Thursday, November 10, 2016

Europe with Donald Trump: EU 2.0?

So, who would have guessed that 27 years after the fall of the Berlin Wall, a man like Donald Trump would be elected POTUS.

It has been a rocky 27 years for the West. They have included the dotcom bubble, the subprime bubble, the WTO, China's entry in the WTO, the EU (Maastricht) and the Euro, Doha's failure and the proliferation of regional trade agreements and NAFTA among others.

In retrospect, maybe capitalism was performing better with competition from communism. Maybe.

Europe has had it good. It has grown from 12 to 28.

Soon 27.

Trump's campaign has shown he is an isolationist, in both defense and trade matters. Plus he wants lower corporate taxes.

Many in Europe are thus concerned about the Russia factor. Whether that is a real factor or not is maybe besides the point.

In recent weeks, I have posted food for thought on EU Reform, some far fetched, some not.

In view of Trump's election, let's have a brief look again.

- EU Army or something like that.
- Closer economic union, including tax matters.

Are these possible? Front National, AfD, PVV and others are banking on nationalism - anti-EU feelings. Won't such proposals play in their favour? Why would CDU, French conservatives, et al ever agree to such proposals?

Well, one way to move the EU forward is convince taxpayers-voters in Germany, NL and other parts of Europe that this won't cost them more. Even better, if it costs less!

For example. should the EU continue to fund regional policy in Spain, Greece and others? It has been 25 years since it started.

The other factor is "take it or leave it"!

Europe has enjoyed protection from the US. Europe has also given in to members' diverging points of view. best example the UK. Where has it led? Brexit.

People in Europe should not feel that their countries have to participate in the EU. The EU has benefits as well as costs. Sovereignty is one of them. So why push members to stay in. Even better, makes the new draft Treaty an EU 2.0. Those states that adopt it, stay in, those that don't, join the EEA or some new form of it.

This may sound harsh or cruel, but is it, really?

If Europe needs a defense and real economic union, then it must proceed. Those that do not share that view should not be forced. The EU should stop being seen as a Hotel California!

The US is 320 mio. EU 2.0 should have a least the same population, same or better GNP/capita and above all commitment to union, by its people. In defense and economic matters, above all. The Trump era may witness trade and currency wars among others. A real union is needed in Europe, that's the rationale. Not more relying on the US. Ability to negotiate with the US on trade matters, as well as the whole world. A common immigration policy. And other parameters. That is a different EU than the one so far.

For the rest, the European Economic Area (EEA) or a revised EEA should do.

Germany and France seem necessary members of an EU 2.0. Together they make 145 mio.
Membership of all other existing 25 members should be welcome but not required. Of the 25, enough will join in to make it 320 mio plus and have a real union.

Are "the Russians coming"? I doubt it, but so many think so that this could be the driving force, but not merely for an EU army, that would be shortsighted, for an EU 2.0.

The alternative is no EU or a stale EU as the current one is.

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