The State of the Union: Period of Reflection or the Sound of Silence

The State of the Union: Period of Reflection or the Sound of Silence

Abstract: Based on an experts’ survey conducted in the 25 EU member states, this report analyses the state of the European Union and its current crisis.

Theme: The recent issue of EU-25 Watch, a joint European project in which the Elcano Royal Institute participates, provides a valuable insight into national debates on key EU topics such as the Constitutional treaty, enlargement, foreign policy and the Lisbon agenda during the so-called ‘reflection period’. The analysis of this broad overview prepared by authors from all EU member states plus Bulgaria, Rumania, Croatia and Turkey suggests five observations regarding the current ‘state of the Union’ (see for the full report).

Summary: In June 2005 the EU’s heads of state and government initiated the so-called ‘period of reflection’ to launch a broad debate about the future of the EU. So far this debate has started slowly. However, the results of EU-25 Watch lead to five observations that are put forward for further discussion: (1) the heterogeneity and diversity of preferences, conditions and capacities among the EU member states as a dominant feature, resulting from different cycles of modernisation; (2) the widening gap between the EU and the citizens of its member states, interpreted not only in terms of diminishing trust but also as a crisis of political leadership; (3) the Constitutional treaty and the wait-and-see approach adopted by many governments to de-dramatise the current situation, which has so far not been very productive in terms of original thinking; (4) the enlargement fatigue that is sweeping through the old member states and has inspired an intensive reflection upon the EU’s consolidation and limits; and (5) an integration process that is currently being driven largely by external factors, especially as an attractive integration project à la single market or the Euro –that would strengthen the EU’s internal political cohesion– is lacking. As regards the EU’s priorities and perspectives for the next few years there is some awareness that institutional reforms will be put on the EU’s future agenda, with or without the Constitutional treaty. In line with a pragmatic approach this is likely to be done case by case and with a relatively low level of ambition, at least in the year 2006.

Analysis: After 2004’s big-bang enlargement and the setback in the process of ratifying the Constitutional treaty (TCE) in the spring of 2005, the European Union is in a bemused state of mind. The ‘period of reflection’ is intended to stimulate the debate on how to deal with the EU’s political crisis and reconnect it with its citizens. However, it has had a slow start. So far, it has been a case of a ‘sound of silence’ rather than of a ‘sound of Europe’ to attract the attention of the public at large.

The 25 heads of state and government acknowledge the importance of following closely the ‘national debates on the future of Europe underway in all member states’. This is precisely the underlying idea and purpose of the EU-25 Watch: to find out about preferences, mindsets and other domestic conditions which shape the positions of governments and other actors in the EU arena and which drive European integration.

The recent issue of EU-25 Watch sheds light on how key issues such as the ‘Lisbon process’ and the ‘EU’s role in the world’ are framed, debated and addressed in the 25 member states and in four acceding/candidate countries (Bulgaria, Rumania, Croatia and Turkey). Five general observations are put forward for further discussion in the following pages.

(1) Heterogeneity and Diversity
The heterogeneity and diversity of preferences, conditions and capacities is a dominant feature of the EU-25. Member states are currently going through different cycles of modernisation and adaptation. The diverse and uneven implementation of the Lisbon strategy is a case in point. While old member states like France, Germany and Italy are particularly slow, the Nordic countries and other newcomers with a recent history of Europeanisation via membership are on the path of reform and still have an impetus for change that others lack. As the Spanish contribution to EU-25 Watch explains: ‘There is also a widespread perception of the crisis being a clash between a dynamic Europe, made up of new and old members from the periphery that are growing and therefore confident in the future, and old members from the core that are in the grip of economic crises and political anxieties about the future’.

Interestingly, in a spectrum ranging from the dynamic at one extreme to the relatively stagnant at the other, the new member states are located somewhere in between. Hungary, Estonia and Latvia are clear examples: they do not follow one and the same approach, but they share the basic orientations and conditions of countries that have undergone a comprehensive pre-accession and modernisation process and are still on a course of reform and catching up. Like many Western European and Mediterranean countries (eg, Spain) they lean towards corporatist and/or clientelist social models that seek a balance between efficiency and solidarity. Thus they demand high transfers from the EU budget for the agricultural sector, for the reduction of regional and social disparities and for investments in infrastructure. However, for catching up with the comparatively wealthy and robust economies of the old EU-15 they try to make use of their comparative advantages to the full. That is why –for the time being– they are also in favour of a liberal agenda, why they support the freedom of services based on the country of origin principle, why many are reluctant to be constrained by a working-time directive and why they try to attract FDI through low taxes and simple tax systems.

Given this background we conclude that the member states are currently undergoing different cycles of modernisation and adaptation, resulting in a lack of simultaneity. This hampers any substantial agreement on concrete measures and effective programmes at the EU level.

The attitudes towards two directives which are currently under debate in the EU –the services directive and the working-time directive– show the differing cost/benefit analyses and diverse effects that are expected from implementation. They also show that the level of commitment and participation of non-governmental actors (social partners) and national parliaments in the formation of a government’s political position varies considerably from state to state: the contributions to EU-25 Watch suggest that their participation is generally more significant among the ‘old’ member states while official government positions seem to dominate especially in many of the 10 member states that entered the EU in 2004. It will be crucial for the EU to assess and explain the likely social fall-out and the overall impact of any piece of legislation as far as member states, economic sectors, social and professional groups and others are concerned.

The bargaining over the financial framework proved that for the EU it is becoming increasingly difficult to produce a coherent and convincing output. Given the constellation of member states described above, coalition-building is volatile and will certainly remain an important issue for all governments. In a larger and more diverse EU the complexities and perplexities of problems and solutions are far greater. Thus diversity and heterogeneity aggravate the EU’s legitimacy/efficiency dilemma. The upgrading of the common interest –which should be more than the agglomeration of the interests of the 25– is a widespread demand but is hard to achieve.

The Gap Between the Citizens and the Political Class
Across the EU the gap between the citizens and the political class is widening. Considering the lack of trust, it is not enough for European leaders to carry on with business as usual, especially since the political crisis is widely interpreted as a crisis of leadership at both the national and the EU levels.

Overall, public opinion in the member states is more sceptical and status-quo oriented than is the case with the political class. This may be one reason why better leadership is demanded by so many commentators and policy makers, among them Tony Blair: ‘The crisis should be seen as one of political leadership in general; neither at the national nor the European level have politicians been providing the answers that the people are demanding as a response to economic and social change’. In the Finnish chapter on the constitutional crisis the authors characterise the crisis ‘as a failure of the European leadership in listening and relating to the wider public’. The Hungarian report goes even further, stating that ‘European integration is desperately missing political leadership and visions of the future. One can say that the highest ranking politicians of the member states “betrayed” Europe, since they do not perceive the EU any more as an excellent historical opportunity to solve problems and face challenges in common, but rather as a battlefield of clashing national interests.’

However, if there is a consensus, it is that the EU should find the ideal way to combine competitiveness with social security. In this respect, and despite the many types of social models and their variations that exist in the EU, the authors point out a marked difference to the US. It has often been concluded that citizens (and increasingly politicians as well) are ambivalent about whether the EU is part of the problem or part of the solution of challenges such as globalisation. This seems to be more than a question of better communication; it is also a question of clear-cut analysis. Political actors (but also the EU’s institutions) have to know and explain to what extent there is an added value in involving the EU or in transferring responsibilities to the EU in a given field of policy. This is even more difficult at times when citizens lack trust in the EU’s institutions.

At the same time, the EU is also confronted with high expectations about what it should do, so that there is the risk of a growing expectations/capability gap. The debate about the Constitution and the demand for a ‘social Europe’ illustrate these contradictory expectations and the gap between the EU’s competences and the public’s expectations. This is reflected in statements such as that by the Belgian Secretary of State for European Affairs, Didier Donfut: ‘Europe’s citizens do not see the Union bringing any solution that is decisive for guaranteeing their existence. They have increasing expectations with regard to Europe, but many have the impression that Europe is becoming a problem rather than a solution for their interests in unemployment, social vulnerability, environmental deterioration, climate change, de-industrialisation and increased energy costs.’

The Constitutional Treaty – Wait and See
The future of the TCE is open and a wait-and-see attitude is prevalent in most member states. Some, like the Belgian Prime Minister Verhofstadt argue that this is the time to make choices, for core and avantgarde groups or for a stagnant ever-widening EU, for a political union or for a free trade area, etc. Others, like the Irish government, remind us that ‘… the very essence of the EU has been built on consent and consensus and such an approach is inherently time-consuming and difficult, but building Europe step by step is the only approach in a world where event the largest state on its own will not be able to effectively meet the challenges of globalisation’.

While the notion of ‘crisis’ is widely accepted as a description of the EU after the negative referendums and the failed summit of June 2005, the governments of the 25 responded calmly and were eager to de-dramatise the situation. They interpreted the ‘non’ and ‘nee’ as being more than an accident but less than a catastrophe, they called them a ‘setback’, a ‘warning’ or a ‘wake-up call’ rather than a ‘turning point’ in European integration. However, in media and academic comments, and probably also behind closed doors, cabinets and party circles discuss the extent of this crisis with more intensity and critical objectivity.

Most actors (probably including the citizens) are at a loss about how to make sense of the crisis and how to overcome it, ie, how to exploit the chances offered by the wake-up call. Those who voted negatively or did not vote at all did not send an unambiguous message: their reasons were rooted in the domestic economic and political situation –aspects that are intense– and echoed a growing estrangement vis-à-vis the EU. The image of the EU as a stronghold to cope with the challenges of the future is diminishing.

As already pointed out above, many contributors to ‘EU-25 Watch’ No. 2 interpret the constitutional crisis as a crisis of leadership. Apparently, governments are hesitant how to respond to the significant degree of discontent. To go on as if nothing had changed –an option provided for by the bureaucratic machinery (at all levels of the EU) that continues to work as a matter of routine– is perceived as disregarding those who said ‘no’. A minority of authors argues that the TCE is dead and cannot be saved. The Polish report contains a statement of the leader of the ruling Law and Justice Party, Jaroslaw Kaczynski, who claims that the whole idea of the reflection period unnecessarily prolongs the crisis: ‘We should accept that the constitutional treaty was rejected, the Nice Treaty is in force and if we were to discuss a long term solution of the institutional problems we should start from the scratch’.

More frequent is a ‘wait and see attitude’ and the impulse rather than the strategy to shelve the TCE or, as formulated in the Hungarian report, the document’s ‘hibernation’. This is not only an expression of the need for reflection and orientation. It also reveals that a consistent idea or programme for an alternative and different EU is missing. This is the reason why many shy away from obvious alternatives, be it cherry picking, rewriting/re-organising parts of the TCE or starting all over again from the Nice treaty. A core-Europe or other flexible arrangements of ‘25 minus x’ to help govern an ever-larger EU have little support from either governments or citizens alike.

The slow start of the ‘period of reflection’ in the member states underlines that a cohesive agent is missing but also that the shock is not as productive in terms of original thinking as hoped for. Some experiences are disastrous, like the one in the Netherlands where after the rejection of the TCE a broad public debate was supposed to be launched, but eventually had to be stopped even before it started due to disagreements between political parties, the government and parliament. In other member states it has also proved to be very difficult to engage the citizens in a public debate on the content of the TCE.

Bearing in mind all these aspects one could ask: is the so called constitutional crisis an episode rather than a critical juncture? Probably only historians will tell us, but there is a danger in simply going on with business as usual. One of the reasons why the EU ran into the ‘referendum trap’ is that it underestimated latent medium-term developments and ignored processes of declining legitimacy and diminishing levels of mutual trust among member states. So far the reflection period has shown that, taking into consideration the widening gap between citizens and the political elite, an intense public debate cannot simply be launched by decree and that trust in the EU cannot be restored merely through a public relations exercise.

Enlargement and EU Fatigue
The consolidation and the limits of the EU in political, functional and also geographical terms is becoming a major concern in member states. Enlargement fatigue sweeps through the old member states. After accession, EU-fatigue is on the rise in the new member states also. They are annoyed by the old member states who have failed to win public support for the constitution but put the blame on the recent enlargement. As part of the above mentioned changing country and preference constellations new roles are being shaped by member states. Former sponsors of enlargement are now perceived as mostly concerned with the defence of their comparative advantages and the status quo.

Thus there is significant demand for internal political cohesion and consolidation after the big-bang enlargement.

Apparently, the EU –that now encompasses the largest part of the continent– needs to reflect upon its limits in geographical terms also. There is not a single government that straightforwardly argues that the EU should definitely answer where it should end. However, the EU has not formally entered into any further commitments that go beyond the four countries that are also covered by the ‘EU-25 Watch’ (Bulgaria, Romania, Turkey and Croatia) and the rest of the Western Balkans that have a ‘European perspective’, as well as the remaining EFTA countries. Notwithstanding the affirmation of consolidation (and as far as the criteria for qualifying for membership is concerned), as in the past, proximity and ties with non-EU neighbours determine the preferences of members to paving the way for their neighbours to join the EU in the future. The Ukraine and Moldova are obvious candidates to this line of thinking.

There is however no movement within the EU for closing the door to others forever. Moreover, the reports show a strong sense of keeping the promise and sticking to the signed treaty on accession with Bulgaria and Romania, despite concerns as to their suitability in political and economic terms. This is one reason why many reports now refer to a strict observance of the Copenhagen criteria and also refer to the Union’s capacity to absorb new members without losing its dynamics. A change is underway, suggesting the need to consolidate and ensure the already large EU’s functioning rather than promoting further expansion.

External Factors Drive Integration
European integration is currently largely driven by external factors that are setting the priorities for the EU. However, an attractive integration project à la single market or EMU that would strengthen internal political cohesion of the EU is lacking.

Citizens and governments alike want ‘more Europe’ in the sense that more collective action and representation would be welcome for the least integrated fields, the CFSP/ESDP and issues of internal security such as fighting terrorism and international crime. This does not necessarily correspond with the wish to transfer competences, to create a European army or to yield border control. But these are surely the most dynamic areas. The new members have also discovered the added value of CFSP and ESDP. This is an interesting process for countries that generally favour a strong transatlantic link and that see NATO, ie, the US, as the primary provider of their security.

The European Security Strategy is the document in which the strategic interests of the 25 converge. It is perceived as a good basis for a global and significant role for the EU. However, potentially controversial issues include: Russia, Eastern Neighbours, regionalisation of the CFSP, multi-speed/directoire tendencies (EU-3), the export of democracy and the NATO-EU-relationship.

There is a lot of sympathy for institutional reforms as implied by the TCE in the field of the CFSP/ESDP. Nevertheless, as long as the period of reflection continues and the fate of the TCE is undecided there are only minimal steps towards an anticipated implementation. This concerns the European External Service as well as the Foreign Minister of the Union, topics that are covered intensively in the chapter on the EU’s role in the world.

When asked to name upcoming issues on the national agendas of the 29 countries that might over time also be uploaded to the EU level or influence decisions taken there many authors identified topics that are linked to external policies: minorities and neighbours (Hungary), immigration (Denmark, France, Ireland, Malta), troops in Iraq (Italy), energy security (Austria, Lithuania, Malta), becoming a full member of the Schengen area (Bulgaria, Estonia, Latvia, Slovakia) and global/international governance (Finland).

While external factors increasingly seem to drive European integration and set the EU’s priorities for action, an attractive integration project (à la Single Market or EMU) is lacking. The goal to become a geostrategic actor cannot sufficiently mobilise political identification and resources and thus ensure the political cohesion, legitimacy and effectiveness that is expected of the Union. As the Danish report puts it, the traditional vision of Europe as ‘a common project for peace is forgotten. Peace and security is not enough to justify the existence of the EU today. People are focused on how the EU affects their everyday lives, and on how they can benefit from it. The Foreign Minister describes this tendency towards a more utilitarian approach to the EU as “tomorrow’s Europe of realism in contrast to yesterday’s Europe of idealism”.’


Outlook: Functionalism is Not Yet Dead
Following the trend of the previous rounds of enlargement, pragmatism prevails regarding the direction of the integration process and its methods. The glue is missing and a visionary project of integration not in sight. At the beginning of 2006 the EU finds itself in a puzzling state of mind and with many loose endings. The scenario in which the EU is trapped is not an unlikely one. The many elections in the EU member states at the national or regional level (in at least 18 member states) in 2006/2007 also limit the room for manoeuvre. The political crisis of the EU is to a considerable extent the crisis of the member states with many weak governments and leaders. Still, glimpses of hope exist that the TCE will eventually be ratified and take effect.

The EU is looking for a new balance to cope with heterogeneity and diversity, to reconnect with the European citizens, to address the finalité issues and reconsider the meaning of what consolidation and limits of the EU will mean in the future and last but not least how to provide security and promote its ideas of and interests in global governance.

Countries that have recently acceded to the EU seem particularly well equipped to cope with change and the demands of competitiveness. Certainly, accession is only one condition, however it seems to be a crucial one because the preparation for membership demands a comprehensive package of modernisation measures that shakes up the whole state and economy. New members are on a path of reform and still have an impetus for change that others lack.

With regard to priorities and perspectives of the EU over the next years there is some awareness that institutional reforms will be put on the EU’s future agenda, with or without the TCE. In line with a pragmatic approach this is likely to be done case by case and with a rather low level of ambition, at least in the year 2006. Besides security issues the goals and problems dealt with under the Lisbon process will become a top priority for the EU and its member states as well as for the acceding countries. Both sides of Lisbon, the competitiveness and social cohesion demands, are reflected in the country contributions. A debate on EU wide minimum standards and corridors for tax rates etc. will surely be discussed across the EU. There might be the danger of stagnation inherent to the new realism and non-charismatic piecemeal approach. However, this might nevertheless produce real progress and prove that “functionalism” is not yet dead.

Barbara Lippert
Deputy Director, Institut für Europäische Politik (IEP), Berlin

Timo Goosmann
Research Associate, IEP, Berlin