Perhaps never in the history of the European Union has there been a greater mismatch between the need for reform and the political capital available to enact that reform. So what will bring the EU member states to the point where they embrace meaningful change in that union of theirs?

This is the question that has been lingering in the air in Brussels as the new EU leaders have begun to take office. Everybody knows that it can’t go on like this, few trust that anything major will change, and many have an inkling that something big is about to occur. The atmosphere resembles a political drôle de guerre—that unnerving phase of silence and tension that everybody knows must end soon so the real battle can finally be fought.

The current combination of challenges facing the EU is extreme, even by the union’s crisis-ridden standards. That calls for an equally momentous reform effort.

First, the EU needs to address the possibility of the departure from its ranks of one of its leading members: the United Kingdom. The UK is a country with a positive long-term demographic outlook, firm liberal economic leanings, a strategic view on the world, and a rock-solid transatlantic orientation. There aren’t too many member states like that, and the EU certainly doesn’t want to lose them.

Second, the EU faces a Europe-wide sclerosis that has created structural unemployment, enormous debt, low growth rates, and lackluster innovation across the continent. Europeans have lived beyond their means and at future generations’ expense to such an extent that harder times with longer work and diminished privilege are unavoidable.

Europe’s lack of preparedness to deal with this sclerosis can be seen in the prolonged economic failure of France, another of the EU’s indispensable members and the second pillar, after Germany, of the single currency. The utter ossification of France’s political elite and the rusty mechanics of the country’s centralized republic have led to systemic paralysis and a huge populist backlash against modernity, openness, and economic and political liberalism.

To be sure, reforming France is ultimately a French task. But so much depends on it for the EU that some hard thinking needs to be done—at least in Berlin, London, and Brussels.

The ossification of #France's political elite has led to systemic paralysis.
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Third, the populist backlash visible in France is a harbinger of what might follow in the EU as a whole if the bloc does not decisively reform its governance structures soon. This will mean creating some sort of democratic participation in the EU that makes Europeans true citizens of the EU, not just token ones.

The European Parliament, in its current form, cannot address the EU’s democratic deficit. Nor can subsidiarity or stronger national parliaments improve the union’s democratic credentials. If the current level of EU integration is to be maintained—or even increased, as necessity seems to dictate—the union will have to establish real Europe-wide participation in EU decisionmaking in the not-so-distant future.

This is highly unlikely. And yet, if it does not happen, the EU will start to come apart.

Democratic participation and its logical consequence, political union, are more likely within the eurozone than across the EU. Just as the currency’s founders envisioned, the euro will require a political union of some sort that creates legitimate governance of the EU’s already deeply developed economic integration.

What the founders did not envision is that political union for the eurozone will also force the fragmentation of the EU. Not all members want political union. But those inside the eurozone clearly need it. Between these two forces, the EU’s future will have to be negotiated.

Fourth, the EU will have to forge a real common foreign policy, at least in those fields where the union’s survival could be at stake. This foreign policy should include integrated and hard-nosed approaches to the Eastern and the Southern neighborhoods, military cooperation, energy security, immigration, Europe’s attitude toward Asia, and cybersecurity.

The #EU is mostly a bystander in foreign policy with occasional success stories and lots of drift.
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The EU is miles away from any of this. The union is, for the most part, a bystander in classical foreign policy with occasional success stories and lots of drift. It still relies on an order that it is ever less capable of underwriting with its own assets. That is not a survival posture.

So far, so ugly.

But what will bring about constructive, well-designed, daring change? The cynic’s view is that only more pain will do the trick. Europe has had it too good so far, so there is no real sense of urgency.

Modern political science’s way of expressing this is what Joseph M. Parent, a professor at the University of Miami, claims in his 2011 book Uniting States: Voluntary Union in World Politics. His point is that throughout history, political union among nations has only ever sprung from a shared mortal threat. Short of that, no union.

Others are less pessimistic. Olli Rehn and Jean Arthuis, both Liberal members of the European Parliament, and a former European commissioner and former French finance minister respectively, recently stated in an op-ed for the Financial Times that “all the stars are aligned for big changes in Europe.”

Rehn and Arthuis claim that 2017 is the magic year to watch. The UK will likely hold a referendum on its EU membership in that year, Germany and France will hold major elections, the EU’s multiannual budget will undergo its regular midterm review, and the EU’s fiscal compact is expected to become EU law.

The year 2017 could well be an important one, but it remains to be seen whether the combination of these factors can free up enough energy to deal with so many fundamentals at the same time.

Clinging to the status quo will destroy the #EU, but resolutely moving on could tear it apart.
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No matter whether the political events calendar can instigate reform or whether existential threats from within or outside will spur the EU into action, reforms need to be enormous in scale and workable at once. The margin of error is small. Even under the best of circumstances, the slow nature of political decisionmaking and the enormous complexity of the issues at stake make reform unlikely. And at any point in the process, a breakup is a possibility.

The EU’s dilemma is that clinging to the status quo will destroy it, but that resolutely moving on could equally tear it apart. Europe might still have its best days ahead of it. But before that time comes, Europe has something else ahead: the toughest calls it has ever made.