the International Monetary Fund. Even if a temporary consensus could be reached on these kinds of policies, they are as likely to suffer from persistent violations or be subject opt-outs as the current set of rules. That would further undermine trust in the Union and render it less functional.

Consensus on Benefits From Single Market

There is a strong consensus on one issue. Access to the single market within the EU is a valuable right. Non-members, such as Switzerland and Norway, pay substantial amounts to the EU for access to the single market. (Economist). If the UK leaves the EU, both the UK and the remaining EU members will suffer economic losses. In addition, this might trigger exit referenda in some other countries, such as Hungary. How can the existing single market be preserved, while taking into account member opposition to unlimited migration? Allow member states to have their own national policies toward outside migrants, and allow all members to have clear but limited restrictions on internal migration. The UK’s request to delay local benefits to migrants for a specified period would be an example. There is ample precedent for countries gaining the benefits of free trade without also requiring free migration. The EU has free trade agreements with over 50 countries (Wall Street Journal 2016b), Some agreements include free migration (Switzerland and Norway), but most of the agreements (Mexico, for example) do not. The United States has many free trade agreements, including NAFTA, that do not include free migration.

Conclusion

The unity of the European Union is being tested by several events, especially the refugee crisis that conflicts with the rule of free migration within the EU and the forthcoming UK referendum. If the EU is too rigid about certain rules, they may lose the membership of the United Kingdom and weaken the allegiance of other members. Differences among members on migration could be accommodated by a more flexible arrangement that allowed countries to have their own rules on immigration from third countries and limited controls on internal migration. The alternative is to allow opt-outs or waivers, ignore massive violations of rules, and pretend that the crisis is temporary and will go away. If members systematically fail to comply with fundamental rules, they forego some of the benefits of a functioning union. The apparent union is not united.

Despite serious current challenges, the EU has been a hugely successful project, and there is a widespread consensus about the net benefits of the common market. These benefits are now under threat, and EU leaders should now focus on preserving and reinforcing these proven benefits rather than envisioning ever closer integration covering new areas.

References

BBC News. 2016. “Swedish Government Struggles over Migrant Crisis”. March 3.

Caldwell, Christopher. 2016. “The Migrants of Calais”. Weekly Standard, March 7.

Economist. 2016. “The Budget that Didn’t Bark”. February 13.

Wall Street Journal. 2016a. “EU Official Aims to Deter Migrants”. March 4.

Wall Street Journal. 2016b. “Europe Seeks to Restore Its Open Borders”. March 5.

Wall Street Journal. 2016c. “Belgian Leader Warns UK on Exit”. March 5.

 

 

 

 

2 Responses to "How United Is the European Union?"

  1. Ed Dolan
    EdDolan   March 17, 2016 at 8:26 pm

    Lots of food for thought here. For the moment, it looks like Orban is right, like it or not, the EU is and will for the foreseeable future remain a "alliance of free nations"–at least if some (Hungary? Poland?) don't opt out of the "free" part.

    Still, it is interesting to speculate–could it have been different? What if, say, the EU had remained with its core 6 members longer, and those had opted for closer measures of integration, including common fiscal policy, a federal form of government, etc., before it started adding members. The members would then have had a take-it-or leave it on sovereignty. How many would have joined?

    Are there parallels with the US? Weren't Vermont and Texas technically sovereign nations at the time the joined the union? And what about income disparities–what was the difference in income between, say, NY and NM when the latter joined the USA?

  2. ThomasGrennes   April 1, 2016 at 9:13 am

    Yes, I think an EU6 today would be a deeper union than the current EU28. There is a trade-off between breadth and depth of unions, especially when the newer members are quite different from incumbents. The newer members have taken strong opposition to decrees from Brussels about which migrants to accept and how many. I think as they have added members, there have been more opt-outs and waivers from rules. The UK opted out of the Euro and they did not join the Schengen Agreement.

    There are probably interesting parallels with the States. Some were territories for a long time. Also states' rights were a major issue, and the Civil War was a prominent manifestation.