Institute for Politics and Society in cooperation with Prague European Summit held on 21st June 2018 a business breakfast called Integration of the Eurozone and Two-Speed Europe. We had the honor to welcome in discussion Peter Balázs, Professor at Central European University and Former EU Commissioner and Minister of Foreign Affairs of Hungary, Josef Janning, Head of ECRF Berlin Office and Senior Policy Fellow, and Vít Beneš, Department of International Relations and European Studies, Metropolitan University Prague.

Detmar Doering, moderator of the debate and the representative of the Friedrich-Naumann-Stiftung für die Freiheit for Central Europe and the Baltic States in the Golden City of Prague, opened the program by mentioning that for decades integration remains a disputing question and the Eurozone has made this topic even more urgent. It has become more and more difficult due to many countries’ contradictory positions such as a position of the V4 Group. The Visegrad Group, with the exception of Slovakia, refused to join the Eurozone, which means actually the two-speed Europe. There is no growth of the two-speed Europe, but rather arise between countries that do not want to integrate. So, what could be the solution to the problem?

Peter Balász started with the statement that the Eurozone is in the strategic focus of the EU, but at the same time, it is a very hard test. The Euro had started as a light and irresponsible construction, based on a very few macroeconomic indicators and under the pressure of the 2008 debt crisis and other shocks it has been strengthened step by step. Balász stressed out that the expression two-speed does not figure in the treaties. This is an invention of the public of journalism, of political commentators, their imagination of what is called officially the enhanced cooperation. For Balász it is not exactly the two-speed, but much more like the London red bus, when there is an upper floor and lower floor. Now, the current President of France Emmanuel Macron came up with the idea of the separate finance minister, budget, and parliament for the Eurozone. In return, J. C. Junker answered that we do not need separate bodies. Sweden and Denmark are handling Euro in a flexible way, they use Euro even that is not an official currency. The UK will leave the EU. Poland, the Czech Republic, and Hungary have not given any sign of intentions to join the Eurozone in the future. Romania, Bulgaria, and Croatia had expressed their intentions to join the Euro in the future. It means that after the Brexit the Euro will be the gravitational center of the EU economy.

Josef Janning continued that the case of EMU has not been conceived as two-speed Europe. It has been conceived as a unitary framework applied to all member states and there would be temporary derogation. That is why countries like Sweden it is a violation of the treaties. Because Sweden could join, as it does do all the criteria but Swedish do not want to join the Monetary Union. The life is different inside the Eurozone and Europe as a non-unitary actor cannot be flexible with the rules. Despite this fact, Janning does not see any reason why we should not wide the Eurozone and try to use all potential in improving governance. He also added that the Banking Union do not need to be limited to the Eurozone.

Vít Beneš pointed out that the Euro did not start as a two-speed project. The Euro studied as a single currency for the whole of the EU, and that time the notion prevailed that it is possible to deepen in the EU and enlarge at the same time. When it comes to the enlargement, there was a provision that Copenhagen criteria, which said that all EU-member states or all candidate countries subscribed to the creating of the political and Monetary Union. We currently see the failure of the notion that the EU can do deepening and enlarging at the same time. The Czech Republic, Hungary, and Poland not only break their promise which was written in the accession treaty, but they also break the political promise, and basically the conditions set for the candidate countries, which said that they should share a political goal of the Economic and Monetary Union in principle joining the Euro. Beneš does not believe that it is politically possible to keep the project open, because it allows cherry picking. The idea of having two-speed Europe or multi-speed Europe is simply another way to reestablish a single-speed Europe but within smaller settle. Also, Beneš added that the Czech Republic is not ready to make the decision to join. It does not want to join the Eurozone for some ideological reasons, because Czechs are waiting for how things will turn out. And they simply end up waiting forever.

Moderator ended with a conclusion that there is no vision of two-speed Europe; there are two visions of one-speed Europe – the slow one and the fast one. The last question to speakers was how the EU can convince those who stand outside to join the project.

Balász answered that there is a window of opportunity, starting with a new budget 2021, when the incoming governments would have a choice – whether they would grasp the opportunity or not.

Josef Janning added his opinion about the Czech Republic by proposing of 3 conditions that would make the Czech leaders change their mind. First, give them a high level of integration of Czech economy into the EU in particularly into the neighborhoods countries, notably Germany. The second condition would be a messy speculation against the Czech currency. The third element could be another global financial crisis. But Janning concluded that it is not likely to happen.

Vít Beneš answered that in the Czech Republic, there is a situation when your past decision limits your future choice. The EU can quite easily convince Czechs to join the Eurozone by proposing them to accept the Euro without signing up to the fiscal compact, the ESM treaty and to the banking union. Vít Beneš expressed his opinion that Czechs always choose the middle way for to be a cushion. In this way, Czechs would threaten the singleness of the Eurozone, and Germany would not like the plan. Josef Janning added that it would fail not because of Germany, but because it is a bad idea.