Europe’s Schengen Area, the world’s largest passport-free travel zone, allows more than 450 million people to move freely, without border checks, between 29 countries. These days indelibly linked with the European Union (new member states are, after all, treaty-bound to eventually join), it is easy to forget that Schengen was originally a simple, inter-governmental agreement, signed in 1985 by the leaders of Belgium, France, Luxembourg, the Netherlands and what was then West Germany. The five countries entered into the Schengen Agreement separately from the rest of the European Community, given that consensus could not be reached among all member states.
Although the Schengen Agreement and its related conventions were incorporated into mainstream of European Union law by the Amsterdam Treaty of 1997, four of its current members (Iceland, Liechtenstein, Norway, Switzerland) are not EU members. Two EU members, meanwhile, do not participate: Ireland has an opt-out in order to protect its Common Travel Area with the United Kingdom, while Cyprus is committed to Schengen membership, although the Turkish occupation of the north of the island complicates the process.
Schengen is arguably the most successful example yet of EU members co-operating (at least originally) outside of European Union structures. It was, in many ways, the first example of what has become known as a ‘two-speed Europe’ (member states working together when others refuse, for whatever reason) to do so. It is a notion that in recent weeks has once again been placed on Europe’s agenda, with European Commission President Ursula von der Leyen saying earlier this month that, “While our ambition should always be to reach an agreement among all 27 member states, where a lack of progress or ambition risks undermining Europe’s competitiveness or capacity to act, we should not shy away from using the possibilities foreseen in the Treaties on enhanced cooperation.”
Her comments followed the creation in January, by the finance ministers of Germany, France, Italy, the Netherlands, Poland and Spain, of a new coalition, the E6, which wants to push for “decisive action and swift progress” in four strategic areas: capital markets, the international role of the euro, defence procurement, and supply chains.
“We are providing the impetus, and other countries are welcome to join us,” said German Finance Minister Lars Klingbeil. What he didn’t say, but clearly insinuated by omission, was that those EU member states unwilling to take part would not hold back those that are.
A well-worn path
The precedents for such arrangements are more numerous than critics like to admit. The eurozone itself is a form of two-speed Europe: 21 EU member states share a currency, while seven do not, either by choice or because they have yet to meet the criteria. Permanent Structured Cooperation (PESCO), the EU’s framework for closer defence collaboration among willing member states, has operated since 2017 without obliging all 27 to participate. The Fiscal Compact, the post-financial-crisis agreement to enforce budget discipline, was signed by 25 member states—but not Britain (then still a member) or Czechia.
What the E6 initiative and von der Leyen’s recent remarks suggest, however, is something qualitatively different: a more explicit acceptance of variable geometry as a feature rather than a bug of European integration. The EU’s treaties already provide for ‘enhanced cooperation’, a mechanism allowing at least nine member states to press ahead in areas where unanimity cannot be achieved. It has been used sparingly, and often awkwardly: the EU’s unified patent court, for instance, took years to establish through this route. What the E6 now proposes is something closer to a standing caucus of Europe’s largest economies, able to build momentum and present smaller or more hesitant members with a fait accompli.
The case for a more formalised two-speed approach is not without merit. Europe’s competitiveness has been slipping for years: Mario Draghi’s 800-page report last year laid out the scale of the challenge in forensic detail, calling for 800 billion euros in annual investment just to keep pace with the US and China. Achieving that through unanimity among 27 member states (ranging from Germany’s 4.7 trillion euros economy to Malta’s 20 billion euros one, is a project for the very patient. If the EU’s larger economies can move faster on capital markets union, defence procurement, or green industrial policy, there is a reasonable argument that they drag others along in their wake rather than waiting indefinitely for consensus to crystallise.
Stuck in the slow lane
The risks, though, are considerable. The EU’s cohesion has always rested on the belief that integration is a shared project, one in which smaller and newer members have as much at stake as the founding six. Countries such as Hungary and Slovakia, whose governments have strained relations with Brussels in recent years, are already inclined to view the bloc’s institutions as vehicles for larger-country interests. A more formalised inner circle would hand those governments a ready-made grievance. Poland, notably, is an E6 member, but its inclusion raises its own questions given that Warsaw has been one of the EU’s more assertive advocates for solidarity with eastern member states, many of which are not in the new grouping.
There is also the question of what happens to those left behind. Western Balkan candidates have long been promised the full benefits of EU membership, including the eurozone and Schengen. If the goalposts shift, and if the ‘real’ EU becomes a smaller, more integrated core, the incentive to pursue difficult domestic reforms diminishes. EU enlargement is already moving slowly and a two-speed framework risks creating a second tier of membership countries might not consider worth the wait.
Von der Leyen’s choice of words is nevertheless instructive. She spoke of using “the possibilities foreseen in the Treaties”, careful to frame acceleration as a legal option rather than a rupture. Enhanced cooperation, as defined in Article 20 of the Treaty on European Union, requires a minimum of nine member states and cannot be used to undermine the internal market or the rights of non-participating members. The E6’s ambitions, particularly around capital markets and the euro’s international role, will run up against these constraints quickly.
Speed versus solidarity
The deeper irony is that a two-speed Europe has always existed in practice. What is new is the willingness to say so openly. Whether that candour leads to a more dynamic union, or accelerates its fracture, will depend less on treaty mechanics than on whether the countries left outside the fast lane believe they will eventually be invited in.
Schengen began as a club of five and now has 29 members. That is the optimistic reading. The pessimistic one is that Europe, already strained by war, migration and the return of great-power competition, is in no condition to afford internal division on top of everything else.
Photo: Dreamstime.
