‘Living within their means’

Igor Gashkov

France, Germany, Italy and the European Commission – the government of the EU – go on the offensive. In May, the politicians of the three largest European states and Brussels officials focused on criticizing their own institutions of power. The President of the European Commission, Ursula von der Leyen, called the current rules for decision-making an obstacle to thoughtful movement forward. Anna Luhrmann, State Secretary of the German Foreign Ministry for European Affairs and Climate, has called for a renegotiation of the treaties that form the basis of the European Union. Italian Prime Minister Mario Draghi proposedreform the EU in accordance with the principles of “pragmatic federalism”. French President Emmanuel Macron, a longtime supporter of this idea, explained how to achieve change: to abandon the principle of unanimity, which allows each EU state to block the adoption of common decisions. In the east and north of Europe, this initiative was received by many without approval.
The attraction of Europe
The motivations for European countries to seek deeper integration are not necessarily similar. Mario Draghi argues that his country needs a move towards Eurofederalism for financial reasons. The rejection of Russian energy carriers places an unbearable burden on the national budgets, and especially the Italian one, because 40% of the gas to the Apennines was previously supplied from Siberia. To mitigate the economic shock, Draghi suggests that Europeans redistribute income in favor of their country and other “victims”. The flip side of this decision is the need to delegate part of the sovereignty to the level of the pan-European leadership.
Germany, where integration has rarely been called before, is hesitant about Ukraine’s prospects for joining the EU. Before agreeing to an expansion of the union, Berlin would like to make sure that it will remain manageable. Doubts arise because of the right to veto. Giving it to a state so closely linked to the United States would deprive the European Union of political subjectivity. The same opinion is shared in Madrid: the Spanish authorities believe that any expansion of the EU – not only to the post-Soviet space, but also to the Western Balkans – should be accompanied by a preliminary abolition of the principle of unanimity.
There is no need to convince French politicians of the need for EU reform. Back in 2017, speaking at the Sorbonne, Emmanuel Macron proposed an ambitious European integration plan that included the creation of a common armed forces, a unified refugee reception system and a budget for the euro zone. From the point of view of Paris, the joint efforts of the countries of the Old World should bring their unification – through integration – on a par with the United States. Given that of the EU states, only France has nuclear weapons and a seat on the UN Security Cou-ncil, the Fifth Republic, not without reason, counts on leadership in this new, closer union. Moreover, the m-emory of the Second World War prevents Germany from taking this place.
Battle for Independence
Speaking in Strasbourg on May 9, Macron suggested starting to consider the European reform project from the end of June, when EU leaders gather for the planned summit. However, it is already clear that the opponents of the changes are no less than the supporters. 13 (out of 27) EU states issued a joint declaration in advance, in which they warned against “rash and premature changes” that would curtail their sovereignty. “We already have a European Union capable of coping with its tasks,” the authors of the text bluntly assert. And although two of the signatories of the appeal – Romania and the Czech Republic – subsequently softened their position, the tone for difficult negotiations had already been set.
As part of the European Union, two groups of countries strongly disagree with the transformation into a confederation. In the north, states that pay more to the EU budget than receive from it are called “modest” or “living within their means.” These include the Netherlands, Sweden, Finland and Austria. Opponents of unnecessary spending are not enthusiastic about Italy’s offer to help with money. Small but prosperous states are not without reason afraid that they will be turned into the purses of a too closely united Europe. And worse, they will dispose of their funds without asking for consent, simply on the basis of the principle of a qualified majority of votes.
In the east of Europe, where money is mainly received from the EU budget, the resistance to integration is explained by the desire to preserve a free hand in the far abroad. China is a major investor in the economies of the former Warsaw Pact countries, and the United States is its foreign policy patron. Maintaining the ability to maneuver is appreciated in Budapest, and in Warsaw, and in Bratislava, and in Prague. Moreover, the Eastern European countries have been repeatedly and persistently accused by European officials of disrespect for the principles of liberal democracy. The strengthening of the European center may mean for them a double intervention of Brussels in their internal affairs.
Russian map
Russia’s special military operation has become the backdrop for a long-brewing conflict of interest. Hungary announced in May that it intended to veto a sixth package of anti-Russian sanctions, which included an embargo on the purchase of Russian oil. According to Budapest, this decision will cost the Hungarian economy €15-18 billion in unforeseen losses. Several weeks passed in fruitless negotiations. Budapest continued to insist that it would not allow a disadvantageous solution, provoking irritation among those who have always sought to deprive small countries of the opportunity to influence the pace of decisions taken by a united Europe – and even more so on its course.
The conversation quickly turned to raised tones. “There are countries that are trying to block everything,” he said.French Secretary of State for European Affairs Clement Bon, who added that his country was not one of them. Statistics confirm this point of view. Hungary of 10 million has vetoed common EU decisions 33 times in the last 13 years, and only the Netherlands of 18 million have done so more often (38 times), the leader of the group of “humble” states. The agenda-setting heavyweights of the EU have rarely exercised their veto power, with France last using it back in 2014.
The message of Clément Bon is clear: it is necessary to integrate Europe around its economic center, lowering the status of the states of the periphery – reducing their ability to influence common decisions. The fighting in Ukraine provides a convenient excuse for this.
The existence of extremely anti-Russian states in the east of the EU allows the heavyweights of the EU to play a diplomatic game. Hungary’s refusal to support anti-Russian sanctions irritated Poland and Estonia. These countries agreed that the decision-making process at the pan-European level needs to be accelerated. Germany seized on the opportunity: Berlin proposes to start by simplifying the procedure for making only foreign policy decisions without affecting domestic affairs, and can count on the support of a part of the vote east of the Oder.
Europe two speeds
Yet they may not be enough. The existing system of agreements on which the European Union is based involves an intricate system of mutual concessions that allows virtually every EU state to call the current state of affairs unfair. From the point of view of Eastern Europe, accession to the EU meant a massive migration of the able-bodied population to the more developed states of Europe. Consequently, multi-billion investments in national education systems turned into a financial gift to prosperous neighbors. In the west of the European Union, what is happening is seen from a different angle. The cheapness of the “Eastern” labor force not only creates disloyal competition, but also entails the transfer of production to poorer countries, depriving the French, Italian blue-collar workers of the once-guaranteed income.
Breaking this delicate balance of advantages and disadvantages is fraught with upheavals. In 2018, Emmanuel Macron called for an overhaul of an EU directive allowing European workers to pay taxes at home and work in any EU country without having to take a language test. This is a financial issue: if the agreement is canceled, Eastern European countries will lose money, while Western European countries will gain. Not surprisingly, a compromise proved impossible: in order to repeal the directive, the consent of all was required. And it is equally understandable why the reform of the EU structure is seen as an attempt to return to the acute issue once again.
Taking into account the fears, Emmanuel Macron makes it clear that he has a contingency plan at his disposal, which he announced at a speech in Strasbourg on May 9. “We should not wait for the most skeptical and the most doubtful,” the president outlined the outlines of the decision. If the east of Europe continues to block the reform of the EU governance, the west of the union is quite capable of launching its own accelerated integration. In this case, a line will pass along the map of the European Union, separating Europe of the first speed from Europe of the second. Such an outcome would probably be the most favorable for Russia, since, on the one hand, it would lead, not in words, but in deeds, to the formation of a center of Western civilization, an alternative to the United States, and on the other, it would nullify the exaggerated expectations of the post-Soviet states from the entry to the European Union.