What is the future of the European Union post Brexit?*
Rule-based flexibility must prevail over tokenism and single market dogma if the EU is to secure continued peace and prosperity and remain credible on the global stage.
For a generation we have taken for granted the liberal economic order on which our democracies are based. Recent events reveal how fragile the foundations are. The EU is a project worth saving for all the reasons it was conceived 60 years ago. Peace, prosperity, tolerance and openness are values worth preserving. The EU must focus on where it can make most difference. Its leaders must rigorously avoid tokenism.
The internal market - built on the four freedoms of capital, goods, labour and services - served us well in a period when it was believed that Europe’s economies would continuously converge. But divergences over the past decade have put the system under unprecedented strain. A well intentioned civil service in Brussels will struggle to accept any talk of exceptions to the four freedoms. It is time to ask bold questions and answers should be equally brave!
For instance, with GDP in Bulgaria one-third of that of Germany, why not acknowledge that it is in the public interest for medicines to be supplied to Bulgarian patients at a significant discount without them being diverted to higher priced markets? Today the single market rules benefit the arbitrageurs without any material advantage accruing to patients or payers.
Why not allow Greece to leave the eurozone in a managed way and permit a core group of countries to build the confidence and discipline required of a true banking union?
Why not relook at the free movement of people rules causing so much disaffection? Why not develop safeguard measures that recognise national concerns over immigration, however short-sighted or over-stated they may be?
More broadly, why not foresee a two or three speed Europe with sufficient flex to preserve the basic tenets in the greater public interest? Embracing rule based flexibility rather than defending EU dogma must be the next chapter in European integration.
It would allow the UK to manage the fallout of the Brexit vote. It would allow for shocks of far left or right election victories to be absorbed without existential crises. It would provide a more efficient framework for relationships with neighbours as diverse as Switzerland, Turkey and Ukraine.
It would embolden the willing to explore deeper integration without catering for the lowest common denominator in a system that is currently subject to too many vetoes.
It would do a better job of promoting economic integration whilst allowing for cooperation beyond the core on matters of foreign policy, security and defence.
It is time for all stakeholders to show resolve and leadership. Industry must speak up and be prepared not just to present its wish list for more open liberalised economies, but to engage in the societal debate on the redistribution of wealth. Above all, national governments must step up to the task of partnering more constructively with Brussels to preserve Europe’s values and relevance in a global economy that threatens to leave it behind.
*All views expressed are personal.
Partner at Morgan Lewis
7 年An excellent and thought provoking article, with some incredibly challenging questions and ideas. Indeed it made me go back and look again at Thatcher's Bruges speech https://www.margaretthatcher.org/document/107332 Whilst this speech is almost 30 years old (and comes with a lot of baggage) it is still relevant today and contains similar ideas that could help in a post-Brexit world. This speech was a pro-Europe speech by Thatcher: "Our destiny is in Europe, as part of the Community." but it was for a Europe with greater flexibility, and results. What seems particularly striking is the following statement: "If we cannot reform those Community policies which are patently wrong or ineffective and which are rightly causing public disquiet, then we shall not get the public support for the Community's future development." This could have been said by a politician today, as opposed to one in 1988. It it these types of issues, and the ones set out by Fiona that now need to be addressed.
Baker McKenzie partner doing Corporate and M&A law
7 年An excellent article which clearly depicts what our world is today and why flexibility is part of the success of any alliance . It is the recognition of diversity among equals. Congratulations Fiona
thecopycourse.com
7 年Thanks for the blog. The last line rings particularly true to me. All empires eventually fail when relevance is missing. But can the EU solve its problems with the same kind of thinking that generated the problems in the first place? I hope they listen to your thinking.
Great stuff - for all the EU talk on the four freedom being indivisible, the Swiss model has no freedom of services so they do not have to be so absolute in reality. After 60 years the EU system is mature enough to allow for differences rather than a rigid one size fits all.
Head of Antitrust in Spain at White & Case LLP | Former Owner/ Managing Partner at GCR 100 Firm
7 年Brave article, Fiona -- thanks for sharing it! There may be a couple of proposals I disagree with, but I understand their rationale and the overall package seems entirely reasonable. More importantly, this kind of the debate is precisely what we need in ???? for our shared institutions to survive this unpredictable decade.