Key Takeaways:
- EU leaders, led by France and Germany, are pushing for faster economic reforms to boost global competitiveness.
- A stalled Capital Markets Union has been given a June deadline; if no progress is made, a smaller group of at least nine countries may proceed alone.
- This "enhanced cooperation" model echoes existing multi-speed EU projects like Schengen and the euro.
- The move highlights deep frustrations with decision-making inertia among all 27 member states.
A Deadline for Unity
EU governments have long championed unity as their shield against U.S. and Chinese economic pressure. However, a recent informal summit in Brussels revealed a stark new reality: waiting for all 27 member states to agree on critical reforms may be a luxury Europe can no longer afford.
The clear message from leaders like French President Emmanuel Macron and European Commission President Ursula von der Leyen is one of urgent action. They have set a June deadline for progress on the long-stalled Capital Markets Union (CMU)—a project designed to pool financial resources and allow the bloc to invest at a scale rivaling the United States.
"Often we move forward with the speed of the slowest and the enhanced cooperation avoids that," von der Leyen stated. "The pressure and the sense of urgency is enormous, and that can move mountains."
The 'Coalition of the Willing' Plan B
If sufficient progress isn't made by summer, a smaller, more agile group of EU countries is prepared to move forward under an "enhanced cooperation" framework. This would require at least nine member states.
The likely first movers are the six major economies that recently met in Germany to discuss breaking the EU's decision-making deadlock:
- Germany
- France
- Italy
- Spain
- Poland
- The Netherlands
This "coalition of the willing" approach is a direct response to what many see as crippling inertia, where national interests and bureaucratic hurdles have held back the CMU for over a decade.
Multi-Speed Europe Is Already a Reality
While the idea of a "two-speed Europe" alarms some diplomats, the model is not new. The EU already operates successfully with concentric circles of integration in several key areas:
- The Schengen Area: Includes four non-EU countries but does not include EU members Cyprus or Ireland.
- The Eurozone: 20 of the 27 EU members use the single currency.
- The European Public Prosecutor's Office: Has 24 participating EU countries.
- The Unitary Patent: Currently includes 18 member states.
Recent decisions, like the €90 billion loan to Ukraine from which the Czech Republic, Hungary, and Slovakia opted out, further demonstrate this flexible approach.
Diplomatic Tensions and Economic Threats
The push for smaller-group initiatives has sparked concern among some EU diplomats. One warned that while threatening member states to agree might work short-term, it is "a very bad idea for the future of Europe." Another noted it "flies in the face of the unity we like to parade."
However, proponents argue the economic threat is too great to ignore. New data shows the EU's trade surplus is shrinking, weighed down by U.S. tariffs and rising Chinese imports. The need for a Plan B is seen as essential.
"It's a hostile world out there. Prosperity is under threat if these bottlenecks continue," a third diplomat noted, defending the pragmatic approach.
A Test of European Solidarity
Think tanks caution that a coalition of the willing is "no silver bullet." Disagreements that have stalled the CMU—often between major players like France, Germany, and Italy—could simply resurface within a smaller group.
As ING Bank economists noted, "Europe has never really suffered from a lack of plans or grand vision; the real obstacle has almost always been weak implementation and national interests taking precedence over European ones."
The coming months will be a crucial test. Can the EU advance as a bloc of 27, or will it increasingly rely on variable geometry to maintain its global economic standing? The June deadline for the Capital Markets Union will provide the first clear answer.