The State of Europe's Union

Europe holds the oldest of nations within the youngest of unions. The European Union is the legacy of a project for peace. Nations ceded sovereignty in exchange for the promise of prosperity out of the hope for stability, and decade by decade institutions evolved that bound the interests of elites across the continent.

The project took a leap forward toward the end of the 20th Century, driven by economic stagnation and changing international conditions -- above all else, by the idea that more integration, for all the pitfalls and concessions involved, was preferable to going it alone in a globalizing world. The birth of the European Union was most visibly anchored by two manifestations of economic power: an integrated single market -- freeing goods, persons, services, and capital of borders -- and a common currency.

It was always a bold vision, and as European Commission President Jean-Claude Juncker gets set to deliver on Sept. 9 the second-ever EU State of the Union address, the European Union is beset by every kind of crisis. The credibility of the common currency threatens to float away on a balloon of Greek debt it has failed for years to deflate. A resurgent, revanchist, unpredictable, and economically unstable Russia undercuts Europe's soft-power focus and threatens the security of its eastern members. Most dramatically, the fast-moving refugee crisis threatens the very heart of European unity, bringing into question the wisdom of a borderless regime with 28 different ideas on how to handle migration. Worse still, it imperils the notion of Europe as a moral beacon.

The questions before Europeans now are as simple as the politics are intractable: Does this moment of generalized crisis call for more integration, or less? Will the European Union move forward, or will it barb the seams of a flammable patchwork of petty nationalisms? And as dissatisfied electorates change the balance of national power election by election, can the center hold? Can pragmatism prevail over parochialism? And, well, should it prevail?

This newsletter, the Europe Memo, is the beginning of what we hope will be an ongoing conversation with you, the reader, about a continent in transition. In the coming months, we will dig through European media -- both English- and foreign-language -- and talk to experts in London, Brussels, and beyond. We will sift through the nuances of European events, personalities, elections, and decisions. We hope this will be a two-way conversation, and we look forward to hearing your thoughts, learning from your experiences, and tapping into your expertise.

Around the Region

Pragmatism, morality, or self-interest? European leaders' handling of the refugee crisis has been couched in the press largely in moral terms. On one side stand the suddenly virtuous Germans. On the other extreme sits Hungary, led by Prime Minister Viktor Orban, who is urging the closure of European borders. Yet behind German intentions there may lie a quality less virtuous: naked self-interest. GMF's Timo Lochocki:

"Accommodating 800,000 refugees calls for trebling German administrative and governance capacities almost overnight, including various related administrative, law enforcement, and infrastructure services. This is a moment for German politicians to showcase the substantial resources the government can mobilize. If the government succeeds here, it will further boost the already strong support of the established political parties with the German electorate. In other words, the successful handling of the refugee situation would further increase the appeal of the governing center-right Christian Democrats-Christian Social Union and the center-left Social Democrats and would sideline left- and right-wing populists."

As BBC Economics Editor Robert Peston also points out, an unexpected influx of migrants could also help boost the country's labor force, and shrink Germany's demographic dependency ratio:

"Here are the European Commission's projections from its Ageing Report that was published earlier this year.

It projects that Germany's population will shrink from 81.3 million in 2013 to 70.8 million in 2060, whereas the UK's will rise from 64.1 million to 80.1 million.
...
It is probably relevant that the Commission forecasts that the proportion of the German population in 2060 represented by migrants arriving after 2013 would be 9%, compared with 14% in the UK. So Germany would be a lot less multicultural than the UK."

Indeed, the United Kingdom's reaction may in part be conditioned by the effects of EU enlargement in the last decade. The Centre for European Reform, in its study The Economic Consequences of Leaving the EU, recalled that the United Kingdom was one of just three countries not to impose transitional restrictions on migrants from new EU states in 2004. The impact of migration that followed was far greater than expected, with 1.1 million people from the so-called A8 countries in Britain at the time the study was published (660,000 of them in work). While studies cited by CER were largely inconclusive about the costs and benefits of immigration, population growth is likely to strain the country's considerable housing crunch.

Closed Doors and Welcome Mats: In an article titled "It's Not the Same to Be a Refugee in Germany as It Is in Spain," Spanish daily El Mundo quantifies the differences in refugee policy among some of the bigger European states. Reaching Spain itself is an "odyssey," writes El Mundo, which characterizes Germany as El Dorado, Sweden as Paradise, Italy as Overflowing, Britain as The Hard Hand, and France as the EU member pushing for all EU member states to accept a quota of refugees.

The Spanish daily's tone reflects Southern European surprise at the way that Germany, seen by peripheral eurozone countries as an adversary due to its role in the Greek debt crisis, has dramatically assumed the mantle of moral leadership on the topic:

"Despite its reputation as lacking in solidarity, Germany is the EU country that receives the most asylum applications and extends the greatest measures for integration of the refugees."

Germany has said it expects 800,000 applications for asylum this year. Meanwhile, less than 6,000 have applied in Spain, and British Prime Minister David Cameron conceded under pressure to accept 20,000 additional Syrian refugees over the course of his government's 5-year term.

The differences extend to the support countries offer refugees. In an infographic published over the summer, Le Monde, citing numbers compiled by Eurostat, illustrated the welcome mats laid out by a handful of EU member states in 2014: Germany, which last year handled 121,000 applications, took an average of 7 months to make a decision. It extended 134 euros to refugees who also received housing from the state, and 346 euros to those who did not receive housing. Sweden, which handled nearly 20,000 applications and where the wait time is three months, gave 75 euros a month to refugees housed by the state, and successful applicants were free to begin working immediately.

Syrian Escalation: Citing a "clear and present danger" to national security, British Prime Minister David Cameron justified a drone strike that killed two Britons fighting alongside the Islamic State group in Syria. Defense Minister Michael Fallon said the strikes are legal. The Guardian:

‘We don't have general permission [from parliament] to carry out military operations in Syria, but at the time of the debate last year the prime minister made it extremely clear that where there was a vital national interest at stake we wouldn't hesitate to take action rather than seek prior permission ... and then come and explain to parliament afterwards, and that's exactly what happened yesterday,' Fallon told BBC Radio 4's Today programme."

Will France soon join the fray? On Tuesday, French planes were set to begin reconnaissance missions over Syrian territory. "We will then be ready to carry out airstrikes" against Islamic State, French President Francois Hollande said.

Hope and Irony in Greek vote: Noting that Greek Prime Minister Alexis Tsipras says he is shooting for an absolute majority despite polling neck-and-neck with the center-right New Democracy party, Italian daily Il Sole 24 Ore plays out three likely scenarios for Greece's snap elections on Sept. 20. The scenarios aren't encouraging for those hoping a stable government will be in place to push through reforms tied to Greece's 86 billion euro bailout package. In the first and second scenarios, either Tsipras' diminished, far-left Syriza party, or New Democracy, win, but fail to obtain an outright majority. With each side lacking the numbers for a coalition, another snap election would likely ensue. The third scenario comes with a dose of hope and irony:

"Syriza and New Democracy realise the only solution is a national unity government that will implement the Memorandum and try to limit its effects on economic growth.

"It would be a Greek copy of a German-style grand coalition. A paradox for Athens, forced to copy Merkel in its own domestic politics."

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