Ever-closer Union?

This is a big year in Southeast Asia, not least because of the ASEAN Economic Community (AEC) that has just come into force this year. It bounds up the nations of ASEAN closer together economically than ever before.  Any talk of economic or political unions, of course, are bound to conjure up thoughts about the most famous such union in the world: the European Union. And while the AEC is related to economic integration more than anything else, and ASEAN creates nothing close to the tight-knit ties that the EU brings for its members, I feel that as we enter the AEC, it is helpful to pay attention at how the EU has been faring.

And what a year 2015 was for Europe. It’s been through quite a wild ride, from the threats of Greece potentially destabilising the eurozone, to Syrian refugees flooding the continent, and ending with the rumblings of a potential ‘Brexit’ this year or the next. It took decades of integration to build up what is now the European Union, and in the space of the year, it’s looking quite stressed and strained. Let’s look at all of these in more detail. 

The Cradle of Economic Uncertainty

The cradle of civilisation was the first to brew trouble for Europe. It all started with a bang in January, when Alexis Tsipras led the insurgent party left-wing Syriza to a massive victory in the Greek parliamentary elections, barely missing an outright majority. Soon enough he was sworn in as Greece’s youngest prime minister since 1865, succeeding the outgoing prime minister Antonis Samaras of the New Democracy party.

Greece by 2015 had already endured many years of grinding economic policies known as austerity. Austerity is an interesting issue that deserves a blog post all to itself, but it can be summed up simply as a set of economic policies that usually include measures to cut spending and increase taxes in order to reduce budget deficits; essentially, it is a lot of belt-tightening. Austerity has certainly left its mark on Greece, and while the economy had been slowly improving under the previous government, the social impact was severe: unemployment was sky-high, considerable increase in homelessness, and decline in public health due to budget cuts to health services. By 2015, the Greek people had had enough, and Tsipras, who along with his party had announced that they were heavily opposed to austerity and would do anything they can to end it, was rewarded with the leadership of the country.

To get elected by promising to end austerity is one thing. To actually deliver on his election promise, however, turned out to be another thing altogether. This was because these measures had been imposed by the so-called ‘troika’ of international agencies: the European Commission, the European Central Bank and the International Monetary Fund. To take Greece out of austerity, Tsipras would have to re-negotiate the relief programme that had been put in place. He would be going against the most powerful people in the Europe.

Tsipras duly attempted to do so. With his motorcycle-loving, professor-turned-finance minister and game theory expert Yanis Varoufakis, they traveled to Brussels and the other capitals of Europe, negotiating with the leaders of the EU. To cut a long story of several months short, the negotiations turned quite nasty. In Brussels, annoyed at the unorthodox style of Varoufakis, who at one point complained that “I am being treated as a strange bird because I talk macroeconomics!”, the EU negotiators wanted to throw him out. Meanwhile in Athens, desperate to gain an upper hand, Tsipras called for a referendum on a deal that was offered that would mean a continuation of austerity. The Greek populace voted to reject the deal and the government hailed it as a proof of the mandate of the people to fight against austerity.

Campaigning before the Greek referendum.Then, just a few days later, Tsipras put up the white flag and accepted the deal that the Greek people had so overwhelmingly told him to reject just a few days ago! The Syriza government was so completely defeated, and Tsipras himself was soon back in Athens defending the biggest U-turn in Greek history.

The ugly negotiations revealed an ugly side to the EU and how it conducted business. Firstly, the Greek government had to go against Angela Merkel, chancellor of Germany, and Wolfgang Schäuble, her minister of finance, both of whom held much influence. Many felt that they were intentionally trying to crush a government that had come out so publicly against their policies (Merkel and Schäuble are behind the austerity measures), contrary with the principles of democracy that underpin the union. It also revealed deep worries about the single-currency eurozone. Many times, it looked like Greece was on the verge of dropping out of the euro (‘Grexit’) and returning to the drachma (and Varoufakis later admitted that he did have secret plans for establishing a parallel currency should he have to); economists pondered what this would do to the European economy.

The Greek crisis resolved itself, if temporarily, however. But then trouble brewed in another country, in a different corner of the EU.

Trouble across the Channel

Eurosceptism has long been a part of British politics, and it has certainly gained force in the past few  years. It is an ideology coming to the forefront of British politics at the moment when the UK is having a bit of a self-identity crisis: can it remain united, even after Scotland nearly voted to leave? What is its place in the international world order? And, now, most importantly: should it remain in the EU?

Leading the rallying of the eurosceptics is the now-prominent UK Independence party, led by Nigel Farage. Their biggest demand? ‘Brexit’, of course. As the party grew in popularity, UKIP eventually forced David Cameron’s hand. 2015 was the year of the British parliamentary elections, and all the exit polls showed that Cameron’s Conservatives would be neck-and-neck with the Labour Party, led by Ed Milliband. Should UKIP siphon off enough votes, Cameron could very well bid a return to Downing Street goodbye. In the end, the prime minister announced that if elected, he would promise an EU in-out referendum by 2017.

In the end, the election was nowhere near as close as the polls made it out to be; the Conservatives won by a landslide and felt safe enough to ditch the Liberal Democrats from their previous coalition government. UKIP, on the other hand, won only one seat out of the entire country and Farage didn’t even win in his own area; a disappointing result that led Farage to quit, although his resignation was suspiciously rejected by the UKIP national committee. But this was a misleading result. UKIP had lost, not because it was unpopular, but because of the UK’s first past the post system where only being number one meant anything. A map of the parties that had come in number two revealed a kingdom checkered with purple.

David Cameron, triumphantly beginning a second term, was tasked with delivering on his election promises. He duly signalled that a referendum could be held as soon as 2016, but only after he has completed a negotiation with the EU leaders about Britain’s relationship with the union. He laid out four main objectives: firstly, the eurozone cannot outvote the single-currency nations regarding policies related to single markets, so that London’s preeminence as a financial centre can be protected. Secondly, more rules and regulations holding back companies should be abolished so that the EU could become more competitive. Thirdly, Britain would be exempt from a concept that underpins the EU: ‘ever-closer union’, and more power should be returned to the British national parliament. Finally, migration must be controllable and the benefits that migrants can claim from the British government can be limited.

The war inside Britain is already starting. Many people, particularly on the Labour side, feel that this is a vote that they never wanted, and is simply a ‘civil war’ within the Conservative Party where some members want to leave while others do not. Indeed, the British cabinet itself is already splitting.The Scottish Nationalists, who have just lost the Scottish independence referendum, are also wailing that Scotland seeks to remain with the EU even if the rest of the UK wants to leave, and if the UK did leave it would give them a perfect excuse to hold another referendum on independence. Meanwhile, the eurosceptics think that David Cameron’s negotiations are just for show and will produce little of real substance.

Mad About Migrants

Now we turn to a final crisis that afflicted Europe in 2015, and continues to do so now: the question of migration.

Greece, seeming to be a magnet for bad luck in 2015, once again ran into trouble. As an EU country relatively close to the Middle East, it became the landing point for many migrants, especially from Syria, who were fleeing the destructive wars in the region. Italy, on the other hand, attracted North African refugees. However, these economically beleaguered Mediterranean nations, especially Greece, had no infrastructure (or money, for that matter) to support the migrants. Where the wealth did lie, however, was in the north.

To get to the richer countries, especially Germany, migrants would have to cross through a myriad of countries. And soon enough, many countries were imposing border controls to prevent migrants from being able to come in, for fear of security. This was in direct conflict with the principles of the Schengen area: freedom of movement. The erection of barbed wire fences began across the borders of many European countries in earnest, such as between Austria and Slovenia. France imposed border controls after the Paris bombings.

In Germany itself, a huge debate began about whether or not to accept the refugees. Chancellor Angela Merkel, who at first was criticised for what seemed like a reluctance to accept refugees, eventually threw the doors to her country open to the derision of her opponents. Germany eventually would register over 1 million migrants in all of 2015: a massive number.

And soon enough Merkel herself would come under fire for her willingness to accept refugees. On New Year’s eve, a gang of men, reportedly of Arab or North African appearance, attacked numerous women in the city of Cologne. Although German police have quickly warned not to jump to conclusions and not to link the attacks to the migrant crisis, many observers simply cannot help but make the connection.

In the end, it is an ethical dilemma for Germany. To accept refugees into Germany is the moral thing to do- but is it worth the additional economic burden and security risk? This is the question that only the Germans- and other European countries accepting refugees- can answer.

Ever-closer Union?

With the eurozone in a hibernating crisis, one of Europe’s largest economies possibly leaving the union, and its principles of freedom of movement heavily undermined, it is clear that the fabric of the EU is becoming increasingly strained.

The 1957 Treaty of Rome, which helped to build the base of what would become the EU, stated that it was determined “to lay the foundations of an ever-closer union among the peoples of Europe”. ‘Ever-closer union”; this symbolic phrase, in fact, is one of the things that Cameron has been trying to exempt Britain from. It represents the vision and ultimate goal of the European project, a vision that is increasingly looking more distant as borders close down, as a common currency is called into question, as more countries are seeking to leave the union.

2016 will be an important year for the EU. The German government, along with all the other European governments, will continue to have to grapple with the migrant crisis, and the outcome of what they decide to do would demonstrate whether or not freedom of movement in the EU could be upheld. Cameron is still not finished with his negotiations, and the in-out debate in Britain is becoming increasingly intense. Greece, on the other hand, is not yet out of crisis, and Tsipras still hopes for debt relief.

Ever-closer union; it’s a vision that the writers of the Treaty of Rome set out, but Europe seems to be straying from that vision from the events of 2015. It certainly remains to be seen if its leaders can bring that vision back again.