The future of the EU in a world in deep disarray – 08/03/2023 – Martin Wolf

“The law of nations will be founded on a federation of free states.”

Thus the great German philosopher Immanuel Kant laid the foundations of his plan for “perpetual peace.” No part of the world embraced its idealism more fully than Europe after World War II. But is this big dream dead?

The British diplomat Robert Cooper brilliantly argued that we can divide the world into the “pre-modern”, by which he meant the parts where anarchy reigns, the “modern”, referring to the world of national “states”, and the “postmodern”, which he understood as Europe’s effort to create a federation of states, as Kant had proposed. Cooper argues that “what ended in 1989 was not just the Cold War or even, formally, the Second World War… What ended in Europe (but perhaps only in Europe) was the political systems of three centuries: the balance of imperial power and impetus”.

No one who knows European history should be surprised that states want to behave and relate to each other in a different way. In fact, only an imbecile wouldn’t understand that.

Yet how does this idealistic EU fit into our new world, in which the imperial drive is horribly visible at its borders? How does it fit into a world no longer characterized by what could plausibly be called a “rules-based international order” but rather by economic crises, pandemics, deglobalization and great-power conflicts?

Theoretically, perhaps, the “postmodern” European Union can survive in this new world, with its frightening impulses of destruction. But the post-1989 dream of a very different world order made it much easier for the EU to be the prosperous and peaceful continent it wanted. The United States exploited the “unipolar moment” by launching its military might around the world. This was not what Europe wanted, as its reaction to the war in Iraq demonstrated.

Some of the problems the EU faces stem from the fact that it is a confederation of states, not a state. The difficulties of managing divergent economies within a currency union are an inevitable result. The European Central Bank plays an essentially political role in holding economies together. The single market is not integrated in the same way as the US market. The lack of dynamism of information and communication technology must be explained in part by this reality: after all, only one European company, ASML, producer of chip manufacturing equipment, is among the ten most valuable technology companies in the world.

Such difficulties only tend to grow in this more nationalist and more fragmented world economy. The open world markets, on which Germany particularly depended, are becoming less open. That must be costly. Furthermore, the US is moving towards an interventionist and protectionist industrial policy. For the EU, such a shift creates existential problems. Similar efforts there are more national than European. This would threaten the single market and give greater power to member countries with more resources. Germany will be the best positioned. At the same time, higher energy costs in Europe than in the US are a threat to its own heavy industry.

However, two major threats to EU security have emerged. One is the confrontation with Russia, which, as many fear, could soon receive military support from China. This, however, is just one aspect of the division of the world into rival blocs, with incalculable consequences for everyone in the long term, but especially for the bloc that wants peace above all else. The other threat comes from the global environment. While the EU is at the forefront of climate policy, it is a problem it cannot solve alone, as it only produces 9% of global emissions and accounts for none of its growth.

So how can the EU, freed from the internal obstacles created by a sovereignty-obsessed UK, respond to a global environment so different from the one it expected some three decades ago?

Globally, it needs to decide whether it wants to be an ally, a bridge or a powerhouse. As long as the US remains a liberal democracy and committed to the Western alliance, the EU will be closer to them than to other great powers. In that world, then, you are more likely to be a subservient ally. The role of a bridge would be natural for an entity committed to the ideal of an order governed by rules. The question, however, is how to bridge a deeply divided world, in which the EU is much closer to one side than the other. The third alternative is to try to become an old-style power in its own right, with resources devoted to foreign and security policy commensurate with its scale. But for that to happen, the EU would need a much deeper political and fiscal union. The obstacles to this are many, including a deep mutual distrust.

Internal reforms must substantially depend on the role the EU intends to play in this new world. The more active and independent it wants to be, the more crucial it will be to deepen its federalism. Such a deepening would undoubtedly be risky, as it would arouse nationalist reactions. It may also be impossible to agree. But some deepening may be unavoidable, given the need for a more robust security position and the visible fragility of divergences across the eurozone.

The Kantian dream did not prove to be exportable. We live in a world characterized by disorder, nationalism and conflict between great powers. This is not the world the EU dreamed of. But if its leaders are to preserve their grand experiment in peaceful relations, they need to fortify it for the storms.

Translated by Luiz Roberto M. Gonçalves.

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