As the 27 meet at Bratislava I thought I should offer the opportunity to all EU lovers to write in with what they would like the 27 to agree as their new “vision” for the EU. All the main players going to the meeting tell us they will pause for serious and honest reflection about the growing gulf between popular wishes and what the EU elites are serving up. It is also a chance for those of us who decided to leave to offer friendly advice to our former partners if we wish.
I must say I much prefer writing about the EU now I know it is no longer going to be our problem or partly our fault. I have long believed that as a good European the best contribution the UK can make is to depart from the monetary and political union. We never wanted either. We have been lied to by some in the UK debate that that is not the EU’s preferred destination. You feel the clearing of the air now the 27 can sit down and discuss the pace and scale of their integration without the UK trying to slow them down or pretending it is not happening.
Mrs Merkel has expressly called for some speeding up of integration. Germany of course wants quota systems for others to help to take the refugees, and more integrated approaches to economic policy so the other states accept more readily firm economic disciplines. France wants to re establish its influence over Germany and to be the main force behind more military union, working on the common EU forces they already have to make them larger and more effective. The Commission as always sees Brexit like all other democratic checks to the EU as a chance to increase Commission power and the range of matters it controls. Mr Tusk makes the most sombre and realistic assessment, as he has to deal with elected officials and the national Parliaments. He wants answers to the growing popularity of Eurosceptic challenger parties of right and left.
My advice to them is to understand that the Euro is the centrepiece of their union, the main achievement of their pressure to integrate so far. The main actions they take must be ones that make the Euro more like a national currency in a major country. These actions are required to tackle mass unemployment in the south and west of the zone. to strengthen weak banks across the zone, and to provide the free movement of capital labour and people that a currency zone needs. Trying to do this without a single official language is always going to be difficult.
To make the Euro more secure and the project more popular, the first need is to set up proper transfer systems so the richer areas can help the poorer areas on a much bigger scale than today. Regional transfers in the UK or US are many times the level of such transfers in the Eurozone, taking place through national benefit rates and schemes, through local authority financing and through large scale regional and sectoral programmes. German, Dutch, Austrian and other richer country taxpayers have to be persuaded that poverty in Greece and unemployment in Spain is their problem too, and they need to make a financial contribution to alleviating it.
The second task is to put in a comprehensive system of bank deposit guarantees that operate across frontiers, and to have a scheme for getting all major banks up to satisfactory levels of capital adequacy more quickly. The EU sovereign and the ECB must jointly stand behind all major banks in the system and be seen to do so. In practice member states customers and investors are on risk, but so also the taxpayers ultimately have to be on risk or be prepared to bridge or prop the parts of major banks that are essential to keep the cash points open. Of course I favour the investors being more at risk than in 2008, with better protection of the taxpayers interests than we then enjoyed. The EU itself needs a broader tax base.
The third task is promote an EU budget large enough and helpful to growth and enterprise. The extreme austerity visited on Greece and some other problem countries in the zone has been a social and economic failure. This needs to be sensibly reformed. Now the ECB has bought up large quantities of member states debts, the overall net borrowing position of many member states is more acceptable.
If the single currency cannot be managed in a way which gets down high unemployment, and spreads better paid jobs more widely around the union, it will be increasingly difficult to get political support for the project. If the richer countries and reigons are not prepared to pay more for the union then it would be best to abolish the Euro.