European Disunion: The Rise and Fall of a Post-War Dream?

From storied Malta in the heart of the Mediterranean Sea to the remote northern reach of Finland in the Arctic Circle and from Ireland’s emerald perch on the Atlantic wall to the Black Sea coastline of Bulgaria, since World War II Europe has embraced an unprecedented spirit of voluntary unification.

The European Union (EU) has been a grand experiment in breaking down the barriers between nations and achieving prosperity through economic integration. Yet the process has been characterized by friction, contradictions, and competing visions of the goals of union.

The most recent example of tensions within the EU were on full display when fireworks lit up the sky and Beethoven’s “Ode to Joy” (the EU anthem) rang through the ancient cobbled streets of Zagreb on July 1, 2013 welcoming Croatia as the 28^th member of the EU.

Even as states such as the United Kingdom contemplate leaving the EU altogether, the president of the European Council “wholeheartedly” welcomed Croatia’s citizens declaring membership would “change the life of the nation for good.”

Croatia’s president, Ivo Josipovic, replied that the “accession of Croatia to the European Union is confirmation that each of us belongs to the European democratic and cultural set of values.” The celebration of shared values and a common future was nevertheless lukewarmly greeted by the 42 percent of Croatians unimpressed by joining the EU.

Europe’s current economic crisis and political disagreements have renewed debate about the meaning of the EU. And many Europeans have voiced concern that the sacrifices are greater than the benefits of membership.

The EU project has wrestled from its very beginnings with tensions between national sovereignty and greater integration.

Greece’s financial meltdown, stagnating economies in southern and western Europe, and the United Kingdom’s proposed referendum to end its 40-year membership dominate the headlines. Yet such developments are nothing new.

Euro-skeptics—those who reject all or part of ever-greater European integration—have long challenged the assertion made by Jean Monnet, the French businessman considered by many to be the modern father of the EU, that “there is no future for the people of Europe other than in Union.” Born from the ashes of World War II, the continent’s most destructive war, the idea of European unity grew in fits and starts through the Cold War.

Amid new realities of sovereign debt crises and referendums on continued membership, the EU now faces some of the most daunting challenges to its core agenda of economic stability and regional harmony.

The EU has transformed its goals and structures in dramatic and unpredicted ways over the course of its existence: from a coal and steel community of six states to a single market and global trading bloc of 28 states; and from an effort to foster peace and prosperity to an institution that strives to define and enhance European values.

As it faces its current challenges and discussions of disunion, the EU will once again redefine itself.

Peace through Business

After World War II, European leaders looked for new ways to promote regional peace and security, hoping above all else to avert another cataclysmic war.

The idea of European integration was not entirely new to the post-Second World War era.

Over the centuries, many had attempted to unify large parts of Europe by force, as in Napoleon’s rapid conquest of much of the continent in the early 19^th century. But European leaders in the post-World War II period chased the idea of voluntary integration and peaceful transnational bonds.

Various schemes for regional unification later in the 19^th century such as the pan-Germanic and pan-Slavic movements garnered some intellectual, political, and popular support but rarely amounted to more than an academic exercise.

In the volatile decades between the World Wars, calls for a wider pan-European concept grew louder. The 1923 publication of Count Richard von Coudenhove-Kalergi’s Paneuropa launched a Pan-European Movement that captured the support of many influential public figures, including Albert Einstein and Winston Churchill.

Despite a reasoned intellectual foundation and moderate support, the idea of a politically and economically unified Europe stumbled over the tension between national sovereignty and collective security. The utter devastation of the Second World War and the need for rapid rebuilding and global competitiveness helped to overcome those tensions.

Robert Schuman articulated the sweeping, utopian goals of the EU’s founders in a speech in Strasbourg in 1949.

“We are carrying out a great experiment, the fulfillment of the same recurrent dream that for ten centuries has revisited the peoples of Europe: creating between them an organization putting an end to war and guaranteeing an eternal peace … The European spirit signifies being conscious of belonging to a cultural family and to have a willingness to serve that community in the spirit of total mutuality, without any hidden motives of hegemony or the selfish exploitation of others.”

Believing that countries with integrated economies would find no benefit in going to war with one another, European statesmen after World War II sought an economic as much as a political solution to continental conflict. This new approach to collective security recognized that Europe’s more recent history had been dominated by an ongoing contest for the resources that drove the industrial economies of Western and Central Europe.

The first small step in the thousand-mile journey to bring a European union to life came in 1952, when the European Coal and Steel Community (ECSC) sprang to life. It bound together the coal and steel industries of France, West Germany, Belgium, the Netherlands, Luxembourg, and Italy—the six founding countries of what is now the EU.

Their newly formed economic bonds based on coal and steel eliminated temptation to territorial conquest and encouraged cooperation and mutual respect. The Schuman Declaration forthrightly acknowledged that “world peace cannot be safeguarded without the making of creative efforts proportionate to the dangers which threaten it.”

The ECSC was a very small beginning to the EU, but actually its limited nature rendered it politically possible.

The proponents of broader European integration realized that they could not unite everything all at once without raising concerns over sovereignty. Bringing together selected industries in a handful of interested nations was a necessary stepping stone to an integrated, if not entirely unified, Europe.

Within its first decade, steel production in the ECSC countries increased 75 percent and industrial production rose by 58 percent. Joint labor and welfare policies also improved the working and living conditions of coal miners, suggesting potential in areas beyond solely economic policies.

Growth and Growing Pains

Success and prosperity prompted ECSC members to integrate more fully additional aspects of their economies and to expand the number of member countries.

In 1957, the six members signed the Treaties of Rome establishing the European Economic Community (EEC) and the European Atomic Energy Community (Euratom). The EEC sought to establish a common market among its members while Euratom encouraged the peaceful use of atomic energy.

The Rome Treaty seemed to acknowledge Schuman’s observation that Europe would “be built through practical achievements that first establish a sense of common achievement.” Throughout the 1960s, this sense of common achievement was hammered out through shared trade and agriculture policies, and in 1968 all customs barriers between the six EEC members were abolished.

As this deeper integration unfolded, other West European states began to acknowledge the advantages associated with the common-market model. Denmark, Ireland, and the United Kingdom joined in 1973, bringing the total number of EEC member states to nine.

While the 1960s saw the growth of common agricultural and trade policies, the 1970s witnessed the implementation of regional social and environmental policies. EEC members increasingly recognized the need for a common monetary policy over the course of the decade.

In 1979, the EEC introduced the European Monetary System (EMS), a first step toward establishing joint fiscal policies and stabilizing exchange rates among member states. The new monetary system demanded greater institutional and bureaucratic support, such as the European Council and the European Regional Development Fund.

These structures proved helpful as the EEC continued to expand, first in 1981 with the inclusion of Greece and then again in 1986 will the addition of Spain and Portugal. In 1986, the twelve member states signed the Single European Act, becoming simply the European Community (EC).

This period of gradual expansion, however, was not universally embraced. Wariness and opposition surfaced, especially within the United Kingdom.

Despite Margaret Thatcher’s claim that Britain’s destiny was “in Europe, as part of the Community,” the United Kingdom has long struggled to reconcile such rhetoric with widely-held concerns over the loss of national sovereignty. As the EC moved ever closer in the 1980s to adopting a single currency, the UK laid the foundation for an ‘opt-out’ clause that has permitted EU membership without the requirement to join the monetary union of the continent.

A Watershed: 1989, the EC, and the Maastricht Treaty

Just three short years after the Single European Act, shockwaves emanating from the demolition of the Berlin Wall in 1989 were felt around the world.

The unexpected end of the Cold War was simultaneously a moment of promise and apprehension. The fledgling EC confronted the problem of how to respond to economically and environmentally devastated states immediately to its east.

Once an integral part of Europe, this region had been cut off, abused, and isolated for the same half-century that had seen the birth and gradual expansion of the EC. While EC members contemplated the meaning of 1989 with trepidation, the newly liberated states of Eastern Europe identified membership in the European “club” as a necessary objective for prosperity and security.

EC membership symbolized a “return” to Europe, but more importantly for East European policy-makers, it provided access to much-needed development funds. Decades of communist rule had neglected infrastructure development and stunted economic growth. East European states identified EC membership as a necessary component of their various economic recovery plans.

Suddenly, the European project took on a new meaning in different parts of Europe. If the EU had begun with the promise of forging peace and stability from the ashes of World War II, it now signaled acceptance and rehabilitation for those East European countries that had found themselves caught in the Cold War.

While Eastern Europe wrestled with the immediate challenges post-Communism, the EC tackled other important issues.

In December 1991, EC members signed the Maastricht Treaty, which paved the way for the establishment of the Common European Market and the creation of the European Union (EU) to replace the EC in 1993. Despite concerns that the treaty took too much power out of the hands of individual member states, two years later, the EU grew to fifteen members with the inclusion of Austria, Finland, and Sweden.

The Maastricht Treaty also set forth ambitious goals. It sought the creation of a monetary union by the end of the century and the historic introduction of a single European currency: the euro (€). It also pushed forward a common foreign and security policy for all member states.

In addition to serving as a symbol of European identity, the euro was supposed to promote greater economic stability and increase market efficiency. By adopting the common currency, member states were agreeing to keep budget deficits below 3 percent of GDP, maintain a debt ratio of less than 60 percent of GDP, and keep interest rates close to the EU average.

By overseeing compliance, the European Central Bank (ECB) could take monetary policy out of the hands of politicians at the national level and make trade within the Eurozone (states adopting the euro) easier and less expensive. Former French Finance Minister Dominique Strauss-Kahn argued that the euro was “a tool to help us … resist irrational shifts in the market” that were detrimental to all.

Opponents to the euro doubted that all member states could abide by the rules and regulations and feared that improper regulation by the ECB could lead to high unemployment and periods of intense inflation.

The United Kingdom and Denmark also asserted that the EU was a political, not an economic project and that a common currency was a serious infringement on national sovereignty. As a result, both states were allowed to opt out of the euro while still maintaining their EU membership—an exception not afforded any other member state.

Despite these concerns and a belief that the recent economic crisis vindicates them, the euro has given its proponents cause for celebration. Since its introduction in 1999, the euro has become a major world currency, it has gained strength as a reserve currency, and many states around the globe now peg their own currencies to the euro. Hence, EU Commission President José Manuel Barroso’s promise to “defend the euro, whatever it takes.”

Beyond the euro, the EU also enabled European citizenship, complete with commonly accepted rights and privileges, to accompany citizens as they travelled across the borders within the Union.

EU Commission President Jacques Delors praised Maastricht, “We’re not just here to make a single market, but a political union,” and German Chancellor Helmut Kohl declared, “The European Union Treaty … will lead to the creation of what the founding fathers of modern Europe dreamed of after the war, the United States of Europe.”

In shifting control over currency and monetary policy, foreign policy, and citizenship to the trans-national EU, the Maastricht Treaty represents an almost unprecedented voluntary shift of sovereignty from individual countries to a larger, cross-continental union of peoples.

Anatomy of a Union

In the process, Maastricht also exacerbated concerns over the balance of power between the sovereign member states, the citizens of those sovereign states, and the EU.

If greater union was to achieve the objectives of its architects, it had to strike the right balance between the different levels of governance involved at the national and supranational levels. The structure of the EU had to ensure that the political rights of its citizens and member states were maintained and their voices heard without devolving into a chaos of competing agendas.

The European Union implemented after Maastricht is best described as an institutional triangle based in Brussels, Belgium. The three corners of this triangle—the European Parliament, the Council of Ministers, and the European Commission— help disseminate power between the EU, member states, and citizens.

EU citizens elect representatives to the European Parliament. Each state appoints ministers to the Council of Ministers, the decision-making institution of the EU. The European Commission is the executive body of the EU and represents the interests of the Union as a whole.

The Commission typically proposes legislation, which is then passed by the Parliament and Council. Member states implement the legislation and the Commission ensures compliance. Together with the European Court of Justice, this triangle produces and enforces EU policies.

Adding a layer of complexity to this structure is the European Council. This body is comprised of the members’ heads of state and the president of the European Commission.

The Council meets twice a year to set the direction and broad agenda for the EU. The Council of Ministers, which is subordinate to the European Council, is then expected to implement that agenda. The presidency of the European Council is rotated between the member states for six-month terms.

An obvious challenge to an organization that today represents 28 countries and a citizenry of 503 million people speaking 23 different languages is to avoid growing so unwieldy that it cannot function.

Greater Integration, Greater Expansion

In the wake of Maastricht in the 1990s, as the EU prepared for the unprecedented introduction of a common European currency, it also rushed toward its largest and most historic expansion.

As they shifted from their communist structures, the eastern European states underwent far-reaching political and economic reforms. The EU offered these states a roadmap to membership, based on requirements stipulated in the 1997 Treaty of Amsterdam.

Given the challenges associated with rapidly reorienting centralized economies toward free-market capitalism and creating transparent and functioning democracies after fifty years of opaque authoritarian rule, many EU members wondered whether these states should be admitted at all.

Some worried that the EU simply could not forge ahead with its goal of a single currency at the same time that it tried to push the EU’s borders hundreds of miles to the east.

The 1997 Treaty of Amsterdam addressed many concerns confronting the rapidly expanding and more tightly integrated European Union. It strengthened the common foreign and security policy of the EU by creating a high representative and mandated greater coordination in immigration and asylum policies. Yet, the solutions agreed to in Amsterdam only increased concern and discontent with the direction the EU was headed. More and more, national concerns began to overshadow EU concerns.

In anticipation of future expansion, the Treaty of Nice in 2000 set forth a revised composition of the European Parliament and the distribution of decision-making power. Intending to keep the EU’s sprawling structure in check while permitting new members, it distributed more decision-making authority to the larger, older, and more stable member states, such as France, Germany, and the UK.

With the Treaties of Amsterdam and Nice in place, on January 1, 2002, eleven of the fifteen EU member states replaced their national currencies with the euro (the UK, Denmark, Sweden, and Greece refrained).

More than a decade after its notes first entered circulation, the euro has become a major world currency. But intense insecurity and skepticism accompanied this transformative moment in European history. While skeptics have used the financial crises of recent years to validate their objections, it is difficult to deny the overall success of the project.

Aside from the relative peace and stability enjoyed by EU members, the EU has justified itself as a major economic bloc on the world stage. It accounts for roughly 20 percent of global GDP—only slightly behind the U.S.—and its share of world merchandise exports exceeds that of the U.S., hovering at about 20 percent.

In many respects, the early success of the euro project helped generate a lot of the excitement that surrounded the next round of expansion.

In May 2004, the European Union nearly doubled in size overnight with the admission of ten new states (Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia).

British Prime Minister Tony Blair declared that the “prospect of EU membership … is the primary reason why [new member] countries have been able to reform their economies and politics so radically and so beneficially.” This sentiment of thanks to the EU was certainly acknowledged by Ivo Josipovic as Croatia became the newest EU member in May.

The 25-member EU was not done growing. As the newest member states became further integrated, assumed greater leadership roles, contributed to common foreign and security policies, and in some cases, adopted the euro, new candidates were still being considered. Despite concerns over the extent of their economic reforms and transparency in government, Bulgaria and Romania were admitted to the EU in 2007.

With the massive expansion of the EU over such a short time, EU leaders undertook further structural reforms.

The Lisbon Treaty of 2009 followed nearly two years of torturous debate, public resistance, and revision.

In order to enhance the functionality of the EU, decision-making power was more evenly distributed between the European Council and the European Parliament. The opportunities for member states to veto EU legislation were reduced, while national parliaments became more engaged in the European legislative process.

In the end, Lisbon strove to define what EU membership meant not just at the state level, but at the street level of the individual citizen.

Debating the Meaning of Membership

After more than sixty years of historic and voluntary integration, the meaning of membership in the EU is still being debated and rearticulated. As Jean Monnet stated upon the launch of the ECSC in 1952, “We are not bringing together states, we are uniting people.”

That statement pinpoints the dilemma woven into the fabric of the European Union: the distinction between national and individual interests. So long as local policy decisions remained in the hands of national bodies, many of these tensions could be debated in the abstract. Popular opinion in Europe has tended to embrace ever greater integration so long as it did not infringe upon existing liberties or national sovereignty.

The free movement of goods and people was appreciated if it brought greater job opportunities and cheaper access to goods and services. If, on the other hand, it flooded local markets with cheap foreign labor from the east, then greater integration was resented and Euro-skeptics found ready audiences.

For instance, the years immediately following 2004 saw an increase in Polish migration to the UK. Mostly young, they found jobs as cleaners, day laborers, and au pairs – low wage jobs that still paid better than what they could find back home in Poland.

Sending remittances home or saving for a couple of years before returning east, their presence generated resentment among some Brits who felt jobs were being stolen and money shipped off to Poland by guest workers not committed to staying in the UK over the long haul.

This scenario played itself out in many other EU states as young East Europeans took advantage of the EU labor market and higher-wage jobs in western European states.

The success or failure of the European project has, to a large degree, always rested on how it is experienced by the individual citizens of each member state.

In the lead-up to the EU’s historic 2004 expansion, policymakers in Brussels commissioned Pascal Fontaine, a former assistant to Jean Monnet, to produce the EU tutorial Europe in 12 Lessons.

This booklet, complete (in its first edition) with cartoon illustrations reminiscent of grade-school primers, showcased the issues confronting European citizens. Stressing the EU motto “Unity in Diversity,” it was primarily addressed to the incoming inhabitants of the 10 new member states.

“Lesson 4: A Citizen’s Europe” explains why EU membership should be welcomed and not resisted. It is understandably focused on the benefits of membership for individuals and begins with the question, “Is Europe about people or business?” The reader discovers that the answer is both, but more the former than the latter. Membership in the EU in 2004 was supposed to mean greater individual freedom and personal opportunity; greater access to education and cultural exchange; and a “sense of belonging.”

Europe in 12 Lessons is also a window into the accusations Euro-skeptics leveled at the EU. Each one of the twelve lessons is a response to an argument against membership.

A defensive document in many respects, it also challenges readers to understand EU membership as a responsibility. The responsibility is not only to take advantage of its opportunities and thus reinforce its institutions, but to adhere to its principles so its benefits can take root and expand equally to all.

Regrettably, the document focusses more on the benefits of membership rather than the obligations, leaving many Europeans with a misconception that rising prosperity might come without the periodic need for sacrifices.

Reversal of Fortunes

Sovereign debt crises over the past five years have severely exacerbated tensions within the EU. Ironically, economic concerns that gave birth to the European Union now give rise to renewed calls for its termination—or at least the termination of the Eurozone.

When a country sells bonds, that country’s sovereign debt is held by the bondholder. The crises arose in 2009 when countries, most notably Greece, had trouble servicing their debt and began to origins.osu.edu on their loans. Because the Eurozone economies are so tightly integrated, when one country origins.osu.edus on its debt, the other member states are also adversely affected.

Under the terms of the Maastricht Treaty, member states are obligated to limit their deficit spending and the level of their public debt. Beginning in the early 2000s, however, Eurozone states such as Greece, Ireland, and Portugal began exceeding these deficits and debt limits.

These actions not only violated the terms of the Maastricht Treaty, they failed to honor internationally agreed-upon best practices. In order to mask the extent of their public debt and to delay origins.osu.edu, they employed complex currency and credit derivatives rather than face EU reprimands or address their underlying financial troubles.

By 2010, the Greek budget deficit approached 125 percent of its GDP – well in violation of EU regulations – and it needed to borrow roughly €50 billion just to service its existing debt. This sent shockwaves through the rest of the EU despite Greek Prime Minister George Papandreou’s early assertion that his country would require no bailout. Bizarrely, he believed “the fact that we are going through a crisis is an opportunity for Europe to be more coordinated and more integrated. We’re actually talking about … economic governance in the European Union.”

One of the biggest problems of the Eurozone is that it is a monetary union, but it is not a fiscal union.

For instance, its 17 member states share a currency, but they do not share common tax or public pension regulations. Sooner or later, being one without being the other was going to present a significant problem for states using the euro. That moment arrived in 2009 when the global economic crisis compounded the European debt crisis as did the bursting of a property bubble similar to the one that battered the United States.

Adding to the EU’s woes, however, was the fact that several states, such as Greece, found themselves required to confront unfunded liabilities in the form of state pensions and high public-sector wages.

Despite the 2010 European Financial Stability Facility in which the Eurozone states set up a €690 billion fund to assist the most troubled states, the credit ratings of several states were downgraded as was confidence in the euro and in the economies of Eurozone states.

Understandably, the economic crisis escalated into a crisis of confidence in political leadership.

Since 2009, eight of the 17 Eurozone governments have collapsed as a result of the economic crisis. These included the so-called “PIIGS” (Portugal, Ireland, Italy, Greece, and Spain) as well as France, Slovenia and Slovakia. Resurgent Populist movements and protests coming from the European street have been responding to the policies coming out of the Brussels triangle.

Attempts to bail out the most troubled of these states, particularly Greece, met with fierce resistance.

People in Germany, France, and even Slovakia wanted to know why they should shoulder an added financial burden because of the poor economic decisions of other states. They challenged the logic of bailouts for member states and other measures that spread the pain across the EU.

Many throughout the Eurozone continue to see bailouts as a breach of the covenant of European integration. The EU promised to bring prosperity, not to spread hardship. Fontaine’s Europe in 12 Lessons explicitly argues this point, as do other EU advocates.

Citizens of the states needing bailouts openly, and sometimes violently, rejected austerity measures required by the rescue packages. Here, again, one can see the disconnect between the abstract notion about what EU membership means and the way it is experienced.

Europe in 12 Lessons – and other EU communiqués – stressed that EU membership was about more than derived benefits, it was about responsibilities. It was about contributions to the greater whole that helped generate a stronger and more robust citizens’ Europe.

Yet the economic crisis has highlighted just the opposite. The violation of debt and deficit policies at the state level and the rejection of austerity measures at the street level showcase a shirking of responsibility and a disregard for the collective security.

Longstanding skeptics of tighter European integration are increasingly being joined by skeptics of the single currency who now also oppose bailing out financially irresponsible member states on the grounds that it weakens their own national economies and punishes populations that did not violate EU policies.

Consequently, calls to withdraw from the Eurozone or even from the EU altogether have grown shriller in Great Britain, Greece, Hungary, and the Czech Republic.

There have always been a healthy number of Euro-skeptics. Some, such as former Czech president Václav Klaus, have even used prominent EU platforms to express their Euro-skepticism, as he did while his country held the rotating EU presidency for the first six months of 2009.

However, it is significant to note that the current debate is a very different one than the debate that typically surrounded joining the EU and/or adopting the euro.

These current debates are about extrication and this is a scenario that was never envisioned by Brussels. The justification behind European integration was that once joined, there would be no incentive to disengage because national and regional interests were simultaneously satisfied.

Furthermore, extricating a member state from the Eurozone is not as straightforward as some proponents suggest in cleverly crafted sound bites and pithy protest placards.

Echoes of former Spanish Prime Minister Felipe González’s charge that the “single currency is the greatest abandonment of sovereignty since the foundation of the European Community” have been met with German Chancellor Angela Merkel’s firm assertion that, “the euro is our common fate, and Europe is our common future.”

To Merkel’s point, currency valuation, debt ownership, and a multitude of other very technical and very significant challenges make disunion impractical for all involved – or at least for all involved who seriously wish to solve the problem.

Union or Disunion?

Despite the current economic crisis, calls for disunion, threats to abandon the euro, and public outcry against austerity measures, there is little reason to fear the end of the postwar dream of a harmonious European Union.

The challenge that confronts the EU as it comes of age in the 21^st century is, in essence, the very same challenge that it confronted through its 20^th-century adolescence. The EU must ask itself what degree of union it truly desires and what it is willing to sacrifice.

In many respects, the EU has been a victim of its own shifting definition and its own overreach. It desires union, but not too much union. It aspires to be no more than a confederation of states, yet promotes institutions that require far more centralized authority than it feels comfortable exercising.

It has had to balance the rational defense of national sovereignty with the utopian ideal of a fully integrated European continent. Unity in diversity works well as a cultural policy, but it is impractical as a political structure and unworkable as economic policy.

If the postwar dream of European unity is to survive the peacetime challenges of a volatile global economy and a European citizenry fiercely defensive of national prerogatives, then the EU must set limits on its ambitions.

The ECSC worked and it worked well because its architects defined not only its goals, but also its limitations. They knew what it was and what it was not. The same must become true of the European Union in the 21^st century.