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integrity of the European Monetary Union

2 — Rethink Europe

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GEOMETR.IT  ecfr.eu/  11.03.2016

Europe is struggling like never before. Controversies among eurozone capitals have been bitter and divisions among the leaders have become personal, but the overall rationale of actors has been to maintain the integrity of the European Monetary Union. In the midst of the refugee crisis, however, balance of the EU seems to have been lost.

Through ECFR’s Rethink: Europe initiative, we have developed a tool, the “EU Cohesion Monitor”, that examines the state of cohesion among EU member states by looking at over 30 different factors in three structural and individual dimensions. The Monitor evaluates the depth of interdependence, the degree of interaction between countries and people, and the place of the EU in peoples’ identity. Detailed results and an interactive tool to explore the findings will soon be available here.

 The ten indicators and the underlying variables used in the EU Cohesion Monitor

  • Cohesion grew mostly on the structural side of the monitor, notably with regard to financial transfer from Brussels through structural funds of the EU.
  • Eastern members began to fully take advantage of their accession to the EU, with EU-transfers amounting up to more than 4 percent of national GDP;
  • money that was translated into construction and other projects across the region. At the same time, the individual resources of cohesion — personal interaction and experiences, language skills, electoral preferences and opinions — did not follow the same positive trend.
  • The most visible gap between structural and individual indicator scores is found in Hungary, a country that is deeply connected to the EU on a structural basis today, while being mentally estranged from it.

Hungary is a special case, however. Looking at east and central Europe at large, the EU Cohesion Monitor does show some improvement on the axis of individual identification with the EU over time, although it is much weaker than the impressive growth on the structural axis. While cohesion potential burgeoned in the east, it shrunk in the south.

For Portugal, like Greece — a “programme country” in deep fiscal troubles – there is almost no change in its cohesion indicator scores between 2007 and 2014.

The overall gains and losses in cohesion between 2007 and 2014 in eastern and southern EU member states

In Western Europe, the financial crisis had a sizeable impact. Ireland’s economy contracted sharply during the country’s deep banking crisis, and a bailout programme became necessary. The EU Cohesion Monitor shows declining levels on the structural indicator for Ireland, but stable numbers on the individual level.

Cohesion profiles of Hungary and Ireland in 2014

Britain is the only country among the large member states that has both a low score on structural cohesion and a low score on individual cohesion. The level of interdependence is lower, there is less interaction on both the macro and the micro levels of the European project, and less support for and approval of the EU than across the Channel.

  • The UK scored poorly on most of the factors that would indicate a willingness to make positive contributions and cooperate. The results emerging from the UK on these issues were lower than in the Netherlands, Belgium, France or Germany.
  • These findings do not necessarily signal that a Brexit-scenario is to be expected, but they do indicate the discontent over Europe espoused by the British Conservative party might have resonated strongly with the public.
  • The findings of the EU Cohesion Monitor support assumptions that it will be difficult to predict which way the UK will vote in its upcoming referendum on its membership of the EU. With the UK’s ties to Europe weaker than almost anywhere else in the Union, issues unrelated to EU-membership could play a larger role.

Rather than going down together countries drifted further apart, causing the sources of cohesion to differ more strongly among them. It follows that cohesion cannot easily be strengthened by taking a single approach. Any catch-all “cohesion strategy” is bound to fail as the patterns of cohesion now differ too much between EU countries.

It is reassuring to find that cohesion, as measured by the Monitor, seems less volatile than expected. However, this also means that cohesion building will be complicated and take time. Over the years to come, higher levels of cohesion will hardly suffice to push ahead the EU’s capacity to act. What might, in fact, strengthen cohesion is if EU member states can prove to themselves that they can overcome the crises facing them by engaging in common action.



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