European Union and their challenges

Context

• The surge of conservative nationalistic politics in Europe has undermined the idea and institution of European Union. It assumes critical significance after the referendum in Britain opting out of the EU and the tendencies represented by the ascend of Donald Trump.
• The year 2017 will be the defining year in the future of EU with the elections in France, Germany, Spain etc. and the implications they will have on the global world driven by integration for quite some time now.

Historical antecedents of EU

• The different nationalities within Europe in the mediaeval times were taken hold into one entity by the centralising religious-political institution of the Church in Rome, which defined all the secular and political aspects of life.
• The system got challenged due to a mix of factors – emerging political thought (Machiavelli, Hobbes and Locke), feudal lords, scientific temperament etc. which eventually gave the way to the Treaty of Westphalia, 1646 establishing different new states in accordance with their nationalities.
• Fast forward to the late nineteenth century and early twentieth century which saw the preponderance of the rivalry between Germany and France eventually leading primarily the Europe to the two World Wars by dividing it into two camps.
• To contain the “German question”, the victorious allies including France decided to create a framework where the plausibility of peace and cooperation dominates. It was heralded by the requirement of rebuilding the economies after the destruction caused by war, supported by USA in its effort to counterbalance communist Soviets in the Europe.
• Treaty of Paris in 1951 established European Coal and Steel Community to purportedly diffuse any attempt to make arms and ammunitions from the coal and steel.
• Treaty of Rome in 1957 created European Economic Community and European Atomic Energy Community.
• European Community was made by merging the aforementioned three in 1967. It is to be noted that the cooperation remained limited to the few Western European countries, which got extended gradually henceforth.
• The Single European Act in 1986 after the Schengen Agreement abolishes national vetoes in economic matters.
• The Maastricht Treaty in 1992 brought European Union into existence. Common Foreign and Defense Policy was also envised for EU.
• Treaty of Amsterdam in 1997 further cut down national vetoes and paved the way for eastward expansion.
• Eurozone was created in 1999 and therefore monetary union becomes a reality in Europe by having single currency ( not all members of EU joined – 18 members out of 28 of EU today)
• 10 new states join the EU, bringing its membership to 25 countries in 2004.
• In 2009, treaty of Lisbon was signed by bringing constitutional treaty of 2005 in new form (which was rejected by Netherland and France). It gave broad decision making powers to EU institutions.

How the European Union works

• The Council: Informally called the Council of Ministers, this is the decision-making branch of the EU, and comprises ministers from the 27 states, who are accountable to their own assemblies and The presidency (vested in a country, not a person) of the Council rotates amongst member states every six months. Important decisions are made by unanimous agreement, and others are reached through qualified majority voting or by a simple majority (intergovernmental body).
• The European Council: Informally called the European Summit, this is made up of the presidents or prime ministers of each member state, accompanied by their foreign ministers, and a permanent, full-time President of the European Council (since 2009, Herman Van Rompuy). The European Council meets four times a year and provides strategic leadership for the EU (intergovernmental body).
• The European Commission: Based in Brussels, with a staff of some 20,000 people, the Commission is the executive-bureaucratic arm of the EU. It is headed by 27 Commissioners and a President (José Manuel Barroso’s term of office as President began in 2004). The Commission proposes legislation, is a watchdog that ensures that the EU’s treaties are respected, and is broadly responsible for policy implementation (supranational body).
• The European Parliament: Usually located in Strasbourg, the EP is composed of 751 Members of the European Parliament (MEPs), who are directly elected every five years. MEPs sit according to political groups rather than their nationality. Although its powers have been expanded, the Parliament remains a scrutinizing assembly, not a legislature. Its major powers (to reject the European Union’s budget and dismiss the European Commission) are too far-reaching to exercise (supranational body).
• The European Court of Justice: Based in Luxembourg, the ECJ interprets, and adjudicates on,
  EU law and treaties. There are 27 judges, one from each member state, and 8 advocates general, who advise the Court. As EU law has primacy over the national law of EU member states, the Court can disapply domestic laws. A Court of First Instance handles certain cases brought by individuals and companies (supranational body).
• The European Central Bank: Located in Frankfurt, the ECB is the central bank for Europe’s single currency, the euro. The ECB’s main task is to maintain the euro’s purchasing power and thus price stability in the euro area. The eurozone comprises the 16 EU countries that have introduced the euro since 1999 (supranational body).

What are the challenges confronting the EU today?

• The challenges are twofold – Economic and Political.
• On the economic front,

1. The gloomy fiscal scenario of some countries like Portugal, Italy, Greece and Spain has destabilised the very basis of the EU concept of economic integration. Countries like Germany have been very vocal against the fiscal indiscipline of such countries given the fact that Germany being the largest economy within EU contributes largest for the bailout packages and IMF’s EU’s Stability Mechanism Fund.
2. The cheap labour from the Eastern Europe has caused job losses in the developed parts for the non-skilled labour.

• The problem exacerbated after the global financial crisis and the accompanied Eurozone crisis which saw enhanced sovereign debts.
• On the political front, the issues emerged of late and are driving the current scepticism about the prospects of the EU.

1. The migration from the civil war strife regions like the Middle East created a sentiment against the EU concept itself which is supposed to aid the migrants and their “alien” culture. The activities of Islamic terrorists only widened the gap further.
2. The spike in terrorism in Europe has given the impression that the individual nation states can do better to stop the terror elements. It was fuelled by the hints given by Donald Trump that EU should not remain dependent on NATO.

• The humongous diversity splurged out after expansion to the east from 2005 particularly generated fears of cultural invasion. Turkey inclusion was opposed therefore, among host of other reasons.

Way Forward

• Monetary policy union in its singularity without fiscal union cannot serve the purpose of common economic development fully. Make necessary amendments in the economic cooperation mechanisms.
• Common Foreign and Security Policy and the constitutional provisions of 2009 should give more space to the nation-states while retaining basics of integration.
• There should be made no hurry to make expansion in the erstwhile “illiberal democracies” in the East. Ukraine has only furthered the security problem when the Russians retaliated.

Practice Questions

1. How did the European Union achieve tremendous success in cooperation despite the history of conflicts? What lessons does it hold for the volatile South Asia?
2. What are the challenges the EU facing recently in the wake of new nationalistic furore? Is it fair for the nation-states to demand sovereign power in Europe? Give your opinion.