Europe’s ‘soft-core’ future of differentiated integration

The best model for the EU is one of differentiated integration—but with a soft rather than a hard core of member states.

Over the past few years, the European Union has been hit by a cascading series of crises in key areas—such as money (how to move forward in the eurozone), borders (what to do about refugees and migrants), security (how to develop effective security and defence co-operation), the integrity of the EU (how to manage British exit from it) and the rule of law (what to do about ‘democratic illiberalism’ in central and eastern Europe).

Most analysts now accept that the EU is unlikely to resolve many of these crises unless it recognises that its future is one of ‘differentiated integration’. EU member-states—beyond belonging to the single market and being liberal democracies—need not all proceed together, at the same rate, to converge on the same array of policies.

‘Soft-core’ Europe

But what kind of differentiated integration? Rather than conceiving of such differentiation as coming at multiple speeds or by way of a ‘hard core’, the EU would do better to see its future as consisting of a ‘soft-core’ Europe. A soft-core EU is made up of the overlapping participation of different clusters of member-states in the EU’s many policy communities—all administered by a single set of EU institutions, all with voice across communities but with a vote only in those areas in which they participate.

Current debates over the future of Europe divide over what kind of differentiation would work best: multi-speed, hard core or what I call a soft-core Europe. The fear with a multi-speed Europe is that it will all fall apart, as member states pick and choose communities in which to opt in or out.

The problem with a hard-core Europe, coalesced around a deepened eurozone, is that there is no guarantee that the core players (France and Germany) will be able to reach productive agreement across policy areas—in particular given how much they still diverge on the currency area. Such a hard core might also create a deeper rift between the smaller core and the rest. And why assume that a cluster of member states which takes the lead in one policy area (the eurozone) would have the ability, let alone the will or imagination, to lead in the others (such as security or migration)?

Multiple clusters

Seeing the future of EU integration as consisting of a soft core of multiple clusters of member states, participating in overlapping policy communities, would allow for any duo or trio of member states to exercise leadership in any given ‘community’. Within such a soft-core Europe, some policy areas would still require deeper integration.

In the security and defence-policy crisis, for example, the failure to move toward any significant integration continues to plague the EU’s Common Security and Defense Policy (CSDP)— this despite the continued instability in the middle east and the threat from Russia. In this area, deeper integration is likely to come with continued differentiation, with more co-operation and targeted investment through any of the many recently created instruments.

Refugee and migrant policy also suffers from a lack of co-ordination and increasing fragmentation, with its failures having been grist to the mill for right-wing populists. This area requires deeper integration through EU-wide agreement on principles of treatment, accompanied by more differentiated integration regarding the modalities of implementation—for example with positive incentives in place of imposed quotas.

Democratise, decentralise

The eurozone is different. EU governance has arguably gone too far in deepening integration, by ‘governing by rules and ruling by numbers’ (see my forthcoming OUP book of that name), yet not far enough, by failing to institute the mutual risk-sharing instruments necessary for any fixed-currency zone to flourish. Differentiated integration here would mean democratising and decentralising the eurozone’s elaborate architecture of economic co-ordination.

The EU level could be made more effective, as well as more democratic, by treating the governing rules and numbers more as guidelines for variable yearly targets set by the European Central Bank, with country-specific deficits and debt targets to be debated with the other member states in the European Council, as well as with the European Commission and the European Parliament. The European Semester could be democratised by making it more bottom-up, and decentralised to the benefit of national actors.

This would not only work better for Europe’s diverse national economies but could also help counter the populist drift. Mainstream political parties would again to be able to differentiate their policies, with debates on the different pathways to economic health.

Solidarity mechanisms

None of this will work, however, if not accompanied by deeper eurozone integration through various solidarity mechanisms—such as significant investment funds, a serious fiscal backstop and individual deposit insurance, some form of mutualised debt and Europe-wide unemployment insurance. If this is not forthcoming, then member states should at least be allowed to invest in growth-enhancing areas without this counting toward the deficit or debt numbers in the European Semester.

But other crisis areas also need more solidarity mechanisms, such as an intra-European ‘EU mobility adjustment fund’—not just to support expenditures on social services and worker training by countries with greater than usual EU migrant worker inflows (such as the UK) but also to recompense countries with excessive outflows of workers (Lithuania, Romania and Greece). Any such adjustment fund should be accompanied by a European fund for refugee support.

Soft-core differentiation also has certain common requirements—including one set of laws, overseen by the European Court of Justice and affirmed by national courts, and one set of overarching institutions, including the commission, council and parliament. In other words, there can be no differentiation in the EU’s core commitments to the rule of law and democratic principles, guaranteeing free and fair elections, independence of the judiciary and freedom of the press. But any number of specialised institutions may be made to purpose to deepen integration in any given policy community, as is the case in the eurozone.

Voice in all areas

For such differentiated integration to work effectively and legitimately, and for all member-states to feel part of this soft-core EU, whatever their level of involvement, they should be able to exercise voice in all areas but vote only in those areas in which they participate. For the eurozone, this could imply, for instance, that were some members to pledge their own resources to a common eurozone budget, their representatives would be the only ones to vote, although everyone could discuss it.

For the Schengen border-free zone, this could mean that current non-EU participants (such as Norway and Switzerland) would have voice and vote. This could equally apply to their participation in the single market. For the moment, such countries experience a major loss in democratic legitimacy, since they have to follow single-market rules and contribute to the EU budget without the exercise of voice, let alone vote. For a ‘Brexiting’ UK, this might be the best way to handle future relations.

But to make EU governance truly workable, the institutional decision-making rules also require revision. The unanimity rule for intergovernmental decision-making needs to be abandoned, replaced by ‘constitutional’ treaties amendable by two-thirds or four-fifths majorities. At the same time, many of the current treaty-based laws should become ordinary legislation, and thereby open to amendment through political debates and compromise in the co-decision mode of EU governance. Beyond this, the European Parliament would also need to find more ways to bring national parliaments into EU-level decision-making.

‘Menu Europe’

In short, re-envisioning the EU in terms of a soft-core, multi-clustered Europe best reflects the differentiated future of the union, in which deeper integration goes hand in hand with greater decentralisation and democracy at all levels. To extend a metaphor I evoked some time ago, the future would offer neither one set menu (prix fixe) for the chosen few nor ‘Europe à la carte’, where everyone orders different dishes.

It would instead involve a gourmet ‘menu Europe’—with a shared main dish (the single market), all member states sitting around the table and engaging in the conversation, some choosing to sit out or join in for one course or another and all learning the manners of the table as they participate.