A Multispeed Europe Will Be Hard to Pull Off

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The  European Council, which includes leaders of EU member states, normally issues a consensus document at the end of each meeting. On Thursday, it failed to do so because one member — Polish Prime Minister Beata Szydlo — refused to approve it. The spat tells us something about the rocky future of a multispeed Europe.

Szydlo’s snub had nothing to do with the document’s content. Poland’s nationalist government tried to defeat the re-election of former Polish Prime Minister Donald Tusk as European Council president, but its protests were ignored. Tusk was first chosen in 2014 in recognition of Poland’s, and Eastern Europe’s, growing role in the bloc. But there’s bad blood between Tusk and the current Polish government’s chief ideologist and informal leader Jaroslaw Kaczynski, and Poland fought to get him removed. Szydlo, in a huff, refused to back the anodyne communique and was conspicuously late for Friday’s session.

The subsequent vote showed Poland didn’t really have a veto and that the EU has no qualms in supporting the opposition, not the government, in a member state. That’s a strong warning not just to Poland but also to Hungary, another illiberal dissident in the EU: If they insist on being ornery, the bloc could, for all practical purposes, abolish its consensus procedure and start making majority decisions. It looks like the multi-speed Europe has already arrived.

The idea of a European Union of many speeds, in which nations progress toward a federation at their own pace, might be looked upon as something of a blackmail tool for the EU’s Big Four — Germany, France, Spain and Italy — to force the other 23 EU members to accept their leadership. But if it became an official EU policy, how would it actually work? This week’s EU summit has provided some clues.

EU leaders, which make up the Council, debated what they should say later this month as they commemorate the 1957 Treaty of Rome, which opened the path toward the EU. One of the final passages in the draft document bothered Eastern European governments and independent-minded Scandinavians:

We will work together to promote the common good, on the understanding that some of us can move closer, further and faster in some areas, keeping the door open to those who want to join later, and preserving the integrity of the single market, the Schengen area, and the EU as a whole. An undivided and indivisible union, which acts together whenever possible, at different paces and intensity whenever necessary.

The language seems intended to reassure those on the slow-track that they are still part of the team. And in the white paper on the future of Europe, recently presented by European Commission President Jean-Claude Juncker, the multispeed option was illustrated with innocuous examples, such as when 12 EU countries agree to harmonize connected vehicle regulations. But that’s mainly sugar-coating.

In reality, multispeed Europe would most likely mean a core of euro zone members moving toward a fiscal union. It’s unclear which of them would want to go ahead with this, and whether those who want it would qualify, but the development would set off alarm bells to all net recipients of EU funds who are not part of the euro zone. With a two-tier budget, the net contributors would be more likely to keep most of the money inside the first tier, sharing it among the more close-knit group.

The core group, in theory, would be more likely to arrive at a consensus in all matters, such as borders, immigration, labor laws, even taxes. Inevitably, the EU would become a more German sort of organization where a discussion precedes any decision but there’s no coddling of those who don’t go along with the majority. That’s the kind of approach French presidential candidate Emmanuel Macron has been pushing in his campaign appearances. He said last week:

If the euro zone has not made progress in recent years it is because it is ashamed of itself and because it is afraid to face up to those that preferred to stay on the balcony or in the entrance hall. Let’s dare to go for a multi-speed Europe.

If the implicit threat is that the core won’t care if they stay in the EU or leave it, it’s hard to see that as very credible. There is no consensus on fiscal policies among euro members. They can’t even seem to agree on a project to introduce a single financial transaction tax, put forward by the European Commission back in 2011. The 11 nations that formed the working group on the proposed levy are the potential core of a multispeed Europe. But they’ve barely progressed, and Estonia has even dropped out of the working group.

The EU’s original sin is that it failed to define its federalist goals in specific terms, making the economic benefits of the union available to many countries that didn’t feel like sacrificing much of their sovereignty in exchange. Relegating them to second class status isn’t as easy as outvoting them the way Poland was outvoted this week. It takes federalist determination on the part of a group of economically powerful EU members. If someone is sidelined for moving too slowly, another must be prepared to move fast.

In Germany, both Chancellor Angela Merkel and her main rival in the upcoming election, Social Democrat leader Martin Schulz, are likely to show the necessary determination for a closer union; so will Macron, if he wins the French presidency. But Spanish, Italian, Dutch and Belgian leaders won’t be as psyched, given these countries’ fractured political systems and the governments’ precariousness. And in any case, it’s almost impossible to start putting the inner circle, “high-speed” group together until this year’s elections are over.

Meanwhile, the architecture talks will continue and various configurations will be tried. Belgium, Netherlands and Luxembourg on Friday invited the Visegrad Four — Poland, Hungary, Slovakia and the Czech Republic — for separate talks on the future of the EU. The Benelux countries’ leaders also plan to meet with their counterparts from the Baltics. Dutch Prime Minister Mark Rutte, who is behind the initiative, wants to try the traditional Dutch consensus-building technique in the hope that it will work better than thinly veiled exclusion threats.

Perhaps a new consensus will emerge; or maybe the Eastern European and Nordic members will simply have their own contingency plans. That’s not a desirable outcome for some of the nations that could potentially be part of the core EU. And yet, messy as multispeed is, the alternatives may just be worse.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Leonid Bershidsky at lbershidsky@bloomberg.net

To contact the editor responsible for this story:
Therese Raphael at traphael4@bloomberg.net

www.bloomberg.com

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