Year XXXVII, Number 2, July 2024

Jean-François Drevet
Former civil servant in the European Commission, specialist in regional development issues

Chapter 2. When will the transition to the EU end?

By recalling, in the experiences of those three countries (United States, Australia, Switzerland), the similarities of their confederal models with that of the EU, we wanted to show to what extent the difficulties we experience today are not new, and what solutions were found for them. However, more than half a century after the signing of the Treaty of Rome, we have not yet seen the end of what was, in the United States and Switzerland, a period of transition. It does not appear in Europe anything similar to the pressure exerted in Philadelphia and Berne to shift the institutional system towards a federation, more or less strongly structured.

As we are unable to move forward with new treaties, could the Australian path to federalization without significant amendments to the Constitution be feasible? It would involve a tax revolution, currently thwarted by the rule of unanimity.

A number of converging signs have emerged in recent years, notably the “Next Generation EU”[i] recovery plan, which brings two major innovations: the possibility for the EU to borrow, and the implementation of new own resources to repay the debts. Thus, European spending could reach 4% of GDP, a credible critical mass, but still much lower than the American federal budget (17% of GDP). This progress is also sustainable since the repayment of the loans will take place between 2027 and 2054.

The illusions of sovereignty

In the monetary and financial domain, the effects of the 2008 crisis fueled doubts about the sustainability of the single currency. Despite the commendable efforts made by the European Central Bank (ECB), the management of the euro, the level of coordination between the 19 member countries has remained below what is necessary to guarantee citizens the security of their deposits and the relaunch of the economy.

Well before the war in Ukraine, it was possible to note the trend in the deterioration of the EU's security, which is the product of both the aggressive behavior in its neighborhood and its strategic recklessness. Since the end of the Cold War, never has Europe, which did not want to have enemies, been confronted with so many threats. If the instability of the Middle East and the eastern Mediterranean basin is nothing new, the spread of radical Islamism in Saharan and sub-Saharan Africa has placed several million km² out of control, letting armed groups proliferate. As for the efforts made to stabilize the Eastern Partnership countries (Belarus, Ukraine, Moldavia, Georgia, Armenia and Azerbaijan), they came up against the “nuisance capacity” of Russia, which Europe wanted to make her partner and which asserted itself instead as a hostile and aggressive power, even before its invasion of Ukraine.

The central question is that of the sharing of sovereignty between the States and the supranational level. It has been debated since the origins of European construction and has taken on a new dimension as the EU's field of action has expanded. It is more sensitive today because it touches the issue of national competences. In theory, many continue to defend a Westphalian conception of the unlimited sovereignty of States. In reality, each of them has already agreed to significant limitations, in order to find solutions to problems that they could not solve in isolation.

National authorities are quick to mobilize when they believe, rightly or wrongly, that they are threatened, because it is difficult to justify relinquishments of sovereignty, often denounced as capitulations by dissenting parties. In addition, it is electorally profitable to mobilize public opinion by claiming to defend the nation against encroachments from “foreigners”, particularly if it is the EU. On the other hand, the opposite political discourse, the calling to responsibility and more simply the reminding of certain realities is not an easy one.

It is true that even among the "small ones" who are now the most numerous countries in the EU, sovereignty remains a sensitive subject: those who have had it for a long time are very afraid of giving it up: the Danes voted against Maastricht and are keen to keep their currency, although it is in reality strongly linked to the euro. Those who had never had it before or have recently regained it are not the least susceptible: thus, Slovenia blocked the entire accession negotiation of its Croatian neighbor over an obscure matter of delimitation of its maritime space. The maintenance of the rule of unanimity, of one commissioner per Member State (while the latter is in principle completely independent of its country of origin) reflects these concerns.

Since the end of the Second World War, Europeans have lost most of their military sovereignty. If it was still possible to wage a few wars alone (Portugal in Africa, the United Kingdom in the Falklands), membership of NATO for some, or of the Warsaw Pact for others, was much more than an “alliance”. Today, no Member State could undertake a military expedition of any importance on its own, should it have the desire to do so. We saw this in the Sahel, where the French army called on its European and African partners for support.

With the creation of the single currency and the crises that followed, much stricter constraints than the devaluations of the past were imposed. Until now, they have been preferred to a return to national currencies. The most indebted countries, notably Greece, made the decisive choice to remain in the Eurozone, despite its strong constraints. In fact, euro zone governments now have only limited room for action to carry out their economic and budgetary policies and this is not about to change.

With the increase of migrations and conflicts on the periphery of Europe, the control of flows has also become beyond the reach of States. Maintaining security, the first duty of governments, depends on their capacity for cooperation.

“Small” states know that they actually enjoy only a reduced sovereignty. They have understood that it is the membership of the EU which gives them greater freedom of action. This has long been the opinion of Luxembourg and Belgium. Other countries like Ireland, Finland and Cyprus believe that the EU protects them against a neighbor that is too powerful or aggressive. And the rule of unanimity allows them “to punch over their weight” and even abuse their resulting veto power more and more often, as Poland and Hungary show.

As for the “big ones”, they still wallow in nostalgia for their past greatness. When you have a permanent seat in the United Nations Security Council (like France), a preponderant economic weight (like Germany) or a large population (Italy, Spain and Poland) you still have some of the attributes of power, which should not, however, create any illusion.

Should there still be any doubt, Brexit showed where the sovereignist ambitions lead. However, there was no shortage of warning signs: the sudden depreciation of the pound during the monetary crisis of 1992, the accentuation of dependence on the United States (the fact that it was voluntary does not reduce its importance). Although leaving the EU has not yet revealed all of its negative consequences, we can already clearly see that the British government's room for action has not been increased. The electoral slogan of “taking back control” is nothing more than a costly illusion. More than other events, Brexit is a full-scale test of “the cost of non-Europe”[ii].

The sleepwalkers

Several years of crisis in the Eurozone have shown the shortcomings of its governance, both at the level of each government taken individually and in their joint action within the framework of the Eurogroup, where it has proven impossible to make the European general interest prevail. From what the media report, everyone defends what they believe to be their national interest, and sometimes only that of their large financial corporations. It is thanks to its independence that the ECB was able to go beyond its prerogatives in dealing with the crisis. The result is welcome, but it is not necessarily democratic; the ECB is a technocratic structure, where the citizen is not represented.

At the level of diplomatic action, the cacophony is profound, because there is no common perception of the threat. This was particularly clear in the face of Russia, before the aggression against Ukraine opened the eyes of those in power. If the temptation of the former satellites of the USSR was to overestimate it, it was the opposite in the West, where they failed to realize, at least for some time, that the Kremlin was no longer a strategic partner, but an adversary. Isolated by its authoritarian drift, Viktor Orban's Hungary is still seeking special arrangements with Moscow.

From the point of view of the means, although military budgets are on the rise again, their overall effectiveness is reduced by the lack of coordination. The armies of the majority of European countries are designed to defend their national territory and not even all of them are able to do so: faced with the Russian or Turkish threat, it will not be those of the Baltic countries, Greece or the Cypriot national Guard who would be able to act effectively. As for operations to be carried out in more distant theaters (Sahel, the Middle East), they will need the special forces available only in France and the United Kingdom (but the latter has become a non-EU country), provided that these countries are really capable of providing them.

In terms of internal security, Europe suffers from a double deficiency, both in the analysis of risks and in the mobilization of the means necessary to deal with them; it lacks in both lucidity and capacity. Despite terrorist alerts, the EU Member States have long continued to act in isolation, although, faced with transnational threats, the diversity of European legal frameworks greatly reduces the effectiveness of their specialized services. As we saw in 2015, the “every man for himself” approach provided opportunities to terrorists.

Faced with these increasingly serious threats, national governments were caught off guard by sometimes predictable crises, and have only agreed on partial and short-sighted measures. This attitude was clearly highlighted by a report by the External Affairs Committee of the House of Lords, which compared them to the "sleepwalkers" who allowed the First World War to break out [iii]. Although the comparison only concerns their attitude towards the Ukrainian crisis, it could be extended to other security issues facing the EU.

Is the dilemma solved?

In order not to overcharge the governments, it should be pointed out that these weaknesses, which are not new, have only recently taken on a worrying dimension. Indeed, during the first half century of the European construction, the deficiencies had neither the same severity nor such damaging consequences.

At the time of the creation of the common market, the Bretton Woods monetary system provided the developed world with a solid and sufficiently flexible framework to make the inevitable adjustments. The circulation of capital and exchanges were highly regulated, and that was sufficient for the management of monetary transactions. It is the general floating of currencies, the free movement of capital, combined with the construction of the single market, which made the monetary union necessary. If a more solid management mechanism had been proposed, that union perhaps would have never seen the light, considering the strength of the opposition to it, particularly in Germany. But it is high time now to give it an organization commensurate with the risks involved.

By entrusting the care of its external security to NATO and indeed to the United States, Europe has subscribed a good “value for money” insurance, which has enabled it to limit its military spending for four decades, and to enjoy a reliable protection. As this is no longer the case today, an integrated diplomatic and military instrument has become necessary; its construction involves harsh revisions, that the largest member states have not yet decided to make.

With great recklessness, arms exporters continue to sell them to countries that can use them against Europe (Turkey, the Middle East). After the criticisms leveled by Donald Trump, questions were raised about the credibility of Article 5 of the NATO Treaty, and the value of the insurance policy taken out in Washington. Since then, the war in Ukraine has shown that the United States, by providing effective assistance to an invaded country, although not a member of NATO, remains the ultimate guarantor of the security of the West. After decades of neutralism, the turnaround of Sweden and Finland, fresh members of the Alliance, shows the extent of the turnaround.

Coordinated in principle by a senior official of the European Council, internal security problems are always the responsibility of each Member State, depending on the information it is able to obtain or exchange and on its own procedures. But since the end of the Cold War, the rise of transnational armed groups has created a quite different context. Denmark, which has been the subject of recurring threats due to its refusal to prosecute the authors of the “Mohammed caricatures”, is now realizing the disadvantages of its self-exclusion from the European policy of Freedom, Security, Justice. Not only did its refusal not increase its independence, but it decreased its security. Even Switzerland realized that its isolation was a source of weakness: no longer able to manage the flow of asylum seekers, particularly those who had been rejected by the EU, it found it more advantageous to enter the “Schengen space”.

Ed. Note: The article will continue (Part 3) in the next issue.

[i]  See the analysis by Catherine Vieilledent, The European Recovery Plan, a historic breakthrough, we cannot live for long below our means,[in French] in Futuribles n°441, March-April 2021, pp.85-94.

[ii]  The notion of  “the cost of non-Europe” dates back to the 1980s, when the Albert-Ball and Cecchini reports of 1983 and 1988 brought this idea into ordinary political usage. These reports have sought to estimate the significant potential economic benefits of achieving a single market, quantifying the disadvantages of segmenting national markets.

[iii]  Christopher Clark, “The Sleepwalkers: How Europe went to war in 1914”, Penguin, 2013