In the years ahead, the European Union is expected to remain under constant pressure due to the continuing crisis of trust within the member states and the lack of cohesion between them. This will have a major impact on the European Union as a political system. This observation is significant given that the next five years may prove decisive for the EU’s continued existence as a functioning system of cooperation. For the Netherlands major interests are at stake, both economically and politically. The European Union has always been of vital economic interest for the Netherlands. But in a world composed of shifting tectonic plates European cooperation in the broad area of security has become ever more important. Against this backdrop fundamental questions arise with regard to Dutch foreign and security policy. First, in response to the departure of the UK – always seen as a natural partner of the Netherlands – the question arises of what this means for the positioning of the Netherlands within the European coalition landscape. Second, there is the question of whether the Netherlands should (further) relinquish its traditional Atlantic orientation in favour of a more continental European focus with regard to its security.

Introduction

How will the EU develop in the years ahead? Will the Union find the strength it needs to meet a number of internal and external challenges? A major question here is what support there will be for the EU in member states and how much cohesion there will be between them. This question is particularly relevant given the crisis that many people believe the EU has already been through in the past few years. In 2016 this crisis even led European Commission President Jean-Claude Juncker to warn in his annual State of the Union address about a looming existential crisis for the Union. He believed that the continued existence of the EU itself was at stake.[1]

Juncker’s gloominess was prompted by the multiple challenges facing the EU and its member states, ranging from the after-effects of the financial and economic crisis and pressure from migration flows through to serious instability on the EU’s external borders. On 23 June 2016 – a few months before his address – a majority of the UK population had also voted to leave the EU. Brexit created a unique situation for the EU. No member state had ever left the Union. This event stoked fear among many that other countries might follow the British example, particularly since elections were due to be held in 2017 in several member states, including France and Germany, with populist and Eurosceptic parties set to put in a strong showing.

Many people believe the emergence of these parties highlights the true nature of the current crisis within the Union. They symbolise the lack of confidence in the EU among parts of the population within member states – a lack of confidence that stems in part from dissatisfaction with the operation of their own national political system. Domestic politics and European politics have thus become inextricably linked, and this is reflected in the crisis of confidence referred to above. That crisis of confidence could seriously encumber the operation of the EU and the unity within it. With fragile public support in member states, decisive European action will be difficult if not impossible.

What, in short, is the state of the Union in 2018? And what can be expected in the next five years? After Juncker’s warning in 2016, are there now grounds for more optimism or does the Union remain under heavy pressure?

These questions are considered in terms of various dimensions. The first part of this paper addresses the challenges facing the EU. The next part looks from various perspectives at the forces putting pressure on the cohesion and responsiveness of the EU. That is followed by a discussion of the implications of this for the functioning of the EU as a political and administrative system. Can the EU respond appropriately to these forces. What are the crucial requirements for this and are they in place in the Union? This paper ends with a discussion of what this means for the position of the Netherlands.

The challenges

Optimism

Whereas Juncker’s 2016 State of the Union address was characterised by concern about the future of the Union, his 2017 and 2018 speeches struck a more optimistic tone. In 2017 he spoke of a ‘window of opportunity’ to deepen and strengthen the European integration process.[2] In 2018 he emphasised the EU’s ability to play a role in the world, provided it acted as a union: ‘United as a Union, Europe is a force to be reckoned with’.[3]

The optimism of 2017 and 2018 was inspired by two developments in particular. First, the feared ‘populist revolution’ did not materialise in 2017. That was a year of elections in a number of EU member states, principally Germany and France. Although Eurosceptic parties strengthened their position overall, Angela Merkel remained in power in Germany and the strongly pro-European Emmanuel Macron won the presidency in France. The second factor was the recovery from the economic and financial crisis. This crisis that started in 2008 had a major impact on public support for European integration, particularly in those Eurozone member states that were forced to take drastic austerity measures, while at the same time having to contend with high or very high unemployment, particularly among young people. The position in 2018 is that the European economy has gone through an extended period of growth. Unemployment has fallen sharply. And even Greece, the problem child, is no longer being drip-fed with support from the European Stability Mechanism (ESM).

But challenges too

Notwithstanding these positive developments, the EU faces a number of serious challenges which, if member states are unable to respond appropriately, will continue to weigh on the EU’s potential in the years ahead.

The first concerns the strength of the European economy and the stability of the Eurozone, including the financial system and its constituent banks. It is true that a series of measures were taken in response to the economic and financial crisis to make the EU crisis-proof. But many people consider it highly questionable whether the Union, the Eurozone in particular, is robust enough to cope confidently with another crisis. The concern focuses inter alia on the extent of economic divergence between countries (particularly the North-South dimension), the high national debt of a number of Eurozone member states, including Italy, the size of the ECB’s asset purchasing programme as part of its quantitative easing monetary policy, and the fragility of parts of the European financial system.

The second challenge is the migration problem in relation to the issue of integration of migrants within member states. In some of them the migration pressure has eased – in some cases substantially – partly due to the agreement with Turkey. Meanwhile the situation on the EU’s southern borders (Syria/Libya) still is so unstable that there is a real danger of a resurgence of the migration crisis. Continuing migration pressure is also considered likely over the longer term having regard to the demographic, economic and political developments in parts of Africa. The existing migration continues to weigh on relations between a number of member states (both North-South and East-West), with migration and the EU’s (assumed) role in it remaining a useful means of political mobilisation for populist parties within member states. In any event, the instability on the EU’s southern flank, encompassing the ‘greater Middle East’ and large parts of Africa, poses a particular challenge for the Union from the point of view of security policy, with the Union presently unable to play a significant political role in parts of these regions, notably Syria.

This latter point, thirdly, exemplifies a set of external challenges, with the main headache being Brexit, the UK’s departure from the EU. This is due to take place on 29 March 2019 in accordance with article 50 of the Treaty on European Union. At the time of writing it is unclear whether this date will be met, i.e. whether there will be agreement between the UK and the EU about a separation deal and their future relationship. This is mainly due to the disunity in the UK and within Prime Minister May’s Conservative Party. The danger that Brexit could herald further departures appears to have receded. At the same time, the EU has every interest in maintaining a close and workable relationship with the UK after March 2019 having regard to the border between Ireland and Northern Ireland, mutual trade, the financial position of the City of London, information exchanges on security, etc. . If the divorce leads to a hard or no deal Brexit, however, the EU will have to contend with a difficult and possibly unpredictable partner on the other side of the Channel in the years ahead.

The relationship with Russia – and that relationship in the broader context of Eastern Europe – is a second external challenge. Aside from the situation in eastern Ukraine, where there appears to be a ‘frozen conflict’,[4] the main challenge lies in the policy of divide and rule and social subversion being pursued in a hybrid fashion by Moscow and to which some present and prospective EU member states are sensitive (see also the next section). A disturbing point from a European perspective is that Russia is seeking particularly to strengthen its own influence in the Balkans, partly by fomenting resistance against the EU.

With Donald Trump in office the EU also faces a third external challenge on a flank that has certainly known crises in the past, but has always proved to be the most stable relationship over time: the transatlantic relationship. The current administration’s America First policy is putting great pressure on this relationship, both with regard to security policy (NATO/European defence spending) and in the economic sphere (particularly trade).[5] Even more disturbing for the EU is the fact that the Trump administration is loudly distancing itself from the Union’s favoured concept of effective multilateralism (including the WTO, Paris Climate Agreement and Iran nuclear deal) – i.e. a rule-based international order – a concept on which European cooperation itself is based. This development symbolises also the growing distance between America and Europe in terms of fundamental values that largely characterised their post-war liberal international order: democracy, rule of law and human rights.

A sovereign EU

In view of the above it should not be surprising to hear calls on many sides for greater unity and effectiveness on the part of the EU. Chancellor Merkel, for example, emphasised the need for Europe to take its fate into its own hands:

We Europeans must really take our fate into our own hands, naturally in friendship with the United States of America, in friendship with Great Britain and – where we can be – as a good neighbour to Russia. ... But we must know that we alone have to fight for our own future, as Europeans, for our destiny.[6]

This call is consistent with the posited need for ‘strategic autonomy’[7], an EU that defends its own interests internally and externally and which, in the words of Jean-Claude Juncker, can present itself as ‘sovereign’: ‘the time for European sovereignty has come’. [8]

Confidence and Unity in the EU

But the most important question here is whether there is sufficient unity among the member states and whether they have the necessary public support for such steps. What is the state of the Union in this regard and what are the most likely developments in this field in the years ahead?

Confidence in the Union and its member states

Confidence in the European Union has been under pressure for some time. It declined steadily particularly since the start of the economic and financial crisis. Whereas 57% of those questioned in 2007 expressed a positive view of the EU, this figure had fallen to 33% in the spring of 2016.[9] It is true that there are differences between member states, but in general the trend was declining. In recent years though there has been an upturn. The latest Eurobarometer survey shows average trust in the EU among citizens rising significantly to 42% in the spring of 2018.[10] At member state level too there is broadly a rise in trust, but in 13 member states a majority of the population still has no confidence in the Union.[11]This rising trend is explained in part by the improvement in the member states’ economic position; the worst of the economic and financial crisis appears to have passed. The prospect of Brexit has also led to a more positive attitude towards EU membership. Asked whether they would prefer to leave the Union or remain, more respondents were in favour of continued EU membership in 2018 than was the case before Brexit. An observation that is also borne out in the Netherlands by the latest Burgerperspectieven survey by the Netherlands Institute for Social Research. Here a majority of the surveyed Dutch population views the EU positively and only a very small minority wishes to see the Netherlands leave the EU (Nexit).[12]

This more positive trend does nevertheless need to be qualified by a number of observations, requiring caution with regard to developments over the next five years. The Clingendael Strategic Monitor 2017, for example, noted that confidence in the EU depended largely on developments within member states. The EU as an administrative tier and political system has become inextricably bound up with the political mood in member states.[13] In this regard, it is firstly notable that after an upturn in confidence within member states in their own government and parliament, this has now fallen again, in any case remains fairly low and, moreover, lower than confidence in the EU as an administrative tier.[14] Here too there are of course differences between member states.

Second, although there was relief in 2017, particularly after the elections in France and Germany, that the feared populist/Eurosceptic revolution had not materialised, a series of events in member states since then have shown that populism/Euroscepticism is still a force not to be underestimated, with consequences at European Union level, not least for the functioning of the Union as a community of values. The parliamentary elections in Austria, for example, resulted in a government which includes the Eurosceptic Freedom Party of Austria (FPÖ). In Italy, after a lengthy period of coalition-building, a government came to power consisting of the right-wing populist Lega Nord and the left-wing populist Five Star Movement acting under a strongly euro critical coalition agreement. In Sweden the Eurosceptic/extreme-right Sweden Democrats scored a major victory during recent elections. This, combined with the nationalist and illiberal tide that has swept across Central European member states such as Hungary, Poland and Romania, shows that populism and Euroscepticism, coupled with nationalistic and xenophobic trends, are now firmly embedded into the mainstream of the European political landscape.

Third, this development at member state level is consistent with a trend that has been evident for some time whereby the traditional political centre in member states, dominated by liberal, Christian and social democratic parties, has given way to more extreme parties on both the left but particularly the right side of the political spectrum. This political centre ground was traditionally the mainstay of a pro-European stance in member states that was based upon an attitude of ‘permissive consensus’ among the population. The crisis of confidence described above put an end to this and as a result the European project has become a politicised issue within member states. ‘Permissive consensus’ has now turned into ‘constraining dissensus’.[15]

Finally, populism and Euroscepticism have many different causes, both economic and sociocultural.[16] The dominant picture revealed by research is that people become susceptible to the populist and Eurosceptic message particularly through a (perceived) feeling of loss of control over their own fate and country – a message centred on a belief that the dominant political elite no longer represents the interests of the ordinary people. In this vision globalisation and the disappearance of borders and the liberal-cosmopolitan cultural relativism of the (political) establishment are undermining the identity and cohesion of society and pose a threat particularly to the position of groups that are vulnerable in terms of level of education, employment and ability to adjust to change: the so-called losers of globalisation who are uncertain about their future. In a world of increasing economic inequality, this provides a fertile breeding ground for populism. Populism that translates directly into Euroscepticism in which the EU is seen as the cause and catalyst of the erosion of a member states’ societal cohesion and identity as a result of open borders, migration, free movement of labour, competition, imposed austerity, etc., without vulnerable groups profiting from the (promised) benefits of European integration. These forces driving populism and Euroscepticism are still very much present in EU member states.

Divisions between member states

This all becomes more acute at EU level, where there are (growing) divisions between member states, disagreements which result partly from developments within countries. During the economic and financial crisis the fault line centred on the North-South dimension of the EU. Southern member states felt compelled by the rich northern countries – chiefly Germany – to take drastic austerity measures in return for financial support from the EU/euro funds. This North-South divide has diminished somewhat since the nadir of the crisis, but it continues to lurk under the surface, as has become clear with the arrival of a populist government in Italy and its announcement of an expansionary budgetary policy. There are fears that this will cause a resurgence of the Euro crisis, including a deepening again of the North-South divide .

Over the past few years, however, divisions have emerged particularly on the East-West dimension, with the arrival in office of populist, nationalist governments being an important factor in Eastern member states. Two interrelated issues are involved here: first, the migration problem in which Central European member states are refusing to receive their share of refugees, usually citing cultural/religious arguments; second, measures taken in countries such as Hungary, Poland and Romania with regard to the rule of law and human rights in general, which are at odds with the fundamental values and principles on which the EU is based. In this regard deep dividing cleavages have recently emerged within the Union which could erode the core of what the EU is or pretends to be – its existence as a community of values.

The divisions between member states must also be seen from the perspective of external developments. The Union is being assailed from the outside by three powers intent on dividing it. Prime among these is Russia. Authoritarian, nationalistic and frustrated, Moscow is trying to prevent the EU from acting as a power-political rival on the Eurasian continent, in particular in the Russian neighbourhood (‘near abroad’). Russia is succeeding in that aim through a policy of divide and rule and of hybrid subversion. Examples can be found in the Balkans and the countries of Central Europe, including Austria. After Russia, China is adopting the same approach, but in a more patient manner. By providing aid and investments, inter alia through its New Silk Road (One Belt, One Road) initiative, it is practising the game of bilateral diplomacy, the aim of which, as some fear, is to detach countries from the broader framework of the EU. The Chinese initiative aimed at close cooperation with a number of Central and Eastern European countries – the so-called 16+1 Cooperation Platform with the participation of 11 EU member states – is an example of this. And then there is the US, under a president who sees the EU as an enemy and Brexit as a blessing. With his policy of America First, his aversion to free trade and multilateralism as well as his criticism of NATO, his attitude is already weighing heavily on the transatlantic relationship and links with the EU. The current US president is not blessed with eternal political life of course, but eight years of Trump – and that is a real prospect – may impact severely on unity within the EU, in particular with sensitive matters such as trade and security on the agenda. In any event, the EU is being challenged from three sides.

Forecasts and shocks

How sentiment develops in the years ahead between and within member states will depend on a number of factors. The first concerns elections at national and European level. Attention should be focused particularly on Germany and France. After what by German standards was an unprecedentedly long period of coalition-building, Angela Merkel’s fourth government came to power in March 2018. It extends the previous coalition between the CDU/CSU and SPD, the ‘Grand Coalition’. This coalition resulted from elections (September 2017) in which the three parties suffered major losses, particularly the SPD and CSU. This has been one of the factors putting heavy pressure on collaboration between these parties. Whether the fourth Merkel government will survive the bad results of the recent regional elections (Bavaria and Hessen) is questionable. But the European Parliament elections in May 2019 may be even more important in this regard. These could end in Germany in a ‘referendum’ on chancellor Merkel – who already has announced to step down as chancellor at the end of her fourth term in 2021 - and her Europe policy. A poor result for her and/or her coalition partners could further weaken her position, both domestically and in the EU. The same applies to France, where president Macron has seen his popularity fall rapidly as he struggles to maintain unity in his government and political movement and public support amongst the population. The recent violent street protests across the country by the ‘yellow vests’ movement show that discontent and distrust towards the political establishment and the president in particular is not only diverse in its demands for reform, but also that it is widespread and deeply entrenched into French society.

A second factor concerns the economic development in the EU. The economic and financial crisis had far-reaching consequences for many member states, particularly the southern ones, in the shape of high unemployment, including youth unemployment, austerity measures and an erosion of the protection offered by the welfare state. More in general, the crisis led to uncertainty for citizens with regard to their employment, income and future. Now that economic recovery is under way, citizens expect to receive the benefits of it. In addition, the political/ideological tide in member states is turning. This is partly due to the economic and financial crisis, the causes of which many people put down to the unbridled market capitalism of recent decades and the associated globalisation. Constraining these forces under the banner of an ‘EU that protects’ is high on the European agenda, partly to win back the trust of citizens. The latter will prove a lot more difficult in the event of another economic downturn or crisis. Such a negative scenario is certainly not beyond the realms of possibility given the rising global trade tensions and very high levels of global public and private debt worldwide and in various EU member states. A new economic crisis may severely test the resilience of the EU/Eurozone and public support in member states for the integration project.

A third factor is the problem of migration. An upturn in migration flows to the numbers seen some years ago will seriously strain relations between and within member states, since even with today’s much lower numbers the member states have been barely able if at all to agree a common approach. That migration is also a highly sensitive subject in member states does not make decision-making at EU level any easier. In this regard the Union depends on circumstances over which it has little influence: developments in the security realm in the Middle East and parts of Africa.

The above also shows that external developments could have a major impact on cohesion within the EU in the years ahead. They may have a positive effect in terms of awareness of individual member states’ vulnerability in a world which is more unstable and insecure, a geopolitical wake-up call. But whether that will happen is by no means certain. At present the recent crisis of trust both at EU level and in member states seems likely to persist. After all, populism and Euroscepticism remain significant forces. Unity among member states will also remain fragile in many areas, impeding decision-making and reform at EU level.

The European System

What does this all mean for the EU system, i.e. the highly institutionalised system of institutions, rules and procedures in which member states negotiate and cooperate? Will that system be able to develop the responsiveness it needs to survive in the future?

An initial question here is whether Brexit will cause more member states to follow the UK through the exit door. That seems unlikely. Brexit has shown that leaving the EU is a very complicated and uncertain process, with potentially high costs for the departing member. In that regard the economic and political consolidation and economic interdependence have evolved too far to be broken ‘easily’.

At the same time there are grounds for concern on various dimensions. This applies first and foremost to leadership within the EU. The EU has no central authority. Leadership has to come from national political leaders coming together in the European Council. The role of that body has rapidly grown in importance in recent times, with crises partly serving as a catalyst. [17] The European Council is dominated by the Franco-German axis, with Angela Merkel’s Germany often being the decisive player. The major question for the years ahead will be whether the two countries will still be able to fulfil this leadership role having regard to their internal political situation (see also the previous section). Without their leadership there is a risk of drift, paralysis and fragmentation.

A second dimension concerns the Union as a community of values. This basic feature is under great pressure as a result of the illiberal developments in Central European member states as described earlier and of populism and Euroscepticism in general. Progress in the integration process will be difficult if not impossible with a continuing or even deepening of these frictions between member states.

This is also due to the fact that this development in combination with other disagreements puts pressure on the principle of consensus as the main method of decision-making within the Union. Such consensus will be more difficult to achieve in a more divided European Union.

The consequences of the above will be felt on the European reform agenda. The Union adopted an ambitious leaders’ agenda under the leadership of European Council president Donald Tusk.[18] The aim is to make the EU ready for the future, with priority focusing on a deepening of the Eurozone, the migration problem and future financing of the EU, alongside the theme of the Union’s external relations. In a more divided EU it will be difficult to reach agreement on these issues, also because the aim of ever closer Union is shared by less and less member states. Moreover, a fundamental reform will probably require amendments to treaties, with all the attendant risks of a new treaty being rejected within member states.

In response, cooperation in smaller groups is now often being put forward again as a fall-back option, implying a more varied, diverse, multi-speed Europe.[19] But that option too – if it is practically achievable at all – requires a credible answer to the biggest challenge facing the EU: building sufficiently strong public support for the EU within member states.

Conclusion: Implications for the Netherlands

The European Union is expected to remain under constant pressure in the years ahead due to the continuing crisis of trust in member states and the lack of cohesion between them. This will have a major impact on the Union as a political system, particularly the availability of political leadership in the EU. This observation is significant given that the next five years may prove decisive for the EU’s existence as an effective and legitimate system of integration and cooperation.

For the Netherlands major interests are at stake, both economically and politically. The Union has always been of vital economic interest to the Netherlands. But in a world composed of shifting tectonic plates European cooperation in the broad area of security (including internal security) has become steadily more important. Against this backdrop fundamental questions arise with regard to Dutch policy regarding the EU. First, in response to the departure of the UK – always seen as a natural partner of the Netherlands – the question arises of what this means for the positioning of the Netherlands within the European coalition landscape. Second, there is the question of whether the Netherlands should further relinquish its traditional Atlantic orientation towards the US in favour of a more continental European focus with regard to security. Third, there is the question of what the most realistic fall-back options are for the Netherlands if it cannot defend its interests within the community of soon-to-be 27 member states. What speed will the Netherlands choose then?