The question is not just a rhetorical one. The train of European integration seems not to know where to go. Divergent visions and disintegrating forces prevent the generation of consensus on what the new Europe should be: a new exciting project that can replace the one that was masterfully sculpted in the first half century but has already lost its bellows. Several milestones have contributed to it.
The seams of the EU began to break when 12 new countries joined the Union at the beginning of this century, most of them from the excommunist East. It was naive to think that a model of integration and governance that could have been suitable for the original Europe of the 6, and then the 9 or the 15, could be transferred to the heterogeneous Union of the 28. Not only did the new members have mostly utilitarian purposes, but they did not share the history or liberal values that make up the DNA of Western Europe.
Then came the euro crisis, which placed the European institutional system in a situation of maximum stress. Governance through institutions based on rules and consensus, with the European Commission at the helm, gave way to the discretion and improvisation of the Heads of State in the European Council, which virtually annulled the economic sovereignty of the countries overwhelmed by debt and wobbly banks. Even the Franco-German tandem that had historically been the axis of European integration did not work this time, since Germany had to assume the leadership in view of the French weakness. The coercive style of its leadership alienated some of its southern partners.
Instead of taking on the tasks of a “benevolent hegemon,” which according to Charles Kindleberger’s Theory of Hegemonic Stability is essential for the survival of an integrated monetary system, Germany denied its systemic co-responsibility, elaborated a misdiagnosis of the crisis and imposed an equally wrong recipe book. The consequence was that the euro was about to perish, had it not been for the decisive intervention of the European Central Bank since mid-2012, which went on to manage the crisis by monetary means.
And then came the 2015-2016 refugee crisis, which made vanish myths such as the EU’s ability to manage internal political crises, the discipline in complying with the community rules, solidarity among members and the respect for the German leadership. It also ended up giving impetus to the anti-globalization and anti-European political movements that had been emerging since the euro crisis.
It was also this immigration crisis the tipping point that tilted the balance of the 2016 British referendum and turned the expected 48-52 into a 52-48 in favour of Brexit, although it must be said that the seed of the United Kingdom’s exit from the EU was sown from the very first day of its incorporation. What is also relevant is the fact that the British aversion to cede sovereignty was and is shared by other members of the union. Brexit is a sign of some deep fault lines of the European construct.
The recent lobbying for the appointment of the main community leaders has also highlighted the lack of consensus on the type of Europe that is wanted. The relevant fact is not that Macron outmanoeuvred Merkel, but that Germany has lost its way, has failed in its leadership, but France has no way of filling that void. On the other hand, North-South, East-West, liberal-populist tensions and differences are no longer manageable within the old concept of a plain-vanilla uniformed Europe. The dream of the “United States of Europe” need to be buried. The EU needs to move towards a plural and flexible framework, with multiple spheres and intensities of integration.
An area that requires urgent attention is that of the monetary union. As long as there is no a benevolent hegemon willing to give viability to the arrangement through solidarity (shared-risk) schemes, there is no way that a common currency can survive between countries with such divergent cultures and economic models. Germany is not won for that task. Given the very serious risk of chaotic rupture in the next crisis, it is necessary to prepare an orderly reconfiguration of the eurozone, in which only countries with compatible economies are grouped around common currencies. From that reconfiguration two or more “euros” will emerge, which will then seek to coordinate in a flexible manner.
A tricky problem is deciding who leaves the euro club first. To pretend that countries with weaker economies take the first step is throwing them into the precipice of speculative attacks. From a technical point of view, it would be up to Germany and its peers to make the first move and create a new currency that suits to its austere and efficient export model. Today, however, this approach is anathema in Germany, but the discussion must take place before a chaotic breakup creates tensions that would endanger decades of integration achievements.