EUobserver opinion: The EU's crisis within a crisis

With Europe currently absorbed by the refugee crisis and, after the Paris attacks, its security implications, the Eurozone i crisis, once considered an ‘existential threat’ to the EU, suddenly feels remote.

The EU’s capacity to respond effectively to the migration emergency in the coming months, however, is heavily conditioned by the legacy of the Eurozone crisis.

There are three parallels between the Eurozone and the migration crises: the hybrid nature of European governance structures that are little prepared to face up to major external challenges; the preeminence of Germany as a key player; and the important role of a peripheral country - Greece - as a conduit for an external challenge that is becoming an internal crisis.

These issues will determine whether and how the EU will overcome the refugee crisis. They are also, all the same, the areas in which the EU’s capacities have been most stretched by the Eurozone crisis.

First, much as the Eurozone, Schengen reflects the willingness of EU member-states to cooperate in an area that touches upon the core of national sovereignty (border control), but without fully delegating decision-making and legislative and regulatory initiatives to a supranational agency (like the Commission in ‘first pillar’ policies).

While the involvement of the Commission can be significant, political impetus requires intergovernmental agreement while effective implementation relies on national policies, in border control as much as macroeconomic policy.

This makes both structures slow in responding to external challenges.

External challenges

The global financial crisis started in the USA and the current refugee crisis has its origins in the Middle East and Africa; but in both cases, the mechanisms the EU had devised for managing those policy areas were neither centralised nor flexible enough to respond swiftly.

The situation is further complicated by the fact that these imperfectly designed structures did not cover related policy areas - there is no real common asylum policy to complement joint management of external borders, just as there was no banking union alongside monetary union.

As in the Eurozone, national leaders will ultimately have to agree on the distribution of burdens among themselves, as well as to bolster supranational institutions, in order to resolve the refugee crisis.

But the Eurozone crisis has depleted precisely these assets (political will, trust between member-states, and the room of maneuver of elites vis-à-vis national public opinions) that are indispensable for such an arrangement to arise any time soon.

The reactions to the Commission’s refugee relocation scheme and the race to throw up fences in central Europe foreshadow a protracted and potentially toxic negotiation process.

Germany's role

Second, the Eurozone crisis has left a complex legacy with regard to Germany’s role.

Because of the Eurozone crisis the EU acquired a go-to leader in times of emergency: Germany, and particularly its chancellor Angela Merkel i.

Merkel’s decision to accept Syrian refugees can be seen as an example of Germany carrying over the leadership role it acquired during the Eurozone crisis.

Absent Germany’s initiative, the consequences could have been devastating - with thousands of refugees stranded in the Balkans, and a mounting humanitarian crisis potentially destabilising south-eastern Europe and tarnishing the EU’s global image as a normative power.

The initial reaction of a majority of Germans was to welcome refugees, but Merkel’s decision was not taken in a vacuum.

During the Eurozone crisis German elites tried hard to balance the need for Germany to safeguard the achievements of European integration with the need to keep German public opinion on board with the sacrifices and costs this entailed.

The same considerations are in play in the refugee crisis, only more burdened by the Eurozone legacy.

It took just a few weeks for negative sentiments towards Merkel’s handling to surface.

That the anti-euro AfD party is now the vehicle for anti-immigrant feelings showcases the neat continuities between the frictions created by the Eurozone crisis and the constraints the German government will face in providing leadership in the refugee issue.

The Greek epicenter

The third parallel between the Eurozone and refugee crisis concerns the importance of a peripheral, but strategically placed, member-state: Greece.

Since 2010, Greece had largely been the epicenter of attention.

While the EU was focusing on the Greek economy, however, the groundwork for the refugee crisis was being laid.

The new radical leftist Syriza government allowed free passage for refugees and migrants through Greek soil, as they moved from Turkey to Europe in the first half of 2015.

Much as in financial matters, Greece was the crack in the edifice that allowed an external crisis to flood the EU.

Just like in Eurozone politics, the long-term viability and attractiveness of the European project will be under stress in the following months as the capacity of the EU to keep its zone of free internal movement and common protection of external borders intact is tested.

Again, Greece may be the crucial test of Europe’s credibility. Ironically, the radical leftist ideology of Tsipras and his government makes them an amenable partner to moderates like Merkel and the Commission in the refugee issue.

Tsipras has been willing to collaborate with the EU on this issue, probably expecting rewards in the question of the Greek debt. This expectation presupposes that the tone in the EU will continue to be given by the moderates.

Schengen zone

This, however, is doubtful after the Paris attacks. At the same time, with the EU’s refugee relocation scheme ineffectual and the states of the Western Balkans erecting fences along their borders, the capacity of the EU to offer relief is rapidly lagging behind the still huge daily inflows of refugees to Greek islands.

Greece may soon realise that, instead of contemplating relaxing its economic terms in exchange for Greece’s cooperation in the refugee question, the EU (or at least some European politicians) will begin contemplating an expulsion of Greece from Schengen as the most effective (and cheaper) way to safeguard freedom of movement in Europe.

The governance deficits of the Greek polity and the imperfect integration in the area of border protection may very soon make the discussion about the EU’s territorial integrity and the irreversibility of European integration flare up again.

The above does not mean that the EU will necessarily fail to survive the refugee crisis.

As with the Eurozone, a combination of skillful diplomacy, purposeful leadership (particularly by Germany) and a sense of urgency may yet allow collaborative solutions to emerge.

Yet there is no reason to expect this to be a smooth process. Instead, much will depend on the political capital that national governments across Europe still have at their disposal in order to push through compromises with their respective publics.

The long shadow of five years of painstaking Eurozone crisis management will make this a tougher challenge than any the EU has ever faced.

Angelos Chryssogelos is a research fellow at the Hellenic Observatory of the LSE and an Academy associate fellow at the Europe Programme of Chatham House.