The European Commission presented proposals on 15 December related to the Schengen area and the Frontex border agency, with the European Council due to meet on 17-18 December to discuss the proposals and how to resolve the ongoing refugee crisis. In light of the proposed reforms, Valentin Kreilinger writes that Europe’s handling of the Eurozone crisis offers four key insights for attempts to manage the current crisis which, if implemented correctly, could help remedy the design flaws contained within the Schengen system.
Both the Economic and Monetary Union and the Schengen area suffer from serious design flaws. This is because, as German Chancellor Angela Merkel put it in parliament on 25 November 2015, Europe “didn’t go quite to the end of what would have had to be solved politically”. In both cases, a core pillar of European integration has been threatened. Even though the Economic and Monetary Union has been stabilised, many think that in the long term it does not remain viable in its current form.
Nevertheless, the way in which Europe dealt with the euro crisis (e.g. reducing the immediate risk of contagion, creating emergency bailout funds and making the governance of the euro area stronger), offers a whole range of measures and lessons for the current Schengen and refugee crisis. These lessons are not capable of bringing about miracles, but they provide guidance for a coherent approach to save Schengen. This ‘euro toolkit’ consists of four sets of instruments that have not yet been exploited fully during the crisis.
Meetings at the highest level
Heads of State and Government have held countless European Council meetings and newly created “euro summits” since 2010, in order to find responses to the euro crisis. They often agreed to too little too late, but these meetings have been a dominant feature of the euro area’s reaction to the financial and economic crisis.
In the current situation, EU leaders have started to use this instrument as well: European Council meetings in September, October and November 2015 all dealt with the refugee crisis and – indirectly – with Schengen, but the involvement of the four Schengen area members outside the EU (only 22 out of 26 members of the Schengen area are EU member states) at the highest political level is an open question.
Independent bodies take decisions
Most prominently, the European Central Bank made purchases of sovereign debt on the secondary market under its Securities Markets programme and promised to do “whatever it takes” to save the euro with its Outright Monetary Transactions programme. Other examples for relying on independent bodies as a reaction to the euro crisis are the Single Resolution Mechanism and Fiscal Councils at the national level.
With its proposal on 15 December to give more powers to Frontex and transform it into a “European Border and Coast Guard Agency”, the European Commission is resorting to exactly the same mechanism in order to better protect the external borders of the Schengen area. Direct intervention rights for Frontex and independent assessments of the situation at the borders are first steps towards creating a European border control system.
Change primary and secondary law
The legal framework for the Economic and Monetary Union was strengthened as a direct response to the euro crisis: Two legislative packages (the ‘Six-Pack’ and ‘Two-Pack’) enhanced fiscal and economic policy surveillance in 2011 and 2013 by, for instance, addressing statistics and reporting requirements. In addition, 25 member states signed and ratified the Treaty on Stability, Coordination and Governance with even tougher fiscal rules in 2012. The European Stability Mechanism and the Single Resolution Fund were also created on the basis of separate international treaties in 2012 and 2015.
Until now, the EU response to the refugee crisis and Schengen has not moved to the stage where concrete proposals to change primary or secondary law are on the table, but the Dublin regulation and the Schengen Border Code need to be revised soon. The registration of asylum seekers and – just like for excessive public debt and deficits – reliable statistics are another problem in the refugee crisis.
More efficient decision-making
For the reinforced excessive deficit procedure, voting by “reversed” qualified majority was invented, the European Banking Agency and later the Banking Union received “double” majority mechanisms in order to bridge the gap between the euro area and the rest of the EU. In addition to that, the European Central Bank did not determine its interventions unanimously – German members of its board or the Bundesbank opposed them, but were outvoted. Numerical rules govern, for instance, the Macroeconomic Imbalances Procedure and more internal differentiation in the euro area will happen with “enhanced cooperation” on the Financial Transaction Tax.
In the refugee crisis, the decision of 22 September 2015 to agree the relocation of 160,000 refugees by qualified majority is an example of more efficient decision-making. Referring to the tensions that have arisen from this decision, Donald Tusk has admitted that in the medium and long run qualified majority voting cannot be used in refugee and asylum policies as an instrument of coercion.
Numerical rules (quotas) to relocate refugees were agreed, but relocation is only moving forward at a snail’s pace. The European Commission may propose to give itself the power to adopt a decision that would allow the new European Border and Coast Guard Agency to intervene immediately in crisis situations at the external border. Only a reversed qualified majority in the Council could block this. Finally, the option to resort to “enhanced cooperation” in the refugee crisis on the basis of Article 20 TEU has not been used yet.
The ‘euro toolkit’
Ultimately, using this ‘euro toolkit’ means embarking on an incremental process. Such processes have been criticised as ‘muddling-through’ or exploratory governance, but this is simply how the EU works. The main difference between the two crises is that, in the euro crisis, as a powerful Leviathan, the European Central Bank stood ready to do “whatever it takes” to save the euro. An equivalent federal institution is missing in the Schengen area.
There is also no “excessive deficit procedure”, no measuring of “imbalances”, no “Protocol n°14” for a Schengen group (like the Eurogroup) and differentiated integration is more complicated because Iceland, Liechtenstein, Norway and Switzerland are inside Schengen, but are not EU member states. There are, however, tools from the response to the euro crisis that can be used now to help resolve the issues being faced.
One irony is that while the UK is outside of both the euro and Schengen areas, the crises might nevertheless have a profound impact on the upcoming EU referendum campaign and tip the balance towards a vote to leave. Meanwhile Germany, the country that was most reluctant to introduce increased solidarity in reaction to the euro crisis, is now demanding more solidarity from its European partners to share the burden during the refugee crisis.
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Note: This article gives the views of the author, and not the position of EUROPP – European Politics and Policy, nor of the London School of Economics.
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Valentin Kreilinger – Jacques Delors Institut – Berlin / Hertie School of Governance
Valentin Kreilinger is a Research Fellow at the Jacques Delors Institut – Berlin and a PhD candidate at the Hertie School of Governance. His main research interests are differentiated integration, European and national parliaments and reforming the Economic and Monetary Union. He graduated from the LSE with a MSc Politics and Government in the European Union. He tweets @tineurope
Nice piece Valentin!
The comparison is certainly instructive. I have to say though that I am somewhat reluctant to consider the handling of the Eurocrisis an “example”; it not only delivered too little at too slow a pace, but also has come at considerable costs and mistakes: most notably, Greece (and other bail-out countries) has been greatly harmed, EU democracy and constitutionalism have been compromised. In that light, I find it difficult to celebrate the intensification of European Council meetings, the empowerment of independent bodies, and the adoption of ad hoc treaties – like you do.
For sure, Schengen was an incomplete (or asymmetrical) construction: it is risky to abolish border controls if you do not have a harmonised asylum system or an integrated security policy (consider how the Belgian code orange last month suddenly stopped at the Dutch border). And for good reasons those latter two things are unlikely to happen any time soon.
However, the big difference between the Euro and Schengen is that the costs and risks of reversing Schengen are much lower and much more manageable. Indeed, much of the value attached to Schengen seems rather symbolic; I find it hard to identify any substantial downsides that are suffered by the EU members that are outside of Schengen.
One final parallel between the Euro and Schengen is probably that internal EU logic has led both of them to expand too quickly without taking sufficient regard of the large variations among their members. Both are in the end more viable and stable with a smaller core set of countries, and more demanding “convergence” criteria before new members can join. The Euro has been locked in in a way that prevents the viability of such a rerun. For Schengen I actually think such a scenario quite likely.
Thank you for your comment! Many of the developments in the Eurocrisis are indeed problematic and without substantive democratic control at the EU level, because democratic control of these measures at the national level varies largely.
The Schengen and refugee crisis risks deteriorating further – I think to some extent because it lacks the governance instruments that I mention. This approach to save Schengen would be incremental, trial-and-error and partly undemocratic. But these costs have to be weighted against the benefits that members inside the Schengen Area enjoy, e.g. cross-border commuters. Countries that are currently outside Schengen have chosen this situation voluntarily – others would fall back to a lower level of integration. It may be easier to dismantle Schengen, but not against the will of one member state either.
I think, despite divergence between member states, that the design flaws exposed by the Schengen and refugee crisis should be tackled quickly, with the instruments of the (albeit imperfect) toolbox of the Eurocrisis. Even then, problems might continue to exist for a long time. That’s not very optimistic (either). But dismantling/exit from the Euro, Schengen or the EU itself would seriously threaten European integration and thus all means of delegation, differentiation, and increasing efficiency should be used.
One central argument of yours I cannot leave unchallenged. That is the fallacy or rhetorical trick (I am never sure) of many (including, most famously, your Bundeskanzlerin) to equate any reversal of EMU or Schengen with a fundamental undermining of the whole “good” of European integration. I simply cannot see why we should not be willing, and able, to take some pragmatic steps back on Schengen. In my view the debate is badly served by ruling any de-integration steps out as a matter of principle. Moreover, if one believes in “trial-and-error”, then one should also own up to one’s errors – and the present situation demonstrates that Schengen in its current form has been an error.
Certainly, some specific interests will be harmed by reversing (part of) Schengen (like those of cross-border commuters, as you point out, and accidental tourists). But I find it hard to see how those specific interests justify us pushing on by way of an admittedly problematic and “party democratic” toolbox, and in a direction that has proven to be problematic in the first place.
Thanks, Ben! This is quite a good point. Maybe I have become merkelised? 😉
The so called “migrant crisis” this year has finally laid bare the problems with the EU, insomuch that it is not fit for purpose on any level.
Merkel decides to issue an unqualified invitation to every person in the world who wants a better life to come to Europe and then insists that all other countries must take a share of the migrants which arrive. Any country that said no was basically told toe the line or suffer the financial consequences.
Orban was the only EU leader to show any leadership qualities, not only erecting a fence to keep the migrants out but also flatly refusing to be dictated to by Merkel and Junker.
The terrorist atrocities in Paris showed that for all the flannel spouted from the EU, it couldn’t even manage its external borders on land.
I cannot wait for the referendum on the UKs membership, hopefully the “leave” supporters will win the day.
The idea that voting to leave the EU will make the UK less affected by the crisis is pretty baffling. Unless we’re going to make some kind of convoluted argument about asylum seekers decades from now getting EU citizenship by settling in Germany and then coming to the UK it won’t change the situation in Britain one iota. Asylum seekers have no right to freely move to the UK under EU rules, there are already border controls because the UK isn’t in Schengen and the UK did not participate in the relocation scheme. About the only thing it would actually change is nixing any say the UK has over the EU’s response – and like it or not, the only way this crisis is ending is if the EU puts a strong solution in place.
Interesting article, Valentin, but I found myself partly disagreeing.
My first thought was similar to Ben’s one: the handling of the Eurocrisis was not exactly a great success, so why using it as an exemple?
Taking the principles rather than the results and decisions then changes a bit. There I agree on something, disagree on something else.
Meetings at the highest level: wouldn’t this just end up in a muscular confrontation, as it basically happened with the eurocrisis? Likely it would. Then a better way to coordinate the efforts would be to accept this crisis will be dealt with by an Independent body, such as the Eu Commission, which will coerce all countries to adapt.
This lead to your second point (even if it leaves unsolved how to deal with Schengen countries not in the EU.
Independent bodies should take decisions, I totally agree. I am less convinced though, that reiforcing Frontex could constitute a solution. In concentrating all in keeping out the refugees European countries are delaying actions to deal with the internal problem of how to settle them, temporarly but potentially for a middle-long term (i.e. until war finishes). In my opinion migrants flux can be slightly reduced, but can’t be stopped unless using a good amount of brutality – and surely the human-rights friendly Europe doesn’t want to do such a thing…hopefully. We should then think how to cope with the right problem.
Changing the law, then, yes, I totally agree on that: Dublin was a wrong idea from its very start, and schengen mught have to adapt as well. If the flux of migrants was permitted and regulated, rather than unsuccessfully pushed back, that will make it easier also to keep up Schengen.
A thought about Schengen in reply to Ben: yes, schengen would be more easily reversible than the euro. But the reason why both didn’t work is the same: the lack of a unified and coercive centre of decision making. Each country play against each other in times of crisis.
You could reverse Schengen, but how much would that help? The refugees issue HAS TO be solved all together cause no one is immune. Illegal migrants would reach all other countries from their arrival point, borders control or not. There’s just too much desperation, and each country would then have an interest on migrants not being on their territory.
Modify Schengen, ok. Completely remove it, I think it would be a loss. Because it is, indeed, not just an economic mean, it IS an idea put into practical term. The easiness of moving freely from a country to the other for travelling, studying, working etc. has builded the feeling of a european community probably more than everything else.
I understand your point of not getting stuck with instruments that don’t work just in the the name of an ideal. So I say, let’s reform… but paying attention not to lost that ideal either. After all, the whole European Union was – is – an ideal. And still one worth preserving I think.