Wolfgang Munchau: Dealing with 'No' votes

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What would happen if one of the 25 member states of the European Union refused to ratify the constitutional treaty? This question usually elicits one of two responses. Some say the non-ratifying country would have to leave the EU. Others argue that nothing would happen: the EU would simply continue on the basis of the existing treaties. It is a choice between a nasty divorce and permanent political stalemate.

Faced with such a choice, one might want to consider a third alternative. An intriguing possibility would be to split the EU in two - an outer part, in which all members take part, and the eurozone. This is not the same as "variable geometry" - the idea that countries should choose à la carte the parts of European integration they want to adopt and the parts they want to avoid. The former would be a more inflexible arrangement. The outer part would consist of a customs union, a common external trade policy, an internal market, a single competition policy and free movement of goods, services, labour and capital. This is essentially today's EU minus the eurozone and perhaps also minus the common agricultural policy, structural funds, and the common foreign and security policy.

The politically strengthened eurozone would act as a hub for future economic and political integration. It would be the logical choice of a hard core because it would constitute the greatest degree of integration the EU had achieved so far. All EU countries should in principle have the right, but not the obligation, to join it. But membership would come with the implicit obligation to pursue further political integration. The eurozone would require a proper constitution. The outer part could exist on the basis of existing treaties, albeit revised. It would have no further integrationist agenda.

This option has a number of attractions. First, the EU could avoid confronting members with a divisive request to quit the EU. Second, countries wishing for greater political integration could proceed unhindered. For example, there is a strong case for tax harmonisation among member states of the euro although there is no case at all for tax harmonisation within the existing EU. Third, this option would take a lot of political heat out of the enlargement debate in France, Germany and Austria. There is no reason why Turkey should not be part of a two-tier EU. The same goes for a democratic Ukraine. By my count, there are 42 countries in Europe, including Russia and Turkey and excluding what I would call the small city states - such as Monaco and Andorra - that have association agreements with existing EU members. The EU will probably not expand to include all 42 but the number of members may eventually approach 35. This alternative would be compatible with another round of enlargement and deeper integration.

There are some respectable arguments against this option. A single-tier EU has so far managed to combine enlargement and integration and may do so in the future. If the principle of a dual-tier Europe were legally established, it might trigger a split. The counter-argument is that this has already happened. In theory, membership of the EU and the euro are inseparable. In practice, some EU countries may never join the euro. The third option would merely formalise in law what already exists in practice.

The search for alternative scenarios is bound to loom large as ratification begins in earnest and runs into trouble. The first of the referendums on the treaty is due to be held in Spain on February 20. The Spanish will almost certainly vote "Yes". But there will be at least nine further referendums, including in the UK, where opinion polls show a strong and increasing majority for a "No" vote. I know of few EU officials who expect all 25 countries to ratify the constitution. If some choose not to ratify, EU leaders will meet at a summit in 2006 to decide whether those countries should be asked to leave - a decision for which there is no legal basis - or whether they accept the politically unrealistic alternative of living without the constitution.

It is not good politics perpetually to confront national electorates with the stark choice between accepting a deeply integrated Europe Union and leaving it altogether. There must be an another way.

wolfgang.munchau@ft.com

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