G3. The complex and ever-changing position of the European Union in a globalised world

Key issues

• To what extent does the EU contribute to territorial cohesion?
• To what extent is the EU a major international power?
• Assess the role of the EU in globalisation.
• How far do you agree that the EU is a trade bloc favouring globalisation?
• Evaluate the success of European policies in the development of the region.
• Evaluate the challenges facing the European Union in a globalised world.

Key terms

• Supranational organisations
• The European Union
• EU's programmes
• Territorial cohesion
• Globalisation and the EU

Key areas

• Regional variations across the EU and development projects
• Challenges facing the European Union in a changing world

The European Union is a unique political and economic construction that has redefined traditional notions of sovereignty, borders, and cooperation. In a globalised world, it stands as both a powerful actor and a space of deep territorial disparities. This chapter explores the EU’s evolving role, from fostering cohesion across its diverse regions to asserting influence beyond its borders, while also confronting significant internal and external challenges.

#1. Regional variations across the EU and development projects

#A. The EU: the most integrated regional organisation in the world

#a) An economic union

At its core, the EU operates as an Economic Union, fostering a common market where goods circulate freely across borders, devoid of any customs duties. This economic integration promotes trade and economic growth among member States, enhancing their collective prosperity.

#b) A unique political union

The EU embodies a unique political union characterised by a distinctive governance system. This system combines intergovernmental and supranational elements, often described as "governance without government." Unlike traditional nation-states, where power is centralised in a single government, the EU's governance structure involves a network of institutions and decision-making processes that involve both national governments and EU institutions.

• Among these institutions, the European Parliament, headquartered in Strasbourg, plays a pivotal role as the EU's legislative body. Deputies are elected to represent the citizens of member States through universal suffrage, ensuring democratic representation and accountability within the EU's decision-making processes.
• The European Council serves as a forum for heads of States and governments to convene and discuss strategic priorities and policy coordination. Through regular meetings, leaders address key challenges facing the EU and seek consensus on various issues, ranging from economic policies to foreign affairs.
• Operating from Brussels, the Council of Ministers of the EU functions as the executive branch, where ministers from each member country come together to formulate and implement EU policies. Decisions within the Council are made through consensus, reflecting the collective interests and priorities of member States.
• The Court of Justice, located in Luxembourg, serves as the judicial arm of the EU, ensuring the uniform interpretation and application of EU law across member States. It adjudicates disputes and safeguards the rights of individuals and member States, contributing to the legal coherence and stability of the EU.

European Citizenship represents another cornerstone of the EU project, granting citizens certain rights and privileges. These include the right to vote and stand in municipal and European elections, as well as the freedom to move, reside, work, and study anywhere within the EU. This enhances mobility and fosters a sense of belonging among EU citizens.

The EU's global presence is underscored by its participation in international forums such as the G20, where it holds a seat. This allows the EU to contribute to discussions and decision-making processes concerning global economic and financial issues, reflecting its role as a significant actor on the world stage.

The EU is often cited as the world’s most advanced example of a supranational organisation, one where member states have voluntarily ceded part of their sovereignty to common institutions. This level of integration contrasts with other regional bodies such as MERCOSUR, ASEAN or the African Union, where decision-making remains more intergovernmental.

A supranational organisation is one in which decisions are made by institutions above the national level, and those decisions are binding for the member states. In the EU, this is evident in the roles of the European Commission, European Court of Justice, and European Parliament. In contrast, organisations like ASEAN operate by consensus and non-interference, prioritising national sovereignty.

Supranational vs intergovernmental organisations

Feature	Supranational organisation	Intergovernmental organisation
Definition	An organisation where member states transfer part of their sovereignty to a higher authority that can make binding decisions.	An organisation where decisions are made by consensus between states, who retain full sovereignty.
Examples	European Union (EU), partly the African Union (AU)	United Nations (UN), ASEAN, MERCOSUR, NATO
Decision-making	Institutions like the European Commission or Court of Justice can enforce laws across the EU.	Member states must all agree. No body can impose decisions without consent.
Sovereignty	Member states agree to limit their sovereignty in some areas (e.g. trade, law, currency).	Member states maintain full control and can veto or opt out of decisions.
Advantages	Greater unity and efficiency in dealing with regional/global issues.	More flexibility for states to protect national interests.
Challenges	Can lead to tensions over national identity and autonomy.	Often slow and less effective due to need for consensus.

#c) A common territory in construction

The EU has built a common territory through the integration of European zones. The Eurozone, with 19 member States sharing the Euro since 2002, is managed by the European Central Bank in Frankfurt.

Additionally, the Schengen Area, established in 1995, eliminates border controls among its 26 member countries, promoting seamless travel and connectivity within the region.

#d) A regional network of transports intensifying exchanges

Trans-European corridors (TEN-T, Trans-European Transport Network) link vibrant economic zones or complementary regions.

But, European nations relinquish significant symbols of sovereignty, such as currency and borders. However, this unified currency and border-free space foster increased trade and mobility.

#B. Diversity of the EU territories at different scales: unequal integration

#a) The European megalopolis

The European megalopolis, stretching from London to Milan along the Rhine, serves as the core of the EU, concentrating activities, resources, and 40% of the European population.

It hosts various functions:

• Political and diplomatic institutions, in Brussels and Strasbourg.
• Prosperous industrial areas like the Ruhr in Germany and northern Italy.
• Financial institutions such as the European Central Bank (ECB) in Frankfurt, contributing to half of the European GDP, along with Paris;
• Global influence with metropolises like Paris, which play significant roles within this dynamic region.

#b) Some very connected territories

Territories are interconnected with the world through major infrastructures.

• The North European Maritime facilities, known as the ‘Northern Range’, serving as a global interface, with Rotterdam ranking as the 9th largest global port.
• Airports, acting as global hubs, such as Paris-Charles de Gaulle (ranking 10th globally), facilitating access to destinations worldwide.

European institutions wield influence as a globalisation node. Economically, the EU accounts for 15% of global exchanges (considering solely EU exchanges with the rest of the world). Politically, the EU holds a seat at the G20.

#c) Marginalised territories

Territorial inequalities persist within Europe. Regions farther from the megalopolis experience lesser integration.

This includes:

• Eastern European countries and overseas territories, characterised by their specific status as ultra-peripheral regions (UPRs).
• Southern peripheries face challenges due to migratory issues.

The European Union comprises nine outermost regions (OMRs). These are territories located far from the European continent but are integral parts of EU member states. They fully belong to the EU and are subject to EU law, with certain adaptations, and facing specific challenges due to their specific geographical and socio-economic circumstances.

Region	Member state	Location	Area (km²)	Population	Capital(s)
French Guiana	France	South America	83,534	281,612	Cayenne
Guadeloupe	France	Caribbean	1,628	402,119	Basse-Terre
Martinique	France	Caribbean	1,128	385,551	Fort-de-France
Mayotte	France	Indian Ocean	374	256,518	Mamoudzou
Réunion	France	Indian Ocean	2,512	859,959	Saint-Denis
Saint Martin*	France	Caribbean	53	36,286	Marigot
Azores	Portugal	North Atlantic Ocean	2,333	245,746	Ponta Delgada
Madeira	Portugal	North Atlantic Ocean	801	289,000	Funchal
Canary Islands	Spain	North Atlantic Ocean	7,493	2,101,924	Santa Cruz de Tenerife, Las Palmas

Notes:

• Outermost regions (OMRs) are fully part of the European Union. They benefit from EU structural funds and are subject to EU law, with adaptations.
• Saint Martin (the French part of the island) is an OMR. Its southern counterpart, Sint Maarten, is a non-EU overseas territory belonging to the Kingdom of the Netherlands.
• The Netherlands has overseas territories (e.g. Aruba, Curaçao, Sint Maarten, Bonaire, Saba, Sint Eustatius) which are Overseas Countries and Territories (OCTs). These are not part of the EU but have a special association agreement, benefiting from limited access to EU programmes and development aid.
• OCTs do not apply EU law, although they maintain special relationships with their EU member state.

At both regional and local levels, there are also pockets of poverty. Member States must address these disparities by integrating:

• rural peripheries, such as the south of Italy,
• urban peripheries, like the northern districts of Marseille.

#d) Case study : Germany, a European power with an unequal integration of its territories in globalisation.

Germany, boasting the 4th largest global GDP as of 2018, stands as the leading economy within the EU, driven by several factors:

Ranked 3rd globally in terms of exports, Germany primarily exports manufactured goods, including automobiles (constituting 20% of exports), machinery and tools (15%), and chemical products (15%). These goods originate from industrial hubs like the Rhineland and the southern regions of the country.

The nation benefits from major international trading hubs such as the Hamburg container port and prominent global city airports like Frankfurt and Munich.

German products are renowned for their quality, high value-added, and alignment with the demands of emerging markets.

The "Made in Germany" label is extended through outsourcing to countries with lower labor costs, exemplified by the production of VW Touareg models in Slovakian factories.

• Integrated Territories: These regions encompass ancient industrial zones, characterised by a significant pool of skilled labor and dense population concentrations. Situated within urban areas, they form pivotal components of the European megalopolis, constituting conurbations with millions of inhabitants, exemplified by cities like Essen, Düsseldorf, and Cologne. In the southern regions lie the states of Bavaria and Baden-Württemberg, which historically benefited from economic development due to their strategic location at the intersection of the North Sea and the Mediterranean Sea. These areas host dynamic industries spanning automotive giants like BMW, renowned sportswear brands like Adidas, and thriving sectors in aeronautics and information technology (IT).
• Marginalised Territories: Located from the eastern outskirts of Hamburg to the southern region of Leipzig, these areas are undergoing a process of reconversion. Despite significant EU assistance and large-scale infrastructure projects, they continue to grapple with economic and social challenges. Unemployment rates in former East Germany are roughly twice the national average, highlighting the persistent disparities in these regions despite ongoing efforts towards revitalisation.

#C. European policies for social, territorial and economic integration

#a) Reduction of geographical inequalities

The EU allocates one-third of its budget to cohesion policy, aiming to redistribute resources from more dynamic regions to the poorest areas through financial instruments like the EU Structural Funds:

• The European Regional Development Fund (ERDF) addresses imbalances between regions.
• Programs like INTERREG facilitate transborder projects.
• The European Social Fund (ESF) supports social initiatives.
• The European Agricultural Fund for Rural Development (EAFRD) finances the Common Agricultural Policy (CAP).
• The Cohesion Fund and the European Investment Bank aim to enhance convergence, regional competitiveness, and territorial cooperation, particularly in sectors like transportation. These funds primarily support less developed regions such as Eastern Europe, as well as struggling regions in Western Europe like East Germany or Southern Italy. Additionally, ultra-peripheral regions (UPRs) receive specific assistance.

Transborder regions, known as ‘Euroregions’, have emerged as a result of cohesion policy. These regions foster cooperation among multiple European States and serve as engines for integration. The aim is for cultural, social, and economic programs implemented in these regions to extend to the broader territory. For example, the ‘Greater Region’, established in 2010, encompasses France, Belgium, Luxembourg, and Germany.

#b) Development and consolidation of regional or local centres in order to face global competition

The development and consolidation of regional or local nodes is a strategy aimed at enhancing the competitiveness of specific regions or localities within the context of global competition. This approach involves concentrating resources, investments, and economic activities in certain areas to stimulate growth, innovation, and job creation. In the European Union (EU), several policies and initiatives have been implemented to support the development of regional or local poles and address sustainable development challenges.

One of the key policies of the EU in this regard is the Cohesion Policy, which aims to reduce economic and social disparities between regions by investing in infrastructure, innovation, education, and employment.

Overall, the development and consolidation of regional or local poles play a crucial role in the EU's efforts to promote sustainable development and enhance competitiveness in a globalised economy. By investing in these areas and supporting initiatives that contribute to economic growth, innovation, and environmental sustainability, the EU aims to create inclusive and resilient communities that can thrive in the face of global challenges.

#c) Case study: Transport as a way to reinforce cohesion, promote the opening-up of territories and increase competitiveness

Developing a European transport network entails transitioning from a patchwork of national-scale systems to a cohesive network on a global scale. The objectives include facilitating the exchange of goods and the free movement of people within the Schengen space, fostering common ideas within the EU, and promoting sustainable transportation practices.

Metropolises like Paris, Frankfurt, and Milan are leading the way by prioritising sustainable transport modes, considering that 20% of greenhouse gas emissions in Europe originate from transportation, with 95% attributed to road transport. Additionally, the European Commission seeks to liberalise transport to enhance competitiveness across the region.

The construction of trans-European routes involves several key projects aimed at improving connectivity and transportation efficiency across the continent. These include:

1. The high-speed railroad project connecting Paris, Strasbourg, Munich, Vienna, Bratislava, and Budapest, facilitating swift and efficient travel between major European cities.
2. Existing railroad lines linking Paris, Brussels, London, and Frankfurt, serving as vital arteries for transportation and trade within the region.
3. The Trans-European Road network connecting Oslo, Hamburg, Luxembourg, Lyon, and Barcelona, facilitating road-based transportation and trade across multiple countries.
4. Initiatives focused on promoting less polluting modes of transportation, particularly in maritime areas such as the Baltic Sea and the Mediterranean, aiming to reduce emissions and environmental impact while maintaining efficient transport routes.

The construction of a European transport network remains incomplete, with significant territorial inequalities persisting across the continent. While the European megalopolis boasts a dense and modern transportation infrastructure, many States in Central and Eastern Europe still require significant modernisation efforts.

Certain infrastructure projects face opposition and challenges, such as the proposed transalpine railway line linking Lyon and Turin. This project, which involves the construction of a new tunnel through the Alps, has encountered delays due to widespread protests, particularly by the "No Tav" movement. Concerns about the project's cost and ecological impact have fuelled opposition.

Additionally, the resurgence of border controls within the Schengen area, observed in countries like France, Sweden, Denmark, Norway, and Austria, raises questions about the future of free movement within the European Union.

#d) The new objectives of the European regional policy (2021-2027)

The European regional policy for 2021-2027 emphasises five priority areas, which receive 30% of the budget allocation. These priorities include fostering innovation, facilitating the transition to renewable energy sources, improving transportation and communication networks, reducing social inequalities, and promoting democratisation.

At the forefront of this strategy is the Green European Pact, aimed at achieving carbon neutrality by 2050. By promoting ecological excellence and sustainable practices, the EU aims to enhance its global competitiveness while advancing environmental goals.

#D. Case study: the territorial impacts of the Common Agricultural Policy (CAP)

#a) Evolving objectives

Established in 1962 in Western Europe, the Common Agricultural Policy (CAP) now accounts for 30% of the European budget. Over the years, its objectives have evolved significantly. Initially, it aimed to ensure food security and increase productivity, leading to the development of intensive agriculture. However, by the 1980s, there was a shift towards addressing overproduction issues.

In the 1990s and 2000s, the focus shifted towards rural development and promoting competitive agriculture in the face of globalisation. In the 2010s, environmental concerns became more prominent, leading to the inclusion of economic, social, and environmental objectives in the CAP.

These new objectives aim to increase competitiveness, rebalance power dynamics in the food supply chain, ensure fair incomes for agricultural workers, guarantee food quality and safety, and promote rural development while addressing environmental challenges such as climate change and biodiversity loss.

However, implementing these objectives is challenging, especially considering the inherent tensions between competitiveness and environmental protection, as well as between competitiveness and income equity. Balancing these competing priorities remains a significant challenge for the CAP.

#b) Operation

The Common Agricultural Policy (CAP) operates through both direct and indirect aids aimed at ensuring a minimum price for producers. Since the 1960s, the CAP has been characterised by the establishment of a unified market, culminating in the formation of a customs union in 1968. It also introduced the principle of preferential treatment for products within the community and promoted financial solidarity among member States.

In the 1980s, efforts were made to address overproduction within the European Economic Community (EEC). This included reducing indirect aids, implementing quotas (such as milk quotas introduced in 1984), and promoting fallowing or leaving land uncultivated to reduce excess production. These measures were aimed at stabilising agricultural markets and managing surplus production.

#c) Challenges and criticisms

Tensions arose from competition among agricultural workers, both within Europe (intra-European competition with social dumping practices in certain member States) and between different agricultural models (such as "organic" versus "conventional" agriculture). Disputes between States and the EU over the use of substances like glyphosate further exacerbate these tensions.

Another issue is the dependency of agricultural workers on EU subsidies, as well as their reliance on the chemical industry and fossil fuels, which has led to criticism of the intensive agricultural model. This dependency has also contributed to the decline in the number of farms and agricultural workers.

Furthermore, there is a decrease in the CAP budget, exacerbated by the withdrawal of the United Kingdom from the EU (Brexit), along with international competition in agricultural markets. The crises of overproduction underscore both the success of the CAP in terms of agricultural productivity and the challenges in stabilising markets effectively.

#2. Internal and external challenges facing the European Union

#A. The EU as a significant international power in the context of globalisation

#a) EU as the centre of all flows

The EU holds a central position in international trade, ranking as the world's top commercial power, surpassing both the US and China. This status is bolstered by robust intra-European trade and numerous free trade agreements such as CETA with Canada and JEFTA with Japan. However, European transnational corporations (TNCs) face challenges in global competitiveness, with only 12 among the world's top 100 TNCs, and notably absent are GAFAM companies. The EU's approach to fostering competitive TNCs has been hindered by concerns over hostile takeovers and unfair competition, as seen in the failed Siemens-Alstom merger due to monopoly fears. Moreover, industries like solar panels have been dominated by subsidised economies like China.

In financial terms, the EU serves as a significant hub for both outgoing and incoming foreign direct investment (FDI). Its integration into the global financial landscape is evident, with stock markets in Frankfurt and Paris playing key roles.

Additionally, the EU stands out as a major destination for migration and tourism. It ranks as the world's leading tourist hub, attracting a staggering 713 million visitors in 2018, representing nearly half of all global tourists.

#b) A strong, integrated, and influential power

As a regional organisation, it demonstrates a remarkable degree of integration, exemplified by its single market and currency. This integration allows the EU to advocate for liberalism and regulate trade effectively on the global stage, presenting a unified voice to protect its economic interests.

With a vast internal market comprising 450 million people, the EU offers high living standards and substantial consumer purchasing power. This large market size contributes to the EU's economic clout and attractiveness to investors.

Furthermore, the EU's productivity is noteworthy, accounting for nearly 20% of the global GDP despite representing only 7% of the world's population. This productivity is fuelled by a skilled workforce and top-quality productive infrastructures, enhancing the EU's competitiveness in the global economy.

Such integration is rare globally. Most other regional organisations do not adopt shared currencies or legislation. The EU’s supranational powers enhance its influence but also cause tensions with member states seeking greater autonomy.

#c) A sustainable economic, political, and social model?

The European Union serves as a potential model for the rest of the world in various aspects. Firstly, it upholds a moral system on the international stage, advocating for democracy and individual freedoms such as freedom of expression and movement. This commitment to democratic values was recognised when the EU was awarded the Nobel Peace Prize in 2012.

Additionally, the EU embodies a strong social model characterised by solidarity among its member States. As the largest provider of development aid globally, the EU allocates a significant portion of its Gross National Income to aid efforts, surpassing the contributions of other major economies like the US and Japan. The combined assistance from the EU and its member States constitutes a substantial portion of global development aid, highlighting the EU's commitment to addressing global challenges.

Moreover, sustainability is a key component of the EU's diplomatic efforts, as evidenced by its support for international agreements such as the Kyoto Protocol and the Paris Agreement. The EU actively contributes to global efforts to combat climate change and promote environmental sustainability. Additionally, the growing representation of ecologist parties in the European Parliament reflects a commitment to advancing sustainable development goals within the EU's policymaking framework.

#B. Many challenges, both internal and external: political, social and fiscal challenges

The adoption of common policies within the EU faces difficulties due to disagreements over the nature of the European Union itself. One key point of contention is whether the EU should operate as an intergovernmental body or as a federalist and supranational entity. This debate reflects the lack of a constraining power over member States.

Additionally, there is disagreement over whether Europe should assert its sovereignty or remain under American protection, as evidenced by the absence of a unified European army. These issues highlight the challenges of defining the EU's identity and role on the global stage.

#a) The opting-out method

Political challenges within the EU stem from its variable geometry approach, which allows for opting-out measures as seen in the Lisbon Treaty of 2007. This means that a State can choose whether or not to participate in certain common policies, while non-member States may also participate in some instances. For example, 19 States have adopted the euro currency.

#b) Enlargement process

The process of enlargement further complicates matters, raising questions about how to reach agreements among 27 member States, particularly in sectors where unanimous voting is required. This risk of paralysis underscores the need to adapt institutions to accommodate enlargement, such as implementing qualified majority voting (requiring 55% of European States or 15 out of 27) in certain areas, although this does not apply to all fields, such as foreign policy.

#c) Lack of a common foreign policy

The lack of a common foreign policy has been a notable challenge for the EU, highlighted by instances such as the war in Syria, where the EU struggled to present a unified position, leaving room for individual member States and outside actors like Putin to exert influence.

The EU's power is dispersed across various roles, including the President of the Commission, President of the Council, President of the ECB, and High Representative for Diplomacy. This decentralised structure has led figures like American Henry Kissinger to famously quip, "Who do I call if I want to call Europe?"

#d) Lack of a common military policy

A common military policy has also been elusive for the EU. The European Defence Community (EDC) proposed in 1950 aimed to establish a unified army under European authority. However, the project faltered due to concerns, such as the French Parliament's refusal to sign, fearing a resurgence of German militarism.

Efforts like the ‘Eurocorps’, established since the Maastricht Treaty in 1992, have sought to address this gap by pooling military resources from member countries. Yet, these initiatives have faced considerable skepticism and reluctance from some member States.

#e) Euroscepticism

Euroscepticism, a term coined in the 1980s to denote a reevaluation of the EU's usefulness, has seen a rise in recent years, fuelled by factors such as economic crises, migration challenges, and populist rhetoric that often scapegoats the EU for various issues.

Extreme-left factions often equate the EU with capitalism, liberalism, and corporate influence, criticising it from an anti-capitalist standpoint.

On the extreme-right, Euroscepticism manifests as a rejection of European integration in favour of national sovereignty, economic protectionism, and anti-immigration policies. Figures like Hungarian Prime Minister Viktor Orban have openly challenged EU policies, emphasising national interests over European unity.

Despite citizens becoming increasingly affected by European decisions, voter turnout in European elections remains low, with only 50% participation in 2019 compared to 62% in 1979. Additionally, discussions during these elections tend to revolve around national issues rather than European ones.

Eurosceptic and illiberal parties have made significant gains, with the extreme-right securing 73 seats and Eurosceptic right-wing parties claiming 62 seats in the 2019 elections, collectively representing about 18% or 1/5 of the European Parliament.

This lack of a sense of European belonging is exacerbated by what critics perceive as a democratic deficit within the EU. Decisions regarding issues like enlargement often lack direct consultation with the people, while the European Commission, responsible for drafting legislation, consists of appointed officials rather than elected representatives, leading to accusations of technocracy and a disconnect from democratic principles.

#f) Lack of common answer to the migration crisis

Since 2010, Europe has experienced a significant influx of migrants and refugees, peaking in 2015 with over a million arrivals, followed by a decrease to 122,000 in 2018. The three main maritime routes in the Mediterranean have become increasingly congested, leading migrants to seek entry into the Schengen Area for its free movement: the western route to Spain, the central route to Lampedusa in Italy, and the eastern route to Greece.

The root causes of this migration include conflicts in Syria and Iraq, as well as growing political, economic, and environmental instability in countries like Sudan, Libya, Nigeria, and Bangladesh. However, the majority of refugees remain in neighbouring countries, with Turkey hosting 3.4 million Syrians and Libya accommodating 1.5 million Syrian refugees and 500,000 Palestinians, constituting one-third of its population.

The journey across the Mediterranean Sea is perilous, resulting in a significant number of deaths, including 20,000 in the Mediterranean between 2014 and 2019, and an additional 6,000 on routes through Africa. Many of these migrants rely on illegal passage through transit countries such as Turkey and Libya.

Europe is divided on how to address this migration crisis, with debates over containment versus welcoming policies. The European Commission advocates for quotas and solidarity among member States, but some countries, like Hungary, resist such measures. The Frontex agency monitors borders outside the Schengen Area, and hotspots were established in arrival zones such as Lampedusa, Sicily, Lesbos, and Niger for migrant processing.

Additionally, agreements with transit countries have been pursued to stem the influx of migrants, as seen in the 2016 deal with Turkey. However, these policies face criticism from humanitarian organisations, particularly those operating in the Mediterranean to rescue migrant boats, such as SOS-Méditerranée and Open Arms.

#g) Limitations of the fiscal policy

The European Union faces significant challenges in harmonising fiscal policies due to the diverse fiscal systems of its member States, which vary widely in terms of social contributions, VAT rates, TVA rates, and income taxes. Fiscal revenue constitutes over 40% of GDP in seven States, including France, Italy, Austria, Sweden, Finland, Denmark, and Belgium, while it remains below 30% of GDP in countries like Ireland, Lithuania, Romania, and Bulgaria. Each country uses its fiscal policies as a tool to attract investment, leading to competition and fiscal dumping among member States.

Taxation of multinational companies poses particular difficulties, with the EU struggling to implement a common tax on digital giants. France has attempted to address this issue by proposing its own "GAFAM tax" to temporarily tax income from certain digital activities of companies like Google, Apple, Facebook, Amazon, and Microsoft at 3%. However, progress on this initiative has been slow.

Fiscal policies also contribute to efforts to evade taxes, with individuals and companies seeking refuge in countries like Switzerland, Singapore, Bahrain, Panama, and the Bahamas. This tax evasion is estimated to result in a loss of approximately 120 billion euros for the EU. Following the LuxLeaks scandal in 2014, the European Commission established a list of tax havens and countries under scrutiny, yet none of the EU member States are included. However, NGOs like Oxfam argue that four EU States, Luxembourg, Ireland, Malta, and the Netherlands, should be on the list due to their tax policies.

#3. France and its border regions in the context of European integration

#A. Flows and dynamics in cross-border territories

#a) The evolving role of borders in mobility and exchange

Once seen as barriers, borders within the EU, particularly those involving France, have become active zones of mobility and exchange. Since 1990, the number of French cross-border workers has nearly doubled, making France the leading EU country in this type of labour mobility.

Beyond employment, cross-border flows include residential migration, education, healthcare, shopping, and leisure. In regions such as the Grand Est, daily border crossings are part of normal life, fostering the emergence of cross-border “living areas” where people live and work on opposite sides of national boundaries.

These flows also involve significant goods exchanges. Germany and Belgium, France’s key trade partners, account for large volumes of imports and exports, often originating from both nearby and more distant EU regions.

#b) Factors and impacts of cross-border flows

European integration has been central to this process. The euro, Schengen Area, liberalised trade, and EU cohesion policies have removed traditional barriers and enabled closer economic and social ties.

Mobility is also driven by regional disparities. Wage gaps, lower housing costs, and better services across the border attract workers and families. For instance, unemployment in Lorraine and Hauts-de-France pushes workers toward job-rich areas like Luxembourg or Geneva.

These dynamics bring both benefits and challenges. While local economies gain from increased spending and logistical development, higher demand can inflate housing prices and strain services in border communities, sparking local tensions.

#B. EU policies and the transformation of France’s border regions

#a) EU instruments supporting cross-border cooperation

The EU promotes cross-border cooperation as a key tool of territorial cohesion. These areas, often seen as testing grounds for integration, aim to reduce the "border effect" and foster joint development.

Projects emerge from partnerships between local authorities, regional actors, and EU institutions, addressing everyday needs: transport, environment, economy, healthcare. For example, the Cerdanya hospital on the Franco-Spanish border offers shared health services to both populations.

Financial support comes mainly from the European Regional Development Fund (ERDF), through the INTERREG programme. Since 2006, EGTCs (European Groupings of Territorial Cooperation) provide a legal structure for managing joint projects. A successful model is the Lille–Kortrijk–Tournai Eurometropolis, connecting France and Belgium. The proposed European Cross-Border Convention (ECBC) seeks to remove legal barriers that still limit cooperation.

#b) France’s evolving role and decentralisation

France, as a centralised state, was initially less equipped than federal countries like Germany to support local cross-border initiatives. Local authorities lacked the autonomy to act independently.

This has shifted with recent decentralisation reforms. The MAPTAM and NOTRe laws have strengthened the role of regions and metropolitan areas in managing territorial development, including cross-border partnerships.

France has also led some key initiatives. The Strasbourg–Ortenau Eurodistrict (2005) with Germany pioneered a new model of shared governance. The Aachen Treaty (2019) reinforced this cooperation, removing administrative hurdles at the Franco-German border and supporting joint infrastructure and planning.

#C. Typology and diversity of border zones

#a) Contrasting regional dynamics

France’s cross-border territories vary significantly in terms of intensity, purpose, and institutional development. These differences are shaped by geographic context, socio-economic contrasts, infrastructure, and the degree of political integration.

• Northern and eastern borders (with Belgium, Germany, Luxembourg, and Switzerland) are the most active. These regions benefit from strong economic disparities, linguistic proximity, and efficient transport networks. Daily commuting is widespread, and metropolitan hubs like Strasbourg and Lille are at the forefront of integration, leading pioneering initiatives such as Eurodistricts and EGTCs.

• Southern borders with Spain and Italy display more limited and localised forms of cooperation. Physical and linguistic barriers, such as the Pyrenees and Alps, constrain daily flows. Yet, projects like the Basque Eurocity and the Cerdanya cross-border hospital show that targeted cooperation can still thrive. Along the Italian border, most initiatives focus on environmental protection, notably in areas like Mont-Blanc and the Mediterranean coast near Nice.

• Overseas and outermost regions, particularly French Guiana, Guadeloupe, and Mayotte, present unique challenges. These territories border non-EU countries (e.g. Brazil, Suriname, and Comoros) and are part of the EU's outermost regions (OMRs). Unlike European borders, these areas face stark development gaps, weaker transport and administrative links, and heightened migration pressures. In French Guiana, for instance, the bridge linking Saint-Georges-de-l’Oyapock (France) and Oiapoque (Brazil) symbolises a fragile yet strategic cross-border connection. EU cohesion funds and specific legal frameworks target these regions, but their integration remains uneven and limited.

This typology highlights the asymmetry of France’s border regions, from high-functioning integration zones in Europe to more marginalised and development-focused borders overseas, each demanding tailored policy responses and governance models.

#b) France and Belgium: a model of EU-driven cross-border integration

#A historically connected and densely populated region

The France–Belgium border, extending over 620 kilometres, lies within one of the most densely populated and economically vibrant areas in Western Europe. The region connects major urban centres such as Lille, Brussels, Kortrijk (Courtrai), and Tournai, where cultural, linguistic, and economic ties are deeply rooted. The area's integration is significantly enhanced by high-speed rail links, including Thalys, Eurostar, and ICE services, which ensure fast and regular connections between Paris, Lille, Brussels, Cologne, Amsterdam, and London. This facilitates cross-border commuting, business travel, and international exchanges.

The Eurometropolis Lille–Kortrijk–Tournai, created in 2008 as the EU’s first European Grouping of Territorial Cooperation (EGTC), exemplifies institutional innovation in cross-border governance. It integrates 14 French and 19 Belgian municipalities, representing over two million residents in a single cross-border urban region.

#EU policy as a lever for cohesion and joint governance

This region has benefited extensively from EU cohesion policy, particularly through INTERREG_funding for cross-border projects in transport, environmental management, healthcare, and economic development. The EGTC provides a flexible and legally recognised governance structure for coordinating policies and initiatives across national borders.

The presence of federal structures in Belgium and increasing decentralisation in France has empowered local and regional authorities to engage directly in cross-border cooperation, without excessive dependence on central governments. This bottom-up integration model aligns closely with the EU’s principle of subsidiarity.

#A successful example of territorial integration

The France–Belgium cross-border zone is one of the EU’s most successful in terms of functional integration. Labour mobility is high, supported by wage alignment, mutual recognition of qualifications, and strong transport infrastructure. Shared public services, such as hospitals, cultural centres, and educational programmes, are routinely accessed across the border. Business parks and innovation hubs have also emerged, benefiting from joint economic development strategies.

In contrast to EU outermost borders, this case illustrates how integration thrives in contexts of economic parity, political alignment, and institutional maturity. It serves as a reference point for what EU integration can achieve under favourable conditions.

#c) Limits of EU cohesion at external borders: the French Guiana–Brazil case

#A remote border shaped by history and marginality

The border between French Guiana and Brazil, stretching over 730 kilometres through the Amazon rainforest, is France’s longest land border and forms part of the European Union’s external frontier. Though this border was only officially settled in 1900 after centuries of colonial contestation, it continues to reflect the enduring legacy of geopolitical uncertainty and environmental constraints. French Guiana, as an outermost region of the EU, is subject to EU law and benefits from cohesion funds, yet remains geographically and functionally peripheral to both France and the continent.

The region is sparsely populated and infrastructurally underdeveloped. The French town of Saint-Georges-de-l’Oyapock and the Brazilian city of Oiapoque are small and historically isolated. Although Saint-Georges is connected to Cayenne by the RN2 road, Oiapoque remains linked to Macapá via a long, partially unpaved route. The harsh equatorial climate, low population density, and complex hydrological and forested terrain all challenge territorial development and integration efforts. EU instruments for territorial cohesion have limited reach in such contexts, where the obstacles are infrastructural, ecological, and international in nature.

#Infrastructure without functional integration

The construction of the Oyapock Bridge, completed in 2011 and opened only in 2017, symbolised France’s ambition to integrate French Guiana more closely with its South American environment. It was also intended to strengthen bilateral ties with Brazil. However, the bridge quickly revealed the limits of infrastructure-driven integration in the absence of political, administrative, and regulatory alignment. Disagreements over visas, vehicle insurance standards, and border control procedures delayed the bridge’s opening by several years. Even today, goods and passenger flows remain minimal, and the bridge is largely symbolic.

Rather than facilitating mobility, the bridge introduced new forms of control. Long-standing informal movement, particularly by river pirogue, continues, while new regulations disrupted traditional practices. Brazilian residents face restricted access to French territory, whereas French nationals enjoy visa-free entry. In practice, the infrastructure serves more as a border checkpoint than as a platform for integration. The contrast with the EU's internal borders, where regulatory harmonisation facilitates mobility, is stark.

#Unequal development and fragile cooperation

The border is marked by strong socio-economic asymmetries. French Guiana benefits from EU funding, public services, and higher incomes, while Oiapoque faces limited infrastructure, informal housing, and economic fragility. These disparities have created resentment and encouraged unregulated settlements, such as Vila Vitoria, populated by displaced or economically vulnerable people. Although cross-border cultural and familial ties exist, mistrust and asymmetry shape the relationship.

Cooperation is often constrained by security and health concerns. Illegal gold mining (orpaillage clandestin) has led to French military patrols along the Oyapock, while the COVID-19 pandemic highlighted the fragile nature of local trust and coordination. The border was closed, the bridge shuttered, and military and police presence intensified to prevent viral transmission, particularly from Brazil, where public health measures were less stringent. This further exposed the limits of cross-border partnership when state priorities diverge.

This case shows that EU cohesion policy, while powerful within the Schengen Area, struggles to extend meaningfully to outermost regions situated along international boundaries. Integration here is less about common institutions and more about bilateral negotiation, infrastructure maintenance, and local community ties. Unlike borders within continental Europe, the French Guiana–Brazil frontier reflects how geography, postcolonial legacies, and asymmetrical development can limit the EU’s integrative reach, despite formal membership. Integration here is not driven by common EU policies alone but requires bilateral engagement, legal harmonisation, and investment in trust across historical and developmental divides.