The prospects of further EU integration

THE EUROPEAN Union works on the principle of so-called sovereignty bargains. When a country gives up something, it receives something back. This principle disproves some claims that states receive nothing in return, according to Jan Techau, director of Carnegie Europe, the European centre of the Carnegie Endowment for International Peace, a foreign-policy think tank. These bargains, according to him, are key to the further integration processes now being discussed by EU member states.

Jan Techau (r) speaking at GLOBSEC 2013.Jan Techau (r) speaking at GLOBSEC 2013. (Source: Courtesy of the Slovak Atlantic Commission)

THE EUROPEAN Union works on the principle of so-called sovereignty bargains. When a country gives up something, it receives something back. This principle disproves some claims that states receive nothing in return, according to Jan Techau, director of Carnegie Europe, the European centre of the Carnegie Endowment for International Peace, a foreign-policy think tank. These bargains, according to him, are key to the further integration processes now being discussed by EU member states.

The Slovak Spectator spoke to Techau about further European integration, the importance of a proposed free trade agreement between the European Union and the USA, and EU foreign policy, during the GLOBSEC 2013 Bratislava Global Security Forum, which took place between April 18 and 20.

The Slovak Spectator (TSS): What is your opinion of further integration within the EU? Is it important to have a more integrated EU?
Jan Techau (JT):
By and large, my answer would be yes. I am not of the opinion that we need integration in all political spheres at the same intensity at the same time. This idea of a comprehensive ever-closer union is the old kind of approach we have. The economic crisis and eurozone crisis that we are in has shown that you cannot have very intense economic integration, including a common currency, without creating the political integration to back it up. What we have created is economic integration that is unguided and unstirred by political integration on the same side. And that is a vision that cannot work. So what we will need if we want to retain the level of very intense economic integration, we will also have to come up with a banking union, a fiscal union, some kind of harmonisation of other policies that can flank the economic sphere, and that will have to do eventually with labour law, retirement age, some social policies. This is, when you have that level of integration that we have reached, pretty much unavoidable.

TSS: In which specific areas is there a need to have more integration?
It is mostly in those political areas that flank the economic side. If you do have this political integration, if you have trade, if you have products going from one side to another, you will automatically start looking at some form of tax harmonisation, some form of labour market regulation questions, some form of workers’ protection standards. These are all relatively minor kinds of examples, but they show you that strong economic integration will spill over into the political sphere and will spill over also to specifically tax and social questions that states really think are their own and where they often believe their sovereignty should be guarded and protected, and even reinstated.

The European integration process needs another big boost in another field, and that field is foreign policy. That is how Europe can position itself as a more cohesive player in the world. Europe is often portrayed and described as a peace project to pacify Europe, so the nations of Europe cannot go to war with each other as they have done for 2,000 years. That is true and that remains a very important rationale, but at the same time you cannot think of that peace project in Europe any longer without an external dimension. You do not have peace at home if you also do not work for peace abroad. This is what globalisation essentially is about. And we are not very good at it at the moment.

TSS: How do you perceive some critical voices which claim that further integration will mean a loss of countries’ sovereignty?
In Europe we are talking about sovereignty bargains. Every country that gives up a little bit also gains something in return. The entire integration process fundamentally rests on the idea of sovereignty bargains. So it is not as if countries just give something away and get nothing in return.

The real fear is the question of the democratic legitimacy of the entire decision-making process. People feel, especially politicians, that the decisions coming from Europe take a lot of their own manoeuvring space away. They have the mandate from their people but they cannot act on behalf of their people because a lot of stuff is coming out of Brussels. There is a democratic legitimacy issue in the EU. If we have more integration, what we need to do alongside that is to increase the democratic legitimacy of the entire project. And that means changing the institutions, reforming the European Parliament, having more democratic, direct elections in Europe, creating real political competition at the pan-European level.

TSS: How do you assess the current foreign policy of the EU? How has it changed during the years?
We have made a little bit of progress. Just yesterday [April 19] you saw that we had the agreement finally in the Serbia-Kosovo issue which was negotiated by the EU, and this is a very clear sign that the EU still has drawing power. Serbia was really pressed very hard to make a compromise in order to have a chance to ever join the EU, because EU [membership] is still an attractive prize for the Serbs to win.

European foreign policy is a very complex kind of thing. We have a post-Lisbon Treaty institutional setup that has not produced the results and the outcomes that we all expected. The External Action Service is not a kind of streamlining, leading organisation in European foreign policy. Europe is still strong where it can offer membership, and that is a currency that gets less valuable because there are going to be fewer enlargements in the future. It is still a strong economic power. It is not very strong in traditional crisis management, as we were able to see in Mali, Libya, and also in Syria, for example. It is not very strong in classic military hard-power terms.

TSS: How do you think EU foreign policy is handling challenges associated with the Arab Spring?
For every non-Arab player it was hugely difficult to find the right approach to the Arab Spring. Because there were different revolutionary movements in different countries. No player, including the United States, did this very well in the end. It is interesting to note that the Arabs said from the very beginning that “this is our revolution, it is not for you to meddle as you did in the past”.

Now we have reached the point where the tide is turning a little bit, because some of these countries, specifically Egypt, are running into fundamental trouble. Not only in terms of their political reform agenda, but economically. So all of a sudden they have more interest in the West meddling, especially when it comes to aid and investment. So the World Bank and the International Monetary Fund came in and started negotiating conditions with the Egyptians. That is a way in which one can exert influence.

Overall the Europeans played a relatively minor role. The big tools that Europe could have had to react, like opening the borders, huge amounts of money poured in, opening markets to imports from those countries … they did not do. By and large they have underperformed, but they have also not completely bungled it. It is interesting that individual countries, like Denmark, play an interesting role as advisors, as investors, for this project. But these are small things on the side. I do not think they will have a strategic, game-changing effect in the region.

TSS: Is EU foreign policy effective in communicating with oppressive regimes or in applying sanctions on countries that violate fundamental human rights?
It is effective sometimes, and not so effective in other cases. In principle the standards are all in place, and they negotiate around them, but in the end then, when push comes to shove, they are not enforcing them very hard. That is the problem obviously. It reflects the fact that the EU is in the end a limited diplomatic power. It has very limited diplomatic means to really influence other people’s behaviour, especially in a strategic way, with the exception of enlargement. But in other fields where the Europeans are less powerful players and have less of a carrot to use, their influence is rather limited.

TSS: How can the EU remove these limitations?
If you want to be a real hard-power player in the world and want to have stronger influence, you will need several things. You will have to have more unity at home about what you have to do, speak with one voice. You have to have more of the carrot, for example in terms of market opening, free trade agreements and opening closed markets. In the end, you also need more hard military power. Because it is still a fact in this not-so-post-modern world that diplomacy needs to be backed by hard power if it is to be effective. That is something people do not feel comfortable with.

TSS: Why is the Transatlantic Trade and Investment Partnership project important? What advantages and disadvantages might it bring?
It is important for two reasons. First of all it is an economic issue. All studies and impact assessments basically tell us that the economic results from this will be quite positive, in terms of growth, but also job creation, and the overall trade flow. The second element is the political meaning of this. Such a scheme will create huge political signs that in this emerging age and century there is the West that gets its act together and that can really go somewhere and do a major political kind of project together and is not willing just to give up in this new, competitive multi-polar world. That will have all kinds of ramifications. It could potentially reignite the WTO, stimulate others to maybe join, and it will also increase the bargaining position of the West when it comes to principles, standards and procedures in global international economic affairs.

I cannot see any international downside. There will be individual industries, individual sectors and markets that might not find this entirely to their advantage because they are losing their protected kind of situation. But that it is a very minor minus when you weight it against the advantages.

TSS: What obstacles might this agreement face?
I think the obstacles lie with those industries, companies, parts of the economy that fear they might lose their sheltered little position on the market. There are all kinds of industries that fear that they will all of sudden be exposed to competition that formerly they did not have, and so they might find this inconvenient. The trades unions often believe that free trade agreements undermine global workers’ protection. And then you have another sector of opposition, and these are environmentalists who, for example on the European side, believe that the import of hormone-treated beef from the US is a bad thing.

TSS: What will the project mean for central Europe?
First of all, this region is part of the European single market, so it will automatically be in the fold, and it will automatically benefit from the entire scheme. There is maybe one example that one can single out: this part of Europe has a relatively strong automotive industry. That is one of the sectors where we still have significant trade barriers across the Atlantic. To lift those trade barriers and to make the market more open can in the end only be good.

TSS: In which other areas do you see potential for the EU and the US to cooperate more closely?
Behind your question is the question of the political spill-over. Is this really merely an economic project that only has business kinds of ramifications and outcomes, or is this a geopolitical project? Does this mean that stronger economic cooperation will automatically lead to more political cooperation? And I think it will. From the economic interest comes an interest in the wider political stability of the world. So there will potentially be spill-over into the political sphere. And that also can only be a good thing at a time when we are agonising over whether the transatlantic relationship is still alive and can be saved and how it can be strengthened.

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