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Why is the refugee crisis not an existential one? In short, because it is widely known what needs to be done, and compromise is possible. The EU needs to adopt some sort of shared asylum standard, speed up asylum procedures, improve control over the EU’s external border, find the key to a fair distribution of refugees among the 28 member states, and improve relations with countries of origin. The union also needs to improve help for countries that host armies of stranded refugees, notably Greece and Turkey.
And while there is no doubt that these policy items will require painful negotiations and much swallowed pride, they can be achieved. Some of them are even at the early stages of implementation. [...]
So if the refugee crisis can be managed, why is the unreformed eurozone so much more dangerous?
Because unlike with refugees and integration, on the euro, the EU’s different cultures cannot be separated. On the contrary, they must somehow merge. [...]This will require political compromise on an unprecedented scale in the history of European integration.
The key to the euro’s survival is the creation of a full-fledged fiscal union among the countries that share the common currency. Essentially, the eurozone will have to be turned into a political union, in which fiscal policies, the true hallmark of national sovereignty, will have to be communalized.
To build such a fiscal union, Germany and France, and their respective allies, will have to agree on a system of transfers, debt mutualization, fiscal oversight, and spending limits. More broadly, they will need to decide how much state interventionism is healthy for functional capitalism. How liberal should labor markets be? How long should people work, in a week and in their lives? What is a reasonable tax regime to stimulate business and equip the state with the funds needed to fulfill its duties? Perhaps crucially, eurozone members must also determine how a unified fiscal approach can be democratically legitimized. They will have to consider whether national parliaments are enough, or whether the eurozone needs its own separate legislature.
In other words: for the euro to survive, you need dramatically more Europe. More integration anyone? Madame Le Pen? Mijnheer Wilders? Herr Strache?
Any one of these issues is more politically poisonous than the more or less technical issues of the refugee crisis. Also, the timing is not great. The shock waves of the upcoming British referendum on EU membership, no matter what the result, will resonate long after June 23; and after that, elections in France and Germany are looming in 2017. Not much will be done before all of that is out of the way. And while more and more time passes without action, the structural flaw in the eurozone, an integrated currency area without a political union, will keep on doing its destructive work.
And that is why refugees, in the end, will bring Europe closer together, while the euro might break the union.