The E6 Core and the Coming EU Cracks: A Contrarian Risk Analysis for Business

The Inconvenient Truth: A Multi-Speed EU Reflects a Failing Political System

The proposal for a “two-speed Europe” championed by German Finance Minister Lars Klingbeil is not a clever, flexible solution for the European Union. It is a desperate, last-ditch political manoeuvre that starkly reveals the bloc’s fundamental dysfunction. The core thesis is this: The EU has become so politically paralysed that it can no longer function as a cohesive unit, forcing its largest and wealthiest members to abandon the pretence of consensus. The formation of the “E6” (Germany, France, Italy, Spain, Poland, Netherlands) is not a temporary working group; it is the blueprint for an elite, high-speed political and economic directorate designed to override the cumbersome machinery of the full 27-member union. This move does not save the EU; it initiates its reconfiguration into a core-periphery model that will breed permanent resentment and could catalyse the bloc’s gradual disintegration, particularly as political winds shift within its own core.

While defenders claim this is a “pragmatic” solution to EU decision-making inertia, the reality is that it formalises failure. It accepts that the core EU treaty principle of achieving “ever closer union” among equals is dead, replaced by a system where a few powerful states simply move forward and impose their agenda. This is not a benign technicality. It creates a de facto first- and second-class membership, where the “peripheral” nations are systematically disadvantaged, their policy autonomy undermined, and their ability to shape the European project severely diminished.

The “E6” Core Group: A Cartel That Will Ignore and Override the Rest

The risk that the E6 will act as an internal cartel, sidelining the wishes of other member states, is not a hypothetical fear—it is the explicit purpose of the formation.

• Circumventing Vetoes and Imposing Policy: The primary motivation for the E6 is to bypass the EU’s unanimity requirement on sensitive matters like foreign policy, taxation, and security. When Luxembourg’s Prime Minister argued for a two-speed model, his logic was chillingly clear: “When a country says ‘I don’t want to,’ I can say: ‘Well, too bad. Don’t block me. Let me get on with it with others'”. This sentiment is the E6’s operating principle.
• Existing Precedents of Core-Periphery Exploitation: This is not a new dynamic, but the hardening of an existing, exploitative one. An academic study examining the post-2009 crisis period shows how EU austerity policies, dictated by core institutions, devastated peripheral economies like Greece, locking them into a dependent relationship and widening economic and social gaps. The E6 formalises this power imbalance, allowing the core to set fiscal, defence, and industrial policies that serve their interests first.
• The Single Market as a Tool of Coercion: Proponents argue that “outsider” nations will remain linked via the single market. In practice, this means they will be forced to accept regulations and standards set by the E6 to maintain market access, but will have no substantive vote in creating them. They become rule-takers, not rule-makers. The EU’s internal market, once a tool for convergence, risks becoming a mechanism for enforcing the core’s will on the periphery.

From Multi-Speed to Total Breakdown: The Domino Scenario of Collapse

The greatest existential threat to the EU is not this proposal itself, but the long-term political chain reaction it sets off.

• Accelerating Divergence and Breeding Nationalism: A formalised two-tier system will halt economic and social convergence. One analyst warns it could increase economic divergence, leading to greater migration pressures and ultimately calls to limit the EU’s foundational principle of free movement. This fuels the very nationalist, anti-EU sentiments the bloc fears. Countries left in the “slow lane” will see their citizens grow disillusioned with a union that offers them diminished prospects and influence.
• Political Shockwaves from Within the Core: The E6 is not a monolith. Poland’s inclusion is particularly volatile, given its government’s history of fierce clashes with Brussels over the rule of law. A future populist government in Italy, Spain, or even France could look at the E6’s commitments and decide to follow a British path. The exit of a single major E6 member would not just weaken the core; it would shatter the entire political and economic logic of the two-speed model, potentially triggering a rush for the exits.
• The “Grexit” Precedent on a Grand Scale: The Greek debt crisis proved that the EU core was willing to entertain the expulsion of a member to preserve the eurozone. A two-speed Europe makes this concept operational. Weaker economies that fail to keep pace could face intense pressure to leave certain policy areas or be politically marginalised, creating a de facto “flexible disintegration”. Once the principle of an “inner circle” is accepted, the unthinkable—managing a member’s partial or full exit—becomes a policy tool.

Six Controversial Risk Management Steps for Business Leaders

Given this bleak prognosis, business leaders must abandon hope for EU stability and adopt a ruthless, realpolitik strategy.

1. Abandon “EU-Wide” Strategy; Adopt a “Core-First, Periphery-Contingent” Model

• Action: Immediately re-allocate capital and strategic focus to the E6 nations. Treat the rest of the EU as a secondary, higher-risk market. Develop separate investment theses: one for the integrated, subsidy-rich core, and another for the volatile periphery.
• Rationale: Future EU funding, defence contracts, and regulatory advantages will be heavily concentrated within the core. The periphery will suffer from capital flight and policy neglect.

2. Prepare for the End of the Single Market as We Know It

• Action: Conduct stress tests on your supply chains and logistics for scenarios where free movement of goods, services, or people is restricted between the core and periphery, or where the core imposes new digital or regulatory borders.
• Rationale: The political logic of a two-tier Europe inherently leads to regulatory divergence and potential barriers. Businesses cannot assume the single market’s integrity will survive this political fracturing.

3. Bet on the Core’s “Fortress” Economy—Especially in Defense and Tech

• Action: Aggressively pivot business development towards sectors explicitly prioritised by the E6: defence manufacturing, dual-use technologies, critical raw material processing, and fintech platforms aligned with a deeper capital markets union.
• Rationale: The E6’s agenda is to build strategic autonomy. This means massive, protected subsidies and procurement contracts for core-based champions, explicitly turning “defence into an engine for growth”.

4. Establish Political Risk Units Focused on Nationalist Movements in E6 Countries

• Action: Move beyond tracking Brussels policy. Invest in intelligence-gathering on rising anti-EU, populist parties in Italy, France, and Poland. Model the business impact of any one of them winning power and renouncing E6 commitments.
• Rationale: The stability of the entire new structure rests on the continued political alignment of its core members. This is its greatest vulnerability. A political shock in one E6 nation could unravel everything overnight.

5. Develop “Nation-State” Lobbying Capabilities to Bypass Brussels

• Action: Drastically reduce reliance on pan-EU trade associations. Build direct, powerful lobbying operations within the national parliaments and ministries of Berlin, Paris, and Rome.
• Rationale: Real power is shifting from EU institutions back to the capitals of the core nations. The E6 will decide policy in closed-door meetings, not in the European Parliament.

6. Scenario Plan for the “Domino Exit” and EU Liquidation

• Action: Develop a confidential contingency plan for a rapid, uncoordinated unwind of the EU. This includes legal entity restructuring, currency re-denomination risk plans, and strategies for protecting assets.
• Rationale: While not the most likely scenario, the two-speed model makes a catastrophic failure sequence plausible. Leaders who dismiss this possibility are ignoring the historical precedent of how political unions can unravel with stunning speed when their central bargain breaks down.

Conclusion: Navigating the Unravelling

The two-speed Europe is a sign of profound weakness, not strength. It is an admission that the grand political project of unification has stalled and is now being replaced by a mercantilist club dominated by its largest economies. For businesses, the era of a predictable, rules-based EU is ending. The new era will be defined by geopolitical manoeuvring, privileged access for insiders, and heightened systemic risk. The prudent leader will not plan for a more integrated Europe, but for a fragmented one, where survival depends on picking the right side in a quiet internal conflict that has already begun.

#TwoSpeedEurope #EUCollapse #GeopoliticalRisk #BusinessStrategy #E6Core

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Two-Speed Europe: Is the EU’s New “E6” Core a Path to Collapse? | BusinessRiskTV