A review of Europe’s future cannot be reduced to just a choice between five scenarios or to combinations of some of them. The whole discussion must be preceded by a critical assessment of how we got where we are and why.
Europe seems unable to gear up to the challenges of the economic and social progress which were promised to European citizens. That is the reality, for reasons which are much more fundamental than the effects of the 2008 financial and economic crisis.
The European project has faltered badly because the enlargement and deepening policies which the EU adopted during the nineteen nineties have now placed it in a situation of overreach. Unfortunately, for ideological reasons, there is limited acceptance of this reality.
Yet, it has led to political stalemates, economic underperformance, a growing divergence between the EU’s parts and popular disenchantment with the Union.
The structures that were built since the nineties to manage enlargement and deepening, and the targets set for them to achieve, even post 2008, were hardly fit for purpose. They gave relatively good results when the international economic climate was good but failed when times got bad. However, institutional deficiencies are not the main cause of the arising problems. Deeper down, were the economic and social imbalances triggered within the Union between parts and regions of it, precisely because of deepening and enlargement.
There was a total failure through political means, to ensure that the different parts of the enlarged union, and then of the euro zone, would really converge. Instead, reliance was placed on free market mechanisms within a continental single market to bind everything. Such mechanisms were to be supported by so-called structural, cohesion and regional funds to compensate for inbalances. That has remained a less than successful approach.
As a result, the south is locked in a transfer union by which resources are being transfered from the periphery to the centre. Yet the perception is that the contrary has been happening. So, representatives of the dominant economy in the Union argue against turning the eurozone into a transfer union, when the terms of trade and exchange given prevailing economic conditions, already make it such, but in their favour. The fact that Donald Trump has also advanced this claim in no way invalidates it.
However, by and large, fired by the soft power that was deployed to implement deepening and enlargement, public opinion in the south still remains broadly committed to the European project, not least the euro. This is the case even after years of austerity and internal devaluation. What bursts of good economic outturn there have been in the south were fuelled by services in tourism, finance, real estate and internet gaming, all of which really fall up to now, outside the strict remit of the single European market.
From a southern point of view, tinkering with institutional arrangements, indeed deep institutional reform, or opting for new fields within which the EU would seek further union, at no matter which speed, hardly makes sense. That would not change the underlying economic and social state of play, but quite likely reinforce it, given the neoliberal model which we follow for economic management.
The overall priority should therefore be now to deliver on the promises held out in the nineties when deepening and enlargement were launched. Seen from the south, the EU needs to consolidate, and not merely by running on the spot while patching up inadequacies as they arise. Consolidation needs to be based on a political project agreed by all, that in concrete terms, politically and not through a reliance on market forces, would lay out the terms for securing convergence between the economies and societies of the south and the rest.
If consolidation is not carried out while eradicating divergences, the south runs the risk of reaping the whirlwind in the medium term.