‘Romantic’ Juncker eyes prize of more integrated EU

Financial Times Financial Times


Vision for federal future will pit Brussels against rebellious member states

yesterday by: Alex Barker and Jim Brunsden in Brussels and Mehreen Khan in Strasbourg

Since the Danes said No to the Maastricht treaty in the early 1990s, referendums have proved the bane of the European project, blunting ambition and infesting the EU machinery with complicated opt-outs, carveouts and half-way-houses.

If Jean-Claude Juncker is to be believed, the UK referendum last year that is leading to Brexit will help achieve the opposite: unleashing a cleansing burst of centralisation unseen since the creation of the single market and the euro.

The European Commission president’s “state of the union” speech is unapologetically ambitious, but also highly divisive and reliant on unanimous EU27 support if it is ever to become a reality. It represents, in other words, the tallest of orders.

“Juncker is a romantic,” said Mark Rutte, the Dutch prime minister. “I am more of a: when you have visions, go see a doctor kind of guy. I see many good things in the speech . . . specifically the more short term proposals.” Another senior EU diplomat at the heart of the reform process said: “We were laughing”.

Rather than pander to national exceptions, Mr Juncker wants the EU’s core projects — the euro, the banking union and the passport-free Schengen area — to be “the norm”. It is a singular model for integration, where the union’s energies are devoted to the interests of the mainstream majority, rather than the dissenting few.

For a Luxembourgish politician famed for his ability to read the political mood and broker delicate compromises, it marks an uncharacteristic bold gamble to close out his 30-year career.

He has, in effect, given himself 19 months to conclude the unfinished business from the 1990s heyday of integration. It sets him against not only the serial EU rebels in Poland and Hungary, but possibly also Europe’s most important decision maker: Chancellor Angela Merkel of Germany.

The plan sketched out — down to a month-by-month implementation schedule — is breathtaking in its reach. It stops short of treaty change, but uses obscure “passerelle clauses” to remove national vetoes over foreign policy, social policy and taxation. That would sweep away prized protections for national sovereignty that enabled the modern EU to be built.

Mr Juncker also advocates an institutional revolution, empowering a single elected EU president who will lead an executive and chair summits of EU leaders. “One captain at the helm,” he said.

Many EU leaders, by contrast, have long preferred keeping a hand on the tiller themselves. Lars Løkke Rasmussen, the Danish premier, immediately rejected the idea, saying how important it was to retain a European Council president as a “voice of member states”.

Such boldness partly stems from Mr Juncker’s desire to make the most of his limited time left; his term ends in 2019 and he will not seek re-election. But it also reflects renewed confidence among pro-integrationists, who feel the political tide turning back in their favour, especially after Emmanuel Macron of France showed that it was possible to be pro-EU and win elections.

In some ways, Mr Juncker’s speech is a return to a more traditional role for Brussels. Mario Monti, the former Italian premier, said Mr Juncker was right to push the commission as “an engine of integration”. “That is how it should be,” he added. “I’ve always believed this is exactly its function.”

There are, however, countless obstacles that Mr Juncker must overcome if he is to make a March 2019 summit in Romania — timed to coincide with Brexit day — the 21st-century turning point towards a more federal EU.

One is Germany. Even before Mr Juncker’s speech, Berlin was damping down expectations on how much change would be possible after the German elections. Franco-German plans are being worked up to reform the euro area and common defence, but in many respects they do not tally with Mr Juncker’s plan.

Berlin wants to avoid fraught institutional debates over a eurozone finance minister. More importantly, it has grown increasingly wary of the commission as an institution, distrusting its economic agenda.

Meanwhile France — even under the presidency of Mr Macron — is unlikely to abandon its traditional reservations about yielding national control over tax, foreign and security policy, or the fight against terrorism.

Europe’s holdouts will pose the second big challenge. By 2025, Mr Juncker would want to see Poland, Sweden and Hungary within the single currency, and under the authority of a single bank supervisor. None of these countries have shown particular enthusiasm for joining, and all have a veto.

Warsaw and Budapest will be particularly alarmed. Making the euro “the norm” has implications for other policy areas, ranging from their share of EU funding to their access to emergency support during crises. It also touches the rawest of nerves in central and eastern Europe: becoming second-class members.

Even staunch supporters of integration are expressing reservations. Markus Ferber, a senior German MEP, said the eurozone could not be enlarged “by political decree”. “Greece has set a striking precedent of what can happen if political ambition beats economic reality,” he said.

The big danger for Mr Juncker is overreaching to such an extent that the commission is shut out when key decisions are made. His forthright agenda may also antagonise governments as they prepare for highly sensitive negotiations on euro area reform.

“It comes across as quite federalist, but it’s his persona, his role,” said one senior non-euro diplomat. “He said he wants it to be the case but he knows it won’t happen.”