Jan Techau is Europe Director at Eurasia Group, covering Germany and European security issues. He is also a Senior Fellow with the Transatlantic Defense and Security program at the Center for European Policy Analysis (CEPA), having formerly served in the German defense ministry and as Director of Carnegie Europe from 2011 to 2016. You may follow him on X @jan_techau.

There are many ways to look at “the future of Europe”: the future of the EU as a supranational political entity; the ability to maintain political stability and prosperity across the continent; Europe as part of a free and democratic West; European unity; “strategic autonomy”; or simply preserving peace on a continent where the majority of people have not known war for 80 years.

Dozens of factors will have to be considered to determine the future of Europe—from demographics, economic growth, artificial intelligence, and military power to competitiveness, innovation, populism, and social stability; from external threats and access to markets and minerals to questions of identity, migration, and the role of the United States in Europe. Many, albeit not all, of these issues are most intensively and decisively navigated and negotiated within the European Union—a miraculous and historically unprecedented exercise in political collaboration that also has the additional advantage of functioning quite seamlessly.

Jan Techau – “The dirty little secret of European integration is the monetization of shared problems. In many fields, integration is possible because member states can buy compromise” | Source: Antonio Costa’s X account

The EU has, in many ways, become synonymous with Europe because it is uniquely relevant to the fate of millions of Europeans. Indeed, most European countries are now member states of the EU; the union is a global mercantile power, and it permeates European politics from the lofty heights of supranational decision-making to local politics in communities and cities in every corner of the continent. This is why discussing the future of the EU largely, although not entirely, means discussing the future of Europe.

The Union’s future, in turn, will depend primarily on two things: first, how it can create input legitimacy by letting citizens participate in EU decision-making; and second, how the EU can continue to deliver value to its 27 member states and its 450 million citizens (output legitimacy). This article will focus on output legitimacy: essentially, the EU’s ability to produce prosperity, security, and stability in Europe.

 

The Big Three

For the most part, the European Union is humming along, producing added value for Europeans every day: via the single market, a unified trade policy, competition policies, consumer protection, the Common Agricultural Policy (CAP), and a myriad of other policies designed to make life easier, richer, safer, and more comfortable for EU citizens.

But the EU has been notably weak in producing similarly meaningful results in the types of crises that have dominated news headlines in recent years. These fields are foreign policy, security and defense, migration (including asylum policy and border protection), and, finally, fiscal policy.

Now, more than any of the past EU successes, these areas shape EU citizens’ perception of Brussels and its machinery. While the benefits of integration are now taken for granted, the shortcomings and failures in these fields determine the EU’s image.

These sectors happen to be the three decisive ones for the future of the EU. It is here that the greatest need for deeper cooperation—and integration—between member states lies. These are also the areas where no significant leaps toward meaningful integration have been made in at least a decade.

The EU managed the global financial crisis relatively well: the European Central Bank (ECB) guaranteed the solvency of ill-faring EU member states (“whatever it takes”), and fiscal instruments were created to alleviate the worst economic meltdown in decades. Similarly, the EU handled the COVID-19 pandemic by coordinating aid work, procuring and disseminating crucial material and equipment, and creating a fiscal aid mechanism aimed at reconstructing Europe’s hard-hit economies. Finally, after the 2022 Russian invasion of Ukraine, the EU not only helped organize military aid at unprecedented levels, but also created programs and budget lines to help its member states spend more on defense, accelerate their military build-ups, and expand defense industrial capacity in Europe.

However, even this successful crisis management did not lead to deeper integration within the EU. We have not made significant steps toward a fiscal union (to accompany the monetary one), and the EU is no closer to being a relevant foreign policy player or a provider of military security. Meaningful action under duress, yes. Meaningful integration, no.

The latter entails genuine sovereignty bargains by member states—i.e., the delegation of significant chunks of national sovereignty to the EU level in return for a gain in collective problem-solving capacity. Contrary to widespread misperceptions, it is not the implementation of temporary measures of crisis management, nor the creation of yet another ad hoc special instrument, project, or budget line meant to address a specific problem. Rather, it is the EU’s systematic involvement in a particular policy field, based on a clear legal mandate from the member states, that produces a net result of enhancing the EU’s ability to act.

 

The Dirty Little Secret

The dirty little secret of European integration is the monetization of shared problems. In many fields, integration is possible because member states can “buy compromise” (i.e., create unity by compensating EU countries for their participation in an unwanted policy, or by granting member states exemptions from particular policies in return for compensatory payments).

In the crucial fields mentioned above, monetization is not (or not as easily) possible as in other policy areas. They all touch upon the core of national sovereignty, not just its secondary or tertiary elements. Giving up sovereignty in these fields is considerably harder for member states, which are eager to guard the principal aspects of their statehood. Genuine sovereignty bargains in these areas would mean trading away constituent elements of sovereign statehood: the power of the purse, unitary command over the armed forces, the decision over whom to let enter the country, whom to show to the door, and whom to keep. These policy fields are also closely tied to citizens’ national identities and therefore cannot be easily re-labeled as “European.”

This is also the reason why the Monnet method of integration in these fields does not work—at least not “properly.” According to the Monnet method, deep economic integration will have automatic spillover effects into the political realm, bringing about sovereignty bargains in both commercial and political fields. The idea is that the momentum toward integration steadily grows as more areas are sucked into the integration logic more or less automatically. The prosperity effects of deeper economic integration lead to more—and even deeper—harmonization and convergence, making political integration unavoidable. According to this method, the single market and the common currency are the two main drivers. No term describes this logic better than “ever closer union.”

As integration deepens, fewer fields are subject to national vetoes and opt-outs, and authority and power increasingly rest with the institutions in Brussels. Member states do not lose their influence altogether; they remain powerful during decision-making in Council meetings. However, they relinquish considerable (and sometimes all) steering power once they have agreed to “communalize” a policy field.

In areas where the Monnet method does not work, standard institutional reform (treaty change, qualified majority voting (QMV), size of the European Parliament and Commission, rebates, etc.) will not bring about more integration. First, institutional reform is generally harder to accomplish in these fields because member states are more reluctant—for the reasons stated above. Second, even if institutional reform happens in these areas, it does not create the same binding power as in other sectors.

In other words, member states are less compliant with decisions in these fields, even if the formal rules compel them to follow the (new) directives. EU countries will take the risk of being non-compliant, even if that creates political costs. These sacrifices are often considered more acceptable and less costly than losing core elements of national sovereignty.

This is also why the introduction of QMV on issues of foreign and security policy is unlikely to bring about great leaps forward in integration—let alone a “single voice” situation in which the EU finds it easier and quicker to develop a unified position and the means to pursue its goals.

 

Crisis Management is Not Integration

As the COVID-19 pandemic and the global financial crisis have shown, a lack of integration in specific policy fields does not necessarily render the EU unable to act under pressure. However, these crises have also demonstrated that contingencies and conflagrations need to be seen as overwhelming and existential in order to lead to a (temporary) transfer of power from member states to EU institutions. Typically, in such a crisis, the EU is seen as the actor of last resort—even by reluctant member states. Traditional notions of sovereignty lose their validity, and established cost-benefit calculations no longer apply.

Remarkable things can be achieved under such circumstances, but these emergency mergers should not be mistaken for “integration” as defined above. Such measures are mostly temporary or come in the shape of narrowly defined special instruments, often with limited running time.

In none of the aforementioned fields has this level of existential fear been reached yet—not even in the field of migration, which is arguably the most pressing, most emotional, and most politically costly issue in the EU today. It is clearly an issue in which only a pan-European solution could bring the relief member states seek.

The migration issue illustrates that as long as the pain from the crisis is considered smaller than the pain from a migration-related sovereignty bargain, that bargain will not happen. Only additional pressure—or “learning through pain”—is likely to bring about a change of mind (even though many reject this notion as an overly cynical view of politics). The same logic applies to security and defense, where, for most EU member states, NATO still offers the best solution to the existential problem of European security. It remains to be seen whether this changes if, during the second Trump administration, the United States decides to no longer be the backbone of NATO deterrence and the guarantor of security on the European continent. In these policy fields, great leaps forward are not expected in the near future, thus defying the integration logic.

 

Matters of Life and Death

Defense is the least likely field to integrate in the foreseeable future. It is the oldest and most primal of all competencies of the modern state. Keeping its citizens safe from external threats is the state’s first and final obligation—long before and long after other key functions such as domestic security, welfare, health, or education. This is why states are least likely to integrate this policy field with other nations and rely on supranational constructs. Apart from the EU’s smallest members, individual countries believe they can avoid this scenario by opting instead for reliance on their own (sometimes residual) strength and capabilities. In other words, for defense to be integrated, EU-style, a level of trust between European states would be required that is unlikely to emerge in ultimate questions of life and death.

The field of defense is also most closely tied to questions of identity. Nation-states are defined as communities of fate that, in the end, need to stand together in questions of physical survival. This requires a strong sense of inclusion and shared identity—a powerful force not easily replaceable by other, more abstract aspects of belonging.

Finally, a look at NATO, the existing military alliance devoted to European security, also does not encourage integrationist defense fantasies. Even in NATO—a well-oiled military alliance—political integration at a deeper, supranational level has never occurred. Despite NATO’s integrated military command structure, there is no such thing as a NATO army. The alliance has always remained strictly intergovernmental; sovereignty bargains that characterize the EU’s integrated policies are unknown to NATO. According to the Washington Treaty of 1949, each ally decides independently whether to participate in alliance operations, according to its national constitutional requirements. Decision-making is not delegated to a supranational body such as the European Commission, nor is it based on an elaborate body of supranational law. Political cohesion in NATO does not come from Monnet-style “integration,” but from external pressure and a shared threat assessment.

Furthermore, the Europeans’ dependence on America—by far the strongest ally—has also created a certain amount of cohesion. Paradoxically, each member’s national veto on NATO decisions works as an integrative force, not as a divider. Member states see no reason to leave or damage NATO, knowing that their veto will always enable them to prevent a massively undesired development from happening. This might hold a lesson to be learned for the EU. NATO has also kept the probability of institutional blockade small by focusing exclusively on security and defense-related issues.

 

The Most Divisive Issue

Flawed migration and asylum policies, and a deeply dysfunctional “Dublin” system in the EU—whose primary role is to determine the country responsible for dealing with individual asylum applications—have made migration and asylum policy the most divisive issue in Europe over the last decade. The inability to resolve this problem remains the number one reason for the populist surge across the European continent.

This is all the more ironic given that this is the policy field in which integration, at least in theory, should be most likely. Member states have a broadly shared outlook on the problem, possess the means to deal with the issue, and feel the pressure both domestically and externally. However, it is also the field in which the strong necessity to devise an overarching pan-European solution collides sharply with issues of identity and sovereignty. Nations are reluctant to relinquish control over a key element of what makes a sovereign nation: control over its borders and the decision of whom to admit or deny.

The much-needed Europe-wide solution would demand painful compromise from EU member states—either in the form of accepting precisely defined numbers of refugees into their societies or by adapting strict asylum and migration policies. The latter, however, would violate existing European law and humanitarian convictions, which are preferred by many national political constituencies over more archaic notions of control based on identity and belonging.

Recent unilateral steps taken by some member states have somewhat eased migratory pressures, but have also come at the expense of further integration. A constructive squaring of this circle—based on watertight migration management at Europe’s external borders and openness within its internal borders—has not yet been devised. Attempts to monetize the issue have failed; the Monnet method does not seem to work. Whether genuine integration will be possible in these policy fields therefore remains unanswered in mid-2025.

 

Monetary, Not Fiscal

When the EU’s common currency, the euro, was devised in the late 1980s and early 1990s, the integrationist ideal behind it was pure Monnet: integrate the easy bits (read: monetary policy) first, then the more difficult bits (read: fiscal policy, meaning common borrowing and budgeting) would follow sooner or later. However, a quarter-century after adopting the euro as a means of payment, this idea has not yet become a European reality.

To be sure, new fiscal tools invented during the euro crisis, the sovereign debt crisis, and the COVID-19 pandemic have created the impression of significant leaps in integration in budgetary policy. But do these measures meet the standard for meaningful integration, as defined above? The answer is no. Ad hoc means of collaboration in crisis—even new fiscal instruments designed to tackle specific challenges—do not constitute an integrationist breakthrough. The fundamental principles of EU decision-making on budgets remain unchanged. Nations are in charge of the primary fiscal decisions in Europe, with the EU playing an increasingly important role in the secondary ones. Member states will likely keep their ultimate veto power on fiscal policy in the EU for the foreseeable future.

The reasons for this are manifold, but the core logic resembles the ones at play in the defense and migration fields: a core tenet of what makes a sovereign nation-state defies all forces that pull in a more integrationist direction. National parliaments show no inclination to delegate their most constitutive right—the power of the purse—to a supranational entity such as the European Parliament. As long as the principal political process in Europe is playing out at the national level, this is unlikely to change. The principal mechanisms for organizing the allocation of power, legitimacy, and responsibility in Europe are national elections, not European ones. Governments stand and fall based on the approval or disapproval of national constituencies.

 

Going Beyond the Nation?

This is where we stand today: the future of the EU will depend on integrationist progress in fields where such progress is least likely to emerge. This is no academic matter. The ramifications of this state of affairs are practical and play out politically in Europe daily. The risk for the EU is obvious: if it cannot offer solutions to existential problems, its output legitimacy will dwindle, and political cohesion will diminish. Ultimately, its existence is at risk.

The big question remains whether the EU’s principal overlords—the EU member states—are willing to risk the union’s demise. So far, the answer is no. However, the majority response to requests for genuine integration in the three aforementioned key policy fields is also a no. This is not a state of affairs that can go on indefinitely. Political realities develop at breakneck pace and demand policy responses. One such response to the dilemma, given mainly through anti-integrationist nationalists, is this: reduce the EU to a free trade zone and, maybe at best, a single market—and forget about the political stuff, the sovereignty bargains, and the pooling of decision-making at the supranational level.

This is what strict sovereigntists have always wanted; it’s the mindset behind Brexit and anti-EU populism. It is the nationalist snake oil that promises to heal Europe from the complex (and sometimes unpalatable) rules-based compromise-making within the EU. It is not the solution to problem-solving in a highly globalized, data-driven, and knowledge-based global environment—facing problems that far exceed the coping capacity of even the biggest nation-states. But it will always retain its lure as long as notions of belonging, identity, solidarity, and fateful connection do not meaningfully exceed the concept of the nation. Nationalists will tell you that this will never happen. But just as the powerful idea of a nation once replaced the family, the clan, and the tribe as the principal frameworks of solidarity and accountability, the nation can be exceeded without losing its value or even disappearing. This is the hope at the core of all thoughts about the future of Europe. Our current times are the threshold moment for this hope.

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