EU Shifts to ‘Coalition of the Willing’ After Brexit & Crisis Era

The European Union is signaling a potential shift towards a “multi-speed” approach to integration, potentially leaving some member states behind as it pushes forward with economic reforms. The move, revealed during an informal summit at Alden Biesen Castle in Belgium, comes as the bloc seeks to bolster its competitiveness and address concerns about falling behind the United States and China.

European Commission President Ursula von der Leyen announced plans to present an action plan titled “One Europe, One Market” to the European Council on March 19th and 20th in Brussels. The plan focuses on establishing a capital and investment union, aiming to streamline capital flow within the EU and facilitate growth for businesses. Von der Leyen indicated that if sufficient progress isn’t made by June, a “reinforced cooperation” framework – allowing at least nine member states to proceed at a faster pace – will be considered. This framework, outlined in Article 20 of the EU Treaty, is already utilized by the European Public Prosecutor’s Office, which began with 20 member states in 2021 and now includes 24.

A second priority for the Commission is strengthening the single market through the introduction of a standardized company form – dubbed “EU Inc.” – that could be digitally founded and managed across the EU within 48 hours. A legislative proposal is slated for March 18th. Von der Leyen emphasized a preference for a unified approach with all 27 member states, but reiterated the possibility of utilizing enhanced cooperation if necessary.

However, the viability of this “EU Inc.” model hinges on its status within member states that do not participate in the enhanced cooperation. Questions remain about its legal standing and operational implications in those jurisdictions.

The shift in approach comes after years of Germany advocating for a more unified EU following the Brexit referendum. According to Nicolai von Ondarza, head of the Europe Program at the Berlin-based German Institute for International and Security Affairs, Germany has consistently promoted the idea of integrating all 27 EU states since the UK’s departure. Angela Merkel, then Chancellor of Germany, reportedly felt “abandoned” by the UK after the 2016 referendum, viewing Brexit as a “humiliation” and a “disgrace” for the EU, and sought to mitigate its impact.

Despite the outward display of unity, tensions between Germany and France were apparent during the summit. While French President Emmanuel Macron strongly advocated for a “European preference” – prioritizing European products in public procurement – German Chancellor Friedrich Merz did not mention the issue during his press conference.

Merz too surprised observers with his comments on the EU Emissions Trading System (ETS). Having sharply criticized the system and suggested political intervention in its price formation at an industry conference in Antwerp the night before the summit, causing a 5% drop in the price of emissions certificates, he later stated that the ETS was a “good instrument” that had yielded positive results for over 20 years. He attributed concerns about the system’s cost to countries still relying on high-emission energy sources.

The European Council is scheduled to convene in Brussels on March 19th and 20th to discuss the proposed action plan, leaving the future direction of EU integration – and the potential for a two-speed Europe – unresolved.