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TWO votes – for Brexit in the UK and Emmanuel Macron in France – seemed likely to breathe life into what is still often called the European project.
With troublesome Britain out of the way, and a pro-EU French president to set an example, the Union would shake off the doubts and lethargy that had assailed it and stride forward, united and inspired. So, the theory went.
Donald Tusk, president of the European Council, set the tone. “We are witnessing the return of the EU rather as a solution, not a problem,” he declared.
In some respects, he was right. The eurozone is no longer in a state of emergency. Europe’s refugee and migrant crisis is, to an extent, subsiding. Above all, electoral contests in the Netherlands, France, Germany and, most recently, Spain, have not given parties of the far right the success they had predicted – although we should wait for the European election results before we cheer too loudly.
Moreover, the UK’s expected (though long delayed) departure from the EU has reinforced a sense of unity among the other 27 states. A recent opinion poll in Ireland showed that support for membership has increased to an extraordinary 93 per cent.
But there is a danger of complacency. Future turmoil in the eurozone remains distinctly possible. The area’s stabilisation has rested too much on unorthodox measures applied by the European Central Bank.
National banking systems are still overexposed to sovereign debt. Economic growth benefits millions, but leaves millions of others unemployed or struggling to cope in low-paid jobs.
Proposals to address these weaknesses tend to divide wealthy, northern European creditor states from less wealthy, southern debtors.
That divide is what European Commission President Jean-Claude Juncker had in mind when he told a German newspaper last week that The Netherlands, Austria “and all too often Germany” are preventing deeper euro zone integration.
There are two assumptions here, neither of which is, in my opinion, correct. One is that the poorer southern countries would love to push ahead with greater integration and are only being restrained by their northern neighbours’ fear of being stuck with their debts.
The other is that deeper integration is, of itself and automatically, a good thing.
It is true that deeper integration among the eurozone states would put the monetary union on a firmer footing.
The reservations of Germany and Finland about how to complete the banking union are understandable, but this project should not be left to drift. Nor should the proposed capital markets union.
However, it would be better to leave plans for a eurozone Finance Minister for another day and talk of a common EU budget is simply unrealistic.
Beyond the monetary field, plans for a common defence policy or further political integration are fraught with difficulty and opposed by many countries, north and south.
Most ideas for closer integration focus on a multi-speed Europe. A core group or groups of countries would press ahead with common policies in specific areas, leaving the door open to others to join if and when they feel ready.
This could be combined with returning some powers to national governments, as Poland wishes, provided that the framework binding countries in the EU single market and upholding other essential rules remains intact.
The danger here is that smaller countries, such as Cyprus, may feel neglected or even snubbed.
My view on integration is that, to use the old cliché, the EU should hasten slowly. The project is sound, but it is not vital. Let it find its own pace.
Michael Doherty is Chief Executive Officer of the Woodbrook Group, an international firm of financial advisers with its headquarters in Cyprus.
It is independent and not owned by any financial institution. Its experienced team provides investment and strategic planning advice tailored to the individual circumstances of clients.
