EU reluctantly accepts two-speed system

By George N. Tzogopoulos Source:Global Times Published: 2013-11-11 20:28:01

Illustration: Liu Rui/GT

Illustration: Liu Rui/GT



  

The EU has not yet overcome its deep crisis. Although several politicians suggest that the worst is now behind them and propose an optimistic vision of the future, uncertainty is still critical.

Radical measures enhancing economic governance are required for Europe to secure its safe exit from the current crisis. These include the creation of a banking and fiscal union and possibly of a political one.

But the adoption of that kind of unprecedented measures goes hand-in-hand with the necessity of a change of treaties. German Minister of Finance Wolfgang Schäuble, for instance, considers this an essential step on the road toward a banking union.

This process, however, will take long time as various European countries have to organize referenda in order to obtain approval from their citizens. Additionally, its successful ending cannot be taken for granted because unanimity is necessary.

As long as euroscepticism continues to increase because of rising unemployment and poverty, the requirement of all 28 member states to agree on treaty changes might entrap Brussels in a new risky adventure.

The failure of the 2005 referendum in France is a characteristic example, demonstrating that the stance of public opinion can hardly be predicted.

Within this framework, other ideas for reforming the modus operandi of Brussels have started to be discussed and developed, gaining ground recently.

The most significant proposal suggests that the eurozone has to distinguish itself from the EU in practice and proceed at its own pace. This does not entail a separation of the two bodies per se but an emergence of a two-speed Europe.

Countries accepting the technocratic way the eurozone is operating will be affiliated with it, while eurosceptic states disagreeing with this approach will only belong to the EU.

Britain and other countries, such as Sweden and the Czech Republic, are hesitant about participating in the banking union, and French President François Hollande has openly talked about a new Europe with two different categories of states.

There is no question that the eurozone already plays a critical role in European politics and economics. The outbreak and the continuation of the debt crisis has led the 17 finance ministers of the group to make important decisions regarding the approval and release of financial assistance for problematic states.

Eurozone governance has seen a greater boost than the EU over the last few years. New instruments such as the European Stability Mechanism have been established which are not placed within the context of EU treaties. Therefore, the participation of EU institutions is limited or downgraded, if not excluded.

But the question remains: What will be the nature of the new eurozone governance? Will it be supranational or intergovernmental? In other words, will a central authority be responsible or will member states hold the keys of decision-making?

No white-or-black answer can be given, but it is almost certain that priority will be given to cooperation among states.

France and Germany will be the driving forces behind the new European economic architecture. Future steps will depend on a potential compromise which will be on the agenda of both Paris and Berlin after the new German government is formed.

It is expected that the power of the European Stability Mechanism will be further increased, and that its new capacities will make up the lion's share of discussions between Hollande and Chancellor Angela Merkel.

The debt crisis forced European countries to embark on impressive acrobatics in order to save the common currency. But the deepening integration of the eurozone makes the formation of two-tier Europe a natural consequence.

As long as members of the eurosystem seek institutional autonomy, this tendency will be possibly reinforced.

Of course, no one can now anticipate how the two-speed Europe will look like, whether the new model will be sustainable and if it will negatively impact on traditional activities of Brussels, influencing the EU's leverage in global politics. But we can say that Europe is about to undergo serious changes, with the eurozone as the spearhead.

The author is a research fellow at the Hellenic Foundation for European and Foreign Policy. opinion@globaltimes.com.cn

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