THE EUROPEAN UNION AND THE LONG CYCLES OF ECONOMIC INTEGRATION

The dynamics of regional economic integration remain under-discussed in academic circles. The European Union’s trajectory—from customs union to common market to monetary union—exemplifies Bela Balassa’s well-known stages. The launch of the Economic and Monetary Union 25 years ago with the single European currency marked a significant advance. Yet the 2005 constitutional crisis revealed the limitations of pursuing Balassa’s full economic union, or a total economic integration that presupposes the unification of monetary, fiscal, social and countercyclical policies. Consequently, traditional stage-based models of integration are increasingly inadequate for explaining 21st-century dynamics. Scholars need new ideas and approaches that would help them to grasp the nature of regional economic integration in the first half of the 21st century. This article proposes a hypothesis of long cycles in regional economic integration. This framework rests on two key assumptions. First, regional integration is a collective instrument of globalization, not an insulated, endogenously induced process aimed at getting welfare gains and expanding national markets. Its pace depends on the interplay of internal and external driving forces, whose interrelation and juxtaposition may accelerate or slow down progress. Second, economic integration unfolds cyclically, characterized by long waves of growth and stagnation, rather than a steady, linear advancement. I identify three such cycles in the European context: the first (1951–1984), the second (1985–2019) and the third (2019–present). Each cycle exhibits distinct goals, agendas and programs. With goals almost achieved and programs close to implementation, the additional institutional and operational burden puts more pressure on integration dynamics. If coupled with adverse external impact, it may suppress integration activity and induce stagnation with certain elements of disintegration. Another upward trend may gain momentum with the initiation of a new cycle, driven by a comprehensive upgrade of the integration project based on novel ideology, revised goals and fresh resources.

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