EU is ill-equipped to meet growing global threats

The European Union would be more effective in a dangerous world if its 27 members could not veto so many joint initiatives. The snag is that EU countries are ever more reluctant to give up their right to block collective actions.

Everywhere one looks, the EU faces challenges. Russia’s invasion of Ukraine threatens the region’s security and, by pushing up the price it pays for energy, has undermined its competitiveness.

Meanwhile, rivalry between the United States and China – and a green subsidy race between the world’s two largest economies – is undermining the world trading system. The EU is struggling to compete, while also having difficulty forming a united front on how to handle relations with the People’s Republic. The response of EU countries to the Gaza conflict has also been shambolic, both individually and collectively.

If Donald Trump wins next year’s U.S. presidential election, the EU will be in an even more precarious position. The former U.S. president has a soft spot for Russian President Vladimir Putin, believes in “Make America Great Again” protectionism, and has been hostile to NATO.

Yet EU countries are also grappling with nationalistic currents, the latest demonstration of which is last week’s election victory by Geert Wilders, the Dutch politician who has long campaigned on an anti-immigrant and anti-EU ticket. It is not clear if the bloc can find a way to reconcile these impulses with the need for more streamlined collective action.

FROM VETOES TO VOTES

When the EU started, all decisions involving its six founding members were unanimous. As new countries joined, the bloc introduced qualified majority voting into areas such as setting regulations for its internal market. This requires, among other things, countries representing 65% of the bloc’s population and a simple majority of the European Parliament to support a measure.

But every state still has a veto on foreign and defence policy. This makes it extremely hard to speak with a common voice. For example, when the United Nations General Assembly last month backed a ceasefire in Gaza, the EU’s members split three ways – with some voting in favour, others against and yet others abstaining.

Similarly, every state has a veto on EU taxation and spending, which is budgeted at 2 trillion euros over the current seven-year period.

The EU’s current challenges are testing this approach. For example, many European states want to make Ukraine a member of the club, a topic its leaders will discuss at their summit next month. But it is not clear they can reach the necessary unanimity.

Even if the EU does decide to accept Ukraine, the danger is that the bloc will become more dysfunctional as it gets bigger. For example, it will need more money to help pay for Ukraine’s reconstruction and compete with the green industrial subsidies Washington and Beijing are spraying around. That is hard to do when every member has a veto.

An obvious solution would be to scrap these vetoes. But this move would itself first have to secure unanimous agreement among all member states. Governments, which are protective of their national prerogatives, will be reluctant to agree.

Germany and France, the EU’s most powerful members, appointed an independent committee earlier this year to see if they could crack the problem. One idea was to require super majority voting – where a country could block a measure if it could get at least one other country to agree – for decisions that are critical to national sovereignty. Since some states might think that still would not give them sufficient freedom of action, the committee suggested they could opt out of any new area where either qualified or supermajority voting applied.

A “coalition of the willing” could then press ahead with further integration, effectively creating an inner circle of the EU. Those that did not take part would be in an outer circle. One precedent is how Denmark has stayed outside the EU’s single currency, as did the United Kingdom when it was still an EU member.

But there might be a problem with this too. Countries that did not want to forge ahead would still have a veto over whether the rest could create an inner circle. This is why the Franco-German committee proposed a fallback plan, where the “coalition of the willing” would sign its own treaty excluding those who refused to participate.

Again, there are precedents. For example, when Britain vetoed the EU’s attempt to create a “fiscal compact” of strict budget rules in 2011, the other states created a new treaty outside the EU. But this approach is messy as the inner circle would have to take care not to do anything that conflicts with their obligations under their existing EU treaties.

IF THERE’S A WILL, THERE’S A WAY

The EU has a history of responding to crises by greater integration. In recent years, it has agreed ambitious decarbonisation plans and a big economic recovery plan after the Covid-19 pandemic, funded by common borrowing. Meanwhile, Russia’s invasion of Ukraine scared the EU into providing Kyiv with financial and military support. Olivier Costa, a professor at the College of Europe and a member of the Franco-German committee, predicts that the move away from unanimity will continue.

But it is not clear that EU countries want to find a way to speed up collective decision-making. The elephant in the room is that all states are nationalistic to a greater or lesser extent, says Jan Zielonka, a professor at Oxford University.

Even Germany and France might have qualms about losing the freedom to conduct their own foreign policy, says Erik Jones, a professor at the European University Institute. Without their enthusiastic support, the whole plan would be dead in the water.

For now, Berlin seems keener. German Foreign Minister Annalena Baerbock earlier this year called for majority voting in foreign policy along with colleagues from several other states. But Paris, which jealously guards its freedom of action in foreign policy, was conspicuous in not signing the article, says Shahin Vallée, another Franco-German committee member.

The EU faces challenges from Russia, climate change and protectionism. But these may still not be enough to persuade the bloc’s members to streamline its decision-making, given the strong nationalist feelings in many countries. If so, the EU may have to hobble along until it faces another even bigger shock.
Source: Reuters (Editing by Peter Thal Larsen, Streisand Neto and Thomas Shum)