Second-class countries: The Dangers of a multi-speed Europe

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Second-class countries: The Dangers of a multi-speed Europe

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Amidst internal and external threats to the European Union, European leaders were pressured to come up with structural changes. After a brief time of reflection the answer that has emerged seems to be more integration, for those who want it. This idea of a “multi-speed Europe” is most countries’ preferred option as confirmed by the Rome Summit. Due to its widespread support among countries which have traditionally engineered previous integration efforts (namely Germany and France), it is safe to assume that the future of Europe will be one of integration at different paces.

The proponents of such policy argue that it provides for flexibility while also allowing the necessary integration to proceed. They argue that 28 countries making decisions unilaterally is almost impossible and any attempt to further integrate the EU as a whole is doomed to fail. In the Luxemburgish Prime Minister’s words “I will not be a hostage of one or the other on domestic policy issues.” All these considerations have merit and a multi-speed Europe truly seems the best way forward.  However, we have to be aware of the danger included in such a project. In particular, the multi-speed Europe includes the danger all of creating a second class status for certain countries.

The differences between various European countries and regions are still present today despite all the convergence efforts of the European Union.  The first area where these inequalities are evident is the economy. As seen in the graphs below there is still a big disparity among EU members.  In  particular the difference between the GDP per capita of the richest EU country (Luxembourg) and end the poorest one (Bulgaria) is 76,000 euros.  This standard of living also by arise significantly by country as 40% of Bulgaria’s population is at the risk of social exclusion in contrast to 15% in the Czech Republic.  The economic inequality of various EU countries is demonstrated by many other measures such as unemployment and growth.

source: Eurostat

At-risk-of_poverty_or_social_exclusion_rate,_2014_and_2015(%)

Source: Eurostat

Added on the economic disparity there is also significant difference between the capacities of each country to implement policy.  These differences are correlated and affected by the country’s wealth as poor countries tend to have weaker institutions.  Many of these countries have widespread corruption and weaker enforcement mechanisms. This means that the ability of every EU country to implement reforms in order to converge upward varies which creates a self-reinforcing vicious cycle of poverty, low growth and disparity. Although even the poorest countries of the EU have improved significantly, the inequality among them and the rich EU countries remains high and in some cases, like Greece, has increased.

In that context of inequality among member-states the dangers of a multi-speed Europe are clear. It is possible to imagine an EU with a core group of decision-making and rich countries and a poorer periphery of second-class countries. Such a scenario would evidently be disastrous for the EU as it would increase economic inequality among countries. This would further encourage internal immigration from the poorer countries causing a “brain drain” and further worsening these countries’ prospects for growth. This environment fuels Euroscepticism, alienates citizens from Brussels, and creates opportunities for populist movements to come to power.

Moving forward, EU leaders should take concrete steps to prevent the multi-tier Europe from condemning certain countries to the periphery. This would mean building adequate mechanisms that would encourage upward convergence by transferring money from the richer countries to the “periphery.” This money transfer can be done in the form of social investments, capacity-building, and economic development loans for these countries. Although the EU already does this it is evidently not adequate especially in the face of the multi-speed Europe. Moreover, the structure of the new EU needs to have clear and easy procedures through which countries can freely integrate further in the future if they don’t choose so now. Maintaining the doors of integration open to anyone willing to assume the responsibilities is essential in order to prevent the creation of a second-class status for some members.

The multi-speed EU is truly an opportunity to move towards the completion of the European project. However, in doing so European leaders have to ensure that we are not leaving any country behind. Therefore, the commitment to upward convergence among members and to maintaining the doors of integration open needs to be reinstated during the creation of the new EU.

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