international analysis and commentary

The geography of intra-EU power games

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The global backdrop upon which the EU has been developing its integration path has gone through multiple and dramatic changes in only a few years. What has not radically changed, however, are some European internal power dynamics. To be fair, some changes within the EU did happen. Before Brexit, European policymaking was led by two major blocks. On the one hand, the “German-French engine” was shaping internal economic policies to promote deeper integration, with the Netherlands backing Germany for more fiscal control, and Italy joining the club when needed. On the other hand, the UK together, with the eastern European countries, was mostly leading the external agenda, generally pushing for enlargement to widen the EU, while undermining opportunities for deeper political integration.

A dance performance during the closing session of the Conference on the Future of Europe, in Strasbourg, France. In the background sit European Commission president Ursula von der Leyen (C, up) European Parliament president Roberta Metsola (C,R), France’s President Emmanuel Macron (C) and Portugal’s Prime minister Antonio Costa (C, 2ndL).

 

Although Brexit disrupted the power of the second block, it provided Germany and France with more capacity to influence the future of European integration since 2016. Yet, such a shift has not produced the desired results. When it comes to general economic governance, Germany is still the leading power, followed by France. Yet, the two countries have been distancing themselves on some issues, with Paris being keener to adopt a more flexible approach when it comes to overall European economic policies, especially in the aftermath of the COVID-19 pandemic.

In this power game, Italy, especially during Mario Draghi’s administration, seemed to be closer to France. The signing of the Quirinale Treaty in 2021, or the letter signed by Commissioners Paolo Gentiloni and Thierry Bretton asking for more solidarity and a fund to face the energy crisis, were evident signs of will for stronger cooperation between the two countries. Recently, however, Rome seems to have turned its back to Paris. For instance, after months of stalling, the recent appointment of the new director of the European Stability Mechanism, in charge of safeguarding euro financial stability, saw Italy supporting Germany’s favorite candidate, Luxemburg’s former Minister of Finance, Pierre Gramegna. This was at the expense of the candidate supported by France, Portugal’s former Minister of Finance, Joao Leao, who, coming from the European south, could have been keener to accommodate Italian stances on a less rigid financial supervision.

 

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While France, too, ended up supporting Gramegna, a lack of full alignment on crucial issues with Paris is considered risky by Germany, which now fears not having full control over economic governance and the need to keep public debts and deficits at manageable levels. Indeed, the Commission is aiming to reform the Stability and Growth Pact and introduce some form of flexibility, especially in the case of countries with high debts. The idea is to allow them to bring debt down at their own agreed pace over a number of years, abandoning current stricter rules. While southern and even northern European countries would support such an approach, Germany is against this solution. It does not want the Commission to have the power to decide debt correction paths bilaterally with EU countries. Yet, considering that even the Netherlands, which is a natural German ally when it comes to fiscal rules, seems to be more open to such changes than previously expected, Germany will have a solo battle to fight.

On migration, positions have not changed, but frictions are on the rise. For instance, it is due to a crisis in the Mediterranean that bilateral relations between Italy and France have soured. In recent months, France accused Italy of not respecting maritime law, after the country refused to allow a boat led by an NGO to dock at one of its ports, resulting in the latter deviating to France. Generally, southern European countries, such as Italy, Spain and Greece claim that they have been abandoned by their partners in facing a rising number of asylum seekers from Africa and are asking for intra-EU mandatory relocation mechanisms. Yet, while Germany seems to be more understanding about the claims from the south, France and other northern European countries lament that in the European south, national institutions are informally allowing “secondary movements” of migrants to illegally exit from the country of arrival, where their asylum requests or identification paths should be processed.

Meanwhile, eastern European countries, such as Poland and Hungary, which have been traditionally opposed to any relocation or redistribution system, claim to be already taking in a high number of Ukrainian refugees since February 2022. To date, all of Germany’s hopes to reform the main existing framework, the Dublin Regulation, are in Sweden, which will lead the next European Presidency. Moreover,  the fact that Ylva Johansson, a Swedish social democrat, is the EU Commissioner in charge of migration, could certainly be of help, even though she does not represent the Swedish government stances.. Certainly, since Sweden has the highest ratio of asylum seekers per capita in the EU, it has the moral standing to push other northern companions to accept a softer approach towards the south. Nonetheless, Sweden might decide to not tackle this issue, since, at home, its center right coalition government needs to count on the support of the anti-immigration Sweden Democrats party.

When it comes to external affairs, and in particular Russia, while all member states condemned the invasion of Ukraine, the unprecedented energy crisis the EU is facing, with cuts to Russian gas supplies and prices on the rise, could result in a thin chance for a common and durable front. While the energy cap decided by the EU is not making anyone happy (too little for southern European countries, too interventionist for northern European countries), the energy crisis will have unprecedented effects on national GDP, expect maybe for Germany, whose billion euro energy package will save industries and private consumers from paying high bills. Hence, in the coming months, to avoid their economies being even more negatively impacted by the crisis, western and southern European countries might well hesitate to support the Polish and Baltic calls for tougher sanctions against Moscow and more military aid to Ukraine. This is particularly relevant, considering that decisions on sanctions and financial assistance need unanimity and Hungary is often the blocking factor.

 

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When it comes to the Transatlantic relations, while eastern European countries fully support NATO and the need for the US to have a stronger presence in Ukraine and, thus, in Europe, France expressed strong doubt about the Atlantic partner during Macron’s recent visit to Washington. For France, the EU is carrying the major costs of the war in terms of energy prices and security issues. On the top of this, the decision by US President Joe Biden to roll out a $369 billion Inflation Reduction Act to support sustainable industries in America was not taken well by many EU member states and it has pushed the Commission to think about countermeasures. While France and other southern European countries want the Commission to propose measures to shield EU industries and agriculture, the German and the central European economic agenda is still led by liberalism and the idea that, to be effective, markets should remain open, with minimum state intervention. The lack of a strong common position means that any European response will be rather weak.

In conclusion, if European political integration has been shaped by crises, it should now be at its fittest. Yet, internal integration is still a working progress, while the bloc’s external projection of power appears to be limited. While it is true that the most important EU achievements have been accomplished in times of crises, EU integration has often advanced under pressure, due to economic or security risks that pushed governments to cooperate more closely for survival reasons.

While the last-minute approach is already economically inconvenient, it could also be politically damaging, as it openly shows that the EU member states are often united only when there is no room left for anything but cooperation.