European Affairs

Summer 2005

 

Cover Story:

The EU Can Continue to Unite Without a Constitution

By Urlike Guerot

 

A speaker at a recent conference in Washington asked a flippant question to illustrate the uncertainties surrounding the European Union's further enlargement. Would Albania, he wondered, join the European Union while Turkey occupied the Presidential chair, or would Turkey join under an Albanian presidency? The question was a light-hearted attempt to address the serious issue of whether and when the Union will expand into the Western Balkans, and admit Turkey, especially now that the rejection of the proposed EU constitution by French and Dutch voters has raised new doubts about the entire future enlargement process.

The speaker, however, missed an essential point. Neither Albania nor Turkey will join the European Union if, when the time comes, the EU Presidency is still rotating among member governments, with each one taking a six-month stint at the reins. Either the European Union gets a constitution that streamlines its institutions, thereby abolishing the rotating presidency, or none of the long list of aspiring member countries is likely to enter the Union in the foreseeable future.

The Nice Treaty, the current legal basis of the European Union, allows for 27 members, which means that there is only room for Bulgaria and Romania, which are due to join in 2007. Before any country becomes the twenty-eighth member, whether it be Croatia, Turkey or Albania, the European Union must first reform its institutional structure. The number of Commissioners, for
example, must be reduced and rationed out among the member states, so that only two thirds of the member countries will have a Commissioner of their own nationality at any one time. The European Council must decide such changes by unanimous vote before 2009.

This is a point that is often overlooked in Transatlantic discussions of the European Union's future. Americans tend to be more interested in the "widening" of the European Union to create an expanding area of economic and political stability in Europe, and place less emphasis on its "deepening," or further integration, which many Europeans insist must accompany, if not precede the "widening." Thus while Americans sometimes refer to the future "European geo-strategic space," Europeans still think of the European Union as a political union. And this is not just true of policy-makers in France and Germany, but even of Tony Blair, the Prime Minister of Britain, the country traditionally least enthusiastic about political integration.

The European geographical area and the European Union are not the same thing. It cannot be stressed enough that the European Union is not like NATO, the OECD, the WTO, the Organization for Security and Cooperation in Europe or any other international organization. It is a union of nations that have pooled a large degree of their sovereignty in, and committed their destinies to, central institutions that have many of the characteristics of an embryonic federal government. The EU institutions are legislative bodies that in many areas have supplanted national governments in regulating the lives of European citizens, as well as in setting the Union's political direction in domestic and international affairs.

Transatlantic discussions about enlarging the European Union cannot thus be conducted in the same terms as enlarging NATO, which is a qualitatively different kind of organization. To lump the two together as "Euro-Atlantic"institutions, into which countries like Ukraine or Georgia now need to be inducted, is deeply misleading.

A similar misunderstanding underlies a looming Transatlantic dispute over how quickly the European Union should proceed with admitting new members. In the Western Balkans, for example, the United States and the European Union share the same goals. Both believe that the Western Balkan countries, and perhaps ultimately Kosovo, should be offered the long-term prospect of EU entry. But the arguments advanced by Washington and Brussels are quite different.

"To lump NATO and the European Union together as 'Euro-Atlantic' institutions is deeply misleading"

Americans tend to apply pressure to the Europeans by arguing that Kosovo is a "time bomb" and should therefore be given an early assurance that EU membership is in its future. But the European Union needs functioning states as members, not "time bombs," and a constructive Transatlantic dialogue needs to take this into account. The consequences for Atlantic relations are simple: the United States should be just as engaged in "deepening" the European Union as it has been in promoting its "widening."

One problem is that some Americans appear to consider the European Union as little more than an economic grouping, along the lines of the North American Free Trade Agreement. They see the admission of peripheral new EU members as somewhat similar to the United States' conclusion of a free trade agreement with the countries of Central America. But when the European Union admits a new member, it offers free movement of goods, capital, services and people, as well as full participation in the EU institutions, including the Council
of Ministers, the Parliament, the Commission and the Court of Justice. The equivalent would be for the United States to admit the Central American countries as new American states, with full voting rights and seats in the U.S. Congress. It will be much easier to engage in useful discussions about future arrangements for the countries bordering the European Union if this is fully appreciated.

"The widespread conclusion that the 'British model' of Europe has won is not the whole truth"

There are also some other misconceptions, in America and elsewhere, that would be better discarded to allow a realistic assessment of the crisis in the European Union, following the rejection of the constitution, and of the likely future direction of European integration. An example is the widespread conclusion that, with the French "No" to the constitution, the "British model" of Europe has won. That would imply a lowering of ambitions for political unification, a greater focus on restoring economic dynamism and the admission of more members.

This interpretation contains some truth, but not the whole truth. Most countries certainly do not favor the French or German socio-economic models. But most EU members do want further political integration, and do not want to reduce the European Union to little more than a single market. Most also fear that the goal of deeper political unity could be compromised by a further, rapid enlargement of the Union. At the same time, many of the anxieties about enlargement that already existed in the older member states are now spreading to the ten new member states that joined in May 2004. These concerns include fears that national cultures may be threatened by mass immigration, thus encouraging the emergence of rising nationalism and left and right wing populist movements.

The wrong way to look at Europe now is to see it facing a choice between a British vision of a single market and a French and German-inspired political union. It is in the interests of both Europe and the United States that the two approaches be brought together. The aim now should be an enlarged European Union that sticks to its goal of an ever-closer union for all member states, not just for a more integrated inner core. The European Union needs to design a new strategy that reaches out to its neighbors, but not at the expense of political union.

In the past, the conventional approach was to ascribe the ambition for political union only to some of the older member states, under the leadership of France and Germany. This led to a divisive debate about the possibility that the European Union would split into an exclusive inner circle, surrounded by an outer circle of less integrated countries, with the two groups bound together mainly by the single market. To bridge this divide, it is essential that both France and the UK accept the European Union as it is today. The UK needs to participate fully in the political union, by joining the euro and the Schengen agreement eliminating internal EU borders; France needs to reconcile itself mentally to the reality of enlargement and its implications.

Despite all the UK's influence, and the admiration it receives for its economic success, Britain will not be able to play a serious leadership role in the European Union unless it places itself at the heart of the drive for political integration. If it does not join the euro and the Schengen agreement, its capacity to steer the future course of the Union will remain limited. For the same reason, the UK cannot play its sought-after role as mediator between the United States and Europe if it is regarded by its EU partners as being only half in Europe. And yet the chances of this kind of a shift in UK attitudes in the near future remains remote.

The defeat of the constitution in France and the Netherlands is widely seen in the UK as the death knell of a more integrated Europe, removing any obligation on the British to pursue a political union from which they have always instinctively recoiled. The same reasoning is likely to strengthen the many British opponents of euro membership, who will remain a majority as long as the euro zone remains bogged down by low economic growth, high unemployment and an old-fashioned social model. If, as is widely expected, the more cautious Chancellor of the Exchequer, Gordon Brown, succeeds Mr. Blair as Prime Minister in the not too distant future, the chances of Britain joining the euro will recede even further. With regard to the Schengen agreement, Britain has always argued that, as an island, it is a special case where border controls are concerned - and the sudden emergence of London as a major terrorist target has hardly created an opportune climate for further relaxing border controls.

As for France and Germany, there is a tendency to believe, especially in the United States, that the dynamics of the Franco-German partnership will change if only the Christian Democrat candidate, Angela Merkel, replaces Gerhard Schroeder as Chancellor in the German elections due in September. In that case, according to this school of thought, Germany will more or less brush France aside.

"The emergence of London as a terrorist target has not created a favorable climate for easing border controls"

First of all, this analysis overlooks the real possibility that the Christian Democrats and their preferred coalition partners, the Free Democrats, might not win a majority of seats in the Bundestag - a likely outcome if the new left-wing party formed by Oskar Lafontaine and Gregor Gysi get some 10 percent of the votes. In that case, the Christian Democrats could find themselves obliged to form a "grand coalition" with Mr. Schroeder's Socialists, a governing formula that would not bode well for solving Germany's economic and other problems.

There is also a tendency to overestimate the policy changes that Ms. Merkel would bring to Transatlantic relations and to Germany's attitude toward France. Ms. Merkel would surely be a more Atlanticist leader than Mr. Schroeder. But she would not favor the United States over France, nor let Paris drop out of the picture, as some American analysts are, perhaps wishfully, predicting. Even if she could adopt such a policy, it would not be wise. The Franco-German tandem has been highly dysfunctional in the past year, performing more like a train with no freight or passengers than the traditional locomotive of European integration. But agreement between France and Germany is still a necessary, if no longer a sufficient, condition for advancing European integration.

"Nothing in the European Union is done without France or against French wishes"

Nothing in the European Union is done without France or against French wishes. France is still Germany's most important strategic partner, as Germany cannot lead the European Union alone, and certainly should not try to. No other country, not even an ambitious UK, can replace France in this function. On the other hand, only Germany can draw France back into the mainstream of EU thinking - and it is Germany's obligation to do so. In other words, it is Germany's job to persuade France to acknowledge the economic and political consequences of enlargement, both of which have weakened France's influence in Europe.

If the Franco-German partnership, however, remains the indispensable motor that keeps the European Union running, it still needs to be modernized - as does the whole Union. The Franco-German tandem is anyway already beginning to change, and is showing greater readiness to include other partners in its initiatives. To the annoyance of many other countries - and particularly Italy - France, Germany and Britain have formed the so-called EU-3 to conduct diplomacy with Iran. The up-and-coming Nicolas Sarkozy, a favorite to replace President Jacques Chirac in the French elections due in May 2007, has already suggested that there might be a "driving engine" of the Big Five - France, Germany, Britain, Italy and Spain.

This is both a good and a bad idea. It is good because the Franco-German engine needs to be enlarged. It is bad because the engine needs to include representatives from the new Central and Eastern European member states. Mr. Sarkozy has since floated the idea of adding Poland, to make a Big Six. But this is still not the right answer, because it is important that the smaller countries not be excluded from the locomotive's cab. One of the secrets of the European Union's success is that small countries have usually been treated equally, or at least with respect. Abandoning this principle would be detrimental to the spirit of integration.

The European Union will now take time for reflection following the debacle of the French and Dutch constitutional referendums. The final decision about what should happen to the current version of the constitution has not yet been taken, and it is likely that no decisive institutional momentum will reappear before the 2007 presidential elections in France. Mr. Chirac no longer has the political power, or the legitimacy, to decide how France wants to deal with the next step on the constitution, and this alone constitutes a deadlock.

In the meantime, therefore, what the European Union needs to do is to avoid touching the institutions and to work on everything else. Despite claims to the contrary, there is no institutional gridlock. Many things can be achieved without the constitution, and their achievement might restore constitutional momentum in a couple of years.

The current version of the constitution devoted much attention to advancing the European Union's role as a global actor, and some of its important provisions in this area, such as plans to create an EU foreign minister and endow the Union with a legal personality, have now been lost. This does not mean, however, that the Union has to be completely immobilized.

First of all, other efforts are already under way to help forge common foreign and defense policies that do not require the constitution's endorsement. Among these are the establishment of a European diplomatic service and the European Defence Agency, and the organization of joint military intervention forces, such as the proposed European rapid reaction force and smaller, faster-moving battle groups. Advances in these areas can lead to incremental progress without waiting for a new constitution to be ratified.

Secondly, a deal on the European budget is in reach, despite the bitter exchanges on the issue that contributed to the failure of the European Council meeting in Brussels in mid-June. Subsequent discussions already point to a possible budget compromise, which could be finalized in spring 2006 with the mediation of Germany. Mr. Blair has admitted that the British budget rebate, negotiated by Margaret Thatcher and one of the main sticking points in Brussels, is "anachronistic."

Mr. Chirac is under pressure on the Common Agricultural Policy (CAP), the other main bone of contention, and not just from Mr. Blair and his allies. Prominent French voices are also demanding deep reform of the CAP, including less bureaucracy and a transfer of more responsibility from Brussels to national capitals, and these voices are those of the farmers themselves. These factors suggest the outline of a compromise in which Mr. Blair would make concessions on the British rebate and Mr. Chirac on the CAP - the main possible snag being the now irreparable personal antagonism between the two leaders.

"Mr. Blair could make concessions on the British budget debate and Mr. Chirac on the CAP"

A breakthrough in reforming the CAP is needed if enlargement is to continue. Such a step would counter the argument that the European Union cannot afford to admit countries in which agriculture represents too high a share of the national economy. It would also constitute decisive progress toward modernizing the European Union, which can no longer, in the 21st century, build its future on the outdated concept of agricultural solidarity.

The European Union of the future needs "out-of-the-box" thinking to move on from longstanding idees fixes dating from its early years that are now shackling its progress. In future, the budget should no longer be used to redistribute resources among the member states, inevitably provoking national complaints of unfairness, but to allocate funds for commonly defined European public goods, such as research and development, infrastructural projects and common border protection. New ideas based on the slogan, "More value for money - more money for value," are already on the table.

"The euro will almost certainly be the most important instrument for binding the Union more closely together"

Thirdly, the ten new member states are supposed to join the Schengen zone in 2007. This is of great political importance, as the four fundamental freedoms of the European Union - the free movement of people, services, goods and capital - can only be fully realized if Schengen applies to all members. Introduction of the Schengen provisions by the new member states means that the European Union will have to work out common visa regimes with regard to bordering countries such as Ukraine and Croatia. It will constitute a major political litmus test of the willingness of the older members to accept that all relevant policy fields of the European Union are extended to the newcomers without reluctance or resistance. And it will also be a further step toward the "deepening" of European unification.

Fourthly, the ten new member countries are obliged to join the euro, although there is no fixed timetable. Considerable political energy should now be devoted to bringing them into the single currency by the end of the decade, because the euro will almost certainly prove to be the most important instrument for binding the Union even more closely together. As it has done among the 12 countries that are already members, the euro is likely to generate pressure for further moves toward political union. And if, as a result of some as yet unforeseen development, the UK were to change its mind and join the euro about that time, the extension of the single currency to all the member states would constitute a tipping point in European construction.

A strong European Union composed of 27 countries, all of them members of the euro and the Schengen zone, would almost be bound to feel the need for further institutional revision. The time could then be ripe for another attempt to strengthen and streamline the EU institutions. That in turn would clear the way for the admission of more new members, starting from around 2010.

Such a scenario, which is far from unrealistic, assumes that Bulgaria and Romania join in 2007 or 2008. These two countries must, however, be ready for membership and get off to a good start. If not, the prospect of further enlargement would be damaged. The European Union cannot allow any mistakes in the admission of new members, which is why pressure for early enlargement, from the United States or elsewhere, is counter-productive.

In the meantime, entry negotiations will start with Croatia and Turkey. But the next major enlargement will only happen if a revamped and consolidated European Union succeeds in reforming its institutions by 2009 at the latest, allowing it to shoulder new challenges. At stake is not the start of negotiations with Turkey, which are likely to begin in October, but their successful conclusion. (In fact, the term "negotiations" is somewhat misleading, as the main issue is the ability of applicant countries to fulfill the clear, largely unalterable conditions laid down for EU entry.)

The real risk is that the talks with Turkey will be frozen right away, as it is not clear whether the political energy exists to pursue them - either in the European Union or in Turkey itself - where setbacks are to be expected. Whatever the arguments for or against Turkish membership, the least that can be said is that it will be a huge undertaking that requires a large amount of sustaining energy and commitment from EU leaders, as much perhaps as was needed to establish the euro. It is hard to see which leaders are going to provide such commitment.

In a broader context, there are other useful steps that could be taken toward closer unity, for which American support would be helpful. Among these are a reassessment of the role of the European Union, or at least of the euro zone, in international institutions such as the International Monetary Fund and the G8 grouping of leading, advanced democracies. If the member countries of the euro zone were to seek a single seat in the economic and financial deliberations of the G8, which may soon be revamped to include other members such as China, India and Brazil, the move could help to promote the kind of deeper, pragmatic European integration that will be needed if countries such as Turkey or eventually Ukraine are to be admitted.

At a more abstract, political and communicational level, the European Union must strive to achieve three further essential objectives. Firstly, the Union needs to develop a kind of new-style European patriotism, as no political entity can live without a commitment from its citizens. Secondly, education about the European Union should be improved. The referendums in France and in the Netherlands have shown that young Europeans are no longer convinced of the merits of integration.

"The Union needs to develop a kind of new-style European patriotism to commit its citizens"

In France, people aged 18 to 40, who often associate the European Union with international capitalism and big business, rather than with international solidarity, were more likely to vote "No" than other age groups. That is cause for concern. European civic education should therefore be considered in schools from Portugal to Estonia, because the citizens of tomorrow need to know the nature of the political entity in which they live. In the words of the French historian, Ernest Renan, "It is not history nor territory, but the vision of a common future that makes a nation."

Thirdly, debate should be engaged about the broader goals of the European Union and their changing nature. With the end of the Cold War, the real dilemma facing the European Union is that it has to evolve from being an entity primarily based on edistribution and solidarity toward becoming a global actor that does not shy away from international responsibility - first and foremost in its own neighborhood.

It will take time to convince Europeans that this shift is necessary. EU leaders have not yet told their citizens that the European Union of tomorrow will have to be further enlarged and become more competitive. But sustained economic, social and political engagement with neighboring countries, let alone the assumption of global responsibility, will not come for free. At the very least, there will be short-term economic and political costs to be paid for longer-term benefits, and that should be made perfectly clear to everyone.

EU leaders should use the "pause for thought" they have called for to explain the changing nature of the European Union to its inhabitants. Europe's citizens should also be urged to contribute to the exploration of creative ideas about Europe's final destination in which their leaders now plan to engage. Mr. Blair has already announced a special EU summit meeting devoted to this topic during the UK presidency in the second six months of 2005. Despite the crisis in which the European Union now finds itself, it still has a success story to tell and it is the model of the future - not only for Europeans, but also perhaps for others.

All these steps can be taken while the constitution remains in temporary abeyance. And they should all be taken with U.S. support. For it is in the interests of America, as much as of Europe, that the European Union should resolve its problems.
Ulrike Guerot is Director of Foreign Policy, Europe, in the German Marshall Fund's Berlin office, where she focuses on a broad range of Transatlantic issues. Her previous posts include Head of the EU-Unit at the Institute of the German Council on Foreign Relations in Berlin; Deputy Director, Department of European and International Affairs, German Employer's Association; Senior Research Fellow, Groupement d'Etudes et de Recherches 'Notre Europe;' and Director of Communication, Association of the Monetary Union of Europe.