Differentiated Disintegration: Brexit

This chapter examines negotiations on differentiated disintegration in the case of Brexit. It includes the efforts of the British government to renegotiate its EU membership prior to the referendum in June 2016 and the subsequent negotiations of the Withdrawal Agreement. The chapter shows that the same factors that explain demand for differentiated integration can also explain demand for differentiated disintegration. However, the supply conditions differ fundamentally. In disintegration negotiations, the EU enjoys the superior institutional bargaining power of the status quo-oriented actor, the superior material bargaining power produced by starkly asymmetrical economic interdependence, and the coherence and unity bestowed by supranational procedures and a common interest in preventing and deterring cherry-picking behaviour.

Introduction

The concept of differentiated integration has become a cornerstone of the debate on the reform and future of the European Union. This chapter introduces key concerns in this debate including the view that deeper integration will require greater differentiation and the fear that this will put the EU on a slippery slope towards ‘ever looser union’ and ‘two-class membership’. This introductory chapter summarizes the book’s arguments about the EU reform debate and differentiated integration. Among others, it states that differentiated integration has not produced ‘ever looser union’ but has been predominantly ‘multi-speed’ differentiation. Whereas differentiation has facilitated European integration under conditions of increasing international heterogeneity, it is an obstacle towards European solidarity and the consolidation of integration. It concludes with an overview of the chapters.

Mapping Differentiated Integration

This chapter maps the development of differentiated integration over the entire history of the EU and across all member states and policies. It shows that differentiation has been on the rise in treaty law and legislation. Yet, relative to the dramatic growth in EU authority and member states over time, there is no evidence for a trend towards ‘ever looser union’. This chapter further shows that differentiated integration is mainly ‘multi-speed’. Most national opt-outs are temporary and end after a few years. However, there is evidence for ‘multi-tier’ integration, too. A small and stable periphery has formed driven by Denmark and the United Kingdom. While there is no sign of multi-menu integration, differentiation also has a policy dimension in that the integration and differentiation of core state powers shapes the evolving multi-tier structure of the EU. In contrast, the EU’s market and flanking policies constitute the domain of multi-speed integration.

Concepts

This chapter offers a concise conceptualization of differentiated integration. It argues that differentiated integration can be understood as the differential validity of EU legal rules across the member states and is, thus, different from other forms of flexibility and non-compliance. Furthermore, the chapter introduces different modes of differentiated integration that have played an important role in the academic and policy debate: multi-speed, multi-tier, and multi-menu integration. Multi-speed differentiated integration is temporary. Multi-tier differentiated integration creates durable differences in the level of integration between groups of member states. Finally, in multi-menu differentiated integration, the composition of membership varies durably between integrated policy areas.

Regional Differentiation

This chapter offers a regional perspective on differentiated integration. It shows that the EU has developed a variegated set of membership grades, cross-cutting the formal boundary between member and non-member states. The chapter shows that internal and external differentiation are driven by the logics of instrumental and constitutional differentiation. In the EU’s internal differentiation, poorer (new) member states are more likely to experience differentiation because of weak governance capacity, low regulatory standards, budgetary competition, and migration pressure. The chapter extends this reasoning to European countries with comparatively weak governance quality. The lower the governance quality of a country, the earlier it is refused further integration on the EU’s ladder of graded membership. The more its governance quality improves, the better are its chances to advance towards full membership. In turn, as their governance quality surpasses that of EU core members, countries become increasingly likely to refuse integration.

Path Dependence

This chapter explores the path-dependence of differentiated integration in the case of the Eurozone. In the aftermath of the Euro crisis, differentiated integration grew significantly in this already highly differentiated domain. Why did differentiation become path-dependent? The analysis suggests that DI becomes self-reinforcing if a shock hitting a differentially integrated policy affects the insiders more heavily than the outsiders and forces the insiders to press ahead with integration. If insiders and outsiders were equally affected, we would not see a widening gap; if outsiders were more affected than insiders, we might even observe convergence at a high level of integration. Moreover, if the insiders could efficiently deal with the shock without having to integrate further, insiders and outsiders would not diverge.

Explaining Differentiation in EU Treaties

This chapter offers an empirical analysis of the conditions under which member states negotiate opt-outs from EU reform and enlargement treaties, covering all treaties since the Maastricht Treaty on European Union. The analysis suggests that constitutional and instrumental logics of differentiation co-exist in European integration. In reform treaties, differentiated integration tends to be driven by wealthy member states with Eurosceptic governments and populations that hold comparatively exclusive national identity conceptions. In contrast, in enlargements, comparatively poor member states that cause distributional concerns, have weak governance capacity, and require help in meeting the competitive pressures of membership are the main source of differentiation. The chapter also shows evidence of path-dependent differentiation. Once countries have opted out of a policy area, these initial opt-outs trigger further differentiation over time.

Conclusion

This chapter evaluates the implications of differentiated integration for the legal order, democratic quality, degree of solidarity, and further development of European integration. The chapter argues that eschewing differentiation would entail serious opportunity costs for the EU. Forgoing differentiation and limiting European integration to a clear choice between ‘in’ and ‘out’ would most likely result in a lower level and regional as well as functional scope of European integration, providing fewer opportunities for democratic community formation, more limitations to democratic choice, and less European solidarity than differentiated integration does. As regards the further development of European integration, differentiation is likely to prove useful in getting new policy domains ‘off the ground’, but less relevant for the further consolidation and deepening of already highly integrated policies. In these areas, the academic and policy debate is likely to focus increasingly on the governance and implications of differentiated integration.

Normalization

Focusing on the 2004 and 2007 Eastern enlargement of the European Union, this chapter traces the ‘normalization’ of differentiated integration after new countries become member states. The chapter explains pre-accession tensions between demands of member states to limit the membership benefits of the applicant countries, and demands of the applicants to help them deal with the burdens of joining a competitive European market. It also explores the post-accession process in which new member states are in a better position to avoid discriminatory differentiation but still have to cope with the repercussions of accession differentiation. The empirical analysis shows that almost all accession differentiation—both preferential and discriminatory—disappears within ten to fifteen years of membership.

Theory

This chapter theorizes differentiated integration based on the major schools of thought in the study of European integration: liberal intergovernmentalism, neofunctionalism, and postfunctionalism. The chapter distinguishes differentiation from uniform integration and non-integration. It explains demand for differentiation on the basis of cross-national heterogeneity in member state preferences and capacities. It then explores the effects of externalities, decision rules, supranational actors, and integration norms on the supply of differentiated integration. Finally, the chapter distinguishes two logics of differentiation. Constitutional differentiation arises in the context of EU treaty reforms and is driven by resistance to the supranational integration of core state powers among the Union’s Eurosceptic and wealthy member states. Instrumental differentiation is predominantly a feature of enlargement negotiations and results from distributional conflicts and differences in governance capacity and wealth between existing and prospective member states.