The Crisis of the European Union

Challenges, Analyses, Solutions

Andreas Grimmel

• Publisher: Taylor & Francis
• Year: 2017
• Print ISBN: 9781138215641
• eBook ISBN: 9781315443669
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Politics
• Index: Politics & International Relations

The European integration project currently faces profound political, economic, legal, and societal challenges. These challenges seem increasingly to overburden the European Union as well as the cohesion among the Member States, and therefore pose a serious threat to the integration project. The EU faces a major task in coping with this situation and it is one that calls for new approaches and ideas

This book addresses the major challenges confronting the EU, analyses the consequences for the integration project, and develops fresh perspectives on the EU's future prospects for coping with the most debated, current and upcoming issues, such as the rise of Euroscepticism or the contested idea of an 'ever-closer union'. Renowned experts in European Studies from the fields of political science, law, economics and sociology provide an interdisciplinary perspective on the different dimensions of the EU's crisis-laden situation and question whether the EU's existing problem-solving mechanisms and methods are sufficient to address the imminent tasks.

This text will be of key interest to scholars and students of EU Politics, European Politics, European Governance, and more broadly European law, history and the wider social sciences.

Part I

Perspectives on a troubled project

1 Understanding European Union governance

Political challenges of the integration project

Desmond Dinan

Introduction

The early post-World War II period in Western Europe was a time of intensive constitution building. In the centre of Europe, Germany was destroyed, defeated and occupied by the victorious Allied Powers. As the Iron Curtain descended and the Cold War set in, the Western Allies consolidated their occupation zones into what became the Federal Republic of Germany (West Germany), a new, liberal democratic state. Before that, liberated France reconstituted itself as the Fourth Republic, a parliamentary system drawing upon elements of previous Republics and including some novel constitutional features. The collapse of the Fourth Republic in 1958, in the face of a grave political crisis, gave rise to the Fifth Republic, a mixed parliamentary-presidential regime, which lasts to the present day.

Perhaps the most intellectually interesting and innovative political system to emerge in the post-war period, however, was not at the national level, but at the supranational level: the European Community (EC), forerunner of the European Union (EU). In fact there were three communities: the European Coal and Steel Community (ECSC), the European Atomic Energy Community (Euratom), and the European Economic Community (EEC). As their names suggest, the ECSC and Euratom addressed particular sectoral or policy problems. The EEC was much broader in scope, covering a range of socioeconomic issues. All three came into existence because the six founding Member States (France, Germany, Italy, Belgium, The Netherlands and Luxembourg) decided that they could best meet an array of challenges – economically based, politically sensitive and touching on national security – not through traditional bilateral and multilateral means but by establishing new, supranational organizations.

The obstacles facing the politicians and officials who designed the EC (as the communities were collectively known) were daunting. The idea of supranational governance was to transfer authority (competence) for decisions in key policy areas from the national to the European level. Doing so was highly controversial and politically contested in most of the prospective Member States. No international organization provided an adequate precedent. In order for the negotiations to succeed, for the ensuing treaties to win national parliamentary approval, and for the resulting entities to enjoy continuing political support, the new communities would have to be more than merely fit for purpose. They would require an institutional design that balanced the desire of national governments to retain as much control as possible with the need for the new supranational actors and institutions to have as much autonomy as possible. While reconciling national influence and supranational autonomy within its governance system, the EC would have to meet basic democratic standards. In order to succeed, it would also need to function efficiently.

Over time, the EC has developed into the EU, and Europe’s political, economic and security landscape has changed considerably. The Cold War is long over; but Europe is far from secure. Today’s threats include cyber attacks, Islamic extremism, instability in North Africa and the Middle East; and Russian revanchism. Economically, bits and bytes have replaced coal and steel as engines of economic growth; new technologies and production processes are constantly emerging; and globalization is economically ascendant but politically painful. Europe today is facing the fallout from the global financial crisis and the Eurozone crisis: persistent austerity; sluggish economic growth; and stubbornly high unemployment. Europe’s security risks and economic uncertainty are exacting a considerable social and political cost. Established political parties are in decline; protest parties are on the rise; populism and demagoguery are ubiquitous; and trust in democratic institutions is low. The EU is hardly immune from these developments: Euroscepticism – rejection of the EU or of key EU policies – is rampant.

This chapter traces the political challenges of the integration project from the post-war period to the present. It describes how the EU’s institutional architecture has evolved over time, and how a system of multilevel governance has gradually emerged. It also examines the ways in which the EU has tried to strengthen democracy and improve efficiency in light of its deepening policy scope and expanding membership. The chapter concludes with a discussion of the political challenges facing the EU at a time of deep crisis and plummeting public support.

The trajectory of European integration

The EC/EU has developed episodically along three distinct but closely related dimensions or axes. One is membership. What began as a Community of six countries became a Union of 28 countries by 2013 (van Middelaar 2013). For the first time in its history, the EU is about to lose a Member State, thanks to the result of the June 2016 United Kingdom (UK) referendum on EU membership. Another dimension along which the EU has developed is policy scope. What began as a customs union with a common commercial (trade) policy, alongside an agricultural policy and a rudimentary global development policy, now covers – to some extent or other – almost every aspect of public policy, ranging from education to the environment and from migration to monetary union. A third dimension of the EU’s development is institutional. Although the institutional design of the EC/EU has remained remarkably stable over time, the roles and responsibilities of the institutions themselves have changed greatly. For instance, decision-making by qualified majority voting is now the norm in the Council of national government ministers, which co-legislates with the directly elected Parliament.

Major advances in EU membership, policy scope and institutional arrangements have revolved in recent years around landmark treaty reforms, such as the Single European Act (1986), which coincided with the accession of Portugal and Spain, and the plethora of treaty reforms stretching from Maastricht (1992) to Lisbon (2007), which took place at a time of impending and then actual EU enlargement into Central and Eastern Europe. The main driver of institutional change, at a time of rapidly expanding membership and policy scope, has been a desire to promote ‘good governance’, notably by advancing the complementary though seemingly incompatible aims of democracy and efficiency.

The early years

The architects of the Rome Treaty of 1957 designed a Community of limited membership and policy scope (Dinan 2014). Building on the already-existing Coal and Steel Community, they designated a Commission having executive authority and the exclusive right to initiate legislation; a Council of Ministers charged with legislative decision-making; a largely symbolic Assembly (forerunner of the Parliament) consisting of members delegated from national parliaments; and a Court. In the negotiations for the Rome Treaty and the subsequent ratification debates among the founding Member States there was little discussion of the quality or nature of democracy at the emerging European level of governance. Members of the Council were democratically elected at the national level; the Assembly gave the appearance of representative democracy at the European level; and the Commission was intended to be apolitical and technocratic. European publics showed little interest in the EEC’s institutional arrangements.

The EC did not move far along the three dimensions of its eventual development in the early years. Enlargement came onto the agenda soon after the launch of the EEC, when the UK reversed its hitherto aloof approach towards European integration and applied to join the new Community. Denmark, Ireland and Norway followed suit, though Norway later decided not to pursue membership. But it was not until 1973 that Denmark, Ireland and the UK eventually joined. In the meantime, the EC had consolidated its policy scope, with the gradual implementation throughout the 1960s of the customs union, the common commercial policy, the Common Agricultural Policy and a rudimentary global development policy. The EC also acquired its own financial resources. Specifically linked to enlargement, the EC introduced a regional development policy aimed at assisting poorer countries such as Ireland, or poorer regions in countries such as Italy and the UK.

By far the most controversial development in the EC’s early years was institutional. Under the terms of the founding treaty, decision-making in the Council was to have shifted largely from unanimity to qualified majority voting by January 1966. As that date approached, French President Charles de Gaulle instigated a row with the other Member States and withdrew French representation from the Council, promising to return only if the others agreed to maintain the status quo of unanimity in Council decision-making. At issue was a fundamental principle of supranationalism: the willingness of Member States to give up the national veto and accept the possibility of being outvoted. De Gaulle, an ardent intergovernmentalist, adamantly opposed supranational principles and practices. Nevertheless, rather than risk the collapse of the nascent Community, which was economically advantageous to France, de Gaulle concluded the Luxembourg Compromise with the other Member States, whereby a government could prevent a vote from being taken in the Council if a “very important” national interest was at stake (Ludlow 2006; Palayret et al. 2006).

The UK, politically inclined towards intergovernmentalism rather than supranationalism, took solace in the existence of the Luxembourg Compromise. Indeed, without formally having to invoke a very important national interest, France, the UK, and other Member States were able to hold up decision-making in the Council in the 1970s and early 1980s – a time of economic nationalism and retrenchment in the face of global shocks and recessions – simply by alluding to the Luxembourg Compromise without necessarily invoking it. Efforts to strengthen monetary policy cooperation – even to the point of launching Economic and Monetary Union (EMU) – in response to widespread currency fluctuations following the breakdown of the Bretton Woods system in the early 1970s also came to naught, not because of the prevalence of unanimity in Council decision-making but because of the unwillingness of post-de Gaulle France to share sovereignty in such a sensitive policy field. Nevertheless, Member States agreed in 1979 to establish the European Monetary System as a means of stabilizing exchange rates and curbing inflation among countries participating in the system’s Exchange Rate Mechanism (the UK was the conspicuous non-participant) (James 2012; Mourlon-Droul 2012).

The inability to make major advances in market integration, due to Member State recalcitrance at a time of adverse economic circumstances leading to widespread use (or abuse) of the Luxembourg Compromise, stymied the development of European integration in the late 1970s and early 1980s. Given public acquiescence in this state of affairs, and economic actors’ apparent preference for state protection and support rather than transnational integration and openness, the EC’s languor did not pose much of a political challenge. That changed as governments, often responding to the shifting preferences of national economic actors, began to appreciate that deeper integration could provide a solution to Western Europe’s malaise. Meeting in the European Council, a body launched in the mid-1970s to provide political direction for the apparently rudderless EC, national leaders began calling in the early 1980s for a political commitment to establishing a single European market, in which not only goods but also services and capital could move freely. Free movement of people – the fourth freedom – was more sensitive for national governments to commit themselves to, but would eventually become part of the single market programme.

Although it was national governments – specifically national leaders meeting in the European Council – who generated the political momentum for the single market programme, it was the Commission that provided the blueprint and legislative action plan in the form of a 1985 White Paper (policy document) (Cockfield 1994). Parliament played a part as well in building political support for deeper European integration. Earlier, as the source of EC funding switched from national contributions to own resources, national governments had given Parliament considerable responsibility for the budget. In view of its financial role, Parliament and sympathetic national governments pressed for the introduction of direct election of Members of the European Parliament, as called for in the Rome Treaty. After much political wrangling among Member States, the first direct elections took place in 1979 for a five-year parliamentary mandate.

The advent of direct elections was a major development in EC governance and a shot in the arm for European-level representative democracy (Corbett et al. 2016). As some of the less supranationality-inclined Member States feared, the EP used the impetus of the first direct elections to bolster political support for deeper European integration, especially in the form of the putative single market. The combination of transnational business interests, national government support, Commission involvement and EP pressure generated a seemingly unstoppable momentum for a big leap forward in the development of European integration (Moravcsik 1991; Sandholz and Zysman 1989).

The contemporaneous emergence once again of enlargement onto the EC’s agenda added another dimension to the deepening of European integration. Following the restoration of democracy in the mid-1970s, Greece, Portugal and Spain applied to join the EC. Greece joined in 1981; and Portugal and Spain joined in 1986 during the height of the debate on the single market programme. The accession of these three countries was a morale boost for the EC, but brought two related political challenges. One was institutional, the other policy-specific. Both pertained to the single market programme.

In order to ensure enactment of the legislation necessary to bring about the single market, national governments agreed on the desirability of a treaty change committing them to use qualified majority voting for most single market proposals. This was the genesis of the Single European Act (SEA), the first far-reaching treaty reform in EC history. The new Member States would not have sufficient votes between them to form a blocking minority, but they could form the core of a blocking minatory that would include one or two other states. The reason why they may be inclined to block single market legislation is that the benefits of the single market were expected to accrue largely to the more economically advanced, northern Member States. In return for supporting the single market, the poorer, Mediterranean Member States wanted a commitment in the Single European Act to cohesion policy, which would address the economic disparities among Member States and regions through the allocation of generous development assistance to poorer parts of the EC.

Since the launch of the EEC in 1958, and especially since the advent of the European Regional Development Fund following the first enlargement in 1973, all Member States were committed, at least in principle, to cohesion policy. But the inclusion of cohesion in the Single European Act (SEA), and subsequent agreements among national governments to provide generous funding for regional economic development, represented major advances in the policy scope of European integration. A twin commitment to deeper market integration and regional development assistance formed the centrepiece of the Single European Act. In addition, Member States agreed in the SEA to strengthen the hitherto extremely limited legislative authority of the Parliament, on the grounds that greater recourse to European-level legislation, which would also be more consequential for European citizens, warranted the involvement of the directly elected body.

Implementation of the single market programme in the late 1980s and early 1990s represented the high point of European integration during the post-war period. Following the serious economic setbacks in the 1970s, the EC had apparently met the political challenges of integration by absorbing new members and launching major new policy initiatives. Although never officially renounced, the Luxembourg Compromise seemed by the early 1990s to be a relic of a more nationalistic and divisive past. Institutional arrangements in the EC had matured to include a functioning system of qualified majority voting and a directly elected Parliament. Further reflecting the EC’s political development, public opinion seemed finally to have woken up to the significance of European integration. In addition, public opinion at the time of the single market programme was largely enthusiastic about the EC. What political scientists called the “permissive consensus” – the willingness of European publics to acquiesce in European integration – was at its zenith (Hooghe and Marks 2009).

Overreach

Apparent public enthusiasm for European integration in the wake of the SEA soon turned to ambivalence and growing scepticism. The reason for this was the further acceleration of European integration in the 1990s, as Member States and the Commission built on the success of the single market programme and reacted to the sudden end of the Cold War by agreeing to far-reaching treaty changes in Maastricht in December 1991. Chief among these was a commitment to introduce monetary union, with a single currency, by 1999 at the latest (Dyson and Featherstone 2000; McNamara 1998). Also in the 1990s, ten Central and Eastern European countries, finally free of Soviet domination, applied to join the EU. The prospect of enlargement on such a scale, involving countries whose economic development, administrative capacity and democratic foundations were far weaker than the EU norm, was unsettling for the existing Member States, European institutions and public opinion alike.

The first intimation of public unrest with the development of European integration in the post-SEA period came during ratification of the Maastricht Treaty. Much to the alarm of national and Community leaders, the proposed treaty faced unexpected opposition not only in the traditionally Eurosceptical UK, but also in France, a founding Member State and customarily a stalwart of the European project. The treaty passed by the narrowest of margins in a referendum in France in September 1992, having been convincingly defeated in a referendum in Denmark the previous June. EC leaders managed to overcome the Danish setback by offering Denmark opt-outs from the treaty, thereby facilitating a second referendum, in which a majority voted for ratification. The Danish and French dramas alerted leaders of the EU, which came into being in November 1993 with the implementation of the Maastricht Treaty, to growing public unease about the integration project (Laursen 1994).

Since the early 1990s, public scepticism, increasingly including outright opposition, has posed the greatest political challenge to the EU by calling into question the legitimacy of the European project. Yet the achievements of the late 1990s and early 2000s belied the extent and obscured the risks of Euroscepticism. To all outward appearances the EU prospered. The launch of monetary union and the single currency in 1999, initially with 11 Member States, was an extraordinary accomplishment. The external value of the...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• List of figures
• List of tables
• List of contributors
• Preface
• Introduction: the many challenges of the European Union
• Part I Perspectives on a troubled project
• Part II The many faces of the European Crisis
• Part III How to improve the EU’s problem-solving capacities
• Epilogue: there’s life in the old dog yet! Challenges as catalyst for European integration
• Bibliography
• Index