The Case for Disaggregating the European Union
It is time to stop thinking of the body as one union. It contains multitudes—and will work far better if everyone recognizes that fact.
This fall, it took the European Union almost two months to impose sanctions against Aleksandr Lukashenko’s regime in Belarus after a clearly rigged presidential election and the government’s heavy-handed crackdown of mass protests. Although the EU was quick to refuse to recognize the results when they were released in August, stated that Lukashenko’s new presidential mandate lacked “any democratic legitimacy,” and called for “an inclusive national dialogue and responding positively to the demands of the Belarusian people for new democratic elections.” Cyprus blocked concrete action for weeks, as it used its veto as a bargaining chip in its own dispute with Turkey.
Then, in September, European Commission President Ursula von der Leyen announced with great fanfare that the EU was stepping up its efforts to combat climate change. As part of that plan, by 2030 the bloc would seek to reduce its carbon emissions 55 percent below 1990 levels. It would also aim to spend over half a trillion euros over the next seven years on climate-related efforts. Again, not everybody was on board. Poland, which relies heavily on coal and lignite (a cousin of coal), has openly defied the ambitious emissions goals. Meanwhile, across Central and Eastern Europe new natural gas infrastructure, including the infamous Nord Stream 2 pipeline and several liquified natural gas terminals, is springing up. While cleaner than coal, an addiction to natural gas would run counter to von der Leyen’s plans.
Both situations raise the question of whether the EU is the right venue to address issues including European geopolitics, climate change, and others. In theory, the answer is a resounding yes. But reality is more complicated.
True, dealing with climate change requires a high degree of international coordination in order to prevent carbon leakage from countries that have committed themselves to reducing their carbon footprint to jurisdictions that have taken a lax approach. And no European country, not even Germany or France, can sit as an equal with the world’s great powers. But the EU collective, with a population of 450 million, can. Meanwhile, actions like cutting Lukashenko’s elite off from the EU’s entire financial and real estate market would be more consequential than sanctions by individual countries.
Yet, in both cases, the EU lacks the policy toolbox to act effectively. This mismatch was long supposed to be remedied by the bloc’s gradual evolution toward an ever closer union. According to the logic advocated by many of the EU’s founding fathers, successive policy decisions and crises would lead to the gradual completion of the EU’s institutional architecture. The euro, for example, would make genuine fiscal union inevitable. Schengen would lead sooner or later to a common visa and asylum policy.
But the political culture of “total optimism,” as the Italian political scientist Giandomenico Majone called it, is unsustainable. Over the past decade, marked by a multiplicity of crises threatening the very existence of the European project, the bloc responded with improvised make-do fixes, agreed by national leaders outside the scope of European treaties. When faced with the prospect of a chaotic unraveling of the eurozone, in the aftermath of the 2008 financial crisis, only then did European leaders agree, reluctantly, on the creation of a rescue fund for countries in financial distress. And only when the wave of Syrian asylum-seekers risked overwhelming the Schengen Area did German Chancellor Angela Merkel decide to strike a bargain with Turkey’s Recep Tayyip Erdogan to halt the migratory flows.
Oftentimes, both acute and chronic problems—such as rule of law in Poland and Hungary, the China challenge, and the turmoil in Syria—linger unaddressed. The reason is twofold. First, the not-quite-federal institutional setup of the EU requires states to meet a high threshold of agreement, often unanimity, on consequential decisions, especially to changes to its treaties. Second, EU member states tend to have widely different views on how various policy challenges ought to be resolved and also about the future of the European project, including the desirable depth of political integration, future enlargements, and the role and size of European institutions.
The underlying assumption of the “ever closer union” is that, for all their differences, all EU members are moving toward the same destination. But that is not true. Poles, Czechs, and Swedes may never adopt the euro, in spite of their formal commitment to eventually do so. Climate goals set by Brussels might go ignored by national policymakers, just as the ambitious economic goals articulated in the Lisbon Strategy and Europe 2020 once were. And Hungarian Prime Minister Viktor Orban-style populism might not be a one-off aberration but a permanent state of affairs in places such as Poland and Hungary.
Perhaps such frictions could be overcome if the threshold of agreement required for action in the European Council were lowered so that decisions were made by qualified majorities, not by unanimity. After Brexit, however, even the most ardent Eurofederalists should think twice before giving member states the prospect of being systematically outvoted.
Fortunately, there is another path. Prior to the Maastricht Treaty, the European project was commonly referred to as the “European Communities.” There was the European Coal and Steel Community, the European Atomic Energy Community, and the European Economic Community—all governed by the same set of Brussels-based institutions. If, 30 years in, the bundling of these groups into the EU has not produced greater unity, perhaps it is time to start thinking about the EU in pluralistic terms again. It may not be one monolithic entity but a multiplicity of only partially geographically overlapping projects of economic and political integration.
The idea of unbundling is not new—Majone articulated it in a book analyzing the EU’s travails during the financial crisis—but the case for it has grown stronger over the past decade as the EU has relied more and more on intergovernmental responses to events in Europe and abroad.
The idea is by no means radical. The EU has long featured a single market, in which several nonmembers take part. There is also the Schengen Agreement and the currency union, which both include subsets of EU members and some nonmembers. While the EU strives to make its lowest common denominator attempts at common security and foreign policies viable, member states, large and small, often act on their own. Explicit and implicit carve-outs and special accommodations exist in many other areas, including the Irish protocol on the Lisbon Treaty, Denmark’s opt-outs from the Maastricht Treaty, and Poland’s opt-out from the Charter of Fundamental Rights.
Such special treatment does not have to be a threat to European unity. If used well, it can be a tool keeping the European edifice together while different blocs of countries deepen their cooperation in various policy areas. When Cyprus refused to sanction Lukashenko, the remaining 26 member states should have proceeded on their own. True, doing so would raise legal questions, since sanctioned entities could still reach the EU’s financial and real estate markets via Cyprus. But that is not an unsurmountable problem given the scrutiny that the union has devoted to such questions in its anti-money laundering directives. If a subset of EU members are truly serious about addressing climate change, they should not be held back by naysayers. And if most but not all eurozone members want to pool their public debt into a common debt instrument, why shouldn’t they?
To become a global foreign and security policy player, Brussels has launched a number of formal, institutionalized initiatives, most prominently the Permanent Structured Cooperation and the European Defense Fund. Yet, in order for such efforts to succeed, it will be critical for the United Kingdom to be heavily involved, in spite of the British decision to formally leave the EU. The U.K. might no longer be an EU member state, but it is one of the few remaining military powers in Europe.
Embracing the reality that the European project is a plurality of initiatives that run in parallel and involve different sets of actors would inevitably de-emphasize the role of common European institutions, such as its parliament and the commission, and put member states firmly in the driver’s seat. But that has already started happening over the past decade.
There are practical limits to the EU’s unbundling, which have to do with the problems of free-riding and adverse selection, where those countries most interested in remaining in the union are the same who require the most from it, whether in investment, fiscal transfers, security, or otherwise. If most but not all of the EU’s members embrace ambitious climate goals, there may indeed be carbon leakage to countries such as Poland—and available tax remedies might well be inadequate. If only a subset of eurozone countries moves to build the fiscal union needed to make the currency union sustainable over the long term, other member states will benefit from the added degree of financial stability without bearing any of the costs.
Yet the world is necessarily an imperfect place. The frictions entailed by the EU’s bow to its pluralistic, multifaceted nature should not be compared against an optimal mix of policies and institutions in an ideal European federation but against the union’s current, highly imperfect reality—in which desirable initiatives are constantly held back and derailed.
An unbundling of the EU would be a simple acknowledgment of reality today. Its alternative, namely obstinate insistence on European unity and one-size-fits-all solutions, will not lead to an ever closer union. Instead, it is the surest path to the bloc’s paralysis and ultimate irrelevance.
Dalibor Rohac is a resident scholar at the American Enterprise Institute, where he studies European political and economic trends. He is also a research associate at the Wilfried Martens Centre for European Studies in Brussels and a fellow at Anglo-American University in Prague. Twitter: @DaliborRohac