History is being made in Brussels today. Sounds loud, doesn’t it? Actually, it is deafening, Today’s summit will show which way the European Union will take with or without Great Britain. And this is the thing we need to be following anxiously, because this is what our destinies depend on – ours and those of our children. What Europe will we live in, how will it look, where will we be, what rights will we have, how will our economy and our foreign policy develop? Will there be peace? What will the distribution of power be? The questions are numerous and will not get answers today, but there are the outlines of something new in the English fog.
The euro area keeps going forward
Positively, with or without Great Britain, the process of deepening of integration in the euro area, which got delayed a little over the last 2-3 years, will speed up. This is what everyone is talking about – from ECB President Mario Draghi, through Eurogroup boss Jeroen Dijsselbloem (The Netherlands, Socialists and Democrats), to the German Finance Minister Wolfgang Schäuble and French President François Hollande. The euro area will be what is left of the European Union if Great Britain leaves. Actually, if it stays too, because the deal that is being prepared clearly shows that the British efforts to leave have caused equal in strength and opposite in direction efforts to tighten ranks in the euro area, Where currently it is strongest anyway.
What are we to be watching for today and tomorrow? It is very important how will the relations between the euro area and the rest in the first basket of the four demands of British PM David Cameron be formulated. From the leaked drafts it becomes clear that there are attempts being made to disengage Britain as much as possible, while at the same time preventing the possibility for the same scenario being repeated with other countries with powerful centrifugal forces ripening, like France for example, where the leader of the National Front Marine Le Pen repeatedly stated that the euro is harmful and is considering following Great Britain’s example.
Earlier this week ECB boss Mario Draghi warned about the formulation, saying that if it were not clear enough, it would cause problems of systemic character in the euro area. He did not name the problems, but a bad formulation could impact most severely the banking union, for, although membership in it is voluntary for countries outside the euro area, the supervisory mechanism monitors the situation in all banks, operating in the euro area and whose business has systemic importance to it. Apart from the supervisory mechanism, of paramount importance is also the mechanism for bank resolution, which also works only for the euro area and the ones, who have entered the banking union.
Great Britain insisted on an exemption from these rules too, but this is not taken well on the continent. As euinside already reported, the formula, which gives opportunity to national parliaments to veto European legislation, could prove problematic. This could prove a serious obstacle to deepening of euro area integration and is met with hostility by France and Belgium.
A Visegrad suburb
The Central European front, which is consolidating and even widening, could prove the second speed of the already emerging two- or three-speed Europe. What differentiates Visegrad from the euro area (with several reserves) is that in the euro area a certain perception of the European value system dominates, while in the Visegrad group views on European values are a bit different, meaning we are talking about purely ideological differences.
What is new in this Eurosceptic constellation is that the leading role no longer belongs to Hungarian PM Viktor Orbán, but to Poland, for it is a country of systemic character to the EU. To these states the most important subject is the fourth basket, which discusses Great Britain’s demand to put the brakes on migration from Eastern Europe. The Visegrad Four states – Poland, Hungary, The Czech Republic, and Slovakia – met at the start of the week, with Bulgaria and Macedonia joining them, to synchronise their position on the refugee problem. They negotiated an alternative plan, which includes the isolation of Greece and relies on Slovenian PM Miro Cerar’s на proposal from several weeks ago.
The leaders of the Visegrad group will meet again right before the start of the European Council this afternoon and will be joined by the Prime Ministers of Croatia and Slovenia [by the time this article was translated in English they had already met]. The group’s behaviour leads to its separation as a less integrated suburb of the euro area. To make this happen, however, several key questions need to be answered. The first one is exactly how will relations develop between the euro area’s Eurosceptic members, mainly Slovakia, because Slovenia is currently not showing Euroscepticism, but is playing an ambiguous role regarding the solution of the refugee problem. A similar role is being played by Austria, but to a far lesser degree. If the euro area increases its gravity, there will be no doubt about the allegiance of Austria and Slovenia as well.
An European periphery, subject to a strong geopolitical draft
Regarding the countries, which are not permanent members of the Visegrad formation, they will end up being the weakest link in what will remain of the EU – a periphery being used as a buffer zone at the more and more tense external borders of the current EU. The role is ungrateful and exposes the ones in it to a geopolitical draft, which will bring them mainly problems. Bulgaria is also in this group in the difficult company of the most problematic countries of the EU enlargement process – Turkey, Macedonia, Serbia. Romania seems to be in a process of regrouping, after earlier this week EC president Jean-Claude Juncker made an unequivocal statement, separating the fate of Romania from that of Bulgaria. The two states had been bundled by the Cooperation and Verification Mechanism because of their common troubles in the battle against corruption and organised crime.
Over the last few years, however, Bucharest tenaciously works on its walking out of the trap of corruption and European isolation. Juncker’s statement shows that Romania has a future, different from being a periphery and a buffer zone. What is more, Romania announced two years ago its intention of joining the euro area in 2019. This means the country has the ambition to be in the core of the EU. What Bulgaria wants is a question that needs to get an answer as soon as possible. The Visegrad suburb or a dominated by geopolitical problems European periphery are hardly attractive alternatives to Romania’s government, which is led by the most successful Romanian Commissioner so far Dacian Cioloș, who was responsible for the Common Agricultural Policy in José Manuel Barroso’s second Commission and in this quality started and finished the reform of the oldest and most expensive community policy.
There are no Eurosceptic forces on the horizon in Romania, thanks to the fact that the state is among the champions of economic growth in the EU and the battle with corruption almost entirely cleared its image of a failed member state.
The moment of choice
As a result of the British pressure, very soon the question will need to be asked in the EU who wants what Union and what integration speed is he going to move with. Moreover, an Europe of several speeds is written in some of the leaked drafts of the deal with London. This means that the euro area integration plans so far will be subject to considerable changes, for the division of the EU into integration spheres will create the need for redistribution of the foreign policy and financial burden. The vision for the euro area’s future at this stage does not provide for a considerable integration of foreign or defence policies, although previous versions of the presidents’ report mentioned foreign policy. It was announced last week that Germany and France were planning to present their visions on the euro area’s future by the end of the year. Considering the stated timeframe this means that the document will take into account the outcome of the British referendum.
With the document they are going to present, Paris and Berlin will most probably send an invitation to all current EU members to join under new and much stricter conditions than so far. This will serve as a new political treaty in the EU, which will lay the foundation of a new European Union, built on the mistakes and the context of the current Union, which was moved by the aftermath of the Second World War. The new Union will be moved by the new geopolitical environment and the new global challenges. From the beginning of its existence until now the EU has shown several serious defects. The first one is ideological. There is a serious difference in the perceptions of member states on what the Treaty on the EU formulates way too generally as an European system of values. The Union is getting more and more ready for the importance of rule of law to its survival.
Secondly, there are the different stages of economic development, which threatened the euro area to a stage there was a threat to its survival when the crisis struck back in 2009. The situation is far better at the moment, but a new crisis is knocking at the door, which will test whether the new framework, again based on a compromise in favour of Eurosceptics, can withstand the pressure.
The third defect is the lack of a common foreign policy and defence policy. Differing historic and economic realities led to serious clashes in dealing with geopolitical challenges regarding foreign policy, energy, and defence. The sanctions against Russia were negotiated with huge effort, and at the moment certain member states are constantly testing their longevity without having any real cause for it – Russia is not only not changing in the desired direction, but is hardening the course of action further and further. Regarding defence policy, as long as NATO exists, there is no need for creating parallel structures, but the course, which the USA will take after the presidential elections at the end of this year will be of paramount importance to NATO, and consequently to European defence policy.
Institutional and legislative complexities are the fourth defect, which hinders the unanimous functioning of the Union. Aiming to please different short-term political challenges, the Union often made compromises in the creation of new institutions or the adoption of key community legislation. This backfires every time when these institutions or laws have to start to work in the real world.
Great Britain is not the cause of what is happening at the moment. It is a consequence of the clash between the ones wanting more integration and the ones that only see the EU as a market opportunity. Over the last 20 years, EU integration, mainly in the euro area, was going slowly but steadily, with the euro area crisis forcing this process considerably. The clash between integrationalists and the supporters of looser relationships was clearly seen in the attempt to answer London’s demand that the phrase “to an ever closer Union” be removed from the Treaties. In the drafts leaked so far it is thoroughly explained that the phrase is subject to interpretation. To some, this means more integration, to others it is not mandatory. This phrase will be leading along the road the EU will take from now on. Those who do not empathise to this phrase and a federalist future will have to accept the alternative and live with the consequences of their choice.
The differentiation of the euro area as a future strong European Union with a suburb and a periphery will not be good news to the countries of the enlargement process, which will probably fall out of the Union’s agenda and will turn mainly into a problem of their immediate neighbourhood. Those will be the EU’s periphery and the Visegrad suburb. The region will turn into a restless zone of lack of rule of law with very low democracy levels. A zone that will continue to be a scene of conflict between key geopolitical players. Such development could only heighten the tension, which is difficult to be curbed in the Western Balkans region anyway. So, drop whatever you are doing and watch what will happen in Brussels today, while contemplating which way do you want your country to take.
Translated by Stanimir Stoev