Adieu, Europe?

The machinery of the European Union has recovered from the shock of the failed French and Dutch referenda, but not the heart that pumps it, says Aurore Wanlin.

When the French and the Dutch voted against the draft European Union constitution in May 2005, many thought this was an unprecedented crisis in Europe's history. One year on, however, little has changed. In Brussels, everything is back to work as usual. Commentators are increasingly inclined to see the talk of a crisis as "overblown and artificial" (Frank Vibert, "'Absorption capacity': the wrong debate", 21 June 2006). Several factors combine to explain this sense of optimism.

For one thing, the turmoil that many of the constitution's supporters predicted in case of a "no" has yet to come. The EU has even taken some significant and difficult decisions over the past months: the opening of accession negotiations with Turkey in October 2005, the agreement of a new budget deal in December, and the qualified decision on a roadmap to Bulgarian and Romanian membership in January 2007. All this, and economic prospects in some of the union's leading economies are finally looking brighter.

These events can plausibly be seen as evidence of a recovery of balance, while current difficulties – such as yet another skirmish between the United Kingdom and other memberstates over the budget settlement – do not appear to call the EU's future into question.

A further reason given for feeling cautious optimism is that a consensus is slowly emerging over three possible approaches that might – individually, or in some combination – offer a route out of the current institutional stalemate.

First, national governments are increasingly rallying to the view that the constitution will never be implemented under its current form. Instead, progress can be made by implementing bits of the constitution or other integrative measures (such as the European Defence Agency) on the ground in an informal or semi-formal way.

Second, and in the longer term, some European politicians (such as France's interior minister and likely presidential candidate in 2007, Nicolas Sarkozy) are calling on member-states to sign a new treaty that would incorporate parts of the constitution, then push it through their parliaments by "normal" legislation rather than resorting to referenda.

Third, agreement among European governments is emerging around the "Hampton Court agenda", alternatively called the Europe des projets. This involves a short-term focus on concrete issues that are relevant to their citizens' day-to-day lives in an attempt to bring the EU closer to the people. Energy and migration in particular are top of their list.

A choice from this set of pragmatic solutions to Europe's current problems is the only course at present available to the EU. This could be presented as an attractive as well as an essential course of action. But it underestimates both the intricacy and the depth of the constitutional crisis in which the EU remains trapped.

In a dark wood

There is no simple way out of the current institutional stalemate. The constitution rejected in 2005, after all, consisted of a whole range of complex and interrelated compromises that could not be easily renegotiated. Moreover, even if EU governments did prove capable of negotiating a new treaty, the results would be modest. The Dutch and the French in particular would oppose any change that resembled an attempt to reintroduce the constitution through the back door. Some countries, like Ireland, would have to hold a new referendum. This would almost certainly prompt opposition parties in other countries to put pressure on their governments to hold referenda as well.

The same difficulties exist regarding the so-called Europe des projets. The successful execution of such projects requires governments to work together effectively. The EU does not lack grand ambitions, but it certainly lacks the means to fulfil them. Over the last ten years or so, member-states have increasingly been reluctant to use the traditional community method that delegates parts of national sovereignty to the EU to fulfil a specific task. By contrast, they have resorted more and more to intergovernmental instruments. This often has the effect of blurring the division of competences between the European and national levels and making it harder for the EU to reach its targets.

A good case in point is the open method of coordination, a flexible but often inefficient tool used to fulfil the Lisbon agenda, agreed in 2000 by EU leaders to increase Europe's competitiveness. At the same time, intergovernmental cooperation itself is no panacea: as national governments increasingly seek to defend their national interests and resort to protectionist rhetoric, the relations between them can easily sour.

Waiting for the light

The overall crisis of the EU that is revealed here, however, is not new. It has its roots as far back as the beginning of the 1990s with the Maastricht treaty. The French and Dutch referenda of 2005 were simply a wake-up call. There is no escape from the reality they reveal: that it is likely to be much harder to pursue European integration in the future. There are three main reasons for this.

First, European integration is reaching a stage where it encroaches on core national sovereignty. In the past the EU has worked more or less along the lines of the "bicycle theory": each new step towards more integration leads to the next one (or "if you don't keep going forward you will fall over"). Creating a single market by getting rid of internal tariffs meant that the EU had to address regulatory barriers. The single market, coupled with the cross-border freedom of capital, led to the single currency. The price of this very success is that the EU has now reached a point where it will be much harder to go forward.

The services directive is the perfect example. It is more difficult to create a single market in services than in goods because it would set national social systems in direct competition. Such a step, though economically sensible, carries high political and social costs. Furthermore, future EU integration would inevitably concern taxation or foreign policy, which are at the core of national sovereignty. The union will have to make sure that it takes the people on board and has the legitimacy to make such steps. Even this may not be enough: governments will also need to think carefully and make sure they give the EU the means to reach its objectives.

A second obstacle to further European integration is enlargement. Enlargement has long provided a motor for further political integration and institutional changes. However, the latest EU enlargement, the inclusion of ten new member-states (mainly from eastern and central Europe) in May 2004, created the feeling that the EU was coming closer to its "natural" geographical limit.

This in turn is prompting a feeling that the EU as a political project might be nearing its end. Such a feeling, combined with a leadership vacuum, makes it unlikely that the EU will take any bold new steps towards more integration. There is no shortage of challenges which member-states could address together at the EU level – climate change or energy security are just two – but the political momentum behind the EU project is running out of steam.

A third reason is the combination of falling popular support coupled with the crisis of Europe's nation-states. There is a social malaise in Europe, most evidently in France but not confined to that country. Inequalities are rising significantly, feeding into a growing sense of insecurity and dissatisfaction among the middle classes and a growth in populist forces across Europe. But the EU itself risks being the primary casualty of such a development.

The European Union is nothing outside of its nation-states, unlike nation-states (from Portugal to Poland, Sweden to Slovakia) which have a legal and political existence independently of the EU. The EU is therefore vulnerable on two sides: it needs consistently to justify its raison d' être in a way that its member-states do not, while the member-states's democratic and social malaise threatens to weaken the union.

Popular support for the EU has been falling consistently over recent years. Member-states have fed this trend by using the EU as a scapegoat for their own ills and policy failures. Many people have held Europe responsible for the perceived negative impact of globalisation on their daily lives. The EU is viewed as a vehicle for forces such as neo-liberal economics and immigration – even globalisation itself – which many citizens would prefer to keep at bay.

In this difficult political and constitutional – even existential – predicament, the only way forward would be for the EU to find a new sense of direction and show its relevance to its citizens. This remains the European Union's "holy grail". It is more elusive now than ever.