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EU’s Building is Losing Pieces

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Great Britain is winning its battle. It abandoned the EU, presumably with great regrets, but it was successful in convincing many other countries to follow its way out. Not directly from the EU, but from the on-going process of reform of the EU launched by Macron, presumably to be followed by the newly born German Government which agreed on this, based on sharing sovereignty in crucial areas of policymaking.

The declaration signed by the Ministers of Finance of eight countries – Denmark, Estonia, Finland, Ireland, Latvia, Lithuania, Netherlands and Sweden – is worrisome. Both for the timing, just after the agreement reached between Cdu-Csu and Spd in Germany to form a new grosse Koalition, and its contents. While the German government has accepted to follow Macron’s challenge, and is ready to start the negotiations for the completion of Economic and Monetary Union and the future framework of institutions and decision-making in Europe, the Document of the Eight sounds like a declaration of war to the Macron-Merkel/Schulz line.

The message is clear: we do not want to give up further sovereignty to European institutions. Not only the largely ineffective and undemocratic ones of the present EU, but even less to institutions which might be the legitimate expression of a popular will that may not be mediated by national powers.

Stabilization functions should be strengthened, but at the national level! A European Monetary Fund is welcome, but only as a backstop for the banking union and with an intergovernmental decision-making! More investments on the European budget are also welcome (to be financed how?), but only if they are devoted “to ease the structural reforms in each country”. At least we cannot claim they did not express themselves in a clear way!

On one single point they are absolutely right: the discussion on the reform of the Emu should be made collectively. The crucial issue is that we need to set the rule, before discussions start, that who is not willing to proceed along a further sharing of sovereignty within a more democratically legitimized institutional framework can of course opt out, without prejudice to those who want to go further on that. If, then, they want to remain in the euro, they are welcome. If they prefer to quit, no problem either. Irrespective of the EU Commisison attempt (also for its institutional role) to keep the EU27 together in drafting reforms for the Eurozone, which in their expectations was meant to be soon overlapping the whole Union.

Here in Italy it is probably not clear. But is manifest that a fight to the death is taking shape on who is willing to go on with European integration (and how they think this can be done) and those who would prefer to remain anchored to an idea of the EU as a mere free market area (and not much more).

More and more, it becomes urgent that Macron and Merkel proceed quickly towards a common, efficient defence; towards the creation of a European Monetary Fund with stabilization and growth functions, not only as a backstop for banking union; towards a proper budget to finance the new common competences with own resources and not managed with an intergovernmental method.

Is it possible to think of this in terms of the Eurozone? Among the 19 euro countries, six (Finland, Ireland, Estonia, Latvia, Lithuania and the Netherlands) are part of this group; Slovak is a member of the Group of Visegrad, certainly not committed to sharing sovereignty; and Austria gave consistent signals that it is not willing to share further sovereignty. And then there were eleven... Let’s hope more pieces are not lost... and, in particular, that, in case, it is not Italy...

Posted by Fabio Masini

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