Henrik Enderlein and Jean Pisani-Ferry started to talk of an “economic Schengen” in the autumn of 2014, and Enderlein and Germany’s economy minister Gabriel were at it again today at a conference in the BMWi in Berlin. This is a really bad idea for four reasons, each of which I will explain.
Communication
Schengen is actually a village in Luxembourg. It happens to be the place where an agreement on abolishment of border controls was signed in 1985. The name stuck. It is part of a trend where towns give their names to things the EU does, because the agreements were struck there (Treaty of Lisbon, Ioannina Compromise etc.) The thing is that the name bears no relationship to what the agreement actually is. So to then apply the term Schengen to something other that a borders issue doubles the absurdity.
Second, when you say Schengen, that either means an area that is damned hard to get into (if you are coming from outside the EU), or a borderless EU system that keeps on being challenged by its own politicians, and even if you believe in it, it does not work properly as I have documented many times on this blog. In short, if you even know what Schengen is, you are rather unlikely to have a positive view of it. A Schengen for the economy hence sounds like a pretty disastrous idea, even before you get to the detail.
This is how Enderlein explains the idea on Twitter:
In theoret terms: Single Market is neg integration top-down, Econ Schengen is pos integration bottom-up @andreasbotsch @huettemann @pipiszke
— Henrik Enderlein (@henrikenderlein) February 24, 2015
If you have any idea what that means then you’re brighter than I am. Or you’re the sort of person that likes abstract concepts more than practical policy recommendations.
Legal
The Schengen Agreement was needed outside the EU Treaties in 1985 precisely because there was no way to do what the signatories wanted to do inside the EU Treaties. No legal basis existed. So the signatories started with a separate Treaty that was then eventually integrated within the European Union. This is not the case when it comes to economic policy – as Enderlein and Pisani-Ferry put it, their proposals are to boost economic growth, and to focus on energy and the digital Single Market. Competence to cope with both of these can already be found very easily within the Treaty of Lisbon.
Democracy
Anything concluded outside the EU Treaties will not make use of the EU’s institutions that, despite their many flaws, at least have some sort of functioning representative democracy through the presence of the European Parliament. There is also the Enhanced cooperation procedure in the Treaty of Lisbon that allows initatives among smaller groups of Member States, staying within the EU institutional framework. So anything agreed, Schengen-like, outside the EU Treaties is going to be intergovernmental and hence less accountable.
Policy outcomes
Enderlein and Pisani-Ferry point out that more action is needed on energy and the digital Single Market. Yet there is plenty of work already being done in these two areas – all of Cañete’s work on the EU Energy Union, and all of the work started by Kroes and continued by Ansip and Oettinger on changes to the digital Single Market, to foster cross border digital services, reform copyright and end roaming. Also in both areas the very countries that are supposed to be the motors of the economic Schengen, France and Germany, are actually brakes to progress rather than the courntries pushing for more speedy action. France worries about copyright reform, while Germany is more worried about how much money the state can rake in from Deutsche Telekom than it is about dealing with roaming or net neutrality. Differing views between France and Germany on renewables and nuclear are a further stumbling block. Further, when it comes to wider issues of economic growth, there is a broad consensus at EU level about what changes are needed to labour market law across the EU – that is what the European Semester reports are supposed to examine.
So, to conclude, an “economic Schengen” is a nightmare of communication, it is questionable as to whether it is legally necessary, it is unlikely to be democratic, and the countries that are supposed to back the core policies within it are the ones stalling the progress in the policy areas just now.
Bin this term!
Relating to the Jack Straw lobbying on behalf of Ukrainian sugar firms (background 
I’ve never met European Commission for Trade 
