The Case for a Two Speed Europe

During my fellowship, I plan to deepen the reflection on the European Union that I began in the concluding chapter of my recent book "The Treaty of Lisbon :  a legal and political analysis" (Cambridge Univ. Press, June 2010).  I believe that the Treaty of Lisbon has not put an end to the major imbalances which affect the Union.  These imbalances, some of which are due to the fact that the EU remains a classic international organisation in some areas, whereas it works in a federal way in other areas, go to the very core of the European project.  They create uncertainty and may be a cause of instability; in any case, they make it difficult for the EU to continue to work effectively in a durable way.  The most serious of these imbalances are the following :

1. The first one concerns Economic and Monetary Union.  The euro - that is, the monetary part of EMU - is managed in a 'federal' way by the European Central Bank, but its economic part - that is, budgetary and economic policies - remains almost completely in the hands of the Member States.  A monetary union which is based on loose rules on budgetary/economic governance will remain incomplete and, therefore, will not guarantee stability.
2. The second one concerns the internal market, whose aim and effect are to open the internal borders to a free flow of goods, services, capital and workers.  This aim has more or less been achieved, with the corollary condition that European legislation prevents distortions of competition between Member States.  However, as differences in fiscal and social laws are not considered as distortions of competition, Member States retain almost complete freedom in those fields, hence the tensions over what some call 'fiscal or social dumping'.
3. The third imbalance concerns the free movement of persons.  The EU allows the free movement of persons inside its borders, and the rules and instruments regulating this freedom are decided in a 'federal' way.  However, Member States keep their power to grant their nationality to non-EU citizens, or to allow them to immigrate for long-term stays, thus offering them complete freedom to move to any other EU State.
4. A fourth imbalance concerns participation in EU military operations : the way it works is that the Member States which decide to participate with troops also have to pay for their expenses.  Therefore, they 'pay twice' (men and money), whereas the Member States which do not participate with troops do not contribute to their financing, even though the military operations are carried out on behalf of the EU.  This reflects the reduction of public budgets for defence in Europe.
5. Last, but not least, the most important imbalance concerns the EU's political legitimacy : as competences to adopt legislation were transferred by the Member States to the EU, this reduced the powers of their national parliaments.  In parallel, Treaty after Treaty, more powers were given to the European Parliament.  However, with steadily falling turn-outs in elections to the European Parliament, the MEPs are elected by fewer and fewer voters.  The truth is that there is no political game at the European level.  The political game continues to be played out almost exclusively at the national level, in each of the 27 Member States.  As a result, citizens think they do not have enough control over the way the decisions and laws are made at the European level and they feel that they have less control over the political decisions which affect their life and their future.

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If this analysis is - even partially - accurate, the EU's present construction will hardly be able to remain stable in the future.  These imbalances not only prevent the EU from developing further, they also risk preventing it from functioning in a satisfactory and sustainable way.  Moreover, these imbalances have become more and more difficult to overcome.  Although they existed previously, the successive EU enlargements have led to more heterogeneity - geographical, historical, cultural and economic - between the Member States.  Therefore, difficult discussions and decisions are required in the years to come.  As the EU is and will remain not only desirable, but also necessary in order to preserve peace, freedom and prosperity in Europe and to meet the challenges of the future, there is no other way for it than to regain the support of its citizens.  This major issue will not be resolved without strong political will, as it implies a change of political culture.  In the absence of such political will, one may expect a stagnation of the EU. However, the fact remains that the methods followed in the past - inter-governmental co-operation and classic international organisations - have proved to be less effective and less democratic than the (imperfect) EU.