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European Identity: The Limitations of EU Integration

The upcoming referendum in the UK is yet another sign of the EU’s ambiguous political trajectory. Even if the UK remains, accusations of economic instability and democratic deficit are central themes that characterize the EU.

This is nothing new. In fact, Milton Friedman in an interview with fellow economist John B. Taylor said that ‘there are real problems’ deriving from having a common currency. Revisiting Mundell’s currency model, he argued that separate monetary policies are required for states such as Ireland and Italy. This begs an interesting question: If Friedman predicted problems with the EU sixteen years ago, why are so many people trying to save it? Friedman also added that heightened movement of labor between these states was improbable.

Indeed, intra-EU labor is low. The cultural and linguistic barriers, as well as the fear of working across borders impede EU prospects of forging a single labor market. The economic benefits arising from EU citizenship have also sparked criticism from four EU governments in 2013.

Arousing calls for more stringent citizenship rules is a result of the eight Central and East European countries that entered the EU in 2004. Austria, Germany, the Netherlands and the United Kingdom have attempted to guard their social safety nets from citizens emerging from the EU’s enlargement program.

A disconnect among citizens and institutions imbue the EU with a sense of political illegitimacy. This perception exists given a lack of faith in the European Commission and European Parliament. While the EU has a large degree of representation with MEPS elected from all 28 EU member states, citizens still feel sidelined from political decision-making. According to a Pew Research Poll in 2014 citizens among seven major European member states felt that their voice is unimportant to the political process. The EU argues that perceptions of democratic deficit arise merely from the ‘complexity’ of the EU system. Even so, member states have made calls to ensure the sovereignty of member states. For example, UK PM David Cameron flagged a red card system where national parliaments would be able to “stop unwanted legislative proposals.” This arises as an attempt to hinder the technocratic nature of EU institutions, having the power to enforce legislation without full political approval.

The aforementioned problems regarding the EU’s labor market and democratic deficit reveal the social unease of creating a European Identity. Merkel’s statement that ‘more Europe’ – rather than less – through what she has termed a ‘political union’ is dangerous. The assumption here is that a European identity can emerge from the Euro Crisis. But the likelihood of Greece, Portugal and Spain accepting and being proud of a European identity is unlikely. This is because the European project is perceived to be one of the factors that led to economic demise. Now, with the prospect of BREXIT, investing time and resources into stringent EU integration is both risky and costly. Ultimately, a lack of institutional completeness and differing system of values among member states hinders further EU integration.

The EU has limitations; the elites can’t continue believing political survival will thrive on more integration. Clearly, the task of implementing a fiscal and monetary system is daring and may not be worth the political consequences. More importantly, it certainly isn’t worth another economic crisis; a common currency doesn’t work because as Friedman said ‘you need different monetary policies’ to adjust the economy.

To that end, the Euro Crisis reveals that there are both institutional and social layers to the European problem. These issues ultimately boil down to the individual. The individual prefers to live and work in the state of their birth, while also having a say in their political system. The EU, if it wants to survive, should consider these facts in order to create a more conducive political and economic environment for all Europeans.