'One Market, One Law, One Money?' Unintended Consequences of EMU, Enlargement, and Eurocentricity

Abstract

A Union of twenty-seven, or more, members at vastly different levels of socioeconomic development must be considered a mutant of the old EU-15, not to mention the original EEC. The mutation pressures to which the EU is exposed today are to a large extent the unanticipated consequences of the application of the old integration methods under radically new conditions. Thus EMU, instead of making the integration process irreversible, has split the Union into two, possibly three, camps. On the other hand, the heterogeneity of EU-27 impedes the establishment of a Single Market for services. Many of the same people who opposed the original (Bolkestein) General Services Directive also maintain that the EU should be much more than a free-trade area. With the services sector - more than two-thirds of the economy - still largely regulated at the national level, however, it can no longer be excluded that the enlarged EU may regress, if not to the stage of a free-trade area, then to a customs union, with some elements of a common market for goods. It seems likely that the EU will no longer follow a straight-line evolution, rather a kind of evolution with many side branches. It is suggested that the economic theory of clubs provides a better theoretical framework for understanding such developments than the received conceptualizations.