German-Polish European BLOG

How can the EU single market and cohesion policy be saved?

It seems that the only way to save the principle of cohesion and take full advantage of the single market is to encourage all the Member States to join the core in deepening European integration.

Józef Niżnik*

The success of European integration has always depended on several factors, including the political will of national leaders, the global context, the removal of barriers in the common market, the lowering of economic disparities among Member States, and on developing the feeling of transnational togetherness in their societies. The last three factors became the declared goals of European Community leaders and the subject of the EU’s official policies. However, these goals do not necessarily support each other and, as it happens, may even be contradictory. Nevertheless, for over half a century the process of integration was effective enough to radically change Europe and to prove that win-win measures involving the redistribution of wealth among the Member States are possible.

Despite the economic terms in the names of the founding treaties from Paris and Rome, the real plans of the architects of European integration were political, and contained the hope for a European federation as the ultimate goal. In fact, at crucial moments (like those when the enlargement of the EU was at stake) the political objectives of integration were clearly of primacy. In effect, Europe, while building economic growth, has enjoyed peace – and the better-off states not only did not pose a threat to those lagging behind, but contributed financially to their development. Owing to effectively applied structural funds, the European Union was approaching economic and territorial cohesion. Political union and social cohesion also seemed within reach.

Owing to effectively applied structural funds, the European Union was approaching economic and territorial cohesion. Political union and social cohesion also seemed within reach.

Such was the case until the failure of the Constitutional Treaty (2005), the subsequent series of financial and fiscal crises in the eurozone, and finally the massive inflow of refugees and migrants from Africa and the Middle East. These developments have shown the weakness of the EU’s social cohesion, exposed radical differences in the understanding of the political goals of European integration, and encouraged nationalist movements. Although differences of this kind had already been discernible, in the current context they created a background of political struggles within the Member States, the most dramatic one being the British decision to leave the EU. In response, the economically strongest countries of the euro area have initiated a debate on deepening the integration of just those states that are willing to forge ahead. In fact, the EU’s treaties do allow “enhanced cooperation” of the willing, so such a move would not require a new treaty. This way, a “multi-speed Europe”, probably involving some or even all the euro area states, may become an institutionalized fact. However, this development would deepen differences in the political and social visions that the Members States have regarding the future of the EU. Thus, an “ever closer Union” is not only in question, but may have become a more distant prospect than ever before.

A “multi-speed Europe”, probably involving some or even all the euro area states, may become an institutionalized fact. However, this development would deepen differences in the political and social visions that the Members States have regarding the future of the EU.

What then will be the fate of the Single Market and Europe’s long-cherished idea of a cohesive community? The problem is that the enhanced cooperation of some states will affect those outside such an agreement. Indeed, ideas for a multi-speed Europe have already raised anxiety among the states reluctant toward such change or having quite different views on the common future. There are, for example, fears that the regulation stipulating that the pay of posted workers comply with the rules of the host country will eliminate the competitive advantage of those Member States which now offer services below local costs. Although this practice is formally incompatible with the EU’s principle of fair competition, it is one of the instruments which has helped substantially weaker economies to function on the Single Market and, in effect, has been a way to compensate for the generally worse economic position of some Member States. The states working together within an enhanced cooperation scheme may be expected to apply further measures of this type. Another fear is linked to the possible separate budget of the eurozone. Although existing regulations preclude enhanced cooperation from affecting the common EU budget, such cooperation may limit the funds devoted to the cohesion policy in a number of ways.

Today it seems that the only way to save the principle of cohesion and take full advantage of the single market is to encourage all the Member States to join the core in deepening European integration. In fact, one may well suspect that this is the hope of those countries which are now preparing such institutional change in the EU. Despite the official declarations of the states which now oppose such a prospect, e.g., the Visegrad countries (excluding Slovakia), we can expect that the institutional changes implemented in the EU will compel those countries to see the future of the EU in a different light. Rapid changes in the global context may become an additional factor, once again making the ideas of community and solidarity a primary value for all European societies.

Józef Niżnik – Professor of Institute of Philosophy and Sociology of the Polish Academy of Sciences