By Adriano Bosoni
The European Union's future has been up for debate since the
Continent's economic crisis began nearly a decade ago. But questions
about the bloc's path have multiplied in recent years as Greece came
close to quitting the eurozone and the United Kingdom voted to
relinquish its EU membership for good. "The bloc's demise is not a
matter of if, but when," Euroskeptics insisted, to which their Europhile
peers replied, "The union is irreversible."
Yet like all political creations, the European Union is a momentary
construction in the vast expanse of history. One day it will disappear,
to be replaced by other entities, or it will continue in name only,
looking and operating far differently from the European Union of today.
It is impossible to know exactly when
this transformation will
happen or just how long the process will take. There are some clues,
however, as to how the new Europe will come about and, perhaps even more
important, what the agent of change will be. If anything, the
Continent's current crisis is a stark reminder that despite decades of
attempts to weaken it, the nation-state remains the most powerful
political unit in the European Union. And as it emerges from the rubble
of the Continent's latest experiment in integration, it will play a
crucial role in charting Europe's course forward.
A Union That's Anything but Uniform
Not all EU members are created equal. Losing a member that belongs to
the eurozone, for example, poses a much bigger threat to the rest of
the system than the departure of one that does not. The prospect of
Greece quitting the currency area in 2015 was probably more frightening
to France and Germany than
Britain's decision to leave the bloc a
year later. To be sure, both events would have serious consequences for
the European Union, but a Grexit would have immediately shaken the
financial foundation of the entire eurozone. The consequences of the
Brexit, however, will be more gradual.
Support for EU institutions likewise varies from country to country.
According to the Pew Research Center, 72 percent of Poles see the
European Union positively — a view only 38 percent of Frenchmen share.
Meanwhile, the latest Eurobarometer poll has put support for the
eurozone at a whopping 82 percent in Luxembourg, compared with a mere 54
percent in Italy. The Euroskepticism sweeping the Continent has assumed
different forms wherever it has taken root:
France's National Front advocates
leaving the European Union, while Italy's Five Star Movement calls for
abandoning only the eurozone. At the same time, moderate political
parties are increasingly seeking to end the free movement of workers and
to reintroduce border controls, even as they hold onto their EU
membership.
Amid these varying demands and faced with the prospect of a Grexit
and Brexit, the European Union is being forced to consider the process
for leaving the union and whether countries should be allowed to remain
members of some parts of the bloc and not others. During discussions on
the Greek bailout last year, some countries argued that leaving the
eurozone also meant leaving the European Union. Others proposed ways to
suspend Athens' membership in the currency area while preserving its
place in the Continental bloc. A year later, the same debates are being
had about Britain. Several EU members have said that access to Europe's
internal market comes at price — namely, accepting EU workers — while
others have proved more open to finding a compromise. Regardless of how
the talks between London and Brussels shake out over the next few years,
they will eventually result in
a roadmap for leaving the bloc that other members could use to guide their own departures.
Of course, this raises another question: Why would countries want to
leave the European Union or its structures in the first place? Again,
the answer depends on the member. Some governments, whether backed by a
popular referendum or parliamentary approval, might voluntarily choose
to leave. Studies like the latest Eurobarometer, which showed that the
Continent's trust in the European Union dropped sharply from 57 percent
in 2007 to 33 percent in 2016, suggest that the British referendum
may not be the last of its kind.
On the other hand, some governments might be forced out of the bloc,
should they become politically or financially unable to accept the
conditions attached to retaining their membership. (Athens, for
instance, made a conscious decision to consent to creditors' demands in
order to stay in the eurozone.) Still others could depart as the
entities they belong to dissolve, either as the result of a consensual
decision or because of an existential crisis.
Likelihood and Consequence
Which countries choose to renounce their membership in the European
Union or its institutions will determine the bloc's fate. The
organization could probably weather Croatia's departure, but it would
not survive France's. There is also something to be said for the
strength in numbers: The flight of a single, small economy would not
endanger the European Union, but a coordinated exit of several assuredly
would.
Certain political and geographic factors will affect members' chances
of someday withdrawing from the Continental bloc. A large Euroskeptic
population could pressure its government to opt out of the European
Union, or encourage politicians to do so in pursuit of higher approval
ratings. Countries with strong economies or strategic locations on the
Continent could use their advantages to wrangle a better exit deal — or
to exact concessions from Brussels in exchange for staying in the bloc.
Members with weaker economies, meanwhile, may have less choice in the
matter, since they would likely be the first casualties of any new EU
crisis to arise.
By and large, EU members can be divided into four categories of
countries based on the likelihood and consequences of their departure
from the union.
The Outsiders
In recent years, some of the European Union's harshest critics have
been Central and Eastern European members that do not belong to the
eurozone. Many of these countries view the European Union as a pact
among states that should remain sovereign, and they have guarded their
national powers from Brussels' ever-expanding reach.
Hungary and
Poland lead
the pack in their resistance to deeper European integration, but states
like the Czech Republic, Romania and Bulgaria have become similarly
skeptical of the eurozone and proposals to increase Brussels' authority.
This is not to say that these countries are willing to desert the
bloc. All are net receivers of EU aid and subsidies, and they see EU
membership as a route to modernizing their economies and attracting
foreign investment. Some even view the bloc as a guarantee of the West's
protection against Russian aggression. The majority of voters in the
region, moreover, still support the idea of staying in the European
Union.
Nevertheless, Central and Eastern European states will not hesitate
to assert their national rights and advocate weaker EU institutions.
Their opposition to integration will lend momentum to Euroskeptic
movements across the Continent seeking to renegotiate terms with
Brussels. Over time, persistent anti-EU rhetoric could boost nationalist
and populist forces in the region, cornering governments into making
decisions that may run counter to their strategic goals.
The Fragile Periphery
By comparison, countries in the eurozone's periphery tend to support
deeper European integration, though they are also among the most
vulnerable economies in the bloc. These states, which include Greece,
Portugal and Spain, rely on EU subsidies and development funds to stay
afloat. They will continue to back the concept of Continental
integration as long as it means financial aid for their foundering
economies.
The region has had its own complaints about the European Union, but
most did not appear until the Continent's financial crisis — and the
austerity measures that followed — began. Even then, instead of the
right-wing nationalism that emerged elsewhere in the bloc, these
countries largely
supported left-wing parties that
wanted to increase spending and restructure debt rather than close
borders or restrict immigration. (Right-wing nationalism rose somewhat
in Greece, but it did not rise nearly as dramatically as it did in
Northern Europe.)
The states along the eurozone's southern edge may leave the currency
zone at some point. But if they do, it is more likely to be in response
to an unexpected crisis than a planned decision. Though these countries
have similar visions of what they think the European Union looks like in
the future, their political and economic weakness will make it
difficult for them to
form an effective alliance and
to take charge of the bloc's decision-making process. And as weak
growth, feeble banking sectors, large debts and high unemployment
continue to take an economic toll, these countries' traditionally
pro-Europe populations could slowly start to turn on the bloc.
The Coalition Builders
The closer Euroskepticism creeps to the Continent's economic and
political core, the more dangerous it will become for the bloc. Northern
European countries such as Austria, Finland and the Netherlands are
some of the eurozone's richest and most fiscally disciplined members.
These states are largely preoccupied with protecting their national
wealth from Southern Europe, and they have strong Euroskeptic parties
that seek to defend their sovereignty against
the interference of EU institutions.
That said, they also have an incentive, given their economies' reliance
on exports, to protect their markets abroad — most of which belong to
the European Union.
Northern European countries tend to coordinate their moves
with their neighbors and
with larger powers. They are far more likely to collectively push for
Continental reform or for the creation of regional blocs than they are
to risk their own isolation by acting unilaterally. Though states like
Denmark and Sweden are not part of the eurozone, they are culturally and
ideologically similar to their counterparts in Northern Europe and
could someday join them in a regional replacement for the European
Union. Talk of forming a "northern eurozone" or "northern Schengen" has
become common in this part of Europe.
Lithuania, Latvia and Estonia are in some ways an exception, though.
They joined the European Union and eurozone to discourage Russian
aggression by linking themselves as closely to the West as possible. As
the home of the European Union's most important institutions, Belgium is
also set apart from its Northern European neighbors, and regional
politics often take precedence over national efforts to chip away at the
bloc's influence. Each of these countries is unlikely to leave the
European Union or eurozone of its own volition, though they could become
part of a northern alliance should the bloc dissolve.
The Big Three
If the nation-state will be the primary agent of the European Union's
coming transformation, it stands to reason that the bloc's largest
members — Germany, France and Italy — will be at the forefront of it.
Italy has historically seen European integration as a means to tie
itself to its prosperous northern neighbors and to preserve the unity of
the country. But over the past decade, Italians have become some of the
Continent's most Euroskeptic citizens, thanks to their country's
skyrocketing debt and political instability. Italy is therefore one of
the countries that is most likely to use the threat of its exit
to squeeze concessions from Brussels.
Rome has already leaned on the "too big to fail" argument in its
negotiations with the European Union, and future Italian administrations
are likely to do the same. But as Europe continues to fragment, each
threat will become more dangerous to the bloc than the last.
France and Germany, meanwhile, hold the key to the European Union's
future. Even the suggestion of a French or German exit from the bloc or
its currency zone would risk triggering a massive structural overhaul.
By the same token, the two countries' continued buy-in could be enough
to keep the European Union — or some version of it — together. But
France and Germany face a paradoxical problem: For strategic reasons
they need to maintain a united front, but their national interests
continue to pull them apart.
France, as both a Mediterranean and Northern European nation, has
found itself torn between a desire to protect its economy and the need
to preserve its alliance with Germany. Paris tends to support
protectionist and risk-sharing measures, and it has a high tolerance for
inflation. Berlin, however, prefers to avoid policies that threaten its
wealth and share the risk created by Southern Europe's weak economies.
Germany would only agree to France's approach if Berlin were given more
control over the fiscal policies of its neighbors — something many
countries would find unacceptable. Of the two,
France is more likely to act first in
demanding the European Union's reorganization because of its rising
nationalism and sluggish economic growth. But Germany, hamstrung by its
own national interests, would find it tough to compromise with its
longtime partner.
At this point, reaching a consensus on a path forward has become all
but impossible for the European Union's members. To knit themselves even
closer together, EU states would have to compromise on issues that are
too important to budge on. The alternative option — reversing European
integration — is gaining ground, but it comes with the very real
possibility of leading to the bloc's complete dismantling. Members could
take a middle road of sorts by choosing to keep things as they are, but
even inaction would come at a price, promising even greater problems
for the troubled bloc down the line.
https://www.stratfor.com/weekly/who-will-exit-eu-next
