Ever closer Union – has EU gone too far in its integration?

The European Union is going through its worst crisis since its creation. Some claim that the difficulties are mainly self-inflicted: the EU has gone off course in pursuit of federal ambitions; it has moved into policy areas where it should never have ventured. Economic and Monetary Union (EMU) and Schengen are mentioned as prime examples.

The genesis of EMU is often described as the political price Germany (Chancellor Helmut Kohl) had to pay to the French (President Francois Mitterrand) for German unification. This description ignores the fact that the project had already started as a joint French-German initiative in early 1988, long before anybody had the slightest idea that the Wall would come down. And the inspiration was not a federalist dream, but a realization that the newly created internal market could not deliver its full potential without internal exchange rate stability in Europe.

The European monetary system then in place with fixed but adjustable exchange rates had become increasingly fragile with frequent exchange rate adjustments as the liberalization of capital movements gave money market operators a free ride to speculate against any currency that showed signs of weakness.  Furthermore, monetary policy in Europe had become de facto German, with the Bundesbank pursuing policies adapted to German needs but not necessarily suited to the other member states.

This would probably still have been the case today without EMU.  It is worth noting that the main policy decisions by the European Central Bank over recent years – up to and including quantitative easing – have been taken against the wishes of German members of the executive council. It is hard to imagine that the internal market would have become a success – even in times of economic crisis -without a high degree of monetary stability in Europe. A generalized system of floating European currencies – probably the only alternative to the EURO – would have been detrimental to the development of the European economy, including to countries that have remained outside the EURO, but have profited from EMU as an “anchor of stability” in their most important export market. Despite all the difficulties experienced over recent years, support for EMU among people in the EURO area is strong (61 percent) and rising, including in the countries most affected by the crisis. This is clearly not an area where the great majority of Europeans are seeking a roll back.


Nor was it federalists’ dreams that led to the creation of the Schengen agreement – first by France, Germany and the Benelux countries in 1985 and then followed by the rest of continental EU. The founders had more pragmatic considerations in mind, like promoting the internal market, and favouring economic development in frontier regions where growth and job creation had been held back. And last but not least, it was a realization that frontiers were no longer efficient in the fight against cross-border criminality and trafficking of various kinds, including illegal immigration. Practical police cooperation across the borders, exchange of intelligence and spot controls were much more effective.

This is certainly a lesson that should be kept in mind by European governments that during these weeks, in a desperate fight to control immigration, have been reintroducing border controls. To go back to a pre-Schengen system will most probably prove ineffective in controlling the flows of desperate people. If one were to rely on national borders in Europe to stop the inflow it would be necessary to build walls and fences – in short to recreate national fortresses that divided East and West during the cold war, notably Germany.

This would have huge direct economicitical costs.costs economic and and we have never known in Europe except between Eahe Europ and political costs both in investment and providing the manpower to control such frontiers and, even more importantly, in damage to the internal market and to the economic and social fabric of frontier regions. This is hardly what Europeans are looking for. There is no real alternative to building up an effective external frontier control, including the necessary investment in close cooperation with relevant third countries, as well as attacking the root causes of the refugee exodus.


But where should one then look in a search for candidates for a roll back in European integration? The biggest advances in European integration over the past decade has taken place in areas like energy, climate and environment, as well as in increased police cooperation to fight cross-border criminality and terrorism. These are the policies that score very highly in all opinion polls on where people want more Europe.


So roll back is hardly the answer to EU’s present problems. The disenchantment with the European project today is fuelled more by disappointment with regard to poor quality in the rolling out of the new policies. To make EU policies work effectively is the answer – not less integration.

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