Francesco Franco

Est européen celui qui a conscience d’appartenir à un tout. Si l’on n’a pas cette conscience, et si donc on n’est pas européen, cela ne veut pas dire pour autant que l’on est un barbare. Mais on n’est pas européen sans le vouloir”

Rémi Brague, Europe, la voie Romaine.

The all-embracing cause of Brexit appears to be the desire of retrenchment from the globalization process. England, like most of the West, experiences stagnation in lower incomes, a rise in inequality and the absence of a vision for the future. Unhappy citizens ask why and populist parties offer the only rapidly intelligible answers: free movement of people and capital; off shoring of jobs and loss of national sovereignty are the causes of your problems. Given that the European Union promotes free movement of people and firms and legislates laws and treaties, one answer is to exit the EU. Therefore Brexit.

The paradox is that the United Kingdom, the most cosmopolitan nation of the World (at least in a not too distant past), knows that Autarky generally results in lower income growth, higher inequality and in autocratic regimes. More, the UK knows that minding one’s own business does not work in a time of international crisis. The UK knows that Autarky cannot be the answer to the citizen legitimate concerns.

Admittedly the European Union was unable to express satisfactory common responses to the multiple turning points that have appeared since the beginning of the 21st century. This is true for the two EU decision-making methods, the community (read the European Commission) and the intergovernmental (read national governments). The latter showed dis-unity in the response to the Iraq war or to the tragedy of the refugees. The former was unable to respond to the current account crises of Greece, Portugal and Ireland without the external assistance of the IMF.

The predominantly rule-based governance of the EU can be sound on trend, when the geopolitical and economic environment is more or less stable but in crises one needs rapid and intelligent decision-making. We have one example of such an assumption of responsibility: the pledge of the ECB to be a lender of last resort for the Eurozone. This decision permitted to reabsorb the euro sovereign debt crisis that had emerged in the aftermath of the current account crises in the periphery. The UK is not part of the Euro, and as such did not experience this European capacity of taking decision. But this is not enough; we need more capable decisions to go forward.

How can we empower Europe with a leadership capable of responding to the crises in the globalization process? There are several options that are considered that can be subdivided in two groups. The first group increases political integration and proposes to strengthen the community method. The second group reinforces the intergovernmental method. The discussion must proceed with the objective to find a solution that creates the consciousness of being European.

Francesco Franco is a member of the board of directors of IPP and Professor of Economics at NOVA SBE.

Views herein are those of the author(s) and do not necessarily reflect those of IPP, the University of Lisbon, or any other institution which either the authors or IPP may be affiliated with.

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