A Divided and Insular EU
from Greenberg Center for Geoeconomic Studies

A Divided and Insular EU

The eurozone fiscal crisis has led many EU members to discount the benefits of European integration, but the bloc is likely to muddle along and focus on inward relations while bonds with Washington weaken, says CFR’s Stewart Patrick.

October 7, 2010 3:44 pm (EST)

To help readers better understand the nuances of foreign policy, CFR staff writers and Consulting Editor Bernard Gwertzman conduct in-depth interviews with a wide range of international experts, as well as newsmakers.

The eurozone fiscal crisis has called into question the future of the European Union project. Unwieldy budget deficits in peripheral eurozone countries have led to calls for the European Commission to strengthen the rules governing member countries, even as stronger EU members reassess the risks and benefits of further European integration. Stewart Patrick, who directs CFR’s program on international institutions and global governance, commissioned a new series of working papers on the eurozone crisis in which many authors found the future of the EU to be uncertain but believe the eurozone project is more likely to stall than to come apart. Patrick says that faced with budget shortfalls after the financial crisis, many European countries have shifted blame for "overextended welfare states" onto the EU. Continued European disunity will force the United States to look beyond the transatlantic union for partners on issues like the deployment of peacekeepers in Africa or forces in Afghanistan, Patrick says, and Britain’s new Conservative-led coalition government will accelerate the creation of a "two-speed Europe," whereby many EU members outside the monetary union "go at their own pace."

Why has Germany, initially a strong supporter of European integration, taken an especially hard line with Greece and other fiscally insecure eurozone countries?

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The great advantage in European integration, dating back to the European coal and steel community in 1950, was the real desire of German leaders to embed themselves within European institutions, out of the memory of the recent disasters that had befallen the country. Germany’s neighbors also recognized the importance of embedding German power within international institutions.

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What we’ve seen in recent years, however, is a generational shift within Germany, so you have a number of leaders whose formative experiences were not necessarily being in leadership positions during the Cold War. You’re beginning to see Germany, which everyone had taken for granted as behaving in a manner that would sacrifice its sovereignty and be in favor of supranational institutions [where power is transferred from national member governments to an external authority], suddenly behaving like a more normal power, pursuing its national interests.

There is a growing sense within the German public as well as some members of the German elite that Germany hasn’t gained as much from European integration, and it has been recently asked to, in a sense, subsidize or compensate for the profligacy of a number of its neighbors.

Is Germany losing more than it gains from European integration?

There is a growing sense within the German public as well as some members of the German elite that Germany hasn’t gained as much from European integration.

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I was describing the perceptions within Germany more than necessarily the objective reality of the situation. There’s no question that Germany has benefited from a reasonably strong euro. The integration within the European Union has created an enormous market for its exports, and it’s allowed Germany to play a significant role on the global stage in a manner that isn’t really worrisome either to its neighbors or to other countries around the world. So there’s no question that Germany has benefited quite a bit. It’s also true that the policy of the current German government, which has gone too strongly toward austerity, is--both within Europe and globally--contributing to economic difficulties in other countries by having such an enormously high savings rate, and rather low levels of consumption.  Going forward, it is incumbent upon the Germans to try to do their own part in terms of rectifying the imbalances within Europe and globally.

In his essay "The Potential Twilight of the European Union," CFR Senior Fellow Charles Kupchan recounts a "re-nationalization of political life" across Europe that is working against EU goals. What’s driving this?

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What we’ve seen across Europe is a shift away from belief in the benefits of European integration toward a growing sense of European integration posing a threat to economic livelihoods and national sovereignty amongst member states. Part of this is simply a generational change, where previously one took European integration as an article of faith. It was connected to Western identity within the Cold War. It is a more complicated picture now, as some European economies are facing difficulties with respect to globalization and overextended welfare states. The blame for moves to try to cut back some on those historic benefits is being laid at the door of the EU. It is unfair to make the European Union a scapegoat, since many of the decisions are taken by national governments, but it becomes a convenient object of resentment [for] a number of populist politicians and mass media.

The EU is also suffering from a crisis created in part by the gradual enlargement of the European Union over the years. There’s always been a debate within [the EU] about deepening the institutional infrastructure of European integration, including moves toward supranationalism on the one hand, and enlargement -- the expansion of the membership of the EU to include new countries -- on the other. Now that we’re at a European Union of twenty-seven members, there is a growing sense that this internal diversity is complicating a sense of solidarity, which was a little bit easier when we were only speaking about a relatively cozy group of West European countries. A number of new members from Eastern Europe, having sloughed off Soviet hegemony, are not particularly enthusiastic about suddenly submerging their national sovereignty within the broader union. Finally, you also have increased resentment at a populist level in dealing with large numbers of migrants entering many EU countries, the blame for which is also laid upon the EU.

What does European disunity mean for the transatlantic partnership and U.S. strategies for tackling global issues?

First, it’s extremely unlikely that the EU will disintegrate in a meaningful sense. It remains one of the most successful experiments in modern history in terms of becoming a zone of peace in which competition, to the degree that it continues to exist, is largely in economic terms. The Union is a security community, and it’s also had tremendous success in creating an entire network of rules and institutions that are not going to go away any time soon.

The international order today is largely a Western liberal one that has been as dependent on a transatlantic European pillar as it has on the United States.

The EU is likely going to bump along with no additional integration and perhaps some slight returns to intergovernmentalism, that is: a movement toward state-to-state relations, so that when there’s a major foreign policy problem, the tendency of German Chancellor Angela Merkel or French President Nicolas Sarkozy would be to consult fellow national leaders, as opposed to continuing to give power to the European Commission and the European Parliament.

We’re likely to see a Europe turning more inward, and, as countries deal with their own national problems, less of an ability of the EU to project both hard and soft power globally. So when one’s looking for solutions to issues ranging from climate change to the deployment of peacekeepers in Africa or forces in Afghanistan, you’re going to find less of a reliable partner in Europe. It will accelerate the tendency of U.S. political leaders and foreign policymakers to look elsewhere for partners, so that this transatlantic bond, while it certainly will not disappear, will be less the absolute foundation for U.S. global posture, particularly as other regions of the world, at least Asia, continue to rise.

How will Great Britain factor into that global shift, considering its traditionally euro-skeptic Conservative government?

The euro-skepticism will be tempered to some degree as long as Britain’s coalition government [between the Conservative and Liberal Democratic parties] lasts, because the Liberal Democrats tend to be positively disposed to the EU. It’s unlikely that the Conservative party in Britain will take any strong action to remove itself from its current level of integration with the EU. But the Conservative government is likely to accelerate what’s already begun within the EU, which is a movement toward, or a consolidation of, a two-speed Europe. By that I mean countries in the eurozone that are deeply meshed with the state of the euro form a block, while Great Britain and others that remain outside the eurozone go at their own pace on a number of issues. The European Union will not break up; it will increasingly take the form of two camps.


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