The world holds more risks for EU than at any time since end of cold war.
Unveiled on Wednesday, the European Commission president’s document contained no fewer than five scenarios for the EU’s evolution up to 2025: “carrying on”, “nothing but the single market”, “those who want more do more”, “doing less more efficiently” and “doing much more together”.
The white paper’s vagueness was understandable. With elections this year in the Netherlands, Bulgaria, France, Germany and the Czech Republic, few if any governments have an appetite for ambitious initiatives from Mr Juncker.
Still, governments appreciate that the world holds more risks for Europe than at any time since the cold war’s end in 1989-91.
Foreign policy strategists in Berlin, Paris and other capitals are re-examining long-held assumptions about the inevitability of EU integration and the permanence of the US-European security alliance.
A “multi-speed EU”, encouraging some countries to integrate more closely than others, is back in fashion. Especially attractive in parts of western Europe, this idea received support on Wednesday from Jean-Marc Ayrault and Sigmar Gabriel, the French and German foreign ministers.
Another idea is to step up defence collaboration, so that Europe becomes a more credible US security partner.
Beyond these relatively cautious proposals, some policymakers and independent analysts are thinking the unthinkable. One example is a report by MacroGeo, a consultancy chaired by Carlo De Benedetti, an elder statesman of Italy’s business community.
The report, “Europe in the Brexit and Trump Era: Disintegration and Regrouping”, arrives at bold conclusions. It asserts that the
EU in its present form is most likely going to decompose, even if pro-integrationists such as Emmanuel Macron, the French independent centrist, and Martin Schulz, the German Social Democrat, win this year’s elections.
“By the 2021-22 electoral cycle, the EU might be entering the last five years of its ‘real’ existence,” the report says, allowing that the bloc’s formal legal structures centred on Brussels would probably linger on.
The report contends that, apart from shocks such as Britain’s vote to leave the EU, long-term geopolitical trends are causing the bloc to atrophy. On Europe’s eastern and southern borders, multiple challenges include irregular migration, failing states, terrorism, climate change and Russian revisionism.
Meanwhile, the US is slowly disengaging from Europe to focus on China and the Asia-Pacific. Germany will not replace the US as Europe’s indispensable power: it will never let the eurozone turn into a “transfer union” and, despite speculation about a German nuclear deterrent, its 20th-century past means neither Germany nor its neighbours want it to be Europe’s dominant military power.
Would not the EU’s disintegration unleash “the dangerous nationalist demons of Europe’s past”, as Guy Verhofstadt, a former Belgian prime minister, fears? The MacroGeo authors do not predict anarchic competition among nation-states, but
“the emergence of a German geo-economic core”.
This would consist of Germany and countries in its industrial supply chains and comfortable with its monetary and fiscal culture. Disarmingly, they suggest that, “if Italy were to fall apart”, northern Italy might join the Netherlands, Poland, the Czech Republic, Slovakia and some Scandinavian countries in this group.
All this implies the
19-nation eurozone’s break-up. Finance ministers and central bankers are adamant that such a step would be devastating for Europe’s economy and global financial stability. However, it is being discussed in circles beyond France’s far-right National Front or Italy’s anti-establishment Five-Star Movement.
Mediobanca, an investment bank that was once the exemplar of northern Italian capitalism, published a controversial report in January which suggested that, in terms of public debt,
Italy would not be harmed much by exiting the eurozone.
In a move reflecting frustration at the European Central Bank’s ultra-low interest rates and bond-purchasing programmes, the
Dutch parliament voted last month to commission an inquiry into the pros and cons of eurozone membership.
As guides to Europe’s future, these developments deserve close attention — perhaps more close than Mr Juncker’s white paper.