Four scenarios for the reinvention of Europe

Looming behind the euro crisis is a larger and more fundamental challenge: the near-collapse of the EU’s political system. The rise of anti-EU populism across Europe has prevented the continent’s politicians from grasping the political challenges.

Technocratic institutional fixes have only provoked more populism. European leaders are now unable to solve the euro crisis because they can only force inadequate solutions through loopholes in the Lisbon Treaty.

In ‘Four scenarios for the reinvention of Europe’, ECFR’s director Mark Leonard offers a new framework for understanding Europe's efficiency and legitimacy crises, and examines the political and legal obstacles to a solution in different member states, the new cultural divisions in Europe, and the rise of new populist forces (including a discussion of the new German and British questions). He sets out different scenarios for solving the euro crisis without exacerbating the chronic crisis of declining European power.

+ Asymetric integration would continue finding incremental solutions without treaty changes. This is the easiest solution but risks failing to solve the crisis, exacerbating the resistance of Europe’s citizens, and shifting from a rules-based EU to a power-based EU.

+ A smaller Eurozone, dropping the Greeks and maybe others, would be more sustainable and less painful, but could unleash a tsunami of panic that could result in the unravelling of the euro, a deep recession and a loss of EU influence in the world.

+ Political union through treaty change would be the most complete and durable, but carry the risk of spectacular failure, for instance through rejection by referendums or parliaments, leading to the disintegration of the EU itself.

+ Federalism without the federalists, based around deeper integration in the Eurozone outside the scope of existing EU treaties and insitutions. But this would risk a gulf opening within Europe and the global marginalisation of the core EU17.

The author argues that the EU has lost legitimacy because its leaders cannot act. But the reason they cannot act is in turn because the EU has so little legitimacy. He examines the three traditional channels for strengthening democratic participation and legitimacy – electing EU officials, referendums and national opt-outs – and concludes that each route could make Europe harder to govern.