Sweden's thumbs down to the Euro strips bare the fundamental choice now facing Europe. Slowly, very slowly, the European Union is approaching the moment of truth when its members must decide what kind of a Union they want. Do they want a politically integrated Union, perhaps developing eventually into a true federation? Or do they want a loose economic club, based essentially on a single economic market, with a few optional add-ons of a political nature?
This question has faced the EU from its beginning, and until now member governments answered it by proceeding at the pace of the most reluctant. But that may be changing. This year, or next year, it may at last become clear that the gulf between federalists and nationalists is too deep to be bridged. At that point, the federalists will see whether they can find a way to go ahead on their own. If they do, there will be a two-speed Europe, with a politically integrated inner core and others more loosely associated on the outside.
The idea of a two-speed or variable-geometry Union, has long been debated, mainly as a way of finessing the Euro-skeptical foot-dragging of successive British governments. Mostly, these debates tended to reach the morose conclusion that a two-speed Europe would be hopelessly difficult to negotiate. Then, thank goodness, the idea of a variable-geometry Union seemed to lose urgency when Tony Blair came to power.
What is now reviving the idea of variable geometry is the prospect of the EU's massive enlargement with the admission of ten new members from Eastern Europe and the Mediterranean, multiplied by the political crisis within Europe over the American war against Iraq. Everyone knows that a much larger EU must be more integrated politically if it is not to grind to a halt through sheer weight of numbers. This is a question of simple arithmetic, not ideology.