Is EU unravelling?

S P SETH

The project Europe to integrate European countries into a tight regional union, European Union (EU), is in trouble. It was doing fine as long as it was on an upward economic curve. But then the credit bubble that sustained it burst and the emphasis shifted from easy credit to tight austerity, leading to rising unemployment, negative growth among some of its member countries, social distress and political unrest, of which Greece became the highly visible symbol. Its government was finally coerced into a humiliating credit bail out in return for extreme austerity putting it on economic diet for whenever. The EU, particularly its 19-member common currency union, euro zone, has a structural problem that will surface whenever its economy is in trouble, as it continues to be. As Thomas Piketty, professor of economics at the Paris School of Economics and author of the much lauded book, Capital in the Twenty-first Century, has written in an article, “We [euro zone] have a single currency with nineteen different public debts, nineteen interest rates upon which the financial markets are completely free to speculate, nineteen corporate tax rates in unbridled competition with one another, without a common social safety net or shared educational standards---this cannot possible work, and never will.” Now, there is also fear of a deflationary spiral.

Even as EU’s economic situation still remains fragile, it has been shaken by a refugee crisis with a million and more uprooted people from Syria and elsewhere in the Middle East flooding into Europe. And so far all EU efforts to slow down and regulate their flow have failed, as some EU member countries are not prepared to let in the refugees. They do not want to subscribe to a quota system or any other way that will require them to an orderly acceptance of some of these refugees. The EU has sought to prevail upon Turkey, from where many of these refugees make the dangerous sea journey to Greece, to slow down/regulate as well as accept reverse flow of Syrian refugees for which it will receive three billion euros. The EU is also willing to consider Turkish proposal for visa free entry into Europe for Turkish citizens, as well as accelerate the process for its entry into EU. But, despite a recent tentative understanding/agreement to this effect, it might not work because some of it, sending back refugees to Turkey, will contravene international and European human rights conventions. Hence, it looks like the refugee crisis is here to stay. Indeed, it is feared that the refugee influx into Europe will get worse before it gets better, whenever.

In the meantime, the refugee crisis is creating political problems among EU members and within their respective countries. For instance, within Germany, the most generous of the EU countries with nearly 1 million refugees, its Chancellor Angela Merkel’s popularity is waning. The much-celebrated Schengen system, which allows the free movement of people within EU countries, is increasingly under threat. European Union members like Hungary and Poland, with their rightwing governments, are getting more political oxygen to turn authoritarian, if not downright fascists. All this is strengthening anti-EU sentiments. It is a mix of Islam phobia, racism and a clamor to reclaim national sovereignty.

On the question of asylum seekers, it is Greece, which already has severe economic problems from its debt, is left to bear even more burden being the European country, in most cases, of first entry for refugees making the dangerous voyage from Turkey. And now that border fences have been built by countries on its northern trajectory to block refugees from onward journey, thousands of refugees are now stuck in Greece. Greece neither has the financial resources nor the supporting infrastructure to deal with the situation, though it has been promised some financial help. But things do not seem to be moving in any satisfactory way. The only effective and durable solution of such large-scale influx of refugees is to create stable conditions in their home countries racked by multiple civil wars, sectarian conflict and any number of other problems. But that is easier said than done. Which would suggest that it would be an ongoing problem putting severe strain on EU, and could easily rupture it with different countries going their own way thus making a mockery of project Europe.

And it is precisely at such a juncture when EU is still trying to find its way around its economic problems, compounded by the refugee crisis, that it is faced with the very real prospect that Britain might decide to quit the organization. As it is, Britain is not part of its common currency, euro zone. It is part of the larger 28-member union. But many Brits have never been happy about their membership, fearing erosion of their sovereignty. And they haven’t taken to the free movement of European labour into their country, resenting access to British welfare payments. Under a new deal negotiated between Prime Minister David Cameron and the EU, Britain will have some special dispensation. Which is meant to make Britain look like it is its own sovereign and not subject to EU’s overriding authority in some important matters. And this is considered necessary because David Cameron hopes that this will make it more palatable for the British people in the June 23 referendum when they would decide whether or not to remain a EU member.

As of now it would appear that the country is divided in the middle, with even some of Cameron’s own senior cabinet ministers favouring to opt out. Apparently, many Brits still have this view that they are central to Europe, indeed the world, which is a hangover of the Empire. And they believe that by being in the EU they have shrunk as one among 28 European countries. It is like losing a much-cherished independent and sovereign identity, and many of them wish to recover that ‘lost’ identity. Even if it is a fantasy, it is a much-cherished fantasy to look real. There is a reference here and there to reviving the almost moribund Commonwealth link, a left over from the Empire.

As it is, the EU is under multiple challenges, with the refugee crisis, probably, the most daunting at present. Its member countries lack the vision and will to deal with it. Indeed, they are not keen on a common policy and are building up walls to keep out the refugees. And at precisely this time, a British referendum on its EU membership, if carried out, might accelerate the process of disintegration. And EU’s disintegration will make things worse all round.  

Note: This article was first published in the Daily Times.