After the German and the Italian elections take place, there will probably be discussions for a new European treaty. Given the wide variety of preferences among the member states, a multispeed Europe seems to be the only way forward.

As the hangover from Brexit passes and the Le Pen nightmare has been avoided, Europe is gathering its strengths to put forward the “ever closer union” target.  Of course, the political and economic challenges remain, with Italy being the biggest threat, as the Populist Movement of five stars is gaining momentum in one of the most fragile economies of Europe.

At the end of 2017, after the Italian and German elections, the political situation in Europe will be more clear for a new European treaty.

Some first thoughts about more integration have been recently mentioned by Merkel and Macron.  More specifically, Macron’s political program for Europe includes a common fiscal policy, a joint finance minister, the completion of the banking union and a strengthened Franco-German relationship.

Furthermore, after a meeting between Merkel and Macron, the two leaders agreed to hold a Franco-German Ministerial meeting in July to work on common proposals to reform the EU, including initiatives such as converging tax rules.  At this meeting, Macron reassured the German side that he “never defended [the idea of] Eurobonds or the mutualisation of existing debt in the eurozone”, as it would make some countries less responsible.  Merkel, on her part, was open to the revision of European treaties, stating that “from a German point of view, it is possible to change treaties if it makes sense in order to strengthen the Eurozone.”

Are the United States of Europe possible?

Referenda such as those that took place in the United Kingdom and in Greece as well as the rise of anti-systemic and Eurosceptical parties in Europe, make the vision of the United States of Europe highly unlikely for the near future.

European treaty
Source: OECD

Adding to this, the financial crisis, from which European states are still recovering, have largely damaged the trust between the member states, especially in the countries of the periphery.  

The latter are still facing major economic problems with high unemployment and a fragile banking system.  Consequently, the idea of any form of the European state, as it was attempted with the adoption of the European Constitution at the beginning of the 2000s, seems utopian.

Towards which direction?

If the creation of a European state is unlikely, then which will be the orientation of a new European treaty? Given the problems that Eurozone countries faced during the financial crisis and the fears of a possible breakout of the Eurozone, financial integration seems the only way forward. However, the decline of trust between member states leaves little space for maneuver.

More specifically, northern countries will probably try to avoid transfers between the north and the south, in the form of common debt, or Eurobonds.  A banking union will be more likely, as Macron has proposed.  Generally, there is a consensus among the member states about the need for economic reforms in the Eurozone.

In the political field, the problems that have risen in the last decade have brought a lot of tension among member states and conflicting goals. Specifically, some of the major problems in the EU remain the refugee crisis and the non-compliance of member states like Hungary and Poland.  Both countries have refused to take in any refugees, as it was agreed under the 2015 deal, causing frustration in a lot of European capitals.

Furthermore, Hungary faces “the nuclear option” of EU, Article 7, under which the voting rights of the member state are suspended, as a result of the serious breach of EU values.  Romania, for its part, has been under the special monitoring of their justice system, along with Bulgaria, since they joined the bloc in 2007, because of deep-rooted corruption.

This heterogeneity of preferences and institutions has made clear that not all member states will be able to follow the “ever closer union” target.  The adoption of a multispeed Europe could bring the EU out of its deadlock.  Though, these countries that will be kept in a “second Europe” will not voluntarily abandon their current position.  Therefore, there should be some compensation for these members.

Last but not least, the high rates of Euroscepticism cannot permit radical changes in a future European treaty.  Consequently, a future treaty can only bring incremental changes, permitting member states to be more flexible on cooperating and therefore overcoming the unanimity principle.

Expert Analysis: Why Is Greece No Longer Making The Headlines?

Vasilis Spyrakos Patronas is a political scientist and expert in European economy and politics. He is a Political Analyst at Greek think tank Synpraxis and is currently pursuing an MSc in Political Economy...

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