Multi-speed Europe will be hard to pull off

The  European Council, which comprises leaders of European Union member states, normally issues a consensus document at the end of each meeting. Last Thursday, it failed to do so because one member - Polish Prime Minister Beata Szydlo - refused to approve it. The spat tells us something about the rocky future of a multi-speed Europe.

Ms Szydlo's snub had nothing to do with the document's content. Poland's nationalist government tried to defeat the re-election of former Polish PM Donald Tusk as European Council president, but its protests were ignored. Mr Tusk was first chosen in 2014 in recognition of Poland's, and Eastern Europe's, growing role in the bloc. But there's bad blood between Mr Tusk and the current Polish government's chief ideologist and informal leader Jaroslaw Kaczynski, and Poland fought to get him removed. Ms Szydlo, in a huff, refused to back the anodyne communique and was conspicuously late for Friday's session.

The subsequent vote showed Poland didn't really have a veto and that the EU has no qualms in supporting the opposition, not the government, in a member state. That's a strong warning not just to Poland but also to Hungary, another illiberal dissident in the EU: If they insist on being ornery, the bloc could, for all practical purposes, abolish its consensus procedure and start making majority decisions. It looks like the multi-speed Europe has already arrived.

The idea of an EU of many speeds, in which nations progress towards a federation at their own pace, might be looked upon as something of a blackmail tool for the EU's Big Four - Germany, France, Spain and Italy - to force the other 23 EU members to accept their leadership. But if it became an official EU policy, how would it actually work?  Last week's EU summit provided some clues.

EU leaders, who make up the European Council, debated what they should say later this month as they commemorate the 1957 Treaty of Rome, which opened the path towards the EU. One of the final passages in the draft document bothered Eastern European governments and independent-minded Scandinavians: "We will work together to promote the common good, on the understanding that some of us can move closer, further and faster in some areas, keeping the door open to those who want to join later, and preserving the integrity of the single market, the Schengen area, and the EU as a whole. An undivided and indivisible union, which acts together whenever possible, at different paces and intensity whenever necessary."

The language seems intended to reassure those on the slow track that they are still part of the team. And in the White Paper  on the future of Europe, recently presented by European Commission president Jean-Claude Juncker, the multi-speed option was illustrated with innocuous examples, such as when 12 EU countries agree to harmonise connected vehicle regulations. But that's mainly sugar-coating.

The European Union leaders' summit in Brussels on Friday. Inevitably, the EU would become a more German sort of organisation where a discussion precedes any decision but there is no coddling of those who don't go along with the majority, says the wr
The European Union leaders' summit in Brussels on Friday. Inevitably, the EU would become a more German sort of organisation where a discussion precedes any decision but there is no coddling of those who don't go along with the majority, says the writer. PHOTO: EUROPEAN PRESSPHOTO AGENCY

In reality, multi-speed Europe would most likely mean a core of euro-zone members moving towards a fiscal union. It's unclear which of them would want to go ahead with this, and whether those who want it would qualify, but the development would set off alarm bells to all net recipients of EU funds who are not part of the euro zone. With a two-tier budget, the net contributors would be more likely to keep most of the money inside the first tier, sharing it among the more close-knit group.  The core group, in theory, would be more likely to arrive at a consensus on all matters, such as borders, immigration, labour laws, even taxes. Inevitably, the EU would become a more German sort of organisation where a discussion precedes any decision but there's no coddling of those who don't go along with the majority. That's the kind of approach French presidential candidate Emmanuel Macron has been pushing in his campaign appearances. He said last week: If the euro zone has not made progress in recent years, it is because it is ashamed of itself and because it is afraid to face up to those that preferred to stay on the balcony or in the entrance hall. Let's dare to go for a multi-speed Europe.

If the implicit threat is that the core won't care if they stay in the EU or leave it, it's hard to see that as very credible. There is no consensus on fiscal policies among euro members. They can't even seem to agree on a project to introduce a single financial transaction tax, put forward by the European Commission back in 2011. The 11 nations that formed the working group on the proposed levy are the potential core of a multi-speed Europe. But they've barely progressed, and Estonia has even dropped out of the working group.

The EU's original sin is that it failed to define its federalist goals in specific terms, making the economic benefits of the union available to many countries that didn't feel like sacrificing much of their sovereignty in exchange. Relegating them to second-class status isn't as easy as outvoting them the way Poland was outvoted. It takes federalist determination on the part of a group of economically powerful EU members. If someone is sidelined for moving too slowly, another must be prepared to move fast.

In Germany, both Chancellor Angela Merkel and her main rival in the upcoming election, Social Democrat leader Martin Schulz, are likely to show the necessary determination for a closer union; so will Mr Macron, if he wins the French presidency. But Spanish, Italian, Dutch and Belgian leaders won't be as psyched, given these countries' fractured political systems and the governments' precariousness. And in any case, it's almost impossible to start putting the inner circle, "high-speed" group together until this year's elections are over.  Meanwhile, the architecture talks will continue and various configurations will be tried.

Belgium, the Netherlands and Luxembourg last Friday invited the Visegrad Four - Poland, Hungary, Slovakia and the Czech Republic - for separate talks on the future of the EU. The Benelux countries' leaders also plan to meet their counterparts from the Baltics. Dutch Prime Minister Mark Rutte, who is behind the initiative, wants to try the traditional Dutch consensus-building technique in the hope that it will work better than thinly veiled exclusion threats.  Perhaps a new consensus will emerge; or maybe the Eastern European and Nordic members will simply have their own contingency plans. That's not a desirable outcome for some of the nations that could potentially be part of the core EU. And yet, messy as multi-speed is, the alternatives may just be worse.

BLOOMBERG VIEW

A version of this article appeared in the print edition of The Straits Times on March 13, 2017, with the headline 'Multi-speed Europe will be hard to pull off'. Print Edition | Subscribe