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Brexit may have dealt an existential blow to the European Union; but the EU was already at an impasse. And Donald Trump’s election has proved even more disruptive. What, though, if the British people had delivered a different verdict? Would our continued participation have helped stabilise the European predicament?
In the early summer of 2016, the EU was trapped in a political stasis — primarily because of the ongoing fallout of the eurozone crisis. There may have been strong imperatives for a more politically unified Eurozone, but how could it resolve the tensions of having euro and non-euro members within a single legal and constitutional order? And how could it advance more integration when the Lisbon Treaty had shown the acute political difficulties of securing political consent to change?
The eurozone crisis appeared to demand significant constitutional change. Yet the two treaties that were agreed — the Fiscal Compact and the European Stability Mechanism treaty — were drawn up on an intergovernmental basis, outside the Union’s legal framework. And the massive changes that occurred to the European Central Bank’s (ECB) effective remit as a result, took place without any alteration of the existing treaties — ones that under any reasonable interpretation should have prohibited some of the ECB’s actions.
Furthermore, the Commission’s weakness in non-Union treaties made enforcing their legal provisions difficult. Indeed, Jean-Claude Juncker noted in his State of the Union speech the autumn before the British referendum that more than four years after the Fiscal Compact’s ratification, no member state had implemented all of it.
The absence of a new EU treaty in good part reflected a set of issues around legitimacy that had bedevilled the EU since the Dutch and French referendums in 2005. These had led to the Constitutional treaty’s demise. Although the EU was able to replace the Constitutional treaty with the Lisbon treaty, the new agreement created more political problems. The French government had to proceed without a referendum, for fear of losing it — despite the clear resemblance between Lisbon and its predecessor — and the German Constitutional Court insisted, just a few months before the Greek crisis began, that there could only be more integration of any kind if there were clear democratic support for it in Germany.
The failure to move to a new EU treaty during the eurozone crisis also reflected the lack of any policy consensus about how to reform the currency. Juncker claimed in his 2015 State of the Union speech that the Five Presidents’ report on the euro was a “roadmap that should allow us to stabilise and consolidate the euro area by early 2017″ so that thereafter “on the basis of a renewed convergence of our economies” the Eurozone could “achieve more fundamental reform”.
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