The Eurozone and The Future of Enlargement in European Union: A problem in sight?

The Enlargement Policy is one of the pillars of the European Union, expanding the influence of Supranationalalism to unite Europe under one banner.

The Enlargement Policy is one of the pillars of the European Union, expanding the influence of Supranationalalism to unite Europe under one banner. The Eurozone is part of the integration of European countries as members of the European Union. However, some countries have not adopted the Eurozone, which could be a problem for the future of the European Union.

A quick look back at European Integration

The Copenhagen meeting, or what we know as “The Copenhagen Criteria,” is the foundation of the European Union’s (EU) Enlargement policy. It is a set of rules defining whether a European country can join the European Union. This set of rules contains Stable political institutions and the guarantee of human rights, economic stability that can be integrated into the EU, and an acceptance of Community Acquis. The Eurozone might not be an immediate requirement for the EU member states, but it is an obligation for most countries! It could face an absolute problem for the future of the European Union and its Supranationalism identities because it could create another competition inside competition between the member states.

The Maastricht Treaty is the pillar of the Eurozone itself. While it took a decade of preparation, the Euro was launched as the official currency of the European Union in 1999. The Euro was considered an “invisible” currency in the first three years because it was only used for electronic transactions and accounting purposes. In 2002, the Euro finally became a currency with a physical appearance as banknotes and coins, and until now, 20 out of 27 countries have adopted the Euro as their primary currency.

Seven countries in the European Union didn’t adopt the Euro as their currency: Bulgaria, Czechia, Hungary, Poland, Romania, Denmark, and Sweden. While these eight countries show some interest in adopting the Euro, they are keen to adopt it as their primary currency. However, of course, there are problems in each of these countries. For example, in Poland, Czechia, and Sweden, their citizen are very skeptical about adopting the euro and still prefer to use local currencies for economic transactions. Hungary is still concerned about losing its economic sovereignty and prefers its national monetary policies. Denmark, with its straightforwardness in opting out to join the Eurozone in 1992, and Romania, which still needs structural reform in its economy, such as fiscal stability, interest rates, and inflations.

The Challenges

This could be a bargaining chip for future member states that want to join the European Union and maintain economic sovereignty. To push it even further, many potential issues will appear later. If future members of the European Union still want to keep their currency over the Euro, it could create fragmentation in the European Union economy. The existence of many multiple currencies in a supranational union could lead to complicated coordination within the European Union itself. Managing a supranational union with numerous currencies can lead to an even more complex situation in the Constitutional framework of the European Union itself. It can lead to a burden in the administrative section due to the need for more coordination and a different set of rules between countries that adopted the Euro and those that didn’t. Not only that, the perception from the public and citizens can lead to questioning their support toward the European Union itself because they might perceive the European Union differently due to differences in economic policies and performance of the European Union.

The critical point: Sovereignty

Some member states always opt out of adopting the Euro as their currency in the European Union because of sovereignty, be it from the government decision or the public vote that has been held in the country. This will affect future potential member states, who may rethink adopting the Euro because sacrificing some aspect of sovereignty could affect whole policies and fundamental principles in that country itself in exchange for integrating into more significant structures and policies. Supranationalism in the European Union is the pillar of how the European Union can work properly, including the Eurozone. Potential member states may have to reform their structural economic policies to adopt the Euro. Continuously aligning their countries with EU standards and the Maastricht criteria will take a long time. With the example of Bulgaria and Croatia still facing challenges to joining the Eurozone in meeting the Maastricht Criteria, the potential member may need to evaluate their country’s ability to adopt The Euro. Possible new member states could take advantage of this Eurozone “loophole.” There are eight potential member states for the European Union: Albania, Bosnia and Herzegovina, Georgia, Moldova, Montenegro, North Macedonia, Serbia, and Ukraine—except for Montenegro, which has already adopted the Euro unilaterally. These countries might maintain their economic sovereignty; retaining their currency will allow the government to control their monetary policies, which can be crucial to responding to national financial crises.

The Future of European Enlargement

               The European Union’s expansion potential is imminent by 2030, just like Charles Michel said. The EU must start a profound restructuring of its institutions and economic reform. That should be done as soon as possible to convince potential members to give their monetary sovereignty to the European Union by joining the Eurozone, which will be more “forgiving” and benefit the current and new members. An initial solution is to increase EU Budgetary Support for potential member states and ensure the absorption capacity of the European Union is stable by increasing the Pre-Accession Assistance (IPA) that can strengthen the potential member in various aspects to align with the EU standards. In the long term, the European Union Multiannual Financial Framework (MFF) will be reformed by increasing its budget to support another enlargement phase after the current MFF ends in 2027.

To conclude, the European Union will embark on a decisive path for this and the next decade to continue its next enlargement phase. Navigating the direction of this supranational will require total effort, as it will require addressing many complex problems and solving them through cooperation, reformation, and fiscal support. This will be crucial in deciding what shape European Integration will be amidst the diversities of every current and potential member’s national interest and economic priorities.

Gema Zikra Rohan
Gema Zikra Rohan
Gema Zikra Rohan is a third-year undergraduate student majoring in International Relations at Andalas University, Indonesia. Gema is very interested in European Union issues, Geopolitics, and Foreign Relations.