A Two Speed Europe – This time for real?

Veteran observers of European affairs know that the proposal for a “two-speed” Europe has been bantered about European capitals for over a decade. The idea is essentially this: there is a “core” group of European nations who should form a more integrated, closely knit union, and an “outer” group of European nations that, because of their lack of willingness to give up national sovereignty, should be regarded as EU members with lesser status.

The “two speed” or “core Europe” concept has never been fully accepted within Europe out of fears that it might lead to a politically divided EU. Moreover, this approach has been viewed widely by many to be an anti-English initiative, aimed at reducing London’s influence in order to punish its reluctance to hand over sovereignty to the EU (It is assumed that in any such plan the UK would not be part of the “core”). But the current economic circumstances may require the two-speed Europe plan to become reality.

Germany, who is largely footing the bill to bail out its financially troubled Mediterranean (and Irish) partners in the European Union, seems now convinced that it must push for greater control over the national budgets and banking systems of other EU nations. The only true means of doing this is by seeking further integration of the EU member states into a single economic governance system. Naturally, this is opposed by the UK and other nations, however, as Germany presently holds the gold it seems well placed to make the rules. A story featured on Financial Times web site today updates the story:

“Angela Merkel said a core group of states needed to press on with European integration to fight the eurozone crisis, a rebuke to David Cameron, UK prime minister, who has called for more short-term crisis measures. Only hours before Mr Cameron’s visit to the federal chancellery, Germany’s chancellor said nations ‘in a currency union have to move closer together’, reinforcing the shift to ‘a multi-speed Europe’ which began with the introduction of the single currency. ‘We cannot just stop [the process] because one or other doesn’t want to join in yet.’” To read this story visit the FT website.

Can the UK or other nations really resist German plans to push for a “core Europe”? As the economic crisis deepens, it appears that this will be increasingly difficult to do as Greece, Spain and perhaps Italy, Portugal and even France will have to seek German financial help to stave off a deeper recession. With each passing day of worsening economic news, the possibility of the emergence of a new, smaller union of European countries dominated by Berlin, appears to grow.

Eye on Europe

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