Concerns are not abstract. Dublin, like Luxembourg, has a direct interest in the future of European financial markets. Similar reservations are also heard from Lisbon, which, together with other smaller and medium-sized economies, warns against the political consequences of too close coordination of large states.
According to some diplomats, this is more of a political tactic than the creation of a new decision-making center. In this view, the E6 should primarily serve as a tool to create pressure on those member states that have been hindering progress on sensitive and politically controversial issues for a long time.
Hard data from the European Statistical Office clearly illustrate why this move causes nervousness in smaller metropolises. These six countries not only shape the European market, but literally create it.
Fear of national interests
The E6 format together controls over 70 percent of the total wealth of the European Union and represents the same share of its population. When the finance ministers of these six countries sit down at the table, the whole of Europe is de facto sitting behind them in terms of market power.
For smaller countries, however, this huge disparity represents an existential political risk. As the comparison shows, countries such as Ireland and Luxembourg form only a fraction of the European economic weight in terms of total GDP (with a share of the EU market of approximately 3%, respectively only 0.5%). But in reality, they are financial powerhouses with enormous influence. A substantial part of European management companies and investment funds are located in Dublin and Luxembourg.
If the focus of discussions on “deepening capital markets” and “centralized supervision”, which are the main goals of the E6, move behind the closed doors of the largest economies, smaller states will lose the opportunity to protect their most sensitive national interests.
Portugal is in a similar situation. Its total economic output (roughly 267 billion euros, i.e. only around 1.5% of the EU market) does not even reach half of the GDP of the smallest member of the E6 – Poland. For countries of this type, E6 is a warning that important investments, concessions for business or rules for European industry will be decided by a compromise of the big players before the official Brussels negotiations even begin. The rest of the Union will thus be faced with a fait accompli.
Geopolitics versus fragmentation of the Union
Analysts have long pointed out that for smaller and medium-sized countries, not only the opportunity to vote is crucial, but especially participation in the formation of political compromises. If agreements are drawn up in a small circle of major states before official negotiations, the rest of the Union may find itself in a position of merely reacting to ready-made proposals.
This dimension is all the more sensitive because similar concerns appear repeatedly in European politics. Smaller countries traditionally react sensitively to initiatives that arise outside of common formats, because the decisive phase – setting the agenda and finding a compromise – is then moved beyond their reach.
From this point of view, the initiatives of the largest economies can be read in two ways. On the one hand, they are a reaction to the pressure of geopolitics and an effort to speed up decision-making. On the other hand, however, they confirm the trend of fragmentation, in which states seek solutions in narrower coalitions instead of strengthening common mechanisms.
This contradiction is at the heart of European politics today: Europe needs to act faster as a whole, but its member states increasingly think in terms of national profit and loss.
