Which future for Europe?: A scenario analysis of European integration

Abstract

Today, the idea of a ‘United States of Europe’ is no longer an attractive option for most European populations. As the European Commission’s Eurobarometer of December 2013 shows, there has been a clear downward trend in the positive and a clear upward trend in the negative image of the European Union (EU) since 2010 (European Commission 2013: 6). Similarly, pessimism on the future of Europe rose significantly in 2010 and again in 2011 (European Commission 2013: 9). The impact of the financial market crisis and the following sovereign debt crisis have left their marks (see also Bieling, Chapter 6 in this volume). The past was characterized by an increase in European integration, namelythe single market, the monetary union and the Eastern enlargement. This evolution of the EU was not always a continuous and smooth process, but nevertheless one without major steps backwards concerning the degree of integration. This is no longer guaranteed. Currently, i.e. in the beginning of 2014, many issues within the euro are not settled which affect the whole European project of an economic and political union. Public debt is high in all member states, unemployment rates are enormous in some countries, gross domestic product (GDP) is still declining in several countries and the regulation of the financial sector is a rather slow progress. A country’s exit from the euro area or a splitup of the area is still not out of question. Paradoxically, even mastering the current challenges of the euro area might lead to political tensions within the EU. The sovereign debt crisis has led to a two-speed Europe with an extension of integration within the euro area. It was pushed forward by pure necessity rather than being the outcome of well-prepared and acclaimed decision processes coordinated with the other member states of the EU. As a result, we see more integration, i.e. fiscal coordination, pacts and agreements and a strengthened role for the European Central Bank (ECB), within the euro area. But this does not hold for the rest of the EU, where the level of integration stays the same. So the flip-side of this is a widening institutional and maybe even mental gap between members and non-members of the monetary union. It seems that a division between core and periphery, i.e. between an increase in economic and political integration within the euro area and a lack of integration into the rest of the EU, is taking place.