News ID: 10
13 May 2017 | 14:26
The European Union has gone through tough trials in recent years and, despite a little improvement in member states’ economic situation

The European Union has gone through tough trials in recent years and, despite a little improvement in member states’ economic situation, is still facing severe crises today, especially in such areas as finance, banking, security, immigration and the growing populist and nationalist tendencies in EU countries. On the other hand, issues like Brexit, Donald Trump’s rise to power in the US, and the existing perception of a Russian threat to Eastern Europe and the Baltic states, have made the situation for the EU even more complicated. Now, 60 years after the start of the unification process, as member states more than ever pursue their national interests and distinct security needs, grounds for divergence are expanding. This piece of writing seeks to analyze the challenges facing the EU and some of the solutions for the union to survive.

EU’s Current Situation

In spite of some indications of relative improvement in member states’ economic conditions and a decline in unemployment rate in countries like Spain, economic disintegration is still threatening the EU. Greece’s debt crisis remains a major threat and Italy’s banking system is facing bankruptcy. These are issues than can put the single European currency at risk.

Meanwhile, what is most noticeable in today’s Europe is lack of an effective means to coordinate policies. Such a mechanism would be necessary to tackle problems gripping most of EU countries in terms of reduced compatibility, low economic growth, unemployment and low investment rates. Today, due to an atmosphere of mistrust created among member states, each EU country follows its own policies, believing that other member states cannot be trusted in terms of adherence to their commitments.

On the other hand, since the emergence of the financial crisis in the EU, two camps have been formed within the union, each believing in different policies for tackling the crisis. One of the camps, led by Germany and the Netherlands, believes that governments are duty-bound to implement the agreed economic reforms and remain faithful to the approved regulations- including the so-called "Golden Rule” (a ceiling of 3% of GDP for budget deficit). According to the other camp, led by France and countries of Southern Europe, governments need more flexibility to make decisions on fiscal and structural reforms. They believe governments with more free hands in financial affairs should be able to increase public spending to address existing imbalances.

Existing Challenges

Under the current circumstances, EU affairs experts acknowledge that the EU integration project, which, at the beginning, had made significant achievements, especially in economic and security fields, is suffering from structural flaws that surfaced at the time of crisis. One of these flaws, apart from an imbalance in Eurozone economies, was an absence of a financial and political unity that can act as a bankroll for the monetary union. Hence, the need for reviewing a project that no longer answers today’s needs has become evident for everyone. It is necessary that during this review, a mechanism be devised that ensures member states’ adherence to commitments and regulations and also creates incentives for more cooperation among member states and maintaining cohesion. In the current circumstances, though, people, especially the less fortunate attribute their economic problems to EU policies (especially austerity policies) and regard the union as a bureaucratic system whose experts- living in ivory towers- are ignorant of ordinary people’s troubles and concerns. Anti-EU sentiments have been rising in many member states. This is among the factors that have helped boost the popularity of Europe’s populist parties that have put on their agenda abandoning the single currency, euro, and even leaving the union (following Brexit). These parties have been posing a big challenge to mainstream parties that generally believe in the process of European integration. However, given the current atmosphere and in order to attract more votes at home, even these mainstream parties show no interest in more cooperation at the EU level, which can be a major obstacle to implementation of reforms in the union.

Should the current trend and the economic depression continue, it seems that EU member states will choose to act in line with their own national interests and in the end, there will remain of EU nothing but a name. Some analysts have predicted creation of different blocks within the EU, such as Mediterranean Europe (France, Italy, Spain and Portugal), Eastern Europe (Hungary, Czech Republic, Poland and Slovakia (known as The Visegrad Group), German Europe (Germany, the Netherlands and Austria), and Marine Europe (Greece and Bulgaria).


The experience of European integration, which began with the aim of establishing peace in Europe and protecting the existence and identity of Western Europe during the Cold War and gave rise to hopes for unifying the entire continent and pushing it toward democracy and economic prosperity after the collapse of the Eastern Bloc, just worked during the relative economic boom period. With the start of financial and economic crisis, however, its structural flaws and shortcomings began to surface. Today, the EU is facing tough problems and challenges, so that not only deepening the integration process is no longer possible, but even maintaining the current situation has become extremely difficult.

Pirooz Izadi
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