Chapter 1

A Multi-dimensional Crisis

DESMOND DINAN, NEILL NUGENT, AND

WILLIAM E. PATERSON

In tro d u ctio n

This chapter provides an overview of the different dimensions of the

crisis, sets them in their contexts, outlines their implications for the
European Union, and summarizes how the EU has responded so far.

The Multi-dimensional Nature of the Crisis

The ‘age of crisis’ for the EU began in 2009-10 with the onset of what
quickly came to be called the euro or eurozone crisis. This crisis, whose
severity has ebbed and flowed over the years that have followed, is the
most obvious manifestation of the EU in crisis. It has threatened the
very existence of one of the EU’s main policy achievements: the single
currency - the apotheosis of Economic and Monetary Union (EMU) -
which 19 of the EU’s 28 member states had adopted as. of 2016. At
various times during the eurozone crisis, the membership, governing
structure, and operating rules of the single currency system have been
fundamentally questioned and challenged.
Apart from the eurozone crisis, the most recognizable feature of
the EU in crisis has been the migration crisis, which greatly escalated
in 2015 when vast numbers of migrants - eventually numbering over
1 million - mostly consisting of asylum-seekers from war-torn Syria,
Iraq, and Afghanistan, together with irregular migrants from North
Africa, flooded into the EU. This wave became a perfect storm (that
is, a situation caused or greatly aggravated by, an unanticipated and
very rare set of circumstances) in September 2015 when Chancellor
Angela Merkel announced that Germany would not limit the number
of refugees entering the country, thereby unintentionally encouraging
many more arrivals. Migrants benefit from one of the EU’s main policy
achievements: the free movement of people facilitated by the Schengen
system. The migration crisis has put severe strains on free movement
within the EU and, indeed, has led to a partial breakdown of Schengen.
 Another dimension of the crisis pertains to EU governance. The
handling of the eurozone and migration crises has demonstrated poor
EU leadership, often slow and insufficient decision-making, harden­
ing national positions, uneven burden-sharing, and fraying solidarity
among member states. Crucially, in respect of fraying solidarity, there
has been a near fracturing of some membership arrangements, notably
with Greece’s continuing membership of the eurozone being much dis­
cussed in EU circles in the summer of 2015 and then the UK, building
on an already considerable number of policy ‘opt-outs’, holding a ref­
erendum on membership in June 2016, which resulted in a decision to
leave the EU.
These features of EU governance have, in turn, fuelled euroscepti­
cism and put the credibility and democratic legitimacy of the EU system
increasingly in question. Originally, public attitudes towards European
integration were characterized as constituting a ‘permissive consensus’
or benign indifference, but that changed in the 1990s as the European
Community evolved into the European Union and the impact of EU
policies and programmes on the everyday lives of Europeans became
more evident and intrusive. Support for European integration gradually
declined after the Maastricht Treaty of 1992, which launched EMU and
ushered in the EU (Eichenberg and Dalton, 2007). Since the beginning
of the crisis this has continued to be the case, with growing doubts about
the desirability and effectiveness of EU initiatives and increasing irrita­
tion with the cumbersomeness of the EU itself. The apparent hollowing-
out of national political institutions and the strengthening of European
institutions, which to many people seem remote and technocratic, have
exacerbated the EU’s inherently weak legitimacy. The EU’s democratic
credentials have been further undermined as apparently unaccountable,
Brussels-based technocrats have been seen to impose, or try to impose,
policy solutions that have often been unwanted and/or thought to be
inappropriate.
So, too, has the EU’s chronic economic underperformance contrib­
uted to the crisis. Peace and prosperity are the twin pillars of the EU’s
existence, but the EU’s economic performance has varied greatly over
time. The internal market, the core policy field of the EU, has had mixed
results. Monetary union, an addendum to the internal market and a
highly symbolic undertaking in its own right, was supposed to have
facilitated economic convergence among participating countries and
stimulated further growth. Yet far from converging, the economies of
eurozone countries have diverged and experienced, at best, only mod­
est growth following the introduction of the euro in 1999. Since the
outbreak of the crisis, economic performances have become even worse,
with most of the economies of eurozone countries having experienced
sharp recession. The impact of austerity policies pushed by eurozone
creditor states (especially Germany) has intensified economic hardship
in debtor states, stoked social tensions, and deepened political divi­
sions. High unemployment, especially among young people, has sapped
morale and nurtured a sense of deep despair.
Inevitably, these internal problems have weakened the EU’s stand­
ing on the world stage. By definition, the migration crisis has had an
external dimension, while the eurozone crisis has been closely related to
global financial developments. The EU’s seeming inability to deal force­
fully and effectively with events in Ukraine has constituted a further
external dimension of the crisis.
The Ukraine crisis, which erupted in 2014, represents the point at
which the aspirations of the EU to extend its influence eastwards col­
lided with Russia’s determination to rebuild power and status following
the collapse of the Soviet Union. This keenly felt loss impelled President
Vladimir Putin to try to regain control of Russia’s near abroad and
restore Russia’s global standing. Putin’s pressure on Ukraine to reject a
proposed association agreement with the EU in favour of a Russian-led
customs union foundered on popular protest in Kiev, which resulted in
the ousting of Ukraine’s pro-Russian president. This, in turn, triggered
violent resistance in eastern Ukraine against the new, pro-Western gov­
ernment, and Russia’s annexation of Crimea. Chancellor Merkel took
the lead in managing the EU’s response, which helped to bring about a
fragile peace - the Minsk Accord - and included sanctions against Russia.
The conflict is now frozen, but could escalate at any time. Accordingly,
the EU faces instability on its eastern border in addition to the instability
caused by the migration crisis on its southern border.
There are thus many aspects to the EU crisis. It is truly multi­
dimensional in nature, spanning politics and economics, touching on
cultural and identity issues, and covering both internal and external
affairs.

Origins of the Crisis

General origins
The origins of the EU’s crisis are many, various, and often - as the sec­
tions below on the EMU, migration, and the Brexit crises show - specific
to particular dimensions of the crisis. However, in addition to specific
factors, some of which have already been mentioned, three general
sources can also be identified.
The first is the weak foundations of aspects of the EU’s system of gov­
ernance and of some of its key policies. The lack of clear, accountable,
and treaty-based EU leadership has been an important factor behind
 the legitimacy/democracy crisis and may even have contributed to what
could be called a leadership crisis. Similarly, the weak foundations of
two of the EU’s core policies - EMU and the Schengen system - have
been at the heart of the eurozone and migration crises. The rules of these
policies were laid down in relatively good times, when the focus of the
EU was on making integrationist advances with great steps forward.
Insufficient attention was given to whether the arrangements that were
established were sufficiently robust to withstand the pressures of less
good and more difficult times.
The second general source of the crisis is that the EU’s member states
are, in numerous respects, significantly different from one another in
terms of national needs and preferences. While it was possible to manage
many of these differences in good times, and with fewer member states,
it has become much less so in a far larger EU that is being buffeted by
severe shocks and policy challenges.
Being part of a highly interconnected global system, the EU is suscep­
tible to what happens elsewhere in the world. As such, external factors
constitute the third general source of the crisis. So, for example, it was
the sub-prime mortgage crisis and the ensuing recession in the USA that
sparked the eurozone crisis. Continuing global financial and economic
uncertainty has made it more difficult to stabilize the situation in Europe.
It was developments in Iraq, Libya, and Syria that triggered the migration
crisis. The global threat of Islamic extremism has reverberated in Europe,
most dramatically with the terrorist attacks in France in 2015 and 2016,
and Brussels in 2016, and has contributed to the EU crisis in that there
have been great uncertainties about how best to deal with this partly inter­
nal and partly external security threat. So, too, have Russia’s actions in
Ukraine added to the crisis. The reasons for the Russian intervention are
largely rooted in Russia’s view of the world and in domestic Russian poli­
tics, but they have presented the EU with a major foreign policy problem.

Particular origins of the three headline crises: eurozone,

migration, and Brexit
As noted above, there have been many dimensions of the EU crisis.
However, three of these have been of particular importance and have
attracted most attention. There are chapters on each of these dimensions -
the euro crisis, the migration crisis, and Brexit - later in the book, but
given their centrality to the EU crisis an introductory account of their
origins is given here.

The eurozone crisis

The proximate cause of the eurozone crisis was, as mentioned above,
a development on the other side of the Atlantic. By the late 2000s, the
US financial system was under immense stress, as the bankruptcy in
September 2008 of the giant firm Lehman Brothers dramatically dem­
onstrated. The ripple effects were soon felt in the real economy, as out­
put and employment plummeted. Even if the foundations of EMU had
been solid, the EU was bound to experience a severe shock from these
events in the USA. As it happened, the structural weaknesses of EMU,
which hark back to the Maastricht Treaty, accentuated the impact of the
shock. Indeed, EMU’s foundational flaws arguably portended a crisis in
the making.
EMU is a long-standing goal of European integration. It first emerged
as a real possibility in the early 1970s, when global exchange rate insta­
bility bolstered the desirability of a fixed exchange rate regime, or even
a single currency, among European Community countries. The policy
debate at that time raised several contentious questions that recurred 20
years later during the Maastricht Treaty negotiations. How much sover­
eignty would members of a monetary union willingly surrender in order
to ensure the success of a supranational currency? What should the
criteria be for countries to join? Should economic convergence precede
monetary union or would monetary union bring about the necessary
degree of convergence?
In the early 1970s, Germany was willing to concede more sovereignty
and France less; Germany wanted a high degree of convergence first
and France believed that convergence could happen later. In the event,
the global economic recession of the 1970s put paid to plans for EMU.
When the issue emerged again in the late 1980s, global economic condi­
tions were more benign and the European Community better integrated
economically. France and German retained their earlier preferences, but
managed to come to an agreement.
Academic economists, especially in the USA, pointed out that the
putative EMU-zone did not constitute an optimal currency area. In other
words, there would be insufficient fiscal transfers and labour mobility to
absorb the impact of asymmetric economic shocks, which would render
the currency union unworkable. Ideally, a currency union would include
a fiscal union and a banking union as part of an economic union, and
a political union as well. Intellectually, the Maastricht negotiators may
have understood this point. They certainly understood that such ambi­
tious objectives were politically impossible to achieve. Political union
was on the agenda at Maastricht, but only in the form of taking steps to
strengthen the legitimacy of the EU, not to engineer a wholesale transfer
of national authority to a federal EU. Germany was willing to concede
more than France, especially in the run-up to German unification, but
Germany could not risk jeopardizing monetary union by getting too far
ahead of French preferences on economic and political union. The result
was a fudge: EMU was established with a weak ‘E’ (no banking or fiscal
 union) and a strong ‘M ’ (a single central bank, single monetary policy,
and single currency). A single European government (political union)
was nowhere to be seen.
EMU and the eurozone were likely to succeed, given their weak
foundations, only as long as the regional and global economy remained
reasonably buoyant. The presumption was that monetary union would
flourish in a eurozone with an economic growth rate of about 3 per cent,
which seemed reasonable by post-war standards. By the mid-2000s, it
appeared as if the eurozone was indeed succeeding, with most members
having growth rates in the range of 2-4 per cent and some, such as
Ireland, having significantly higher rates. However, these healthy figures
obscured some disturbing underlying developments, notably growing
disequilibria in competitiveness, investment, and exports between
financially stronger northern countries and increasingly debt-burdened
southern countries. Nonetheless, as long as growth remained high and
international borrowing costs low, this did not seem problematical.
However, the shock of the US financial crash caused a sudden drop in
capital flows to ‘peripheral’ eurozone countries, notably Greece, Ireland,
Spain, and Portugal. It also exposed the extent of some European banks’
reckless lending and some European countries’ excessive borrowing.
The magnitude of the problem first became apparent in Greece, where
a new government revealed, in 2009, that the country was running a
deficit of over 12 per cent of GDP, more than four times the permissible
deficit for eurozone members. The problem in Ireland was caused not by
excessive debt, but by the Irish government’s decision to write a blank
cheque to rescue the country’s failing banks. Spain was also in difficulty
because of a banking crisis, and Portugal because of excessive debt.
By 2010, a balance of payments crisis had turned into a public debt
crisis, and EMU’s inadequate design - notably the lack of a fiscal union
and a banking union - resulted in there being no readily accessible solu­
tions to what was becoming a eurozone crisis (Baldwin and Gros, 2015).

The migration crisis

The roots of the migration crisis lie in a mixture of push and pull factors.
The push factors are partly accounted for by shortcomings in the EU’s
external relations. The EU has done little - and perhaps could not have
done more - to promote peace and stability in North Africa, to address
the turmoil in the Middle East, to prevent the rise of the Islamic State,
and to stop the civil war in Syria. All of these developments, and others
besides, resulted in attempted mass migration to the EU from Iraq and
Syria, and from other war-torn or impoverished countries.
Despite a large amount of money and effort having been spent on a
range of elaborate initiatives, the EU was blindsided by the Arab Spring
and found that it had little influence in a large, strategically vital, and
 A Multi-dimensional Crisis 7

increasingly unstable part of the world. It would, of course, be absurd

to blame the EU for all of the problems of North Africa and the Middle
East. But the EU must bear some responsibility for the failure of its
diplomacy, which has been backed up with generous economic induce­
ments, to help reduce the factors that push migrants from the Middle
East and North Africa towards Europe’s shores.
The pull factor for migrants is the lure of living in a peaceful and
secure country, with the prospect of employment or, more likely, wel­
fare assistance. Germany and Sweden have been the main destinations of
choice. Chancellor Merkel’s apparent willingness in the summer of 2015
to allow unlimited numbers of refugees to enter Germany opened the
floodgates. Schengen’s largely lightly protected external borders made
it possible for hundreds of thousands of refugees and other irregular
migrants to reach their desired destination.
Merkel’s generosity rebounded on her politically in Germany, and
exposed the inherent weakness of the Schengen system. Despite years
of negotiations, when the numbers of attempted migrants to the EU
exploded in 2015, a fully functioning common asylum system had not yet
been established. The Dublin Regulation for processing asylum-seekers
(which specifies that migrants should be processed in the EU country
in which they first arrive) was not effective in dealing with the vast
numbers of people attempting to enter the EU, which led to Germany
suspending the Regulation, of which it had been a staunch defender, in
August 2015. The porousness of the EU’s external borders undermined
the integrity of the intra-EU free travel area, resulting in several ‘tempo­
rary’ restrictions on free travel being put in place. Like EMU, Schengen
had been designed from the perspective of hoping for the best rather
than anticipating the worst. When the worst happened, the system was
unable to cope.
As with EMU, the influx of migrants has resulted in the EU trying
to fix a system (Schengen in this case) while it is in crisis. Like EMU,
the Schengen system was not designed for conditions of severe strain.
Certainly, there was no systemic anticipation of what would be done
if hundreds of thousands of migrants suddenly appeared at Schengen’s
external borders. To make matters worse, the eurozone crisis has
resulted in there being less trust and goodwill among member states to
help resolve the migration crisis. Resentment'of Germany’s preponder­
ance in the EU, and especially of Germany’s insistence on austerity, has
spilled over into the migration crisis, in which Germany has desperately
needed its EU partners to carry out their Schengen obligations and share
the burden of refugee settlement.
At the same time, the migration crisis has sown deep divisions between
EU member states. This has been especially so with Greece which, hav­
ing been on the front line of the eurozone, crisis;, has similarly Iv^n n™ rl^
front line of the migration crisis. The Greek border forms the principal
EU external border through which most migrants set out for Germany
and other northern states. As countries along the migration route dosed
their borders in 2015, tens of thousands of migrants became trapped
in Greece, sparking a major humanitarian disaster. Given Germany’s
treatment of Greece during the eurozone crisis, Greece has not been
inclined to accommodate Germany during the migration crisis, at least
not without the prospect of significant financial assistance and possibly
even debt relief.
The Brexit crisis
Whereas the roots of the eurozone and migration crises lay primarily in
the inability of EU states to agree on stronger policy foundations, those
of Brexit (the term commonly used for the UK exit from the EU) lay
firmly in domestic UK politics. Britain had long been the most euroscep­
tic member state, but the political significance of its euroscepticism was
given a much sharper edge when the Prime Minister, David Cameron,
promised a referendum on UK membership of the EU if his Conservative
Party won an overall majority in Parliament in the 2015 general elec­
tion. Against most expectations, an overall majority was duly won,
which resulted in the referendum having to be held.
Cameron promised the electorate a referendum not because he genu­
inely wished to consult the British people. Rather, he did so because he
was pressurized and saw electoral advantages in being seen to ‘let the
people decide’. One source of pressure came from a growing body of
eurosceptic opinion in his own parliamentary party. Another source was
increasing support for the United Kingdom Independence Party (UKIP),
which Cameron thought could be diverted by a mainstream party (his
own) offering a referendum.
However, it is unwise for governments to hold avoidable referendums
unless they can be sure (which they rarely can) that they will receive the
answer they want. For, in referendums electorates have a habit of not
answering the question they have been asked, but rather of answering
the question they wished they had been asked. They have a habit also,
in considering how they will vote, of not focusing on the aspects of the
question the government wishes to direct them to. Both of these tenden­
cies strongly contributed to 52 per cent of those who voted in June 2016
supporting a British exit. Whereas the government wanted the elector­
ate to concentrate on (the claimed) damaging consequences of an exit-
vote for the UK economy, many of the electorate chose to give a higher
priority to voting on the perceived iniquities of EU migration laws (and
the free movement of people principle) and the powers of unaccountable
decision-makers ‘in Brussels’. ‘Let’s Take Our Country Back’ was an
appealing call for many voters.
Implications of the Crisis for the EU System

Greater centralization, but also disaggregation

There is a recurring refrain in EU history that crises are ubiquitous and
good for European integration - that at pivotal moments, crises have
been catalysts for major breakthroughs and for advancements of the
integration process.
The recent and current crises have undoubtedly resulted in some cen­
tralizing developments, most notably in respect of EMU where the euro­
zone’s fiscal powers have been strengthened. They have, however, been
only slightly strengthened and have not resulted in the (much-needed?)
fiscal union - in which there are strong revenue-raising and spending
distributional powers at central level - being even remotely on the imme­
diate horizon. Furthermore, because eurozone rules do not apply to
non-eurozone countries, such centralizing as there has been only applies
to part (albeit the major part) of the EU. In short, the crisis has not had
much of a stimulating effect on European integration.
As noted in Chapter 2, the pervasive notion of crisis as opportunity,
and a tendency to use the word ‘crisis’ loosely to label events of varying
urgency in EU history, may have blunted EU leaders’ appreciation of the
seriousness of the crisis, and delayed or undermined their responses to it.
Certainly, for the most part, the crisis of recent years has served rather to
extend and sharpen European disaggregation and to stiffen differences
between EU political actors.
Amidst sharp policy differences about how best to proceed, the euro­
zone crisis has threatened to unravel monetary union and the migration
crisis has threatened to unravel the Schengen free travel area. Monetary
union and Schengen are, arguably, the two most iconic and politically
important achievements of European integration. The collapse of one
or the other, let alone both, would have a devastating effect on the EU.
Both policies are linked to the internal market, which might not survive
in its present form without monetary union and unimpeded cross-border
travel. The blow to the EU’s image and international credibility would
be incalculable. Even if monetary union, the single market, and Schengen
survive the crisis largely intact, the EU has already changed markedly.
Similarly, the outcome of the UK referendum has been devastating
for the EU’s image and self-esteem. Uncertainty surrounding the precise
path to Brexit has greatly exacerbated the sense of crisis in the EU. In
the months after the referendum, the remaining 27 EU members were
left waiting to hear what terms the UK would be seeking and when
exit negotiations would begin. While thorough preparations on these
questions were sensible from the UK’s perspective, the delay added to
the atmosphere of uncertainty in the EU - at a time when it needed to
concentrate not only on the implications of Brexit but also on resolving
the many other policy challenges and crises facing it.
A related potentially disaggregating, and damaging consequence of
Brexit is the encouragement it has given to eurosceptics elsewhere in
the EU. Some - including in member states where euroscepticism was
already strong, such as Italy, Austria, France, Hungary, and Poland -
have used it to help marshal support for their own national aspirations
of disengaging from the EU. All have been emboldened to use it to try to
pressurize national governments either to hold similar referendums or to
dilute existing levels of European integration.

Relations between member states

The crisis has strengthened a tendency towards more intergovernmental-
ism in the conduct of EU affairs at the expense of supranationalism and
has elevated separate national interests over shared EU interests. In times
of political difficulties and economic strain, governments are less able
or inclined to pursue common European rather than individual national
preferences, and the two tend to diverge. A widespread political consen­
sus within member states on the value of European integration and the
benefits of EU membership has frayed. Nationalist, populist, and anti-
EU parties have grown in most countries. For many Europeans, the EU
is no longer seen as a solution to a problem or set of problems, but as a
problem in itself.
Fault lines between EU member states have thus appeared or reap­
peared because of the crisis. The distinction between eurozone and
non-eurozone members has become acute. Within the eurozone, the
distinction between creditor and debtor countries has become politi­
cally as well as economically crucial: a distinction that broadly mirrors
a core-periphery differentiation within the EU. North-south and east-
west fault lines, reflecting deep-seated political, economic, and cultural
differences, are more noticeable than ever before.
Among national governments, Germany has become much more
influential than previously, but even it has been unable to master the
migration crisis. The rise of German hegemony, however uncomfortable
for Germany itself, has been a direct consequence of the crisis. At the same
time, given its economic weakness, France has barely maintained the fic­
tion of parity in Franco-German relations. The UK’s non-participation in
monetary union and Schengen, and the result of the Brexit referendum,
has accentuated the country’s semi-detachment from the EU.

Institutional effects
Institutionally, the severity and suddenness of the crisis have required
a response at the highest political level. This has ensured the elevation
of the European Council, which officially became an EU institution
in December 2009 when the Lisbon Treaty came into effect - coinci­
dentally at the start of the eurozone crisis. European Councils - and
on euro-only issues Euro Summits, which bring together the leaders of
countries in the eurozone - have met frequently during the crisis in an
effort to provide overall political direction and thrash out agreements on
specific crisis-related issues.
It is within the European Council that Germany’s preponderance has
been most noticeable, and where resentment of Germany’s role has been
most pointed. Traditionally, the leaders of France and Germany domi­
nated meetings of the European Council, but since the onset of the crisis
Germany alone has been predominant, though Chancellor Merkel, who
has been in office since 2005, prefers to act in concert with others. This
does not mean that Merkel always has had things her own way, but
Germany’s preferences have most often prevailed. However, hegemons
are rarely popular and tend"to generate countervailing force. Austerity,
Germany’s preferred remedy for the eurozone crisis, has been hugely dis­
liked in countries that have had to accept the strings attached to the bail­
outs, and has aroused resentment throughout much of the EU, especially
among political parties on the left. The economic and social pain of auster­
ity has gradually eroded the consensus that initially existed in its favour.
The European Commission remains at the institutional heart of
the Union and has acquired new powers, notably with regard to fiscal
governance, as the crisis has progressed. But the political influence of
the Commission, which traditionally has been most clearly expressed
through the office of its President, has somewhat receded. Neither José
Manuel Barroso, Commission President until November 2014, nor his
successor, Jean-Claude Juncker, has been a favoured interlocutor of
Merkel, nor a particularly effective actor in the European Council.
Whereas the Commission’s technical expertise and executive authority
have been essential in advancing detailed proposals for combatting the
eurozone and migration crises, the Commission has not been a suc­
cessful trailblazer for major political decisions - such as those concern­
ing the size of and conditions to be attached to bailouts to the heavily
indebted countries. .
For many years the European Parliament (EP) has been in the ascend­
ant institutionally and its powers were further strengthened by the pro­
visions of the Lisbon Treaty. However, it has exercised only very limited
influence in helping to resolve the various dimensions of the EU crisis.
Even the novelty of linking the outcome of the 2014 EP elections to the
selection of the incoming Commission President did not arouse much
public interest. Not only did voter turnout continue its downward trend
since the first elections in 1979, but also eurosceptics made large gains.
This was symptomatic of growing opposition to austerity and increasing
disillusionment with the EU in many member states.
Supplying Solutions

Whereas demand for solutions to crisis-related problems has been con­

siderable, the supply has been conspicuously lacking. Too often, prof­
fered solutions have eventually emerged as watered-down versions of
original proposals and as minimalist responses to pressing problems
of the day. Take, for example, the eurozone crisis, which the leaders of
the main EU institutions (and most outside observers) have thought can
only be properly tackled by moving towards ‘genuine’ EMU (see the two
reports by the presidents of the main EU institutions: van Rompuy, 2012;
European Commission, 2015). Progress in addressing the eurozone cri­
sis has included the Treaty on Stability, Coordination and Governance
(the Fiscal Compact) and related legislation aimed at preventing fiscal
profligacy, and the passing of measures to create a (partial) banking
union. But there has never been any realistic prospect that the eurozone
governments would seriously consider the bigger, and arguably neces­
sary, step of creating a fiscal and political union.
Similarly with the migration crisis, a number of specific measures
have been adopted - including a strengthening of the EU’s external bor­
ders, a reinforcement of naval patrols in the Mediterranean, and finan­
cial subsidies to Turkey to reduce the flow of refugees into the EU. But
the EU has been largely unable to deal with the ‘big picture’ issues, espe­
cially where they have touched directly on sensitive national interests
and cherished national sovereignty. Not surprisingly, the Commission’s
proposal in 2015 that member states should accept mandatory quotas of
migrants made no headway, nor did its protests when several Schengen
member states began introducing restrictions on free movement across
internal borders.
To some extent, the absence of ‘macro’ solutions may reflect com­
placency in the EU about the nature and consequences of crises past.
However, even if EU leaders had appreciated at the outset the gravity of
the situation, the multi-level character and structure of most EU policies
are not conducive to a rapid crisis response. In the case of the eurozone
crisis, the European Central Bank (ECB), which initially misread the
seriousness of the situation, was able eventually to respond rapidly and
forcefully to ease the supply of money and to exercise a leading role
in banking reform. But decision-making on fiscal policy, by contrast,
remained, and has remained, decentralized within the EU, with respon­
sibilities residing partly at EU level but mainly at national levels. The
Eurogroup of finance ministers has met frequently since the onset of the
crisis but, given the political salience of the issues being discussed and
the existence of many policy differences between the member states,
it has often had to defer to national leaders, meeting in the European
Council or Euro Summit, for ultimate decision-making.
 However, the European Council is not analogous to a cabinet gov­
ernment with a designated chief minister and with the authority to
make decisions in a wide array of public policy fields. It is a rather
cumbersome body, whose 28 principals (national leaders) are nominally
equal. Though the political reality is that some members are more equal
than others, the organizational nature of the institution - which almost
invariably proceeds only on the basis of consensus - is that its meetings
are often indecisive. Of course, EU leaders do not restrict their contacts
to meetings of the European Council. They are frequently in touch with
each other in all sorts of formal and informal ways. Key players, such as
the German Chancellor, the French President, the Eurogroup President,
and the ECB President, have kept in close contact since the extent of
the crisis became fully apparent. But, even when they have agreed on
what needed to be done, they have ultimately required the approval of
the entire European Council, which has been by no means automatic.
Furthermore, often what EU leaders have been able to agree in the
European Council has required approval in national capitals, which has
taken time and has not always been without controversy.
Echoing the old adage of crisis as opportunity, some politicians and
pundits have called for ‘more Europe’ - deeper European integration
along supranational lines - in response to the crisis. Such calls have an
obvious appeal, in that the structural weaknesses of EMU and Schengen
could be repaired if the EU was radically redesigned and substantially
more sovereignty was transferred to the European level. But the fun­
damental reason for these structural weaknesses - the unwillingness
of national governments to surrender full authority in such sensitive
policy areas - has persisted long after EMU and Schengen were first put
in place. If anything, the rising tide of euroscepticism has made gov­
ernments even more wary of transferring additional decision-making
responsibility to Brussels. The crisis may have brought about ‘a little
more Europe’, for instance in the area of fiscal governance. But going
beyond that and establishing a system of fiscal federalism or a truly com­
mon asylum and migration policy with EU-level border enforcement
would require a major upheaval in political thinking and ambitions, and
also treaty changes. Given the fraught experience of EU treaty change
in the 2000s, and growing anti-EU sentiment in the meantime, this is a
challenge that few national governments are willing to meet.
There are historical and political limits; therefore, to the potential
supply of solutions to the EU crisis. Within those limits, nonetheless,
it is hard not to fault the EU for the sluggishness and inadequacy of its
responses. Even without the benefit of hindsight, it seems clear that the
EU reacted in a piecemeal fashion to the escalating eurozone crisis, and
that Merkel’s announcement that there would be no limit on the number
of refugees allowed into Germany was bound to trigger a flood of new
arrivals. In the case of the eurozone crisis, Merkel has been accused of
being too cautious; in the case of the refugee crisis, she is seen as having
been too rash. Politicians are motivated by a variety of factors, ranging
from personal conviction to political opportunism. Decision-making in
an age of crisis is especially difficult, not just for Merkel, but for each and
every one of the EU’s decision-makers, both individually and collectively
in EU institutions. Having so many different actors with so many different
motives and perspectives involved in crisis resolution, and with resolution
processes usually being based on consensus rather than majority voting,
EU political decision-making is bound to be complex and protracted. No
political system is perfect; by its nature, the EU is less perfect than most.

Conclusions

Economic and political developments within and around Europe remain

highly unsettled. The eurozone crisis is quiescent, but hardly resolved.
Wars and poverty in the Middle East, North Africa, and beyond continue
to propel thousands of desperate migrants towards the EU. Although the
outcome of the UK referendum was unequivocal, there is uncertainty
about the timing and terms of Britain’s departure from the EU. Russia is
a revanchist power, eager to exploit weaknesses within the EU and dif­
ferences among member states for its own advantage. Illiberal regimes
in Hungary and Poland, and illiberal movements in other member states,
are challenging core EU norms and values. Global economic and finan­
cial uncertainty is accentuating Europe’s poor economic performance
and exacerbating political unease.
It is not unlikely, therefore, that the ‘crisis will become the new nor­
mal’ (Haughton, 2016: 15). Having once been occasional events in EU
history, crises may now be a quasi-permanent condition of European
integration. The EU may well have entered a new era, clearly distinct
from earlier phases of its existence. The domestic political implications
of rampant euroscepticism and dissatisfaction with the status quo are
already undermining the ability and willingness of national leaders to
act decisively on the European stage. Forces that once pushed European
countries to share sovereignty in order to resolve collective action prob­
lems seem to have given way to forces that are pulling countries apart.
The EU is likely to soon lose one of its biggest member states, hav­
ing already lost many of the intangible elements that define its unique
political character. Steady progress over many decades towards deeper
political and economic integration has stopped, with the prospect of
disintegration suddenly all too real. Such a dramatic change of fortune
calls for new thinking about the nature of European integration and the
direction of the EU.
References
Baldwin, R. and Gros, D. (2015) ‘What Caused the Eurozone Crisis?’, Centre
for European Policy Studies (CEPS) Commentary, 27 November.
Eichenberg, R. and Dalton, R. (2007) ‘Post Maastricht Blues: The Transfor­
mation of Citizen Support for European Integration, 1973-2004’, Acta
Politica, Vol. 42, No. 2, pp. 128-52.
European Commission (2015) The Five Presidents’ Report: Completing
Europe’s Economic and Monetary Union, Brussels: European Commission,
22 June.
Haughton, T. (2016) ‘Is Crisis the New Normal? The European Union in
2015.’ In N. Copsey and T. Haughton (eds), The JCM S Annual Review of
the European Union in 2015, 54, pp. 5-7.
Smith, D. (2015) ‘Not Just Singing the Blues: Dynamics of the EU Crisis’.
In H.-J. Trenz, C. Ruzza, and V. Guraudon (eds), Europe’s Prolonged
Crisis: The Making or Unmaking of a Political Uniott. London: Palgrave
Macmillan, pp. 23-43.
Van Rompuy, H. (2012) Towards a Genuine Economic and Monetary Union,
Brussels, 5 December.