Brexit? That missed long-term opportunity…

Brexit? That missed long-term opportunity…

Suppose for a while that the UK would not have taken the route of a referendum to part with the European Union; how do you think this Country would have found itself in 7-10 years’ time vis-à-vis to the EU? Well, oddly enough it would have found itself – or very close to – the situation it is now struggling to arrange with Brussels, at no added cost and without substantial political tussle. Am I talking about Astrology? Not indeed, but political Astronomy may have something to do with be the subject of this essay.

Having set fire to art. 50, the UK has initiated a difficult task of distancing itself from the “regulatory shackles” of the European Union. Nevertheless, according to its Premier, Mrs May, the UK is keen to retain deep and meaningful relations with the EU. Having studied various possible formulae, it seems that the EFTA arrangement in operation between the EU and Norway, Switzerland, Iceland and Lichtenstein would be more viable for future relations, albeit with “minor” exceptions to suit the Country’s peculiarities: no free movement of EU nationals and to be outside the CJEU.

Carl Baudenbacher, President of the EFTA Court, argues that Britain could use his court to resolve disputes.

Forgoing the consideration of detailed economic aspects of this hypothesis, the Country’s contribution to the EU would persist with a difference: the UK would not enjoy voting rights and, in principle, it should grant freedom of movement to EU citizens, although it may be debated if freedom of movement also implies employment rights.

An overlooked economic aspect is the added cost that the UK should bear in terms of added administrative personnel and technical structures to deal with non-EU Countries when closing and servicing future commercial agreements.

Another flawed credence is the feared unbearable load of immigration from the EU. Movement of people in search of employment within the EU (UK included) will necessitate a rethink of the whole social system sooner rather than later, due to the advancement of Artificial intelligence and Intelligent Robots, all going to replace large portions of low and medium skilled work.

In the meanwhile

The European Union is in the process of initiating an extended period of transformation whose objective is to make the bureaucratic machine slender and more effective. The intent is to leave the 27 members decide if, at what level and when they would be prepared to deepen their integration inside the Union. A core of Countries comprising Germany, France and a few more advanced economies would inaugurate a European Monetary Fund and other banking instruments to make the Euro more stable. A second layer would include other Eurozone members which, together with the core-group will share a proper Parliament with a dedicated budget. A third layer is expected to include non-Euro members who subscribe to the Internal Market, the Common Economic Area plus Customs Union. The problem of intra-EU purchasing-power differences (encouraging intra-EU emigration) will also be reviewed. The EU parliament, as it is now, would probably have less duties and it would morph into a body modelled as a European Trade Organisation.

The whole programme, in principle, is scheduled to begin toward half year 2018, will go through next EU elections of 2019, it would be ratified and implemented in the years following.

It must be conceded that the European Union’s future will not be smooth as glass and political skirmishes may easily ensue but, alas, the UK will not contribute to those scuffles. As I have anticipated, the political astronomical encounter between the UK and the EU will be missed by a mere 7-10 years; it is a big miss as it would have spared Britain substantial economic and political cost.

Article by Elio Pennisi

About the author: A techno-economist, after three decades’ experience in the field of Applied Economics, having worked for international institutions, I regard Europe as my Country of residence, well aware of the strengths and weaknesses characterizing each Nation. My motto? Intertwining strengths is the only way to minimize weaknesses. Also, supporter of the “Third Culture Club” and member of European Humanist Associations.

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