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Where it all began

“GENTLEMEN, you are trying to negotiate something you will never be able to negotiate. But if negotiated, it will not be ratified. And if ratified, it will not work.” Those were the words of the British representative at the negotiations from which the European Economic Community eventually emerged in 1957. Nearly four decades later the British were still sceptical about European integration. Writing in The Economist in 1993, John Major, then Britain's prime minister, derided efforts to form a single currency as having “all the quaintness of a rain dance and about the same potency”. Wrong again.

Given this long British record of lofty and mistaken predictions that European integration cannot work, a British newspaper should be especially cautious in expressing scepticism about the future of the European Union. Yet to this writer at least, it does indeed seem that the EU is about to enter a particularly troubled period. It still seems highly unlikely that the Union will collapse. What is much more probable is that it will split.

The likeliest immediate cause of a split in the Union would be a failed effort to ratify the EU constitution. But the ground would have been prepared much earlier by the developments described in this survey: the waning of the forces that originally propelled the drive for European unity; the growing diversity of views and interests introduced by EU enlargement; and the increasing difficulty of maintaining popular support for the European project as the EU's powers expand.

Just how much new power the constitution gives the EU remains a matter for debate. It clearly does increase the EU's say in sensitive areas such as immigration and criminal law. It also strengthens the Union's foreign-policy role and puts down a marker for the development of a common defence policy. Moreover, the constitution includes a detailed charter of fundamental rights, which could mean that the European Court of Justice will play an increasing role in defining social, political and economic rights across Europe. It also advances EU powers in many other small ways, for example by creating an explicit EU role in the promotion of sport and tourism for the first time.

Some defenders of the constitution nonetheless insist that it is not a very radical document, certainly compared with the Single European Act of 1986, which set up the single market, or the Maastricht treaty of 1992, which created a single currency and a common foreign policy. That is probably true, but it may be beside the point. Countries such as Britain and the Netherlands did not hold referendums on the internal market or on Maastricht, so a vote on the constitution will be the first opportunity for their voters to express their cumulative misgivings about what the EU has become. Even in France, which did have a referendum on Maastricht, voters may still take the opportunity to voice discontent with recent developments in EU policy—say the European Commission's “ultra-liberal” economics, or the unpopular promise to admit Turkey to EU membership.

Eleven of the 25 EU countries—Belgium, Britain, the Czech Republic, Denmark, France, Ireland, Luxembourg, the Netherlands, Poland, Portugal and Spain—have now promised or all-but-promised to hold referendums on the constitution, and even Germany is thinking about it. For most of the countries involved, this desire to consult the people about European integration is new, and itself reflects growing uneasiness about the popularity of the European project.

The constitutional referendums will carry a heavy risk for the EU. In theory at least, if even a single country refuses to ratify the treaty the constitution cannot come into force. But as Giuliano Amato, a vice-president of the constitutional convention, puts it, “Legally we could not proceed, but politically we could not stop.” It is difficult to imagine more than a score of EU members meekly abandoning a political project to which they have committed so much energy just because one or two countries have turned it down. For the moment they have simply agreed that if there are problems with ratification, EU leaders will meet in two years' time and decide what to do next.

Leaving some wiggle-room is probably wise, because much would depend on how many countries had rejected the constitution, and who they were. The biggest question marks hang over Britain, Denmark, France, the Netherlands, the Czech Republic and Poland, but at the moment the outcome is impossible to forecast. For example, the latest polls would suggest an easy victory for the “yes” camp in France, where opinion is running 2:1 in favour of the constitution, and a big defeat in Britain, which is split roughly 2:1 against. But French supporters are palpably nervous, recalling that the Maastricht treaty only just squeaked through with a “yes” vote of 50.5% in 1992. With the French socialists divided about the constitution, President Chirac unpopular with the electorate and the extremes on left and right likely to take a share of over 20% of the vote, a French “no” is certainly possible.

In the same way, Britain may change its mind. Europhiles there are currently deeply gloomy, but cheer themselves up by recalling that when Britain held its only other European referendum back in 1975, on whether to remain in the EEC, the “yes” camp started way behind and ended up winning by a respectable margin.

The outcome in the other battleground states is equally hard to call. The Danes have a record of rejecting European treaties in referendums, but seem to be bucking the EU trend by becoming less Eurosceptic. Poland was always deeply doubtful about the constitution; on the other hand, Polish farmers will soon begin receiving large cheques from the EU, which could turn opinion around. The Dutch have tended to be solidly in favour of European integration, but have been in a funny mood ever since Pim Fortuyn set off a wave of populism. The Czechs have no overriding grievance, but the country's president, Vaclav Klaus, is opposed to the constitution.

It remains possible that the constitution will be approved everywhere. For example, if sceptics such as Britain and Poland vote last, after a string of “yes” votes elsewhere, they may end up approving the constitution, fearing that otherwise they may have to leave the EU altogether. But it seems much more probable that one or more members will say “no”. What happens then?

If only one or two countries reject the constitution, they might simply be asked to leave the Union. There is already a lively debate in the French press about whether Britain should be thrown out if it votes against the constitution. But ejecting Britain (or any other country) might not be so straightforward. Under current EU law, Britain would have every right to insist on staying in the Union under the existing legal framework. And many of the smaller EU countries might be reluctant to see Britain leave because they see British influence as a valuable counterbalance to Franco-German dominance.

One outcome might be that Britain and other sceptics establish a semi-detached relationship with the EU. At one extreme this could be similar to the one Norway has negotiated. Norway is not a member of the EU and opts out of policies it dislikes, such as those on agriculture and fisheries. However, it is a member of the European Economic Area, which gives it access to the EU's single market. In return, it has to accept single-market laws on which it has no vote, and it also has to contribute to the EU budget. For Britain, a semi-detached relationship with the EU might be even more complicated. For example, as a major European power it might press for continued participation in EU summits and diplomatic activity.

If a larger number of countries said “no”, the EU could evolve into two blocks, with an integrated “political union” at its core and a looser economic union around it. The “core” countries would push on with integrationist projects that the British have traditionally rejected, such as the introduction of direct EU taxes and the establishment of an independent EU military force. They would also try to persuade Turkey to enter the looser economic “outer” Europe, which might include Britain, Poland and much of Scandinavia.

The most difficult scenario to predict is the aftermath of a putative French “no”. The French have always been so crucial to the EU that this would kill the constitution. That might bring about a sullen period of Eurosclerosis in which the EU remained in its current form but was increasingly by-passed by the bigger member countries in favour of bilateral deals, condemning it to increasing irrelevance.

Niall Ferguson, a British historian at Harvard, suggests that it might end up as just another big international organisation, like the International Labour Organisation in Geneva or the OECD in Paris. Alternatively, there could be a dramatic attempt to relaunch the EU and save the dream of European unity. In France itself, the political elite, already disenchanted with EU enlargement, has long fantasised about dissolving the present EU and starting again with a political union of the original six members; or perhaps just with France and Germany.

All these scenarios share a common factor: they envisage some sort of split in the European Union. Some observers find this prospect alarming. “Anyone with any knowledge of European history would be wary of seeing Europe split into rival camps,” says Oxford University's Timothy Garton Ash. The Iraq crisis provided a taster of how disturbing such a scenario might be. The sight of the German chancellor and the French and Russian presidents issuing joint statements on an international crisis sent shivers down a few spines in London and Warsaw. Mid-Atlantic meetings between the British and the Americans also stirred a few memories.

It is certainly conceivable that the European Union will split into rival, mutually suspicious camps, but the eventual outcome is likely to be messier and less frightening. Instead of two clearly defined alliances—an inner and an outer core, or an “old” and a “new” Europe—there will be a range of overlapping structures depending on the form of co-operation. Countries such as Germany, France and Italy are likely to belong to everything—the euro, the border-free area, the internal market and any future EU military force or judicial zone. Others, such as Britain and Denmark, will try to pick and choose, taking part in the single market and perhaps a new military structure, but avoiding monetary or judicial union and perhaps trying to slip out of participation in such areas as social or fisheries policy.

As it happens, this is the sort of European Union that has already been evolving over the past decade. The assumption that all EU countries would eventually join the euro has gradually eroded as first Denmark and then Sweden voted to reject membership of the single currency and a British decision moves ever further into the future. The passport-free Schengen area operates on a similar multi-tiered model: Britain and Ireland have stayed out and the central European countries have not yet been allowed to join, but Norway and Iceland, which remain outside the EU, are members of Schengen.

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The evolution of defence co-operation will further blur distinctions. Certainly as long as Tony Blair is prime minister, the usually stand-offish British are likely to want to be part of an inner defence core. However, some countries that are members of the single-currency zone but traditionally neutral on defence matters—such as Ireland, Austria and Finland—will probably stay out. Attempts to impose a single economic model on the EU are also likely to stall. The central Europeans are determined to follow the Irish model of low taxes and light regulation and to fend off efforts to impose a Franco-German-inspired “European social model”. Under the current legal and political arrangements, they will probably succeed.

In the short term, a failure to ratify the constitution may actually disrupt the emergence of the multi-tiered European Union described above. In the long run, however, a constitutional crisis would confirm that the emerging European Union is simply too diverse to contain within a single uniform structure. The federalist dream of a “United States of Europe” will slide into irrelevance. A shell of an organisation called the European Union would probably be preserved, but some of its current members might even quit and negotiate new association agreements.

The result would be messy and hard to understand, and might cause new frictions. But it would also have two strong benefits. First, a more diverse EU would allow countries and their citizens to adopt different levels of European integration to suit their national preferences. Second, diversity would allow some useful competition between different economic and social models within Europe.

With peace and prosperity established, the European Union can safely abandon its old aim of an “ever closer union”. The new motto might be vive la différence.

Copyright © 2004 The Economist Newspaper and The Economist Group. All rights reserved.