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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.

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:

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.

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.

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!


  1. Yes, he theoretically has his own thoughts. Whether they are sensible or not is another question!

  2. @Jon: Just a detail, but I said that Gabriel seems to like the term – and (without prejudice to his understanding or lack thereof of economic policy) I’m quite sure that as a party leader he has his own thoughts about communication strategies.

  3. @Manuel – Gabriel likes the plans because Enderlein advises him! You think Gabriel is capable of his own thoughts on this? Pfff. And yes, calling all of this “economic Schengen” is as tenuous as calling Invest EU the “Juncker Marshall Plan” or calling TTIP the “economic NATO”. And that the federalists have organised campaigns to protect Schengen does not surprise me, but they are hardlty representative – sorry!

  4. As I understand it, the term “economic Schengen” is just an attempt to label the rather detailed proposals presented by Enderlein and Pisani-Ferry last November. From a legal point of view, these proposals are nothing revolutionary; as far as I can see, many of them could simply be realized on a national level in France or Germany, others via enhanced cooperation. In any case, they are not a comprehensive proposal for a new intergovernmental treaty framework.

    So why call them a “Schengen”? My impression is that for most people with a certain interest in European affairs, “Schengen” has a much better connotation than you suggest, as the freedom to travel is pretty close to their hearts. (At least, I don’t know many other EU policies in whose defence people have actually organised manifestations.) Thus, the term “economic Schengen” seems to be a marketing trick in order to obtain part of this popularity, too.

    I’m not sure whether I think this is a good idea or not, mostly because the “real” Schengen Agreement was a very ambitious and coherent policy, and transferring the term to a set of heterogeneous economic proposals seems rather exaggerated to me. (Similarly, we don’t call Juncker’s investment initiative a “Marshall Plan”, and we have good reasons not to do so.) Still, I’m not so sure whether the term will necessarily be a communication disaster – for Enderlein and Pisani-Ferry, it might be helpful in order to popularise their paper among a certain audience. For starters, Sigmar Gabriel seems to like the term…

  5. @Steve – from my reading of the – admittedly sketchy – details of what has been said about the term, I think it could all be done with enhanced cooperation. And you are right with that additional point about Schengen but I still do not think that changes the reasoning that this “economic Schengen” term is a lousy one.

  6. Is it possible that the authors of the idea would be ok with enhanced cooperation as a means to their end? And another reason for Schengen was that not all Member States agreed to its intentions.

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