Differentiated integration in Europe

and its potential implications for the EU’s neighborhood

Differentiated integration as a scholarly concept developed together with the real-life increase in differentiation (Andersen, Sitter 2006) in the form of opt-outs, exemptions, discriminations, enhanced cooperation, constructive abstention, special clauses, additional protocols, and many other instruments.

In the last two decades, differentiation has been the dominant feature of European integration. (Dyson, Sepos 2010). It is argued that approximately half of the EU policies are implemented in different ways (Lord, Leruth 2015). Some Member States opt out (internal differentiation), whereas some non-member states opt in (external differentiation), which results in the need for reconciling heterogeneity inside and outside of the union (Genschel, Jachtenfuchs 2014).

The abovementioned constitutes the essence of differentiation and therefore the differentiated integration can be best understood as an institutional response to the increasing heterogeneity of the Member States’ preferences and capacities resulting both from the widening and the deepening of the EU (Leuffen et al. 2013; Schimmelfennig 2014).

The political idea of differentiated integration can be traced back to the famous Tindemans report (1975), whereas as a legal concept it appeared in the Single European Act (1986). Academic debates on the topic fi nd their roots in Dahrendorf’s formulation of Europe a la carte (1970s.). Already by the 1980s scholars had identifi ed several variations of differentiated integration and the scientifi c discourse has exploded ever since. From that moment on, many various conceptualizations can be traced in literature, including fl exible integration, multi-speed Europe, Europe as an empire, Europe of variable geometries, concentric circles, hemispheres, etc.

Yet differentiated integration is understudied in comparison with the huge amount of literature on integration as a whole. The reason for it may be that it has been limited by an assumption that differentiated integration would erode over time. That Member States (and their neighborhood) would converge over time, the same variously applied policies would fi nd their cohesive end (Lord, Leruth 2015). This assumption was however challenged by the crisis and other developments inside and outside of the EU (Lemke 2014). The new assumption suggests that we are heading towards some more diversifi ed forms of integration. It was John Eric Fossum who claimed that the EU of tomorrow may combine all three of the following: accelerated integration for some, outright disintegration for others and greater differentiation for

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the rest (Fossum 2015). The idea that differentiated integration amounts to little more than a process of convergence on similar outcomes at different speeds seems increasingly questionable. Instead we observe a growing consensus among the observers and analysts that differentiated integration is a permanent organizational principle of the EU. The need to manage divisions or disagreements will not simply go away.

In this context, it is noteworthy to mention Brexit, which constitutes an important milestone in the processes of differentiation. A legitimate question here is what consequences Brexit may bring for differentiated Europe. First, potential strengthening of the center – the core of integration, which is Germany without any balancing power (taking into account France’s relative status after the economic crisis). Secondly, the EU without Britain also means the EU without free marketers – it was the UK (no matter if ruled by the Labor or Conservatives) who brought the liberal component to the European integration project. Less Britain in Europe also means fewer liberal ideas. Thirdly, we have learnt the limits of internal differentiation – as a result, Britain placed itself outside of united Europe. In addition, the British exit potentially widens the circles of differentiated integration.

It goes beyond the known schemes of inner and outer core as well as inner and outer peripheries. To the already existing categories of members and non-members, it adds the category of a for member, unknown so far in the European studies. Brexit gave the differentiated integration new impetus and dynamics. Hopefully it was not a turning point, reversing the trend towards disintegration.

The observed increase in differentiation (Wallace, Wallace 1995) came to the limits of carrying the potential for disintegration. Exemptions from the Eurozone and the Schengen area have already been quite prominent examples of differentiation. But undermining one of the four freedoms (free movement of people) attacks one of the fundamentals and questions the very idea of the European integration project. Openly opposing the very core of the Single Market turns the direction of the integration trajectory.

The economic theories of international integration inform us that it is not only the free movement of products and services which constitutes the common market. But for its creation and functioning, it is conditional to liberalize also the free movement of the factors of production: the capital and the labor. This is why the four freedoms were treated so far as four inseparable elements of one concept.

The story of European integration can be told as a story of its deepening and widening – these two dynamics found the mechanics of differentiation.

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Consequently the progress in integration meant the increase in differentiation over time. Up to a certain point some countries supported the widening of the European Communities (later the European Union) as a “panacea” for the deepening. The interplay between the two dimensions of integration seemed to effectively answer their allergy to the “ever closer union”. The alternative to the “ever closer union” appeared to be not less of an “ever closer union” but more “ever looser union”, which is quite a substantial difference. The trajectory of the European integration project has changed and the threat of disintegration is looming on the horizon. Emerging ideas of differentiated integration are trying to answer this growing threat.

At the preset, the European integration project is not only a game of deepening and widening, but also of differentiation of a new generation.

Reluctant Europeans (Gstoehl 2002) like Switzerland or Norway had to fi nd a solution to the risks associated with economic isolation and reached a state of “membership without accession” or “unfi nished integration”. After calculating the costs and benefi ts of membership and non-membership, they decided to gravitate closer and closer to the EU core. We know there is life outside of the EU (in Norwegian, Swiss or Ukrainian variants).

Differentiation in Europe has reached such a phase, scale and depth in which it is legitimate to agree to the argument that it is a systematic characteristic of the European integration project as seen in the 21^st century. Frank Schimmelfenning, Dirk Leuffen and Berthold Rittberger (2015) wrote even about the system of differentiated integration in which differentiation is an essential and enduring characteristic of the EU.

Even though there is a difference between the EU Neighborhood Policy countries and other countries (with candidate status, associated, belonging to the European Economic Area or Switzerland – framed by the packages of Bilateralle) – from the point of view of differentiated integration they can or even should be analyzed together. The different levels and statuses they represent are the essence of differentiated integration concepts. In the end many of the EU neighborhood policy countries seek to become, one day, a member or linked closely with the EU, or the common market at least.

As some skeptical voices say, the enlargement is the only EU foreign policy that really works. And this statement is important from the point of view of EU’s relations with its neighborhood. Despite calling itself a soft power, the EU exercises quite a top-down approach when implementing its conditionality policy towards its partners that are under association or enlargement agenda. The conditionality of norms transfer works perfectly well until the country is in the waiting room (not too long however, as the

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Turkish example shows). However, once you are invited to the party you do not have to behave too well any more – as the Hungarian or Polish examples show. Until now (2017) the EU does not prove to be effective in advancing or even defending the standards of democracy, the rule of law and human rights standards even at its own territory. It is not only a digression – this remark raises legitimate questions about the effi ciency and ethics of democratic conditionality outside and inside of the EU. It is contestable whether you can expect certain standards of democracy from the outsiders, in times when you cannot answer the problem of democratic defi cit inside of the EU – understood as the EU as well as individual Member States (Italy, Greece, Hungary, Poland or even Ireland).

Subsequent waves of enlargement (especially embracing the countries outside of the Western cultural hemisphere) taught us a lesson that the association and enlargement agenda is a suffi cient framework to keep some states mobilized in their democratization efforts. However, political and economic transition trajectories turn when the accession conditionality disappears. Full membership status demobilizes some Member States’ (or their elites’) commitment to the shared values and norms to such an extent that they become similar to not only the pre-accession phase, but sometimes even resemble some elements of the pre-transition system.

Conclusions

In the upcoming future we should expect more internal differentiation inside of the EU. This fact combined with the external differentiation in the EU’s neighborhood may lead towards a situation in which the clear and thick borderline between members and non-members is blurred. So far, the deepening of EU integration has meant more and more diffi cult integration effort for the newcomers (more EU legislation to adopt, more standards to adapt to, more changes to undergo). It has also meant the possibility of using various excuses for not granting the full membership status (and its benefi ts). In today’s Europe we observe the departure from dichotomous thinking of a zero-one game. The black and white picture of members and non-members evolves into a much more complicated puzzle.

Today, the benefi ts of full membership may not be as lucrative as they seemed one or two decades earlier – the EU budget is shrinking and it may get divided into two parts – (Eurozone budget) which means more resources available for the core countries. This may result in the current EU

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periphery members becoming even more peripheral (due to the growing Euroscepticism related to diminished attractiveness of EU membership).

Certainly the costs-benefi ts analysis of the full membership scenario will be more complicated (in 2004 or 2007 it seemed a rhetorical question). Various countries (or social groups/interest groups/industries, etc. inside them) may be interested only in some benefi ts while the costs are not distributed equally either.

A classic example of unequal distribution of the EU membership costs and benefi ts (or more importantly their perceptions and misperceptions) was the case of the UK. At the same time, the British special case shows the limits of internal differentiation. Brexit may become an impulse for an EU reform, it may also result in various new concepts of quasi-membership solutions that can be useful for other countries of the EU neighborhood.

They can potentially be both positive and negative for the neighboring states. More differentiation may lead towards endless status of peripheries or semi-peripheries. However, states that would never be likely to be granted the full membership status could gain some opportunity to participate in the European integration process. In both cases we will experience an ever looser instead of ever closer union that was prescribed in the treaties.

The same will, most probably, be observed inside of the European Union.

The tendency to build exclusivist circles of deeper integration will widen the inner and outer core of the union, as well as its inner and outer peripheries.

Wider spectrum of integration will make the countries of the EU’s outer periphery much more similar to the EU’s neighborhood – especially the countries willing to participate in the integration project in a more advanced manner. The distance between the core and the periphery will not only become longer, but it may also be more diffi cult to change the status in the system of differentiated integration. Due to more exclusivist circles of integration, it may be available only for a limited number of countries representing specifi c socio-economic parameters, as well as readiness to participate in the cost-sharing of deeper integration. The balance of costs and benefi ts of a specifi c position in the system of differentiated integration will not only vary a lot, but it will also be dynamic and change according to the evolving constellation of the whole system and its surroundings.

References

Andersen, S., Sitter, N. (2006), ‘Differentiated Integration: What is it and How Much Can the EU Accomodate?’, European Integration, vol. 28, No. 4, p. 313–330.

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Dyson, K. and Sepos, A. (2010), ‘Differentiation as design principle and as tool in the political management of European integration’, in: Dyson, K. and Sepos, A. (eds.), Which Europe? The Politics of Differentiated Integration, Basingstoke: Palgrave, p. 3–23.

Fossum, J.E. (2015), ‘Democracy and Differentiation in Europe’, Journal of European Public Policy, 22:6, p. 799–815.

Genschel, Ph., Jachtenfuchs, M. (2014), ‘Introduction: Beyond Market Regulation.

Analysing the European Integration of Core State Powers’, in: Genschel, Ph., Jachtenfuchs, M. (eds.), Beyond the Regulatory Polity? The European Integration of Core State Powers, Oxford: Oxford University Press, p. 1–23.

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Lemke, Ch. (2014), ‘Challenging the “Ever Closer Union”: Political Consequences of the Eurozone Crisis’, American Foreign Policy Interests, 36, p. 18–24.

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Leruth, B., Lord, C. (2015), ‘Differentiated integration in the European Union:

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Explaining Variation in the European Union, Basingstoke: Palgrave.

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discrimination or equal treatment?’, Journal of European Public Policy 21 (5), p. 681 – 98.

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