The European Union is caught in a trap; but is this a trap of the European Union’s own making? Following Dani Rodrik’s analysis, the problem might be argued to be akin to the ‘trilemma’ associated with economic globalisation. For as long as the Union fails to overcome its founding functionalism and eschews its own (federal) ‘statalisation’, it will only ever be able to guarantee two out of three cherished notions of economic integration, national sovereignty and democracy. The parings might vary: sovereignty can always be combined with (national) democracy, just as trade liberalisation can be undertaken in a democratic manner (albeit of the Europeanised variety); yet, the simultaneous presence of all three concepts is an impossibility, a simple and inevitable consequence of the effort to move beyond the traditional structures of the nation state in pursuit of a single, integrated European market.

In the period spanning nearly a decade from the beginning of the financial crisis to the present, the constitutional state and state system in Europe has been affected by a series of challenges to its authority and legitimacy. With regard to the European Union, these challenges are fundamental in that they go to the very existence of the project and to the values it professes to be founded on. They seem increasingly interconnected to the EU and the trajectory of integration rather than merely external to it. For the moment, the EU remains relatively resilient; outside of the UK, appetite for ending the experiment mostly inhabits the political fringes, although even in core countries, anti-European pressures are mounting and Eurosceptic parties are on the ascendency. What is clear is that the challenges to the current system go as much to the legitimacy of domestic regimes and their political authority as to the EU itself, not least from the fragmentary pressures on the state from below in the context of subnational claims to autonomy. In short, the crisis of authority is not merely of the EU but of the regional state system and the governing order in Europe.

Almost ten years since the eruption of the global and financial crisis of 2008 and its European manifestation as the ‘Eurocrisis’, there is growing consensus that the latter quickly escalated or mutated into (among other things) a more profound democratic crisis. A number of prominent public intellectuals put pen to paper to warn not only of a crisis of European democracy, but of a crisis of the very ‘political institution’ of democracy, and particularly its representative and liberal variants. Contemporary manifestations of the ‘hollowing out’ of democracy following the Eurocrisis have taken many forms and several contributions in this volume have dealt with various aspects of the phenomenon.

The focus of the present chapter is on one aspect of this crisis, namely the Eurocrisis as a crisis of the EU’s own democratic credentials. Even as they insisted on its purely economic character, commentators were quick to criticise the undemocratic form that the emergency EMU-related responses to the Eurocrisis came to assume, particularly at the European level, where not only parliamentary processes, but also the Treaties’ legal prescriptions, were systematically circumvented.

This chapter focuses on the trajectory of the European Union in order to elucidate and discuss its current problems. My main argument unfolds on the historically proven premise that the uneven and combined development of different national economies produces a major contradiction between the trend for greater integration and the continued assertion of national interests, a contradiction which is not likely to be transcended in the near future. My analysis brings forward two points, through a historical exploration of the European integration process.

First, I suggest that what invites further research and guides the formation and the development of the European integration process is geopolitical antagonism. This antagonism has two dimensions. The first revolves around the EU Member States, as countries in competition with each other, and the second encapsulates the ‘external’ antagonism of these nations as parts of a single entity (Europe) vis-à-vis the big geopolitical powers outside Europe (the Soviet Union in a former period, the United States, Russia and China nowadays).

Legal texts are the outcome of political processes. As such they provide an insight into the deep ideological changes that may be taking place within any legal system. In this chapter, we propose to contrast two important instruments of the EC/EU, the first being the Community Charter of the Fundamental Social Rights of Workers of 1989, and the other being the EU Social Pillar of 2017. The aim is not to engage in a literal compare and contrast of the two instruments, as one might compare and contrast apples and oranges; rather, it is to engage in a contextual compare and contrast of the two instruments, with a view to understanding what they tell us about the changing economic and political direction of the EU. In doing so we aim better to understand the evolution of social policy, the changing role of trade unions within the EU, and the inactivity in relation to employment rights despite the great changes in the global economy and working practices since the last employment law directive was produced in 2008.

Legal texts are the outcome of political processes. As such they provide an insight into the deep ideological changes that may be taking place within any legal system. In this chapter, we propose to contrast two important instruments of the EC/EU, the first being the Community Charter of the Fundamental Social Rights of Workers of 1989, and the other being the EU Social Pillar of 2017. The aim is not to engage in a literal compare and contrast of the two instruments, as one might compare and contrast apples and oranges; rather, it is to engage in a contextual compare and contrast of the two instruments, with a view to understanding what they tell us about the changing economic and political direction of the EU. In doing so we aim better to understand the evolution of social policy, the changing role of trade unions within the EU, and the inactivity in relation to employment rights despite the great changes in the global economy and working practices since the last employment law directive was produced in 2008.

Legitimacy is essential for any polity that seeks to exert law-making authority over its people. Although the EU is not a single state, it is a polity that has to obtain legitimacy for its power to make laws affecting some 500 million people across twenty-eight Member States (soon to be twenty-seven pending UK exit). And yet in the eyes of EU citizens the Eurozone crisis and Brexit vote call into question the EU’s legitimacy as it cannot guarantee prosperity for all its peoples or shield against economic and political uncertainty. There is growing unease and disaffection, particularly among southern EU states’ voters, and divisions between core–peripheral Member States, with emerging alternative popular representation structures (e.g. Podemos in Spain) and reappraisal of the EU, even among pro-EU politicians (e.g. the British left-wing, albeit historically deep divisions have remained since the membership referendum of 1975 with vocal Labour Eurosceptics such as Tony Benn and Jeremy Corbyn). In this context, ‘core’ Member States refers to the advanced economies and strong democracies including the original founding members (Belgium, France, Germany, Italy, Luxembourg and the Netherlands), and new members from the enlargement period between 1973 and 1995 (Denmark, Ireland, the UK, Greece, Portugal, Spain, Austria, Finland, Sweden).

The European Union is caught in a trap; but is this a trap of the European Union’s own making? Following Dani Rodrik’s analysis, the problem might be argued to be akin to the ‘trilemma’ associated with economic globalisation. For as long as the Union fails to overcome its founding functionalism and eschews its own (federal) ‘statalisation’, it will only ever be able to guarantee two out of three cherished notions of economic integration, national sovereignty and democracy. The parings might vary: sovereignty can always be combined with (national) democracy, just as trade liberalisation can be undertaken in a democratic manner (albeit of the Europeanised variety); yet, the simultaneous presence of all three concepts is an impossibility, a simple and inevitable consequence of the effort to move beyond the traditional structures of the nation state in pursuit of a single, integrated European market.

This chapter analyses the Treaty on Stability Coordination and Governance (TSCG), as an emblematic example of the New Economic Governance. The New Economic Governance is the ensemble of economic and fiscal reforms that were introduced in the wake of the financial crisis. In this work, when we talk about New Economic Governance we refer specifically to: the European Semester; the Six-Pack; the Two-Pack; and the TSCG, better known by the name of its Third Title, ‘Fiscal Compact’. All these measures have been adopted by European institutions to deal with the financial speculation on the euro and the financial crisis after 2008. Together with the Financial Aid Programmes and the extraordinary measures of the European Central Bank (ECB), these financial and economic regulations form the institutional answer to the financial crisis in Europe.

Europe was shocked by the news that a boat full of migrants sunk into the Mediterranean Sea taking with it fifty-seven people. The episode occurred when the Italian Navy vessel Sibilla, in its effort to protect the common EU borders collided with the migrants’ boat. Some serious debates took place then, raising questions as to whether it was an accident or part of a political effort to stop the flow of migrants or whether the Italian Navy could have intervened and rescued the migrants. The year was 1997 and the non-EU migrants were Albanians fleeing the 1997 civil war that followed the collapse of the ‘pyramid’ banking system in their home country. The transition of the country to market economy and the new ambitious financial innovations had been promoted by the World Bank (WB) and International Monetary Fund (IMF) but also the European Economic Community (EEC).

In the midst of the multifaceted crisis the European Union (EU) is currently experiencing, almost every recent referendum held on European issues has been regarded as another crack in European unity. Not only have the questions addressed to the people – as well as the respective political campaigns – touched upon key areas of the European crisis such as finance and migration; the answers finally delivered were often also unexpected and sometimes even shocking from a European integration point of view.

The Greek ‘no’ to the bailout referendum in July 2015 and the Danish ‘no’ to an opt-out referendum six months later were followed in 2016 by a Dutch ‘no’ to the Ukraine–EU Association Agreement, by a Hungarian (invalid) ‘no’ to EU refugee-relocation quotas and, of course, by the famous Brexit referendum; the British ‘no’ to the EU itself.

Since 2010 the EU has been in an ‘emergency’ situation due to the eurocrisis, where the crisis management by the EU institutions, notably the European Central Bank (ECB), and national governments has been increasingly out of step with the EU Treaties which define the scope of the mandate of the ECB and the EU’s economic policy powers as well as the conditions and limits subject to which Member States have transferred policy and lawmaking powers to the EU in accordance with their national constitutions. The ECB is independent of parliamentary control, which means that it is not accountable to national parliaments and merely has a reporting duty to the European Parliament. Exempt from democratic control the ECB is subject only to judicial review at both EU and national level. At EU level, the competent court is the Court of Justice of the EU (CJEU) which claims the right to be the sole arbiter over the interpretation of EU law.

Much of the criticism levelled against European policymakers since the eurocrisis has centred around the claim that the adoption of a common currency was an essentially political project which courted disaster by decoupling monetary from political integration. According to what has become a popular narrative, the European leadership chose political grandstanding and symbolism over pragmatism in recklessly pushing forward with a fatally deficient scheme of monetary union. Little wonder, then, that the hubris of political fiat found its nemesis in the hard facts of economics.

I shall argue that this narrative is in many ways incomplete as it leaves out entirely the intellectual background to the steps that have furthered the development of the EU. From the 1950s, the integration process has been underpinned, or at least accompanied and justified, by what might be called the theory of ‘self-fulfilling Europe’: the idea that economic integration, once set in motion, can remove political resistance to European unification by creating factual interdependence and a consciousness of solidarity.

The purpose of this chapter is to further explore the nature of ‘crisis’, and how the incorporation of an economic ideology as ‘solution’ to that crisis in the form of legally binding obligations restricts the ability to pursue alternative courses of action, creating tensions within society. Focusing upon economic doctrine as reflecting ideological positions, the authors consider the way in which the framing of events as ‘crises’, and thereby establishing them as threats to the current political and economic system, enables political actors to facilitate changes that may not otherwise be politically feasible. In particular, by responding to a crisis through the creation of laws that codify an ideologically guided economic doctrine, a temporary state of crisis creates a permanent legal set of obligations. By doing so, prevailing (if not altogether hegemonic) political actors are able to delegitimise alternatives to that economic doctrine as falling outside of the rule of law: there is no legal alternative but to follow that legal obligation.

In the period spanning nearly a decade from the beginning of the financial crisis to the present, the constitutional state and state system in Europe has been affected by a series of challenges to its authority and legitimacy. With regard to the European Union, these challenges are fundamental in that they go to the very existence of the project and to the values it professes to be founded on. They seem increasingly interconnected to the EU and the trajectory of integration rather than merely external to it. For the moment, the EU remains relatively resilient; outside of the UK, appetite for ending the experiment mostly inhabits the political fringes, although even in core countries, anti-European pressures are mounting and Eurosceptic parties are on the ascendency. What is clear is that the challenges to the current system go as much to the legitimacy of domestic regimes and their political authority as to the EU itself, not least from the fragmentary pressures on the state from below in the context of subnational claims to autonomy. In short, the crisis of authority is not merely of the EU but of the regional state system and the governing order in Europe.