European Union: The Future Of Europe

In 1957, the six EU founding members–Germany, France, Italy, Belgium, the Netherlands and Luxembourg—agreed to settle their conflicts around a table rather than on the battlefields. We are now days away from the 60th anniversary of the EC Treaty Rome. Like all anniversaries, the Rome Summit will be a natural time to reflect on the last 60 years at a time when BREXIT and the fear of a “domino effect” across Europe is driving change. The European Commission’s “White Paper on the Future of Europe” (“Paper”) was written to help the European Council decide on a course of action by year-end, with a view to implementing a plan to be rolled out in time for the European Parliament elections in June 2019. Whilst BREXIT is only indirectly referred to, references to “EU27” abound, alongside references to the refugee crisis, terrorism, the global financial crisis and “new global powers”. The EU may still be home to the world's largest single market, however “Europe's place in the world is shrinking.” This comes at a time when newer powers such as China, Brazil, India and Mexico, rise, and when the United States becomes more inward-looking. Other notable challenges include unemployment and friction over borders.

Necessarily high-level at this early stage, the Paper presents the following five scenarios for the future of Europe:   

  1. Keep calm and carry on! The European Commission would continue to focus on jobs, growth and investment by strengthening the single market and by increasing investment in digital, transport and energy infrastructure. EU27 would actively pursue trade agreements with partners from around the world, in the same way as it does today—although hopefully in a more efficient manner. Interestingly, the Paper hints at some countries maintaining their own “targeted internal [border] controls” in order to deal with migration–a nod to placating opposition to unrestricted freedom of movement.
  2. Nothing but the single market. This scenario is essentially what many western Europeans really want the EU to focus on. “Ever closer political union” is a lofty idea, but it is difficult to achieve in practice. Unfortunately, the Paper is rather pessimistic about this option, talking in terms of it leading to a “race to the bottom” for consumer, social and environmental standards, which is not necessarily the case. 
  3. Carry on EU plus. New groups of member states would be able to agree on specific further legal and budgetary arrangements and deepen their cooperation in chosen domains (see e.g., the Schengen area or the Euro). The status of other member states would be preserved, and they could join those doing more over time, thereby creating a multi-speed EU. This scenario would be quite complex to organise and manage though. Would those member states “left behind” quickly fall (or be pushed) off the wagon? The opposition to, inter alia, the Financial Transactions Tax by the likes of the United Kingdom and the Netherlands was arguably the precursor to BREXIT and a possible NEXIT.
  4. Less is more. Cherry-picking where the EU27 can really achieve things. Rather than trying (and often failing) to achieve lasting improvements in public health and social policy, the EU would focus on areas where it perceives that it can really make a difference in critical ways, such as innovation, trade, security, migration, and the management of borders and defence. Typical examples are further cooperation on space, high-tech clusters and the completion of regional energy hubs. Problems may arise in choosing which areas to focus on and allocating the budgets accordingly.
  5. Doing even more together: Accelerating toward a truly united Europe. This is a favourite with the hardcore believers. The more peripheral non-Eurozone countries, and even those within the Eurozone who do not agree with harmonised tax laws, for example, such as Ireland, would be effectively forced to exit, unless they obtain (further) carveouts.

Clearly none of the above scenarios provides a silver bullet. However, the Paper does try to get us thinking, firing an initial salvo into urgent discussions on the future of Europe. The authors note that the “the allure of isolation may be tempting to some, but the consequences of division and fragmentation would be far-reaching.”  This is the European Commission’s initial contribution to the Rome Summit, with a series of EC “reflection papers” in the pipeline, including on “deepening the Economic and Monetary Union,” “harnessing globalisation,” “the future of Europe’s defence” and “the future of EU finances.” Meanwhile, Far-right National Front party leader Marine Le Pen closes the gap on Emmanuel Macron in the run up to the French presidential election, and the Dutch will soon know whether the leader of the populist Party of Freedom, Geert Wilders, will dislodge the incumbent Prime Minister, Mark Rutte (leader of the more moderate People’s Party for Freedom). Over here in the United Kingdom, Prime Minister May is close to issuing an Article 50 Notice to the European Council, which will start the 24-month withdrawal negotiations with the EU. Surprisingly upbeat in parts, though, the Paper notes that “the Union has often been built on the back of crises and false starts. . . through to aborted accessions and rejections in referenda in recent decades, Europe has always been at a crossroads and has always adapted and evolved.”

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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