Multi-speed pertains to the fact that the more members there are in the Union, the more difficult it becomes to reach consensus on various topics, and the less likely it is that all would advance at the same pace in various fields.
Leaders of the EU’s four largest economies threw their weight behind a multi-speed Europe on Monday (6 March) as the European Union prepares for life after Brexit, with rising populism, and an uncertain US strategy over Europe.
The leaders of France, Germany, Italy and Spain met in the palace of Versailles to prepare for a 25 March EU summit in Rome, marking the 60th anniversary of the Treaty of Rome, which gave way for European integration.
German chancellor Angela Merkel, head of the EU’s economic powerhouse, said leaders need to find the courage to forge ahead with integration despite opposition from others. Otherwise they risk the fate of the EU.
“We need to have the courage for some countries to go ahead if not everyone wants to participate. A Europe of different speeds is necessary, otherwise we will probably get stuck,” Merkel said at a joint press conference.
French president Francois Hollande argued that “unity does not mean uniformity”.
He called for new forms of cooperation to allow some member states to push ahead quickly in the area of defense and the eurozone, deepening of economic and monetary union, harmonising social policy and tax policy.
Other EU members could opt out of measures intended to deepen integration, Hollande added.
Spanish prime minister Mariano Rajoy and Italy’s premier Paolo Gentiloni also supported the idea of a multi-speed Europe.
Last week EU Commission president Jean-Claude Juncker proposed five scenarios the EU could take after the UK leaves the bloc. One of the playbooks would for the first time officially back a multi-speed Europe.
- The EU has 28 countries, soon to be 27 as soon as the UK leaves.
- The EMU has 19 countries.
- The Schengen zone consists of 26 countries that abolished their internal borders, offering freedom of movement between participating countries.
As you can see, there is already a “multi-speed” Europe. The implied progression was that countries joining the EU would move towards joining the Eurozone.
In essence, there is much cheering over something that has been ongoing for at least 16 years given the Euro launched on January 1, 1999.
With that background out of the way, let’s play a game. It’s a quiz show with simple yes or no answers.
The quiz pertains to the European Union (EU), and the European Monetary Union (EMU), better known as the Eurozone.
Multi-Speed Quiz Show
- Can a subset of the EMU agree to a special banking union? No
- Can a subset of the EMU agree on debt mutilation? No
- Can a subset of the EMU agree on eurobonds? No
- Can a subset of the EMU agree to fix flaws in the Target2 system? No
- Can a subset of the EMU that includes Germany fix grievances regarding Germany’s current account surplus? No
- Can a subset of the EMU that excludes Germany fix grievances regarding Germany’s current account surplus? No
- Even if a subset of the EMU could agree on items 1-6 above, do Germany, France, Italy, and Spain see eye-to-eye on any of those issues? No
- Does the overwhelming desire of the EU to punish the UK for Brexit solve anything? No
- Can a subset of the EU fix the mess caused by agricultural tariffs demanded by France? No
- Does it take a treaty change to make major changes in the EMU? Yes
- Does it take a treaty change to make major changes in the EU? Yes
- Is it extremely difficult to negotiate trade treaties with the EU because all 28 nations have to agree to the treaty? Yes
- Is there anything special about the recent multi-speed announcement that changes anything significant? No
- As a result of this announcement, is it more likely that a subset of the EU or EMU countries will get together periodically, swill beer, and make meaningless statements at taxpayer expense? Yes, with a caveat: The bigger the subset the less likely they can agree on virtually anything.
What’s Going On?
Nothing has changed. So, here’s the bonus question: what’s going on?
Thre answer: Rather than admit complete gridlock failure, Merkel elected to hop on the multi-speed bandwagon to make it appear something is being done about problems that cannot possibly be fixed because the nations involved can never agree on what changes to make.
The EU and EMU are fundamentally flawed and can never be fixed. Merkel finally hopping on the multi-speed bandwagon provides sufficient proof.
Mike “Mish” Shedlock