Is European integration in trouble?

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One thing is certain: Economic experts never seem to anticipate political risk. Witness the Arab Spring, which came as a shock to many economists. Could the European refugee situation play just as unpredictable a role? Has the huge influx of refugees already turbo-charged the anti-EU movement? To what degree has the refugee situation put European integration at risk?

Some analysts suggest the so-called Schengen agreement, which guarantees freedom of movement within European countries, has been weakened long-term. Others suggest German Chancellor Angela Merkel's opening of Germany's borders to 10,000 refugees a day, or 1.5 million a year, has put her own political base in jeopardy, creating the risk of a scenario of a leaderless Europe. Are the effects of the refugee crisis being exaggerated, or do European policymakers have something to really worry about? Is there a populist anger bubbling up just below the political surface?

Twenty noted policy experts offer their analyses.

MICHAEL EMERSON

Associate Senior Research Fellow, Centre for European Policy Studies

Yes for sure, but "at risk" is to put it very mildly indeed. After over half a century of European integration achievements, and after seeing off many a crisis, the present constellation of multiple crises now makes for existential worries like never before. What is unique is the coincidence of several seemingly unrelated crises: very slow recovery from the Great Recession, the Grexit affair that is only anesthetized but not resolved, British Prime Minister David Cameron's Russian roulette in risking a Brexit, Russian President Vladimir Putin's insidious aggression with hybrid war against Ukraine and head-on challenge to European values, the rise of ISIS, and now to cap it all the refugee tsunami. Taken together, the European Union is looking worse than temporarily unmanageable, but rather systemically unstable and unsustainable.

There is an old saying in Brussels folklore: "Integration is like riding a bicycle--if you don't keep going, you fall off." No doubt at some point that becomes invalid, as the centralization of powers stops, and Cameron's objection to "ever-closer union" becomes relevant. However, the European Union is not there yet. On the contrary, the euro ran into big trouble because it was systemically inadequate on the side of bank supervision and fiscal union, and now the Schengen area is cracking up because of inadequate common border controls and asylum management. The immature mechanisms of foreign and security policy have made the objective of "Europeanization" of the wider European neighborhood vulnerable to both Putin's machinations and the barbarity of ISIS.

And now it is the chemistry of democratic politics that synthesizes it all, with a sinister combination of rising extreme right-wing populism and secessionist tendencies. Until now, German Chancellor Angela Merkel was the bedrock of stability for the European Union as a whole, gently leading with calm good sense and firm commitment to the European ideal.

But now she seems to be in big trouble at home for having "invited" the refugees, while Poland has just voted to undermine its impressive European credentials, and Marine Le Pen's popularity in France is sustained. All the ingredients of a nightmare scenario are being assembled. Our leaders will have to make a huge turnaround in their performance to avert something very bad indeed. Merkel and French President Frangois Hollande talk of some big new initiative after their 2017 elections, but nothing of substance is on the table.

MAREK DABROWSKI

Non-Resident Scholar, Bruegel, and CASE Fellow, CASE-Center for Social and Economic Research

Indeed, the refugee crisis did take European societies and politicians by surprise even if it could be predicted. The push factors such as civil wars and associated humanitarian disasters in countries such as Syria, Iraq, or Eritrea are not new phenomena. Limits of refugee absorption capacity in Turkey, Lebanon, and Jordan (Syria's direct neighbors) should surprise nobody. Finally, it has also been clear that the potential of the migrant-smuggling industry in the Mediterranean basin has been growing systematically since long time.

The refugee crisis has revealed the incompleteness of the European integration architecture. As a voluntary project in which each major step forward, at least those requiring treaty revisions, must obtain the unanimous approval of all member states, the European Union represents a hybrid construction with many institutional asymmetries. Economic integration has advanced further than political union because the latter has been considered by some member states as a compromise to their sovereignty. Such asymmetry did not cause tensions in "tranquil" times, but is proving to be a serious problem in crisis time.

In the area of concern, the European Union offers the free movement of people without internal border controls, but policies related to migration, asylum, and internal security, including counter-terrorism, are still largely dealt with in the national domain. This means the fragmentation of already-scarce administrative and financial resources, cross-border coordination problems, and a diluted sense of responsibility thanks to the temptation to conduct beggar-thy-neighbor policy.

Furthermore, the Common Foreign and Security Policy which could hypothetically address some of the root causes of the refugee crisis in advance, although subject to coordination on the EU level, requires unanimous decisions of all member states. This often shortens the horizon of CFSP decisions and limits its effectiveness.

Nevertheless, one should remain optimistic about the European Union's capacity to draw the right lessons from the current crisis and find a common response even if it takes more time. First, looking back at the history of the EU project, crises and new extraordinary challenges always created impulses for the subsequent integration steps. Second, none of the EU member states is able to respond to a refugee crisis alone; this is the challenge that requires a joint European or even broader--global-- cooperation. Third, in the medium to long term, absorption of refugees can be beneficial for the European economy, which suffers from population aging and decreasing working-age population.

The common EU response should include, at minimum, strengthening EU external border protection, operational overhaul and unification of asylum policy (including social benefits provided to refugees to eliminate cross-border arbitrage in search of preferred asylum destination), fair burden-sharing related to absorption of the current refugee inflow, and enhanced cooperation with non-EU countries directly neighboring with the conflict zones or located on major refugees transit routes.

MIROSLAV SINGER

Governor, Czech National Bank

As a central banker, I can't claim to be much of an expert on immigration. Still, recent developments in the Schengen area have all too many similarities with past episodes in the eurozone. They reflect some unpleasant regularities of EU political processes on which I feel I can venture a few comments.

The recent history of Schengen is reminiscent of two eurozone stories: the weakening of the Stability and Growth Pact and the interpretation of Article 125 (the "no-bailout clause") on mutual financial aid. In both cases, the rules were "reinterpreted" to give eurozone sovereigns much more leeway. This required the consent of Germany. In the case of the Stability and Growth Pact, Germany was quite keen to agree, but in the case of mutual aid it was reluctant. In both cases new mechanisms were later needed to recapture some of the strictness of the original rules.

The immigration story is analogous. Again, it involves an exclusive club of EU countries--this time the Schengen Area rather than the eurozone. Again the rules were broken initially by Greece, which failed to protect the Schengen borders, and then by German Chancellor Angela Merkel, who invited everybody in need to Germany. We are now in a minor retreat phase in which the need to protect borders--even internal ones--is starting to prevail and there is growing recognition that many of the immigrants are economic migrants rather than refugees. In general, we in the European Union are too willing to build our institutions on bendable rules and Germany is too willing in troubled times to establish new rules rather than observe the existing ones.

However, there are new aspects to the latest crisis. Among the most notable is the recent ostracizing of Hungary for attempting to protect its Schengen borders, that is, for observing the current rules. Another is the breathtaking speed of demolition of the Dublin asylum rules and the more recent attempts to reverse that process. A third is the obviously futile measures proposed by the European Commission given the scale of the problem. As I write, Austria is building a border fence just a week or two after criticizing the Hungarian one, and the Commission is saying it will propose new rules as early as next spring.

What should be done? The first positive steps to contain the eurozone financial crisis were taken once the scale of the problem had been accepted and some initial attempts had been made to assess the situation in individual countries. The same should be done now. No one has any idea about the size of the problem in the transit countries or about the nationality composition of the migrants. In addition, measures should be taken on the Schengen borders to ensure that migrants enter in a controlled manner. And finally, containment of the problem should be allowed--if a country fails to protect the Schengen borders, those harmed by this fact should be able to treat it as a non-Schengen territory. New rules--and possibly also new institutions--will of course be prepared, but these will be steps equivalent to those that initially helped contain the...

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