On the 26th of April, PubAffairs Bruxelles hosted a debate on the “two-speed Europe” project and the Brexit negotiations: a combined unity test?” with Ms Danuta Maria Hubner MEP (EPP/PL) and Mr Michael Theurer MEP (ALDE/DE). The event was moderated by Graham Bishop, a leading expert in EU and UK Economic, Financial and Government Affairs.
At the event, Graham Bishop argued that UK public opinion was not favouring a Brexit outcome that might reduce voters’ standard of living but that the sudden announcement of a General Election might reduce the chance of a further referendum on Brexit. On 8th June, the British electorate delivered a major blow to the Conservative government – and thus its plans for a brutal Brexit. Even a first analysis of the election results shows that the Remainers managed to cause a number of Brexit Conservatives Parliamentarians to lose their seats to Labour. But, correspondingly, Brexiteers swung a number of Labour seats to the Conservatives. The schism over Europe continues to deepen in the UK and the stage may well be set for another referendum.*
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Unlike the UK, Europe is not immobilised by Brexit – as demonstrated by the publication of the Commission’s Reflections on deepening EMU. The paper develops the policy flow laid down in the 2015 Five Presidents’ Report but most of the `big ideas’ are still proposed for a time frame some years away. But “Financial Union” – the sum of banking union and capital markets union plus a bit more – argues for shorter term measures. Moreover, there is an immediate need to ensure that financial stability is preserved even in difficult times, for example flowing from the removal of ultra-lax monetary policy. The Commission is looking for the creation of a `safe asset’ to cut the doom loop between banks and their sovereign and has suggested Sovereign Backed Bonds (SBBs). However, the moderator served on a Commission Expert Group in 2014 on Debt Redemption Funds and Eurobills. This may be the moment to dust off his plan for a Temporary Eurobill Fund (TEF) that fulfils many policy goals of the Five Presidents’ Report, does not require a change in the TFEU and can be completely reversed within two years if the new French (or Italian?) governments do not succeed in reforming the major economies of the EU27.*
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*Please note that the moderator’s intervention has been updated in the light of trhe after the UK general elections results.
Consequently, Graham Bishop introduced the panellists and asked, as a first point of discussion, which was the speakers’ position on the effects of Brexit on the question of unity of the EU.
Mr Theurer MEP opened by saying that the lengthy process of negotiations, as well as the possibility of passing through an interim regime or a transitional period, may prevent the EU from undertaking major reforms and impede member states from resolving current issues as this may also have influenced the decisions of British citizens when voting on Brexit. According to the MEP, given this current critical moment of EU history, the European Union should rather focus on finding solutions to compelling challenges, such as demographic change, innovation gap and lack of enduring economic growth. Mr Theurer MEP also elaborated on the question of the use of a referendum tool in Europe as a strong parliamentary democracy such as the UK, however not used to frequent referenda, opted for an non-binding referendum without allowing its citizens to enjoy the possibility to review this decisions sometime after. Whereas, in Switzerland, which often holds referenda, it is customary to hold the same vote on the very same matter a second time, in case the outcome of the consultation remains divisive. He also pointed out that, along with Brexit talks, the messages coming from Washington should arise a renewed sense of unity among member states and citizens of the EU alike. The speaker concluded by making reference to the intentions of the US to hold bilateral relations with EU states, in order to gain a footing in Europe. Mr Theurer suggested that the best option is for EU member states to stick together and strongly confront such an attempt. Ms Hubner MEP began by echoing the views of Mr Theurer concerning the complex nature of the current decision-making in Europe, as well as on the possible dangers of holding referenda in countries where they do not often occur. The MEP stated that citizens tend to attribute different significations to their vote rather than voting on the actual issue at stake, as confirmed by authoritative studies. For these reasons both caution and the understanding to allow citizens to change their mind are required in the current European political momentum as misinformation is heavily influencing European politics . Ms Hubner continued by underlining the importance of keeping unity among the member states before and during the Brexit negotiations. This will prove to accelerate the process, reach an agreement as soon as possible and allow EU institutions to focus their attention elsewhere. However, she stated, although difficult, EU member states should overcome the divisions that separate them, some of which, according to the MEP, are justified by differences in national interest. Ms Hubner added that it would be naive to think that national interests do not exist in EU politics, nevertheless upholding a given national interest within the European framework is the current challenge for both EU institutions and member states. Ms Hubner continued by remarking that unity remains a central question, especially when defining the guidelines for the Brexit negotiations, as also stated in the Parliament resolution on Brexit. In addition, the MEP explained how Brexit could also be conceived as a window of opportunity for mobilising Europe for change. Given that the European project has been based on change, the current momentum is not only an opportunity for all member states to reflect upon their role within EU, but also to accelerate the pace of other necessary reforms. The EU reform process, she concluded, has been forced to slow down its pace due to both the Brexit question and the series of national elections which are being held this year.
A second point of discussion concerned the proposal of different speeds within the EU and the need for further integration.
On this matter, Mr Theurer MEP emphasised the fact that the European Union is operating at different speeds and that these features will persist in the future since they represent a way to go forward while setting more prospects and ensuring more integration. Moreover, he pointed out that further integration is also necessary in order to foster integration and address issues such as border control, the fight against terrorism and security. Furthermore, the speaker stated that more policy efforts, especially on Eurozone-related issues, are necessary. Ms Hubner MEP made reference to the fact that a degree of flexibility is a key part of the EU governance system, exemplified by continual enhanced cooperation. She added in the same vein that there is also the option of implementing intergovernmental agreements which are not contrary to EU treaties e.g. the euro area, the Schengen area and the so-called “Fiscal Compact”. As a result, the European Union has already sufficient experience on how to manage different speeds and paces of integration. However, she added, there has been a lack of capability in applying the procedures to reach the necessary consensus for changing policies. For these reasons, the speaker remarked that this momentum must be exploited as a standstill position would be detrimental for the future of the EU. However, Ms Hubner highlighted that, especially in the context of Brexit, it is very important to talk about the “double” or “two-speed” Europe, rather than “multispeed”. Indeed, she argued, as Eurozone countries represent the main bloc, the debate should be focused on how to manage the differences between Eurozone and non-Eurozone countries also in consideration of the threat of Eurosceptic parties.
A third point of discussion concerned the effects of Brexit on the future of the European economy.
Ms Hubner MEP replied to this question by stressing that both the EU member states and the UK would benefit from a strong, fully-fledged Eurozone that is able to deliver on growth. With regard to this matter, she emphasised that, after Brexit, the traditional British leading role towards Eurozone and non-Eurozone countries alike will become weaker and the UK’s political potential to influence EU politics will gradually decline. In addition, she stated that the external threat represented by Brexit should eventually lead to a strengthening of the Eurozone, as well as to a new mechanism of differentiated integration. Moreover, Ms Hubner added her praise for the initiative of an increased role of the European Commission as the entity responsible for preserving the integrity of the single market, as well as the guardian of the necessary safeguards that non-euro countries will have to deal with for choices that have not been taken by them. Furthermore, she concluded that European Union’s institutions and member states should focus on encouraging those member states that are not in the Eurozone to accelerate the process of integration in order to prevent the gap between euro countries and non-euro countries from increasing. With this aim, she believed that reforming the Eurozone would mean completing the basic infrastructure of the European Union, while making the treaty change taboo vanish at the same time. With regard to this matter, Mr Theurer MEP emphasised the fact that the Euro is the official currency of the Eurozone and, as stated in the treaties with the exception of UK and Denmark, all parties accepted to define the euro as the currency of the European Union and to join in at a certain point in time. Mr Theurer also stated that the Eurozone would be strengthened only if those who match the required criteria join. Consequently, at a certain point member states will be confronted with two options: either they make the currency more workable by agreeing on a set of instruments and policies with the aim to develop a joint economic and financial policy or they risk falling behind. In addition, he stated that the Euro is neither the cause nor the solution of any crisis, since there is evidence that both euro and non-euro countries face economic and socio-political problems regardless of their macroeconomic setting. He also suggested that embracing the right approach does not simply imply “muddling through”, but rethinking about a more workable institutional framework and political process. Continuing on from this he agreed with Ms Hubner’s support for giving more responsibilities to the European Commission and European institutions in general as the discussion about the steps towards further integration is needed to strengthen common values.
A fourth point of discussion concerned the debate on the reform of the system and the need to foster citizens ‘participation.
Mr Theurer MEP addressed the question by stating that it is crucial for the process of further integration to rely on citizens who act in favour of the EU. In support of this argument, he remarked that as shown by Brexit, the European Union is based on voluntary membership. Consequently, he emphasised the need to foster discussion among citizens on political models and their trade-offs in order to enhance the degree of consensus in society and make the EU more attractive and transparent. In addition, the major question at the basis of designing a new system consists of achieving a common understanding of how the institutional framework should be adapted to the current situation. Such a question, he explained, has to be addressed in a broader discussion and in an inclusive manner. He concluded by stating that there is a need to discuss with citizens about the integration responsibility at each level of the European Union and that such needs should be fostered not only by Brussels-based EU institutions, but also by national, regional and local governments. Ms Hubner MEP agreed on the need to reform the European Union by including citizens in the decision-making process and paving the way to the changes by explaining the reasons of the choices that need to be made. Moreover, the opportunity of restarting talks about Europe comes together with the need for people to exchange their ideas on what future change would eventually look like. This strategic approach should foster a new form of legitimation of the European Union based on transparent and straightforward arguments. Ms Hubner also added that the issue of addressing the needs of citizens within the Brexit process has been taken into account by EU institutions, while, for the benefits of UK citizens as well, she concluded, it is also important to remind them that there is still the possibility of revoking Article 50, provided that there is unanimous consensus from the other 27 member states.
The Q&A session also covered the following issues: The consequences of including national parliaments in the discussion about the future of Europe; which are the most evident signals of disunity within the European Union; Article 50 and the degree of feasibility of reaching an agreement within the established time framework; how a two-speed Europe would help the integration process with concern to the areas of tax and fiscal integration; the possibility for the UK elections to postpone the Scottish referendum; the security issue in the Brexit negotiations and after the UK leaves.
Do you want to go further into the issues discussed in our debate? Check our list of selected sources which we have provided for you!
UK general elections result in full | BBC.com
EU threatens year-long delay in Brexit talks over UK’s negotiating stance | The Guardian.com
Tories manifesto can be ‘pruned’ as May prepares to meet with furious MPs | Telegraph.co.uk
What Macron’s victory means for Brexit, by A.Glencross | EUROPP
White paper on the future of Europe and the way forward | European Commission – Publication
Reflection paper on the deepening of the economic and monetary union | European Commission – Publication
The Five Presidents’ Report: Completing Europe’s Economic and Monetary Union | European Commission – Publication
Reflection paper on how harnessing globalisation | European Commission – Publication
EU leaders embrace multi-speed Europe amid tensions | BBC.com
Germany and France endorse multi-speed Europe | EUObserver.com
EU’s big four back ‘multi-speed’ Europe | EUObserver.com
‘Two-Speed’ Europe: A Plan For EU Unity Or Disintegration? | Radio Free Europe
Remarks by President Donald Tusk at the panel discussion called “European (Dis)Union?” during the Globsec forum in Bratislava | EU Council press