To get out of this crisis we need to rebuild Europe from scratch

In an op-ed published recently in the Financial Times, Jean-Claude Piris, the former chief lawyer for the EU Council of Ministers, warned that the present institutional set-up of the EU is “no longer tenable” and called for a two-speed Europe. Coming as it did from a former top-ranking EU official, from one of its founding member states (France), who was also one of the architects of the Lisbon Treaty, this was powerful stuff.

Piris is right. The European Union is in urgent need of repair. Its structures are incapable of dealing with the huge political and economic issues we are facing today. It lacks the legitimacy it needs to operate efficiently and effectively. His proposal to create an avant-garde group of 17 member states would allow the Eurozone countries to forge ahead and should therefore be welcomed. But it doesn't address the wider issues of crumbling legitimacy on the one hand, and the need to reinforce the stability and security of the European continent on the other.

There are two major fault lines which divide the current EU. The first is the euro. As most people now realise, the euro cannot function properly without a much greater degree of political and economic union. But such a level of integration cannot be achieved within the existing EU, given the strong anti-European sentiment in several member states, especially the UK. Europe cannot wait for a national consensus on EU membership to develop in the UK and other euro-reluctant countries before it puts its house in order.

The second fault line is identity. As the Brussels-based journalist, academic and producer Gareth Harding argued recently in a powerful speech at the University of Missouri, most European citizens (who don't even see themselves as such) no longer have faith in the EU project. They believe the euro and enlargement were costly mistakes. They consider Turkish membership of the EU as a threat to our way of life. To win back their support, and to get Europe back on track, we need a new approach and a new architecture.

We have to accept the reality that some countries are ready and willing to be part of a single currency and all that entails, while others are not yet and may never be; we also have to recognise that some countries are ready, willing  and even eager to subsume some of their national and cultural identity into a European political union and others are not yet and may never be. All deserve a place at the European table. The answer is to replace the existing EU with a new two-layered structure.

The outer layer would be an overarching, less intrusive and more inclusive framework for European cooperation: a European Area of Freedom, Security and Prosperity (EFSP). This would comprise all EU and EFTA member states, as well as all existing EU candidate countries including Turkey. It could be expanded eastward to all European countries, one day even up to and including Russia, if and when the Copenhagen accession criteria (or similar) are met.

EFSP would be a free trade area with a common foreign and security policy. It would operate on the basis of the existing internal market rules, although the creation of EFSP would be used as an opportunity to review and if necessary amend existing rules. It would co-operate on physical cross-border issues such as transport and the environment, but it would have no role in policy areas where public resistance to EU co-operation and fear of further enlargement is greatest, such as education, social and taxation policy and justice and home affairs.

All decisions in this area would be taken by unanimity, under the control of national parliaments, in recognition of the fact that many European countries aren't ready to give up their veto or their policy-making powers in areas perceived to be of vital national or political importance. This will reduce the area's firepower but enhance its legitimacy. EFSP would eventually be merged with the Council of Europe and would take over the role of the OSCE. The European Court of Human Rights would be modernised to increase its legitimacy.

The inner core would be a European Political and Economic Union (EPEU), comprising a smaller group of member states without internal borders, all members of EFSP, a single market with a single currency and an integrated system of economic governance, with full political and fiscal union and democratic accountability at the EPEU level for decisions taken at that level. Schengen would be subsumed into this inner core.

Legislation governing the internal market would apply in this area over and above the free trade rules agreed within EFSP. To avoid gridlock and to ensure progress in making the necessary political and economic reforms, all decisions within EPEU would be taken by qualified majority. Membership of EPEU would be open to all members of EFSP, but the accession of new member states would be subject, as now, to the unanimous agreement of existing member states.

Such a new architecture would be inclusive, accommodating the increasing eurosceptic sentiment in several member states while at the same time bringing more countries into the European fold. But it would also allow countries that wish to do so to push ahead farther and faster with the integration of their political and economic systems. To get there we need to say goodbye to the EU as we know it. To build the Europe of the future we need to start from scratch.

Michiel van Hulten is a Member of the ECFR Council and a former Member of the European Parliament.