Guide to the European Union: The Future

On 25 March 2007, a special meeting of the European Council was held in Berlin. It issued a ringing declaration calling for reform and renewal within the EU to celebrate the 50th anniversary of the signing of the treaty to set up the European Economic Community (EEC). This was a very different gathering from the one 50 years earlier, when the heads of state and government of France, West Germany, Italy, the Netherlands, Belgium and Luxembourg first assembled in the Italian capital. That cosy club of six west European neighbours had expanded to 27 member states by 2007, and the population of the Community had grown from less than 200 million to nearly 500 million.

The expansion in the scope of its activities had been equally impressive. What started out as an embryonic customs union, with a Common Agricultural Policy tagged on, had emerged as a leading economic actor on the world stage, the policies of which had proliferated into many fields not mentioned in the original treaty.

Economic achievements

The more recent achievements of the EEC, and its successor the EU, are too numerous to list in detail, but on the economic side two, in particular, stand out. First, the 1992 programme for completing the single market was substantially concluded on time, and the bulk of the internal barriers that prevented the Community from operating as a single trading area were removed. Second, the member states committed themselves to economic and monetary union. The successful launch of the euro at the beginning of 1999 and the astonishingly smooth introduction of notes and coins in January-February 2002 left little doubt that it would act as a further spur to European integration.

It may well, in time, come to challenge, if not surpass, the US dollar as the principal world currency. The value of the euro connection became apparent during the recession in 2008-09, when the Irish banks and economy were saved from disaster by the country's membership of the euro zone.

The contrast with Iceland, where the banks had met similar difficulties and the currency crashed, was widely observed, and prompted the hitherto Eurosceptic Icelanders to apply for EU (and euro zone) membership without delay. It was also noteworthy that the euro zone recovered from the recession more quickly than the UK (which had chosen to keep its own currency), despite the energetic steps the UK government took to bail out its grossly overextended banks.

A third major economic initiative was launched at the Lisbon summit in March 2000 to turn the EU into "the most competitive and dynamic knowledge-based economy in the world". It is a ten-year programme, which is being monitored each spring by special meetings of the European Council. Although considerable progress was made in some areas, the overall result after the first five years – assessed at a summit in Brussels in March 2005 – was disappointing. The target date of 2010 was abandoned, and it was decided to relaunch the initiative, with a greater concentration on more limited objectives, mainly economic growth and job creation.

Foreign and security policy

Progress has also been mixed in the EU's objective of forging a common foreign and security policy, with sufficient military clout to back it up, without being heavily dependent on the US. The EU's response to the end of the cold war was highly positive. It took the lead in providing moral and material support for the newly free countries of central and eastern Europe, to which it clearly acted as a powerful magnet.

It was the EU that took the initiative in setting up the European Bank for Reconstruction and Development and subscribed more than half its $12bn capital, while establishing the Phare and Tacis programmes, which have dispersed a substantial amount of economic, financial and technical aid. In so far as this has represented a continuation of the Marshall Plan, which rejuvenated western Europe, it is the EU and not the US that is providing the great bulk of the material assistance.

The EU also opened up the prospect of membership for the countries of central and eastern Europe. Eight of them (together with Malta and Cyprus) became full members in May 2004, with Bulgaria and Romania joining in 2007 and the prospect of Turkey, Croatia, Macedonia and other countries in the Balkans, and further east, eventually also joining.

EU defence and cooperation

The uncertain EU response to the break-up of Yugoslavia in 1991-92, when the combatants looked to the EU rather than to the Organisation on Security and Co-operation in Europe (OSCE, formerly the CSCE) to broker a peaceful settlement, underlined how unready the Union and its member states were to assume such a role. This story was largely repeated in Kosovo in 1998-99, and in both cases it required massive intervention by Nato, with the US contribution predominant, before the conflicts were resolved.

Since then the momentum towards a common European defence effort has significantly speeded up. The wastefulness of competing national research and manufacturing concerns, most of which are too small to compete successfully with their American rivals, has produced a spate of mergers, which will certainly continue. The moves to develop a European Defence and Security Policy, with its own rapid reaction force (RRF), offer a hopeful prospect. But the member states will have to do a great deal more – in terms of contributing to the equipment as well as the manpower of the RRF – before it is able to play an effective role in peacekeeping, let alone peacemaking, operations.

As the second decade of the 21st century began, the EU stood at a crossroads. A large part of the previous decade had been taken up with disputes about the institutional structure of the Union as it struggled to update the Treaty of Rome and its successor treaties to enable the EU to operate successfully with a much larger membership and the prospect of further enlargement.

The Treaty of Lisbon, which finally came into force on 1 December 2009, is far from being perfect, and it is unfortunate that – unlike the TCE, which it replaced – it does not clearly set out the aims and purposes of the Union. But given the will of Europe's leaders to make it work, and a spirit of give-and-take among them, it should just about meet the purpose for which it was designed. It will not be the last word in EU governance, and future changes will no doubt be made in the EU's institutional structure, but for the moment it will have to do.

It is likely to be another decade or so before the issues fought over since the Laeken summit of December 2001 are re-examined. When they are, it is to be hoped that one of the most important lessons will have been learnt: that the holding of referendums is a wholly inappropriate method for seeking approval for complex and detailed changes to EU treaties.

New member states joining the Union usually feel the need to put a straight "yes" or "no" question to their citizens, as EU membership profoundly affects their international status. But to submit a series of often petty amendments to largely uninterested and uninformed electors is a negation rather than an affirmation of democracy. The proper forums for examining such details are popularly elected parliaments, whose members have the opportunity to consider legislative proposals on behalf of their electors. To take this responsibility away from them is to undermine the basis of representative democracy. Traditionally, referendums were used by dictators – such as the two Napoleons and Hitler – to manipulate their electors, and were thus widely distrusted.

They have a more respectable history in Switzerland and several US states, but recent experience from other European countries has not been encouraging. The evidence is that many voters use their vote to indicate their approval or disapproval of the national government in power rather than the question on the ballot paper. To get 27 or more national electorates to vote the same way at any one time would be the triumph of hope over experience. To rely on referendums in the context of institutional change within the Union would be a formula for stagnation.

Dick Leonard's Guide to the European Union: The definitive guide to all aspects of the EU was published in March 2010.