Rethinking Europe

A Copernican Revolution in Europe?

How European integration is regressing – and yet stabilizing.

Credit: Hadrian - Shutterstock.com

Takeaways


  • European nation states no longer seem to circulate around Europe, but increasingly again around themselves.
  • The EU is on the way to a community of convenience that better enforces the interests of its members in the world.
  • The hopes once associated with Europe as a community wanted primarily for peace, common values, common history and culture have receded.
  • The EU is becoming more decentralized. It cannot be ruled out that current members other than the UK quit.
  • The hope remains that, over time, the EU becomes more liberal, more pragmatic and more open to the world.

When the European Central Bank was set up, its first president, Wim Duisenberg, introduced each of his colleagues by country of origin.

But there was a twist to it. It had them hail not from their respective nation state, but from “Europe” instead, as if it were a country. Duisenberg wanted to make a point about collective responsibility and a commonness of vision.

This kind of team spirit now seems lost. Today, the German Finance Minister Olaf Scholz, a Social Democrat, says straightaway: “The German Minister of Finance is the German Minister of Finance,” even if he is in Brussels.

And his colleague from The Netherlands, Wopke Hoekstra, bluntly examines the benefits of whichever European policy proposal solely based on what they yield for his home country.

Back to “what’s in it for me, stupid!”

This is a Copernican revolution of sorts. European nation states no longer seem to circulate around Europe, but increasingly again around themselves.

Consequently, the hopes once associated with Europe as a community wanted primarily for peace, common values, common history and culture have receded.

With that, the EU is on the way to a community of convenience that better enforces the interests of its members in the world.

The new rationale is as simple as it is entirely self-serving: If the EU serves one’s own people, a country’s government is for Europe — if that’s not the case, it is against.

Great Britain’s Brexit comes down to the belief that the country will better be able to serve its interests on its own, rather than as part of the EU flotilla. Such crude nationalism is also flourishing elsewhere in Europe, such as in Hungary and in Poland.

Anti-EU “groupism”

This splittist mindset is also evident in other areas. Consider the various groups of EU members that have joined forces to form regional groups in order to give their national interests greater assertiveness.

The “Hanseatic League,” headed by the Netherlands and including Ireland, Finland, the Baltics, Sweden and Denmark, was formed in opposition to Franco-German plans to reform the eurozone.

The “Visegrád Four” group has been around for some time now. It includes Poland, Hungary, the Czech Republic and Slovakia. Their main concern centers on defense and refugee policy.

Some also consider Germany and France, the proverbial (or erstwhile?) “motor” of European integration, as one such group. However, Berlin and Paris vehemently deny any such “groupism.”

Common interests also exist among the southern European countries. However, a formal group has not originated from this, at least not yet.

Differentiation of interests = EU maturing?

In fact, it is no surprise that, in a community consisting of 27 countries with different interests, groups are forming. There have always been coalitions. What’s new is that they now solidify into blocks.

There are reasons for this. One is that the “big two,” Germany and France, relying on their weight, apparently take too little consideration of the smaller countries.

This has been a danger that existed in the European community from the beginning. It is why then-German Chancellor Kohl always placed great emphasis on gaining the approval of the smaller EU members.

The euro as a tool of division?

The euro has also played a role. Eurozone members felt from the beginning that they were privileged, sort of the spearhead of integration. They meet at many Council of Ministers meetings the evening before and agree on disputed points.

The next morning, they introduce their agreement to the others as a fait accompli. This, of course, stirs up displeasure.

How Brexit divides the EU27

The latest factor in the rise of EU groupism is Brexit. With the likely departure of Great Britain, the country that is probably the leading liberal market voice in the EU is exiting.

And indeed, once the UK is out, key voting mechanisms inside the EU, especially regarding the qualified majority voting items, change in terms of their internal composition.

Together with U.K., Germany, the Netherlands, Austria and Finland, all countries with a liberal, market-oriented policy stance presently have a blocking minority of 35% in the European Council. After Brexit, without the UK’s voting share, their voting percentage is reduced to 25% — which is not enough to veto any decisions.

No wonder that some countries fear that they will forthwith be dominated by states in southern and central Europe. Hence the founding of the Hanseatic League, led by the Netherlands.

What does this mean for the EU’s future?

Do not worry, contrary to joyful American and Asian voices that engage in anti-EU jeering, Europe will not fall apart.

It is important to remember that a key motivation of these external critics is that they engage in their criticism to a large extent in a thinly veiled effort to cover up the internal stresses that they are exposed to in their home regions. Such as the incredible difficulty many U.S. policy thinkers have with squaring their global ambitions and their sense of Trump.

A sobering up in the EU

True, the emotional bond between the members of the EU is getting smaller. In addition, today’s EU is quite different from the EU-6. The formation of political will across such a large grouping becomes more difficult.

Decisions take longer. The direction of the EU is also changing. The deepening of integration, which has been a high priority for a long time, is no longer a major goal.

The community is becoming more decentralized. It cannot be ruled out either that current members other than the UK quit.

This is not bad luck in my opinion. One should not keep anyone in the community who believes that he can do better alone.

Consider the positives

First, the stronger southern orientation of the EU that many in the EU’s north feared due to the advent of Brexit, is effectively prevented by the Hanseatic League.

Second, Germany and France, as the largest members of the community, no longer sit alone in the EU’s “driver’s seat.” They have to take considerably more consideration of the others.

This is also due to the simple fact that the two countries have an ever-harder time to agree with one another. As a logical result, the other members are increasingly becoming part and parcel of the two countries’ respective political jockeying.

Third, the euro is losing its special status. It is no longer the highest form of integration and the center of the community. Sweden, Denmark as well as the Central and Eastern European countries that are not members of the euro are calling for greater consideration of their interests with good reason.

Fourth, as a result of the less central role of the euro, the ECB is losing importance within the European institutional framework. Moreover, after past experience, especially but not solely with Greece, it will no longer be rushed into taking anyone who wants to join the euro into the eurozone. But that, too, is not a mistake.

Conclusion

Overall, the hope remains that, over time, the EU becomes more liberal, more pragmatic and more open to the world.

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About Martin Hüfner

Martin Hüfner is the former chief economist of Germany's HVB Group.

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