Crisis Years

Between 2008 and the present the Union was hit by a financial crash, a debt crisis in the countries that share its currency, a surge of asylum seekers, the departure of a major member, a pandemic and a major war on its border. Each reshaped it, and each left arguments that have not been settled. This chapter treats the crises in turn, asks what changed after each, and then looks at a well-known claim: that the Union moves forward chiefly by being pushed. Because it covers recent events, which are still developing and still politically charged, it states a cut-off date, gives the facts first and the arguments second, and marks many points "check".

The Euro Crisis, 2009–2015

The world financial crash of 2008 exposed weaknesses in the euro, which Chapter 4 described being built. Countries that share a currency cannot devalue it to recover competitiveness, and the system had no common budget to help a member in trouble.

• Greece. In late 2009 a new government revealed that the budget deficit was much larger than reported (check the figures). Lenders lost confidence, and Greece's borrowing costs soared. In 2010 it received the first of three international rescue programmes, from euro countries and the International Monetary Fund, on conditions of spending cuts and reforms (check).
• Others. Ireland, Portugal and Cyprus also received programmes, and Spain obtained a loan for its banks (check the details). Italy was a source of worry because of the size of its debt.
• The human cost. The conditions, known as austerity, were followed by deep recessions and high unemployment, especially in Greece and Spain, with young people hit hardest (check the figures).

What Changed After the Euro Crisis

• Rescue funds. Temporary funds were turned into a permanent European Stability Mechanism (check the dates).
• The ECB. In July 2012 its president, Mario Draghi, said the bank would do "whatever it takes" to preserve the euro, a statement credited with calming markets (check). The bank later bought government bonds on a large scale.
• Banking union. The largest banks in the euro area came under a single European supervisor (check).
• Tighter fiscal rules. Stronger monitoring of national budgets, later revised (check).

Greece held a referendum in July 2015 that rejected the creditors' terms, then accepted a third programme within weeks (check). It left the euro neither then nor later.

The Migration Debate, 2015 Onwards

In 2015 more than a million people arrived in the Union, most crossing the Mediterranean or the Aegean, many of them fleeing the war in Syria (check the figure). The arrival was uneven: Greece and Italy were the first points of entry, while Germany and Sweden received many applications.

• The rules. Under the "Dublin" rules the country where an asylum seeker first arrives is normally responsible for the claim, which put pressure on a few states (check).
• The responses. Germany's chancellor allowed many Syrians to enter, with the phrase "we can do this" (check). Other governments, particularly in central Europe, refused to accept quotas for sharing out asylum seekers. Some states reintroduced internal border checks (Chapter 5).
• The Turkey deal. In March 2016 the Union agreed with Turkey that irregular migrants arriving in Greece could be returned, in exchange for money and other incentives (check).
• Afterwards. Years of negotiation led to a Pact on Migration and Asylum in 2024 (check the details), whose implementation is a continuing argument.

This is one of the most heated subjects in European politics. The facts about numbers, routes and legal duties are firm. The arguments about what the right response is, and what the Union can compel its members to do, are not.

Brexit

In June 2016 the United Kingdom voted in a referendum to leave. It left on 31 January 2020, and a trade agreement took effect at the start of 2021 (check). The full story is in European Politics Fundamentals 9. Its place in this chapter is the effect on the Union: the remaining members did not follow, and public support for membership in several countries rose in the years afterwards, a result that surprised some commentators (check the survey data).

Covid and the Recovery Fund

The pandemic in 2020 began with each country closing borders and competing for supplies, and the Union was criticised for a slow start. The vaccine programme was organised jointly, with the Commission purchasing doses on behalf of members, a decision that brought both advantages and a dispute with some suppliers (check).

The economic response was more significant. In July 2020 the leaders agreed a recovery fund, NextGenerationEU, of around €750 billion, which the Commission would raise by borrowing on markets together, repaying over many years (check). It was the first time the Union borrowed on this scale in its own name, and some commentators called it a step towards deeper integration, others a one-off emergency measure (check). Money is distributed as grants and loans to member states, tied to national recovery plans.

War in Ukraine and Energy

Russia's full-scale invasion of Ukraine in February 2022 produced swift and unusual responses (check).

• Sanctions. Successive packages against Russia, adopted by unanimity.
• Energy. Many members, Germany above all, had relied heavily on Russian gas. The Union set out to reduce that dependence quickly, at the cost of high energy prices (check).
• Refugees. The Union activated for the first time a "temporary protection" rule giving Ukrainians the right to live and work in the Union without individual asylum claims (check).
• Arms and enlargement. The Union financed weapons deliveries for the first time through a special fund (check), and in 2022 granted Ukraine and Moldova candidate status (Chapter 6).

Does the Union Advance Through Crisis?

Observers have noticed a pattern. Jean Monnet is often quoted as saying that Europe would be forged in crises (check the wording). Political scientists have given a more formal version, called "failing forward" (check the authors): a crisis arises because governments agreed a minimal deal, and then they respond with another minimal deal, which solves part of the problem and leaves a new weakness for the next crisis.

Exercises

Next chapter: Everyday Life I: Money, Shopping & Consumers, which turns from the big events to what the Union means at the till and on the shelf.