This could in turn create a danger of the fragmentation of the EU into informal or even formal alliances and the emergence of geo-economic power struggles within it. There has already been some co-ordination between the Polish presidency, Denmark, Sweden and the UK. Some have suggested that the non-Eurozone states should formally organise themselves into a “Non-Euro Group” (NEG) that would elect its own chair and hold its own summits in order to protect itself from discrimination (in particular, by ensuring that future Council and Commission presidents can still come from non-euro countries). However, unless the Eurozone behaves in an aggressive way, it is unlikely that this group — which includes some states such as Poland that want one day to join the euro, others such as Denmark that haven't yet decided, and others such as the UK that are unlikely to join for the foreseeable future — will cohere into a coalition with shared interests. As well as a lack of cohesion among the “euro-outs”, there is also a lack of cohesion within the Eurozone: one Eurozone minister recently said in private that “the countries we want in the Eurozone like Sweden and the UK are not there and the ones we do not want are.”
In order to avoid the break-up of the EU, attention should be devoted to the relations between the 17 and the 10, as well as to the governance of the Eurozone. It will be important to devise membership criteria that are open so that other countries can join at any time if and when they are willing and able (many Eastern Europeans are keen to make sure they are able to join when they meet the convergence criteria). It will also be important to leave a gateway open for the absorption of the core into the larger union at a later stage. The best outcome would be to develop the two-speed Europe within the existing treaties under the provisions for “enhanced cooperation”>45>. This would make it possible for non-euro countries to stay in the room when discussions take place and to prevent the “euro-core” formally discussing without them issues that fall within the scope of the existing treaties. This would also keep alive the prospect of a messy Europe of variable geometry rather than a two-speed Europe of first- and second-class states.
Above all, European leaders will need to agree an explicit new deal between surplus and deficit countries and between northern and southern, eastern and western member states. As well as reconciling the Eurozone with the non-Eurozone countries, this deal will need to strike a balance between austerity and budget transfers, liberalisation and social protection, and ways of transferring money from the rest of the world to the eastern and southern neighbourhoods. Such a deal will require many national leaders to recognise that it is in their own national interests to reach consensus about how the Eurozone and the EU should work in the future. They must agree on a vision that is perceived as fair by all member states rather than seeming to penalise any of them.
