European Union member states have more reasons than ever to work together. Their trading partners are in disarray. The world is at war. Economic growth is too low, demographic trends are worrisome, and extreme weather is an ever more regular occurrence.
It is hard, though. The EU is a collective, not a federation. It is used to working by unanimity on its most important common interests. It is further used to taking a similar approach on the world stage, through consensus-building fora like the G7, the G20, and the World Trade Organization. The hard reality is that keeping a unanimous commitment to European values will require developing some system of majority voting that accommodates dissent without halting because of it.
Taking decisions in a split environment requires considering whose votes are most crucial for finding a plan that works. Worldwide that swing vote is often China. Within the EU, Germany’s voice is always critical, but smaller countries also can hold up a bargain. The bloc’s enlargement trajectory poses multiple versions of this problem: Will member states block new states getting in? And then, will those new member states have, or exercise, veto powers of their own, from within?
Viktor Orbán, Hungary’s famously recalcitrant former prime minister, may have given the EU a headstart on some of these new challenges. Because of his persistent refusal to join the consensus decision to help Ukraine, the rest of the member states had to seek creative solutions for getting things done. From strategic coffee breaks to creating new budget rebates, getting around Orbán showed that the EU can move without its stragglers.
Enlargement’s Turn in the Spotlight
“Ever-closer union” is an explicit goal of the EU’s core treaties, jumpstarted by optimism and propelled by crisis. The eurozone is now 21 members strong, with four new members joining during or after the currency’s 2010-15 debt crisis. That episode also ushered in European Central Bank supervision for big banks and sovereign fiscal backstops that protected bond market access during the worst of the turmoil.
Since then, further financial integration has frequently topped EU wish lists but nothing much has happened. As Luis de Guindos said in May, shortly before finishing his eight years as vice president of the European Central Bank, “I think that I have some doubts.” Most gains came during the crisis, when he was Spanish finance minister, and not during the period after.
Fiscal matters had their leap forward in 2020, when the COVID-19 pandemic shut down economic activity around the globe. The NextGeneration EU recovery program ushered in joint borrowing on behalf of all EU member states—within the treaties and including non-euro users—on a temporary basis. Although new borrowing for that program will expire at the end of 2026, the EU bond-selling machinery will remain active thanks to long-term commitments and new pledges to support Ukraine.
Enter New Members?
Enlargement looks set to be the next crisis point, driven by the war on Europe’s eastern borders. The EU granted Ukraine full status as a candidate country in June 2022, just months after Russia’s full-scale invasion. Four years later, Kyiv continues to forge closer ties with Brussels in ways that have also improved the chances of Montenegro, North Macedonia, and other countries that have long been waiting in the wings. Even Iceland might be reconsidering its earlier decision not to sign on.
France, long a skeptic of expanding the EU aegis to the Western Balkans, has stepped up alongside Germany with a proposal to offer graduated access to the single market. However, those recommendations stop short of offering a way around any break in consensus among current EU member states.
My colleague Nina Vujanović at the Bruegel economic think tank argues that minimizing veto-prone pinch points will be essential to make much progress. For example, the EU could reduce the number of votes requiring full consent, allowing some earlier steps to take place without facing a full yes-or-no reckoning until a country drew closer to full membership.
More Money, More Problems
Adding more countries to the EU would bring overall benefits but require some shifts in how Brussels allocates “cohesion” funding, the catch-up funds directed at poorer regions. If nine candidate countries made it in, fiscal benefits would offset possible budget cuts, according to a December 2024 analysis by Zsolt Darvas and Juan Mejino-López. In any case, that kind of transformative shift is nowhere near imminent.
That leaves the 27 incumbents with no one to blame but themselves for stalled talks over the next seven-year funding plan. Negotiations over the 2028-2034 Multiannual Financial Framework (MFF) are in full swing and so far everyone’s a critic. The European Commission’s starting plan is laudably ambitious in its bid to merge slush funds, reduce funding for specific regions, and map out new revenue sources for servicing all that joint debt.
But each of those elements has already faced strong resistance. Regions that currently receive money fear they will be left behind. Lawmakers who backed specific subsidies worry about losing those earmarks, and the European Parliament supports an even bigger budget than the roughly €2 trillion already on the table. Meanwhile, the European Commission favors a contentious business tax that would stifle economic growth if it somehow made it through.
The EU’s more affluent member states have a chance to show true leadership if they can push through their frugal instincts. Public goods, designed well, benefit all countries. And as noted by MEP Manfred Weber, group leader of the European Parliament’s center-right European People’s Party (EPP) alliance, “net payer” countries look especially cheap when they argue for shrinking the overall budget while protecting subsidies to their own farmers.
Two-Speed Tools
All of this gridlock has prompted increased interest in ways to move ahead without all countries being on board. Creating so-called coalitions of the willing can offer a way forward on big initiatives, but such multi-speed approaches can also become bogged down in even more fragmentation rather than a stronger single market.
The EU will therefore have to think hard about whether it wants to increase use of qualified majority voting (QMV), especially in areas like tax and foreign policy where the current treaties insist on unanimity. European Commission President Ursula von der Leyen has said QMV procedures would help in areas such as sanctions and human rights, where there is a clear collective interest. In other areas, however, there will be little political incentive to move ahead unless and until the treaties are amended.
Other procedures may be called on to fill the gap: enhanced cooperation, two-track policies, and the so-called 28th regime. Each tool has its clearly beneficial uses. The euro itself is a case of enhanced cooperation. The ECB’s Single Supervisory Mechanism applies to large financial institutions while national authorities maintain oversight of smaller ones, a two-speed system that so far mostly works. And the 28th regime has shown promise for aspects of patent and divorce law, and may now be used to help small companies get started more easily.
Politically, EU leaders would do well to focus on outcomes, rather than process. A decade ago, “enhanced cooperation” was associated with two failed tax proposals, the doomed common corporate consolidated tax base, CCCTB for short, and a financial transaction tax plan that led nowhere but a bunch of fruitless meetings. While the technique is a poor replacement for collective motivation, it can be used well to accommodateholdouts as in December’s Ukraine loan deal.
When it comes to business law, 28th regime solutions will need to stay available for promising avenues, not tied too closely to the EU Inc. startup proposal. Whether or not EU Inc. gets off the ground, European companies deserve more cross-border options, and there is room for other kinds of promising proposals using that method.
Worldwide Workarounds
At the global level, the EU will need to work harder than ever to hold its own. The United States is in political turmoil. It started a war that so far it cannot stop and that has driven up energy prices all over. China’s policies are all about self-interest, while it is challenging the US in the race to build the best artificial intelligence systems and to run those AI models on the fastest chips. The United Kingdom has burned through seven prime ministers in 10 years during its Brexit journey. Russia continues to wage war in Ukraine.
That leaves the EU clinging to its green transition as an energy-policy shield as well as salve to a burning planet. To their credit, EU leaders have rallied around Ukraine and shown a willingness to put common defense, financial-market supervision, and other top long-term issues on their summit agendas. Yet, their very success at staving off the next serious crisis may also have kept the next serious solution out of reach.
True strategic autonomy will require more decisive political will. Like it or not, the EU will need to move away from consensus, which will create a more transparent set of leaders and dissenters. Otherwise, European leaders will be at the mercy of outside swing votes without claiming enough of their own.
Rebecca Christie is IPQ’s Brussels columnist and a senior fellow at Bruegel, the economic think tank.
