tl;dr: The Brexit referendum is an opportunity to re-think the European Union.
The UK referendum over the country’s membership in the European Union (EU) on 23 June this year marks a watershed. The ‘Brexiteers’ have won narrowly by 52 percent. However, what this actually means remains unclear. The leading figures of the both referendum campaigns, David Cameron for ‘Remain’ and Boris Johnson for ‘Leave’, have abandoned ship: David Cameron resigned as Prime Minister on the morning after the referendum, Boris Johnson stepped down from the upcoming leadership contest within the UK’s conservative party for the Premiership. The now famous Article 50 of the Lisbon Treaty that is dealing with the withdrawal of a country from the EU, will not be invoked until after the new PM is elected. And given the comments by Theresa May, Home Secretary and most likely Britain’s next PM, the decision on Article 50 will in fact have to wait until the end of this year, until the British negotiation strategy was agreed. At the same time, there is considerable doubt, if the UK government can trigger Article 50 solely on the basis of the referendum, which was legally non-binding, or if a parliamentary vote is needed. Adding up to the uncertainties and tensions within Britain are the clear results for remaining in the EU in Scotland and Northern Ireland, two of the four constituent countries of the UK. Talks of a second referendum or a snap national election loom large.
On the EU side, the pressure is on Britain to move fast, especially from Jean-Claude Juncker, the president of the EU commission, and Martin Schulz, head of the European Parliament (EP). Also the French government shows genuine interest of a rather quick start to the withdrawal negotiations, most likely due to domestic reasons, be it the looming Presidential election next year and the specter of the Front National’s Marine LePen or the possibility to snatch London’s status as Europe’s financial center and transfer it to Paris. Article 50 however cannot be forced upon any EU member by the union; it is a decision that has to be taken by the government of the country intending to leave. This and the fact that the not so secret leader of the EU, German chancellor Angela Merkel, has emphasized the need for calmness and allowing the British more time to sort themselves out, will leave the EU in political limbo for some time. But even if the British would invoke Article 50 the process would take at least two years and possibly even longer.
Opportunity to re-think the EU Integration Process
It is my believe that the EU and in fact all of us who regard themselves as passionate Europeans should embrace the limbo and take it as an opportunity to think really hard about the future of the European Union after the Brexit referendum. First of all, the current internal turmoil within Britain leaves the future of the UK wide open. A break-up seems not too far-fetched depending on how actual withdrawal negotiations will proceed. This can hardly be in the interest of the EU or its members. At the same time, the UK for the last 40 years was an integral member of the EU. Britain actively pushed for the common market and was an architect of its rules. On global trade, on environmental issues like climate change, and on foreign policy, the EU would not have been such a driving force in global issues if it wasn’t for consecutive British governments and officials working with and in Brussels. Any withdrawal agreement needs time to keep Britain close to the EU and its policies in order to avoid a loss in global political clout.
The major issue, however, is the fact that the EU and its members cannot brush off the outcome of the Brexit referendum as the folly of an island nation, never really wanting to belong to the union; it rather is a wake up call for Europe to re-think its integration process and its institutional framework. Especially if there are no majorities across the EU in sight for increased integration i.e. ‘more Brussels’. If even the post-national Germans are starting to become wary of the ‘ever closer union’ from which they benefitted like no others, business as usual would not only miss this opportunity to reflect and re-think but also endanger the entire European project.
I was arguing last year, at the height of the Greek debt crisis that a positive case could be made for a soft form of ‘Grexit’: allowing Greece to exit the common currency, the Euro, but keeping the country firmly within the EU, while at the same time strengthening the institutional framework of the Eurozone with a fiscal union with commonly enforced budget rules and possibly even a democratic assembly. This would have entailed abandoning the ‘ever closer union’ as a teleological endpoint for all EU members and actually accepting the reality of different types of integration. It was my hope that such an arrangement could not only keep Greece safely in the EU while enabling a restructuring and renewal of the Greek economy, but also that it would open up new avenues for EU members like Britain to retain their status in the EU but outside of a more integrationist core: soft Grexit to avoid hard Brexit. This was of course the road not taken but I still believe that the EU can choose to move towards such a direction and abandon its one-size-fits-all integrationist approach. At a time like this, when the entire union is in peril and its peoples are increasingly skeptical towards the benefits of having more integration, the Brexit referendum can be used to re-think European integration for the first time since the enlargement process of the 1990s took place.
From Core to Periphery: Images of a renewed EU
The ideas of a ‘Core Europe’ are almost as old as the union itself. Traditionally, this phrase meant the founding six members of the EU: the Benelux countries, France, Germany and Italy. Some call this the EU’s ‘Carolingian Core’, reference the half-real, half mythical Charlemagne, Charles the Great, as the founding father of post-Roman Europe. The issues I have with this Carolingian phantasy is its exclusive nature. It is fixed on the big member states in the center of the EU and openly neglects matters of smaller members and especially from members in the east, north and southeast of the union. Such Carolingian EU would also magnify the role of Germany, most likely giving way to greater unease about German dominance across Europe.
But there is another, non-mythical, core within the EU that is much more fit to play that role: the Eurozone, especially those Eurozone countries that are also within the Schengen agreement, which largely has abolished internal border controls of the so-called Schengen countries. Austria, the Baltic countries, the Benelux countries, Finland, France, Germany, Greece, Italy, Portugal, Slovenia and Spain could constitute a new EU Core, probably accompanied by Ireland and Cyprus (both in the Eurozone, but not part of Schengen). Other countries not within the EU Core could join them in selected areas if they wish to but would not be pressured on the ‘ever closer union’.
A second layer of the EU might then be constituted by member states outside the Euro but inside Schengen: the Czech Republic, Denmark, Hungary, Poland and Sweden would then make up the EU Expanse. Such an Expanse would at times move in accordance with the Core, at other times remain on the sidelines. The EU Periphery is then comprised of EU members that are neither in the Euro or Schengen: Bulgaria, Croatia, Romania and… the United Kingdom.
Intergovernmental Action before EU Treaty Renegotiations
This new set-up is in line with the current factual realities of the EU. What is needed to enact it is not necessarily a European convention according to Article 48 (3) of the Lisbon Treaty, at least not in the first place. Actually, given the current situation I would advocate an intergovernmental approach headed by the governments of the EU Core. A group of member states can move faster on certain agreed upon topics than the EU27 (or EU28 before Brexit). This would also recognize that the present integrationist approach of ‘one size fits all’ – i.e. that all members, in the long run, would have to join the Eurozone – is a dead-end street. Such intergovernmental action, if focused on the right topics and taken swiftly, with yielding visible results for the public, could then lay the ground for a general institutional overhaul of EU treaties and selective integration in certain policy fields. The EU Core and their governments would then have to focus on two fields where the political pressure and public dissatisfaction is felt most intensely in recent years: the EU’s refugee and migrant policy as well as fiscal policy in the Eurozone.
Refugee and Migration Strategy
The influx of refugees and migrants especially over the course of the last year has brought the EU and its members under severe political and administrative stress. Southern EU members want assistance from other members, especially as regards relocating refugees and migrants that use Spain, Italy and Greece as their port of entry into the EU. Northern EU members like Germany, Sweden and Austria are the desired destinations for most of people coming into the EU. The proposal of a relocation scheme based on country quotas including monetary and administrative assistance in dealing with refugees and migrants, neglected especially by EU Expanse members like Poland, Hungary or the Czech Republic, could be formulated as a key field of integration for EU Core members. Germany, Austria, also the Netherlands along with Italy, Spain and Greece might find common ground much easier on this matter. Such a refugee and migration agreement of the EU Core could thereby be open for other non-Core EU members to join (most likely Sweden). Once in place, such an agreement would be instantaneously visible for the public in the EU member states, especially in the Core. The benefits of intergovernmental ‘Europeanization’ in such a publicly heated topic could be a first step to increase legitimacy of the EU as a whole, even in non-Core members. Apart from a quotas system for refugees, such a common strategy would also entail joint EU Core admission centers in border countries like Italy, Greece and Spain, but also in EU neighbor countries like Turkey, Morocco, Algeria and Tunisia. The Dublin Regulation, that any asylum seeker needs to apply for asylum in the first EU country they reach, would no longer apply in the EU Core – but very well in the Expanse and Periphery countries.
Fiscal Union in the Eurozone
The second field is the Eurozone and it’s lacking of a coherent fiscal union. During the Greek debt crisis last year it was argued over and over that a monetary union requires a fiscal union: a coherent budgetary regime and a transfer system to decrease imbalances of payment between Eurozone members. The southern Eurozone members, especially Greece and Italy, but also France, wanted a fiscal union under looser budgetary restraints; northern Eurozone members, especially Germany, the Netherlands, Austria, but also Finland and the Baltic countries, could only accept such a union with stricter budgetary discipline and ‘sharp’ instruments to enforce them. I don’t think that there will ever be a majority in the northern EU Core for anything soft on the budget on southern EU Core countries; however I do think that stricter budgetary rules and a system of checks and enforcements could be made acceptable to the South by having a more generous transfer union against imbalances of payments including debt relief especially in the Greek case. In combination with such a new fiscal and transfer union, a new regional development fund could be established by way of the European Central Bank (ECB) that exclusively funds public investment projects in the EU Core e.g. investing in renewable energy infrastructure and electricity grids, transportation infrastructure, schools and universities.
Re-thinking Integration and maybe avoiding Brexit
Intergovernmental success with Europeanization in these two fields of refugees and migration as well as strengthening the Eurozone would stabilize the EU Core while at the same time allow the Expanse and Periphery of the EU to stay away from overtly integrationist projects they do not wish to participate in. After setting up itself as the new EU Core, its member countries could then try to institutionalize this re-integration and re-separation of Core, Expanse and Periphery by either way of a European convention or by invoking Article 48 (6) that allows a simple revision process of the EU Treaties. The more immediate success such an intergovernmental initiative of the Core has, the easier it will most likely be to take the other EU members on board for a treaty change. This process might take a year or two but given the fact that Brexit will take just as long, these two processes could be connected. And if the EU reforms itself in such a manner, it might well be that a new door opens for a continuation of British EU membership as part of its new Periphery. As a default position, the Periphery could e.g. be outside of integrationist policies of the Core with neither obligation nor option to join them. In such a case it is even thinkable that the freedom of movement, one of the four key freedoms of the common market, is restricted for Periphery members and vice versa as regards the necessity of a work permit before taking up residence in another EU country and a deadline for leaving that country after employment has finished.
This could then be brought in front of a second UK referendum, choosing between exiting the EU or staying within the new multi-integrationist framework sketched above. In the end, the peoples of Europe probably will have to thank the British to allow all of us to re-think and re-new the European Union and save it for ourselves and for our posterity.