The European Union into the maelström

Pavlos Gkasis - Associate Fellow of SPERI & Lecturer in Economics, International Faculty of the University of Sheffield-CITY College, Thessaloniki

European integration is currently facing one of its most difficult phases since the aftermath of the financial crisis of 2008 found the EU severely damaged, not just financially but politically as well. The future of the EU and the dangers that lie ahead revolve around two main categories of threats.  The first is the internal condition of the Union, while the second is the external conditions of the international environment.

Internal pressures have been rising from a vast majority of member states and they all have a common ground which is a separatist (or a potentially separatist) stance that many countries have been following. A prominent example have been the debates in Greece in the last few years about whether the country should remain in the European Monetary Union (EMU) and in some cases in the EU (a Greek exit or ‘Grexit’).  These debates which question European solidarity were triggered by Greece’s economic malaises, yet they have now moved into the political and mostly humanitarian arena due to the on-going migrant crisis.  At the same time, a rising movement has appeared in the UK in favour of the country leaving the EU (‘Brexit’) while the movement against it has steadily lost its momentum.

A potential Brexit poses a further threat to the survival of the EU since the UK’s exit from the EU would be a major blow for the process of EU integration. The UK has diachronically been following a rather sceptical approach towards the EU integration project and does not forget to remind the rest of Europe that above all what is most crucial for the country is to safeguard its political and economic sovereignty.  This approach gained even more ground during the Eurozone crisis when the survival of the EMU, and even of the EU, was being put to the test.  Advocates of the sovereignty of British monetary policy must have felt vindicated when the EMU was on the verge of collapse and with troubled countries’ monetary policies locked-in to a supranational authority such as the EMU.  These recent developments have given rise to voices inside the UK asking for further sovereignty and further relaxing of the linkages between Britain and the EU.  This though, is a road that can be potentially very harmful for the UK, and one that could have grave economic costs. David Cameron’s government seems to have found itself in a situation where it thought it could use the referendum as a leverage for more sovereignty, but as last June’s referendum in Greece so flagrantly demonstrated referendums can lead to challenging and contested political decisions, rather than settled or irreversible outcomes.

Similarly, the external pressures put on the Union by the on-going migrant crisis have added a new chapter to the story of the tortured EU integration project. These pressures have led member states such as Hungary, Austria and Slovenia, and potential members like the Former Yugoslav Republic of Macedonia (FYROM), to unilaterally close their borders to intercept the flows of migrants mostly from Greece, thus, leading to an entrapment of migrants in Greek territory. Agreements to signify the percentage of migrants that each EU member state needs to accept have never been realised (with the exception of Germany) which has further accentuated the need for a viable solution to be found.

All of the above issues have significantly changed the agenda within the EU. After many years of common policies decided and pursued centrally in the EU, some of its member states appear to be defying agreements they have recently approved and signed, and made unilateral decisions such as going against the Schengen agreement and declining free movement.  This has led to new negotiations regarding Turkey’s long-troubled efforts to join the EU and their ability to comply with the chapters of the EU’s ‘acquis communautaire’, and to the provision of financial aid in exchange for the interception of migrant flows in Turkish territory. Such deliberations with Turkey though create further pressures inside the EU and heighten the sense of turmoil.  A series of countries are severely sceptical about whether Turkey fulfils many of the criteria for proper integration in the EU and question whether the country can become a full member of the EU.

With the Balkan corridor closed, the migrant problem looks as if it has been temporarily resolved but (as is usually the case) it is probably just swept under the carpet. Grexit is not an option any more but everything will be back on the table if the Greek government does not conclude its deliberations with the ‘troika’ to reach an agreement that will initiate the flows of funds in the Greek economy, flows emanating from the third bailout package.  The most prominent threat though, seems to be the possibility of a Brexit.  With the decision-making process inside EU being severely damaged from recent developments, a departure of Britain from the EU would signify a new era, which unfortunately seems to be under way in case this indeed materialises.

The economic cost for all sides will be minimal compared to the political cost that the Union will incur. This of course, as is the case with every ‘proper’ maelström, will take the Union to further eddying in unchartered waters.