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WHICH WAY NOW FOR EUROPE?

EU ideals crumble as countries choose limited interdependence
Dateline: 19 November 2007

Since the new EU Constitution was soundly rejected in mid-2005, countries have been trying to sketch out alternate futures around which there might be general agreement.

Yesterday’s announcements in London, Berlin and Paris took the bureaucrats in Brussels by surprise.

The lofty ideals on which the core countries founded the EU, are now being challenged by two very different, but extremely pragmatic, decisions.

The UK, confident of its economic future under Gordon Brown, has firmly put its weight behind open markets and open competition, opting out of EU subsidies and restrictions on working hours and employment conditions.

France and Germany have teemed up around closer integration between their two countries, building on the perceived success of the Schengen passport-free zone. Further tax, agricultural and commercial ties may be next.

But, where does this leave the EU dream? A schizophrenic was once defined as someone who mounted a horse and rode off in all directions at once.

Will the EU become more and more schizophrenic with a smaller and smaller core of agreed philosophies?

(Read the full story behind four possible futures for the EU and explore the MindBullets Matrix in the detailed Analysis/Synthesis section – then debate your thoughts on these possible futures – for subscribers only)


ANALYSIS >> SYNTHESIS: How this scenario came to be

The scenarios in this MindBullet have been heavily based on ideas featured in a 31 May 2005 article in the UK Independent. See the link to this article to read their full comment and supporting articles. We believe this is one of the best analyses of the future options for Europe that we have seen to date.

Here is a fuller description of the four scenarios featured in the MindBullets Scenario Matrix below:

Constitutional Europe

Builds on the status quo with reforms to make the EU work better. Drawn up after more than two-and-a-half years under the chairmanship of the former French president Valéry Giscard d’Estaing, it is the result of compromises and trade-offs. It combines existing treaties into one text and changes EU decision-making structures to help an enlarged EU operate more efficiently. It creates a new president of the European Council and an EU foreign minister. Other changes include a voting system linked to population size and a cut in the size of the Commission from 2014. Nine countries have already ratified the treaty.

NATIONS IN FAVOUR: Spain, Italy, Greece

Free-trade Europe

The British model under which European co-operation is limited or kept at an inter-governmental level (preferably with national vetoes). The cornerstone is seen as the single market, allowing free movement of goods and eliminating trade barriers. Meanwhile, the UK has always favored EU enlargement in part to weaken prospects for closer integration in core economic areas such as harmonizing taxes. Britain has won new allies with the accession of Eastern European nations which tend to be more Atlanticist in instinct and put greater onus on free markets and competition than social protection.
NATIONS IN FAVOUR: UK, Poland, Estonia

United States of Europe

The dream of some of the EU’s founders such as Jean Monnet and Altiero Spinelli, the idea of a federal Europe has receded as the EU has enlarged. It describes a division of responsibilities between a central authority and states, regions or provinces. But it is usually coupled with the term “superstate” in Britain, or shorthand for closer European integration, for example on the economy, taxation, agriculture and the environment. Founding EU nations (France, Germany, Italy and the Benelux countries) traditionally supported closer union, though even in these, its appeal fades.
NATIONS IN FAVOUR: Luxembourg, Belgium

Multi-speed Europe

An idea debated much over the past decade which would allow an inner core of countries – probably based on France, Germany and the Benelux – to forge ahead with closer integration, leaving Britain and others in the slow lane. It already exists with the single currency and the Schengen passport-free zone. The Nice Treaty allows groups of nations to identify areas where they want to co-operate more, though this has never been put into effect. If France and Germany could agree on common objectives they might use the mechanism, for example, to boost economic co-operation in the eurozone.
NATIONS IN FAVOUR: France, Germany

1950: Precursors to the EU
For centuries, Europe was the scene of frequent and bloody wars. In the period 1870 to 1945, France and Germany fought each other three times, with terrible loss of life. A number of European leaders became convinced that the only way to secure a lasting peace between their countries was to unite them economically and politically.

So, in 1950, the French Foreign Minister Robert Schuman proposed integrating the coal and steel industries of Western Europe. As a result, in 1951, the European Coal and Steel Community (ECSC) was set up, with six members: Belgium, West Germany, Luxembourg, France, Italy and the Netherlands. The power to take decisions about the coal and steel industry in these countries was placed in the hands of an independent, supranational body called the “High Authority”. Jean Monnet was its first President.

1992: Maastricht Treaty creates EU
The ECSC was such a success that, within a few years, these same six countries decided to go further and integrate other sectors of their economies. In 1957 they signed the Treaties of Rome, creating the European Atomic Energy Community (EURATOM) and the European Economic Community (EEC). The member states set about removing trade barriers between them and forming a “common market”.

In 1967 the institutions of the three European communities were merged. From this point on, there was a single Commission and a single Council of Ministers as well as the European Parliament.

Originally, the members of the European Parliament were chosen by the national parliaments but in 1979 the first direct elections were held, allowing the citizens of the member states to vote for the candidate of their choice. Since then, direct elections have been held every five years.

The Treaty of Maastricht (1992) introduced new forms of co-operation between the member state governments – for example on defense, and in the area of “justice and home affairs”. By adding this inter-governmental co-operation to the existing “Community” system, the Maastricht Treaty created the European Union (EU).

In 1992 the EU decided to go for economic and monetary union (EMU), involving the introduction of a single European currency managed by a European Central Bank. The single currency – the euro – became a reality on 1 January 2002, when euro notes and coins replaced national currencies in twelve of the 15 countries of the European Union (Belgium, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal and Finland).

2004: The growing EU family
The EU has grown in size with successive waves of accessions. Denmark, Ireland and the United Kingdom joined in 1973 followed by Greece in 1981, Spain and Portugal in 1986 and Austria, Finland and Sweden in 1995. The European Union welcomed ten new countries in 2004: Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia. Bulgaria and Romania expect to follow in 2007; Croatia and Turkey are beginning membership negotiations in 2005. To ensure that the enlarged EU can continue functioning efficiently, it needs a more streamlined system for taking decisions. That is why the Treaty of Nice lays down new rules governing the size of the EU institutions and the way they work. It came into force on 1 February 2003. It will be replaced, in 2006, by the new EU Constitution – if all EU countries approve this.

2005: Europe rejects new EU Constitution
With a requirement that all 25 member states sign off on the new constitution, France’s ‘non’ in a national referendum on 29 May precipitates a flood of negativism and forces a re-think of what the EU really is all about.

2006: Frantic re-negotiations
The past year has been characterized with frantic bureaucratic efforts to redefine the common ground but with little apparent progress. Tony Blair moves into the EU hot seat but is unable to create any further synergy.
Gordon Brown replaces Tony Blair as British PM and uses the slogan “Let’s get the best out of the EU” to signal an independent UK economic growth strategy – shedding what are perceived to be the “constraints to growth” imposed, for example, by EU labor laws.

New German Chancellor, Angela Merkel, Germany’s own ‘Iron Lady’, who succeeded Gerhard Schroeder earlier in the year, moves closer to the French in an attempt to build a powerful “economic core” for Europe. She invites the Benelux countries to join this highly integrated unit.

2007: UK, Germany and France go their own way
Brussels bureaucrats are perturbed by the fact that they appear to have been side-lined as some of the major countries in Europe have de facto usurped much of EU central power.

Links to related stories

Warning: Hazardous Thinking at Work

Despite appearances to the contrary, Futureworld cannot and does not predict the future. Our Mindbullets scenarios are fictitious and designed purely to explore possible futures, challenge and stimulate strategic thinking. Use these at your own risk. Any reference to actual people, entities or events is entirely allegorical. Copyright Futureworld International Limited. Reproduction or distribution permitted only with recognition of Copyright and the inclusion of this disclaimer. © Public domain image.

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