May 18, 2016

Different Union, Greater Unity: Reflections on a Semester of Debates at NYU on the EU’s Concurrent Crises

The EU is facing four concurrent crises that may call into question its very existence: the EMU, Brexit, refugees, and terrorism.  This semester, the Jean Monnet Center for International and Regional Economic Law & Justice at NYU School of Law has had the privilege of hosting a series of fascinating seminars on these traumatic circumstances. Georgette Lalis, Senior Emile Noel Fellow, and Samuel Dahan, Emile Noel Fellow, have forwarded us this overview of those debates along with some provocative reflections of their own on the path forward.

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What has emerged from this semester's enriching debates at the Jean Monnet Center is that the EU is facing both circumstantial crises – the refugee and terrorism crises – but also, and more significantly, structural problems coming from within: Brexit and the EMU crisis.

The EMU crisis occurred as the result of the financial meltdown of 2008; but it is nevertheless an institutional crisis, predictable and indeed predicted, that resulted from flaws in the structure of the eurozone itself. While is it true that the EMU has succeeded in partially addressing these issues, the euro area is still faced with both an economic and a governance crisis. In a nutshell, the decision-making process in the euro area is unnecessarily complex, lacks transparency and democratic legitimacy, and calls into question the balance between Member States and European Institutions. We, the Emile Noel Fellows, are privileged to have the opportunity to conduct research on the legal aspects of the crisis and explore potential avenues of addressing the EMU’s flaws. Our research will eventually take the form of a Jean Monnet Working Paper.  

    While the Brexit crisis has very different causes from the EMU crisis, it is also a political deadlock that threatens the integrity of the EU as a whole. Brexit is the climax of a long and difficult British-European relationship in which the UK has always kept one foot outside the EU. A potential Brexit, let alone the threat it might represent to the integrity of the EU, would substantially change the nature of the UK’s membership in the EU (although the latter is already limited by important opt-outs.) From a reputational/formal standpoint, the departure of one of the EU’s strongest members would set a bad precedent and could trigger a domino effect, ultimately leading to deeper fractures in the Union. Much has been written on the economic effects of a Brexit for both the UK and the EU. It is clear to us, however, that a Brexit at this time would send a bad signal to the outside world concerning the cohesion of the EU. On Friday, February 12, former UK cabinet minister and Shadow Chancellor Ed Balls eloquently described the “backward relationship” between the UK and the EU in a discussion entitled "Brexit or Bremain? Britain’s Fraught Relationship with the EU.” While Balls made a strong argument in favor of ‘Bremain’, the outcome will only be known in June after the UK referendum.

As for the refugee and terrorism crises, while they clearly have an EU dimension, they are closely linked to outside factors and to national politics. Though public opinion often associates one with the other, it is important to emphasize that they have very different origins and implications. Both are the result of circumstantial/non-institutional pressures, and the juxtapositions between these two sets of crises leaves room for significant improvements in the situation through efficient coordination of national policies. Although the refugee and terrorism crises do not stem from European institutional flaws as such, they may well turn into an institutional nightmare if the Union doesn’t learn from its mistakes and mount a quick response to strengthen its immigration and security policy coordination.

On March 7, the Jean Monnet Center had the privilege of hosting David O’Sullivan, the EU Ambassador to the United States, at the Hauser Global Law School Program’s Annual Dinner. O’Sullivan argued that the refugee crisis has been both fiscally and politically challenging for the European Union and for its member states, some of which, such as Greece, are just emerging from an economic crisis. Putting the crisis into perspective, O’Sullivan pointed out that over the past year Greece has had to absorb 850,000 migrants—equivalent in proportion to 28 million people arriving at the US border. He emphasized the importance of a coordinated response to this unprecedented migration, a solution that would strike a balance between self-preservation on the one hand and compassion for refugees and respect for international law on the other. 

More recently, the lounge at 22 Washington Square North was filled to capacity in April for a fascinating discussion on “Counter-terrorist Measures in the EU and the US.” Zach Goldman (Center on Law and Security, NYU School of Law); Michael Farbiarz (former Assistant United States Attorney); and Benjamin Haddad (Research Fellow, Hudson Institute) discussed weaknesses in the both the EU and US security models. Significant attention was devoted to deficiencies in European security policy and how these may have contributed to the recent attacks in Brussels. These experts were less blunt than David Ignatius, who wrote in The Washington Post that "Brussels shows Europe's shockingly dysfunctional approach to security." However, they all pointed out the absence of comprehensive and meaningful information exchange among EU Members. Benjamin Haddad even highlighted the counter-intuitive existence of intelligence service rivalries, with some Member States reportedly sharing more intelligence with the US than they do with each other. On a more optimistic note, the panel made clear that these institutional deficiencies also create a learning opportunity for the European Union.

These are the crises.  The question, then, is what type of solution they call for. 

Professor Sergio Fabbrini (LUISS) shared an interesting viewpoint during his recent visit to the Jean Monnet Center at which he presented his new book, Which European Union? Europe after the Euro Crisis (Cambridge). According to Fabbrini, the EU we knew before the EMU crisis is not the EU of today. Members no longer share the same raison d’être, and there is an absence of a core EU sentiment. Fabbrini sees three sets of Unions. First, there are the countries that only want a common market, such as the UK. These countries want to retain their sovereignty in many areas, and find themselves at odds with the EU as soon as it fails to rationalize the market. The French represent a second type, namely countries that believe the EU should move towards integration on the basis of governmental control: France has promoted a very intergovernmental Europe in order to build a highly centralized union controlled by the more powerful countries. Finally, a third group, represented by Italy, Spain, and, to a lesser extent, Germany, has been advocating for parliamentary federation with a stronger role for the parliament.

Fabbrini argues that none of these positions are sustainable over the long term.  According to him, we have to think of Europe in a different way if we want to achieve a political Union. Europe is a differentiated system of coordination and integration in which a one-size-fits-all approach doesn’t work. 

Ultimately, Europe needs to come up with a kind of integration that combines both parliamentary and intergovernmental approaches. Strong citizen representation through the European Parliament is crucial, but it is also necessary to recognize that the EU was built with pre-existing states, each with their own administrative cultural traditions. The idea that we can override the integrity of nation-states is naive; but at the same time, any attempt to build a Union without a coherent European identity is doomed to fail. The answer lies in finding a way to unite national governments and citizens while building in a system of checks and balances. Fabbrini calls this a “compound union” based on a separation of powers. 

Specifically, the EU’s most influential countries, and Germany in particular, need to stop playing a short game and adopt a longer-term approach. The leading countries should propose a new treaty with the founders of the EU and identify a new system that would keep the core member states in balance with each other. While the present imbalance would seem to benefit Germany and harm the other members in the short term, the pursuit of this kind of unilateral intergovernmental strategy is in fact deeply problematic for Germany as well as for the existence of the EU as a whole. 

Our reading of the problem is that the EU needs to regain its lost vitality. We are fierce supporters of the European project, and we believe that only unity will allow EU member states to successfully compete economically. More crucially, greater unity will lend the European Union the necessary political weight to play a greater role on the world stage. Furthermore, unity acts as a strong shield against a repetition of past atrocities; the surges of nationalism that have haunted Europe in the past are certainly not entirely behind us, as recent political developments have shown.  

That being said, we also believe that the EU is an oversubscribed club that does not promote unity. Indeed, the EU has difficulty recognizing its own identity. While conflicts of interest should not necessarily be problematic in and of themselves, in the current European context they have the power to bring the system to a halt thanks to the inadequacy of the governance process. Both the community  and the inter-governmental methods have proved useful in some instances.  A mix of both will probably continue to lead the way, with an increased dose of intergovernmentalism in difficult times, entailing a subsequent price to be paid in terms of the balance of power between countries and institutions. 

The real question for we Europeanists is how the EU can regain a certain level of cohesion. One solution would be to build a new scheme that might be better for the core countries as well as for those willing to develop a new type of relationship with the EU. In that sense, the UK referendum will have a considerable significance in terms of the future of Europe. The UK is not the only country that has états d’âme concerning its participation in the EU.  As a result, if Bremain triumphs, the agreement that EU leaders have conceded to the UK will, in itself, trigger changes in the EU legal order and complexify further the decision-making processes of the EU. A Brexit, on the other hand, may offer an opportunity to institutionalize a new kind of Union, a multi-speed one, in which the core maintains a strong relationship with the satellite Members States that are interested only in a common market. 

The time may have come to reconsider the EU’s makeup and its future enlargement policy. A smaller and stronger Union, perhaps one made up of core euro countries and “common market” members, might have a better chance of survival than a larger, uncoordinated EU. One possible solution – recently discussed at the 14th Jean Monnet Seminar in Dubrovnik in April – would be to develop a binary system offering either full-EU membership, or partial membership for those countries uninterested in an “ever-closer union.” In practice, this model is already taking shape as the UK, and to a lesser extent other countries, have opted out of many core EU provisions and are effectively only partial members of the EU. While Brexit is a challenge to the integrity of the (uncoordinated) EU as we know it, it may also be seen as an opportunity to institutionalize an already-existing situation.  This new Europe would take the shape of a stronger, genuinely united core, one with robust links to a constellation of affiliated “common market” Member States.

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