The European Union on Thursday celebrated Europe Day, the annual commemoration of the proposal made in 1950 by then-French Foreign Minister Robert Schuman to create a supranational organization of states in Europe. Schuman’s proposal gave birth to the European Coal and Steel Community in 1951 and led to the creation in 1957 of the European Economic Community and the European Atomic Energy Community, the institutions that preceded the European Union. After six decades of integration, the bloc is going through an existential crisis.
What is a Geopolitical Diary? George Friedman explains.
At the core of Schuman's plan was the need to reach a political and economic alliance between France and Germany, the two European powers that fought each other in three wars between 1870 and 1945. More than six decades later, the expansion of the European project is impressive. The six original signatories of the Coal and Steel Community (France, Western Germany, Italy, the Netherlands, Belgium and Luxembourg) grew to 27 members. More important, Europe has achieved the longest period of peace in the Continent's history (with the exception of the Balkan wars of the 1990s).
The European integration project is based on the assumption that member states will progressively cede national sovereignty to supranational institutions managed by technocrats. It tries to overcome history and geography, since it pursues unity in a continent that has traditionally been marked by fragmentation.
The European Union has been partially successful at this. Member states have adopted a common external tariff, and goods, services and capital move almost without limitations in Europe. Border controls among most members have been eliminated, and people can move and work freely within the European Union. Moreover, 17 members have given up their national currencies and adopted the euro, something that was unimaginable when Schuman made his proposal.
But the Europeans have underestimated the pervasiveness of the nation-state, a key actor in geopolitics. Supranational institutions, where decisions are taken by qualified majority and affect all the members, coexist with national governments, which have domestic interests that are frequently not aligned with the bloc's goals. This has created a cumbersome decision-making structure in which exemptions, vetoes and violations of the rules are frequent.
The European crisis has deepened political divisions within the bloc, because the interests of the core (and their level of economic development) often don’t match the needs of the periphery. There’s also a growing divide between the members of the eurozone and the countries that have not adopted the euro, since most of the recent measures created by the EU are designed to address the eurozone crisis.
Additionally, the crisis is weakening the promise of prosperity in Europe, one of the founding pillars of the European Union. As economic activity contracts and unemployment rises in most European countries, the benefits of EU membership become less evident for a growing sector of the European population. The recent electoral growth of Euroskeptical parties in some European countries highlights the increasing disconnect between voters and the traditional political elites that remain largely pro-European. This disconnect is exacerbated by the austerity measures designed by Brussels and applied by national governments in reaction to the crisis. Some moderate governments are also questioning the benefits of EU integration, as highlighted by recent criticism of the free movement of people within Europe by countries like the United Kingdom.
With the economic crisis deepening, EU members have two options. The first is to reverse the process of economic and political integration. This does not necessarily mean the dissolution of the European Union but the return of some prerogatives to nation-states. The United Kingdom defends this option because London believes that the European project has moved too far from its original idea of creating a customs union.
The second option is to deepen the integration process. This involves national governments relinquishing the power to tax, borrow and spend, one of the last elements of national sovereignty that EU members have left. At the core of the European crisis is the coexistence of a currency union without a fiscal union. Brussels has put limits and targets on the fiscal policies of EU members, but enforcement is weak and national governments are largely in charge of fiscal policy.
The struggle to achieve a fiscal union will mark the European Union in the coming years, and will be the ultimate test for the Franco-German alliance. If achieved, it would mean the virtual dissolution of nation-states and be a crucial step in the creation of a federal Europe. Europe, however, cannot avoid its perennial fight against history and geography.