On the limits of EU differentiated integration : lessons from the Eurozone crisis and from Brexit

Variable geometry ought to imply "variably geometry Europe" as variable geometry or differentiated integration in the European Union has reached its limits. Drawing on the lessons of the Eurozone crisis and of Brexit, this chapter argues that (treaty-based) variable geometry or differentiated integration in the core European Union (EU) institutions - especially economic and monetary union (EMU) - is not sustainable. EMU has in the meantime become the (economic and political) core of the Union and of the integration process. It is therefore the Euro area, and no longer the internal market, on which one would have to anchor EU integration. From an EU point of view, it does not make sense to accommodate member states' preferences that are too divergent from the Union's by means of more institutional flexibility at the Euro areas' expense and the objective of ever-closer union. This would mean transforming the EU into a mere intergovernmental organization without a common currency (and for that matter without political ambitions). Therefore, all EU countries should be in all main EU (treaty-based) institutions, most notably EMU and Schengen, or leave the Union and opt for membership of the European Economic Area only or for a lesser preferential trade agreement like a free trade agreement.