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About this book

The European Union (EU) is in crisis. The crisis extends beyond Brexit, the fluctuating fortunes of the eurozone and the challenge of mass migration. It cuts to the core of the EU itself. Trust is eroding; power is shifting; politics are toxic; disillusionment is widespread; and solidarity has frayed. In this major new text leading academics come together to unpack all dimensions of the EU in crisis, and to analyse its implications for the EU, its member states and the ongoing study of European integration.

Table of Contents

Chapter 1. A Multi-Dimensional Crisis

Abstract
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 ‘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.
Desmond Dinan, Neill Nugent, WilliamE. Paterson

Chapter 2. Crises in EU History

Abstract
As noted in Chapter 1, the multi-dimensional crisis facing the EU is unprecedented in seriousness and severity. But crises are nothing new in the trajectory of European integration. Specifically, events to which politicians, officials, journalists, and others have attached the label ‘crisis’ are almost commonplace for the EU. According to the conventional wisdom, EU history is replete with so-called crises, which have been instrumental in driving the project forward. Indeed, the notion of ‘crisis as opportunity’ is central to the founding story of the European Coal and Steel Community (ECSC), the European Economic Community (EEC), and the EU itself. The severity of the current crisis has led to a reappraisal of the role of crises in EU history (Parsons and Matthijs, 2015). This chapter contributes to that reappraisal by reviewing EU history critically, with a view to exploring the relationship between the onset and the impact of supposed crises and the course of European integration. The chapter does not define the concept of EU crisis. Instead, it accepts at face value that a variety of political and economic shocks emanating from inside or outside the EU system constituted crises. Exogenous shocks include global economic and financial jolts; endogenous shocks are rooted in EU politics, policies, and procedures. The chapter raises a number of questions.
Desmond Dinan

Chapter 3. The Political Economic Context of EU Crises

Abstract
This chapter considers the ways in which the current crises of the EU are nested within a series of broader crisis dynamics that together challenge the standard operating procedures of European capitalist democracies. Of course, it makes little sense to ‘factor out’ the EU from any analysis of the trajectory of crises in present day Europe. But equally, it is mistaken to suggest that the EU is straightforwardly the wellspring of all crises currently facing European societies. Rather, this chapter assumes that the relationship between European integration and broader European political development is mutually constitutive, and that this has always been so. The broad argument here is that the EU needs to be understood as the product of a particular moment in the history of European democratic capitalism, and further that the EU’s current tribulations can be best understood in relation to the unravelling of the political settlement in which it was born. It goes without saying that ‘exogenous shocks’ such as the post-2008 global financial crisis and the post-2014 migration/refugee crisis (see chapters 4 and 6 respectively) place the EU system and its constituent polities under considerable stress and thereby give rise to new and complex forms of political conflict. In the EU’s case, this cocktail has generated nothing short of an existential crisis (Zielonka 2014, see also chapter 17). The contribution here is to suggest that the particular ways in which those shocks and the resultant politics have developed cannot be understood without a wider appreciation of the changing dynamics of European capitalist democracy.
Desmond Dinan, Neill Nugent, WilliamE. Paterson

Chapter 4. Playing for High Stakes: The Eurozone Crisis

Abstract
The EU had invested huge stakes in the creation of monetary union, which was agreed to in the Maastricht Treaty of 1992 and launched with 11 member states in 1999. By 2016 the eurozone area had grown to encompass 19 out of the 28 EU member states, only two of which had negotiated an opt-out, Britain and Denmark. Monetary union was a bold experiment in the absence of a European federal state in which to embed it. It depended on the effectiveness of the new European Central Bank (ECB) in delivering monetary stability and on the member states’ loyalty in complying with the rules to support the monetary union. The assumption was that monetary union would act as a catalyst for economic and political union. Clearly in creating monetary union in this way the EU was playing for high stakes. The onset and progression of the eurozone crisis cast serious doubt on the timing of this investment, on the underlying assumption that monetary union would drive economic and political union, and on the will and capability of eurozone states to cede the requisite sovereignty to form an economic and political union. The early signs were not auspicious. In 2003 the German federal government, the chief advocate of tough fiscal rules, had shown a willingness to see the application of these rules suspended (Heipertz and Verdun, 2010). Subsequently, in 2005 two key eurozone member states, France and the Netherlands, had rejected the Constitutional Treaty. With the escalation of the eurozone crisis, fear grew that monetary union could act as a catalyst for EU disunion (Dyson, 2012).
Desmond Dinan, Kenneth Dyson

Chapter 5. The UK: Membership in Crisis

Abstract
The UK has rarely been a contented member of the EU. Over the last decade an historical wariness towards integration gave way to increasing and vocal euroscepticism and to growing calls for the UK to quit the EU. This led to a crisis in UK membership of the EU, which saw continued membership put into question, culminating in the referendum on 23 June 2016. This resulted in 51.9 per cent of voters opting, on a turnout of 72.2 per cent, to ‘leave’ the EU. The result was unexpected and the UK government had not prepared for it. The UK thus entered a new stage in the crisis: how to withdraw from the EU. For the EU, the priority became how to prevent others following the UK example. This chapter explores the nature and implications of the crisis of UK EU membership. It starts by providing an overview of the crisis before illustrating, in the section ‘Avoiding Crisis through Exceptionalism’, how wariness towards European integration and reservations about its speed and direction have generally been managed by securing various forms of exceptionalism. The UK government may have claimed in its 2016 White Paper on UK membership of the EU that a recently negotiated ‘new settlement’ provided the UK with a ‘special status within the EU’ (UK Government, 2016a), but such a special status has long existed. The section ‘Heading towards Crisis: Mounting Pressure for a Referendum on EU Membership’ explores how a fragile membership moved into a period of profound crisis, triggered in 2013 by a promise from the UK Prime Minister, David Cameron, of an ‘in-out’ referendum before the end of 2017.
Desmond Dinan, Neill Nugent, WilliamE. Paterson, Lee Mcgowan, David Phinnemore

Chapter 6. The European Migration Crisis

Abstract
What is unique about the migration crisis? How is it possible that the waves of asylum-seekers and irregular migrants coming ashore on the eastern Greek isles and Italy’s Lampedusa island could threaten to undermine a major accomplishment of the European integration project – the single market, of which the Schengen system of free movement of persons is a key part – and contribute to the UK’s decision to leave the EU (anti-immigrant sentiment was a significant influence on ‘leave’ voters)? Why have the EU and its member states struggled to find ‘solutions’? Finally, have such solutions as have been adopted resulted in ‘more’ or ‘less’ Europe? These are the broad questions informing this chapter on the European migration crisis. Two distinct lines of inquiry are followed in the chapter. The first seeks to discover whether the migration crisis arose from a ‘perfect storm’ of (mainly) unpredictable events.
Desmond Dinan, Neill Nugent, WilliamE. Paterson, Laurie Buonanno

Chapter 7. The Eurozone in Crisis: Core-Periphery Dynamics

Abstract
The two inter-related concepts of core and periphery are widely used in historical and social science analysis. The concepts are inherently relational as one implies the presence of the other. Relations between the core and periphery have played a major role in the evolution of economic and political power structures at a global level, within empires, continents and nation states. Europe’s first nation states were moulded by strong cores spreading their writ to surrounding geographical areas. The centre-periphery cleavage was identified by Lipset and Rokkan as one of the four key cleavages that dominated state formation and the emergence of party systems in Europe (Lipset and Rokkan, 1967). Deutsch et al identified the ‘cores of strength’ around which nation states were built (Deutsch et al, 1956). Rokkan and Urwin in their work on territorial politics in Europe’s peripheries concluded that peripheral regions shared three characteristics, namely, they were geographically distant, culturally different and economically dependent on the core regions (Rokkan and Urwin, 1983, 13). Scholars of European integration and the actors who forged the early Union, were attentive to the challenge of economic divergence in Europe, particularly the Mezzogiorno (the impoverished south of Italy), in the original EU of six member states. That challenge came to the fore as the iterative process of enlargement brought a north-western, Mediterranean and eastern periphery into the Union beginning with the first enlargement in 1973. In fact, all enlargements, with the exception of the EFTA enlargement of the mid-1990s, were characterised by new member states whose level of economic development was below that of the core. It was for that reason that the Union developed cohesion policy and a set of related policy instruments.
Desmond Dinan, Neill Nugent, WilliamE. Paterson

Chapter 8. The Aftermath of the Eurozone Crisis: Towards Fiscal Federalism?*

Abstract
The Eurozone crisis, which followed in the wake of the global financial crisis, affected eurozone economies asymmetrically. The seeds of the asymmetric impact were inherent in the structure of Economic and Monetary Union (EMU), which called for a single monetary policy for all members of the club, despite wide-ranging macroeconomic divergence among them. The single monetary policy embodied a very low real interest rate for the peripheral economies in the years preceding the crisis, while the interest rate was de facto high for the northern economies. The challenges of developing a genuine single currency area – an ‘optimal currency area’ in the language of economists – were accentuated further by the absence of (direct) fiscal policy coordination and only minimal financial regulation (Copolevitch et al., 2016). Thus, the persistently low real interest rates set by the European Central Bank (ECB) in the years preceding the crisis had encouraged lax fiscal discipline in the periphery economies, a key reason for the explosion of budget deficit and public debt (Maddaloni and Peydro, 2011). The policy responses to high deficits and debt were determined by the EMU structure, leading to domestic or EU driven austerity policy, accompanied by
Desmond Dinan, Neill Nugent, WilliamE. Paterson

Chapter 9. The Crisis and the EU’s Institutions, Political Actors and ProcessesNeillNugent

Abstract
This chapter examines how the different dimensions of the crisis have impacted on the EU’s main political actors and policy processes. It shows that there that have been three main effects. First, the powers of and the influence exercised by the EU’s institutional actors have been partially re-shaped during the crisis. They have been so in such ways as to intensify both the extent to which the EU is in some respects intergovernmental in character and in other respects is supranational. Second, the crisis has brought out and exacerbated deep-lying differences between the EU’s main non-institutional actors – the member states –– on key policy issues. Such has been the depth of some of the differences between member states that policy- and decision-making processes in some spheres have increasingly not involved all member states, while in others they have sometimes been extremely slow and protracted. Third, the crisis has shown how the EU still has a major leadership problem. One of the main concerns of the so-called ‘constitutional decade’ (the years leading up to the application in 2009 of the Lisbon Treaty) – unsatisfactory EU leadership – has remained, with it often not being clear during the crisis who or what should be providing leadership, and when it has been provided it has often been contested. Further to these aspects of the leadership problem, as the EU has become increasingly differentiated during the crisis such leadership as has been offered has often been so only to parts of the EU. It is thus not going too far to say that one of the dimensions of the crisis the EU has been experiencing in recent years is a leadership crisis.
Desmond Dinan, Neill Nugent, WilliamE. Paterson

Chapter 10. The Legitimacy Challenge

Abstract
The EU has been in permanent crisis mode since the onset of the global financial crisis in 2008. The crisis has accentuated the EU’s declining legitimacy, which has increasingly manifested itself since the ratification of the Maastricht Treaty in the early 1990s. The failure of national governments to address the EU’s legitimacy problem is increasingly coming to haunt them, with the crisis undermining public trust in the problemsolving capacity of EU decision-makers. The public call for greater transparency and democratic accountability in the EU is getting louder, with the traditional permissive consensus giving way to what is now being described as a constraining dissensus in which citizens have started to scrutinize the EU’s institutions and policies. Under crisis conditions the EU has shown a distinct lack of collective solidarity and engagement, with national governments pursuing a predominantly reactive and functional governance approach.
Desmond Dinan, Neill Nugent, WilliamE. Paterson, Christian Schweiger

Chapter 11. Germany and the Crisis:Asset or Liability?

Abstract
The EU crisis has presented important challenges for Germany. In the early 1990s, Germany’s post-unification commitments to deeper integration in the Maastricht Treaty were accompanied by the internal challenges of integrating the former East Germany into the Federal Republic. Later, in the 1990s, the German economy was named the ‘sick man of the Euro’ (Economist, 1999). However, economic and social reforms in the 2000s under the Red–Green (Social Democrats – Greens) coalition of Gerhard Schröder resulted in a much stronger economic position, prompting Thomas Bagger, the head of policy planning in the German Foreign Office, to write of ‘the German moment’ (Bagger, 2014: 26). A more apt description may be that Germany has become ‘the indispensable power’ in the EU. As such, German agreement is a prerequisite for forging EU solutions to most dimensions of the crisis. Germany may be indispensable, but is it an asset or a liability in helping the EU weather the storms of the 2010s? The traditional view is that it is Germany, ‘in the form of … a pro-integrationist regional hegemon that best explains Europe’s comparatively very high level of political integration’ (Webber, 2014: 355; for wider debate on Germany’s role in the EU, see Bulmer and Paterson, 2010).
Desmond Dinan, Neill Nugent, WilliamE. Paterson, Simon Bulmer

Chapter 12. Greece: A Crisis in Two-Level Governance

Abstract
The Greek economic crisis dominated the international headlines for much of 2010–16. It was the first and most acute case in the sovereigndebt crisis that emerged in the eurozone during that time. The fact that Greece received three bailouts and is the only eurozone member not to have exited its ‘adjustment programme’ points to the extreme conditions of the case. More than any other episode in the history of the Economic and Monetary Union (EMU), the Greek crisis encapsulates the vulnerabilities and dilemmas inherent in the two-level governance – European and national – of the single currency. It also highlights the lack of preparedness for the crisis, owing in large part to the inadequate provisions of the Maastricht Treaty; the challenges of creating a mechanism for domestic intervention, especially in light of low-quality national institutions that struggle to deliver reform; the conflicts of interest that arise from loan conditionality; and normative issues that are prompted concerning choice and democratic accountability. The bailouts brought the EU into uncharted territory and raised existential questions about EMU’s operation. For Greece, the strains on its institutional capacity were exacerbated by the onset of a second crisis: that of handling thousands of new migrants, desperate to flee conflicts in Syria and beyond, entering the country from Turkey. In 2015 alone, the United Nations High Commission for Refugees (UNHCR) calculated that 856,723 migrants arrived in Greece by sea. The country already had a poor record in processing asylum-seekers and flows on this scale overwhelmed the public authorities.
Desmond Dinan, Neill Nugent, WilliamE. Paterson, Kevin Featherstone, Dimitris Papadimitriou

Chapter 13. Central and Eastern Europe: The Sacrifices of Solidarity, the Discomforts of Diversity and the Vexations of Vulnerabilities

Abstract
In the wake of its multi-faceted crisis, the EU appears ‘battered and bruised’, with the states of central and eastern Europe (CEE) having taken their fair share of the blows (Phinnemore, 2015). Even before the crisis began, it had been quite a ride for CEE. Over the preceding two decades, the region had experienced the collapse of the communist regimes, democratization, marketization, state-building, and the timeconsuming and often demanding process of meeting the onerous entry criteria for the EU. A brief respite for the 2004 entrants was followed by the global economic downturn, which not only hit the economies of CEE hard, especially in the Baltic states, but also put the eurozone – of which an increasing number of CEE states were becoming members – under severe strain, provoking bailouts and austerity measures. A sense of crisis engendered by pressure on the purses of states and citizens was soon compounded by Russian aggression in Ukraine, by the migration crisis, and by concerns over Brexit. This chapter examines not only how the EU crisis has manifested itself in, and impacted on, the countries of CEE, but also how these states have contributed to the search for (common) resolutions.
Desmond Dinan, Neill Nugent, WilliamE. Paterson, Tim Haughton

Chapter 14. The European Union, Ukraine and The Unstable East

Abstract
Developments in Ukraine in 2013–14 and a new, aggressive Russian foreign policy represent the most pressing challenge the EU has faced to its Common Foreign and Security Policy (CFSP). What is at stake is both the integrative capacity of the EU vis-à-vis its east European member states and a coherent response to the threat of destabilization resulting from ‘a Russia that has made unpredictability a signature element of its strategy’ (Bagger, 2015: 31). The Ukrainian crisis thus ‘undermines key elements of the post-World War II political and security arrangements in Europe’ (Menon and Rumer, 2015: 157). This chapter describes the failure of the EU to achieve the ambitious goals of its European Security Strategy and Eastern Partnership and it analyses the perceptions, responses, and learning patterns that shaped EU policy towards Russia and Ukraine before and during the crisis. The crucial argument is that a mixture of misperceptions and successful learning explain the EU’s actions and that future effectiveness hinges on the commitment and diplomatic skill with which the EU implements what eventually emerged as a relatively coherent position in response to Russian aggression against Ukraine. For the EU, from the early 2000s the idea of building a cordon sanitaire along its southern and eastern flanks and combining it with a new tool known as the European Neighbourhood Policy (ENP) was pragmatic and unrealistic at the same time. Like the USA, the EU identified democracy and good governance, built on freedom and prosperity, as the main pillars of international stability.
Desmond Dinan, Neill Nugent, WilliamE. Paterson, Wolfgang Seibel

Chapter 15. The EU’s Global Image

Abstract
The multi-dimensional EU crisis explored in this book has generated negative and positive images of the Union. Critics argue that the crisis has resulted in the EU losing credibility both as an international economic player and as a ‘soft power’ foreign policy actor and that its lack of decisive responses to key international events has critically impaired both its institutional integrity and its overall presence. Defenders of the EU, in contrast, contend that, despite setbacks, the EU’s global image remains intact, based on its many and varying worldwide initiatives that range from promoting peace and stability in its neighbourhood to development policy, humanitarian assistance, and climate change mitigation. Critical matters examined in this book are the various impacts the crisis has had on the EU and the overall consequences for the EU in the short and long term. This chapter takes an outside-in approach by examining the challenges to the EU in terms of the abiding identity that it currently holds in the eyes of a range of external others, the reputational damage done to this identity as a result of the EU’s responses to the crisis, and the subsequent impact this has had on the EU’s strategic relationships with Russia, the USA, and China.
Desmond Dinan, Neill Nugent, WilliamE. Paterson, Amelia Hadfield

Chapter 16. Theorising Crisis in European Integration

Abstract
The manifold crises of the EU have not only put pressures on policymakers but also present a challenge to theories of European integration, which explain the dynamics of integration and suggest how and under what conditions integration progresses, stagnates, or recedes. Such theories should therefore be able to tell us about the causes and effects of crises in integration, on the basis of general, abstract conditions and mechanisms of integration. For the purpose of this chapter, a crisis in European integration means a decision-making situation with a manifest threat and a perceived significant probability of disintegration (see Chapter 17). Disintegration means a reduction in the existing level, scope, and membership of integration (Leuffen et al., 2013: 8). In other words, a crisis in integration threatens to reduce the extent of pooling and delegation, repatriate EU policy competences, or lead to the exit of states from the EU or one of its integrated policies. This definition fits many aspects of the current EU crisis, including the eurozone crisis, the Ukraine crisis, the Brexit crisis, and the migration crisis. Whereas the eurozone and the migration crises are multi-dimensional (potentially impacting on the level, scope, and membership of integration), the Ukraine and Brexit crises primarily just affect the (differentiated) territorial borders of European integration. All of the crises are open-ended: they may result in disintegration but also lead to a reassertion of the status quo or to more integration.
Desmond Dinan, Neill Nugent, WilliamE. Paterson, Frank Schimmelfennig

Chapter 17. Can the EU Survive?

Abstract
It is a measure of the depth of the current crisis that in 2015 and 2016 an increasing number of political leaders and observers publicly expressed fears that the EU was on the verge of collapse. The aim of this chapter is to assess to what extent these fears are justified - that is to say, how likely it is that the EU will survive or disintegrate. The notion of political integration (or disintegration) has three distinct dimensions. Horizontal (dis)integration refers to the decline/growth in the number of EU member states; vertical (dis)integration to the decline/growth in the competence and powers of the EU’s supranational organs - the European Commission, the European Parliament, the Court of Justice of the European Union (CJEU), and the European Central Bank (ECB) - visà- vis national governments; and sectoral (dis)integration to the decline/ growth in the number of issue areas in which common policies have been adopted in Europe.
Desmond Dinan, Neill Nugent, WilliamE. Paterson

Chapter 18. Conclusions: Crisis Without End?

Abstract
At the beginning of this book – in the Introduction and in the editors’ opening chapter – much was made of the large number of specific crises that have simultaneously existed within the general crisis that has affected the EU in recent years. The headline crises revolving around the eurozone, migration, and Brexit have been accompanied by deep concerns about a number of related issues, including the diminution of popular support for the EU, legitimacy and identity issues, strains in the EU’s system of governance, divisions between North and South and East and West, and the role of Germany – the last of which has been a common factor to most of the crises. As was shown by Desmond Dinan in Chapter 2, the EU has faced crises before, but not on such a scale. Past crises in the EU’s history have typically been about one set of issues, such as the disputes over the size and distribution of the budget in the 1980s and the problems with treaty ratifications in the 1990s and 2000s. But the crisis of recent years has been multi-dimensional and, consequently, quite unprecedented. The crisis has been unprecedented not only in the large number of specific crises it has contained but also in the severities of these crises.
Desmond Dinan, Neill Nugent, WilliamE. Paterson
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