By the CPMR Secretariat
It’s been a few weeks since the European Commission published its White Paper on the future of Europe which has given us a bit more time to reflect on what the different scenarios could mean for the CPMR’s member regions. Take a look at the CPMR’s reflections on each of the scenarios:
Scenario 1 – Carrying on
The ‘status quo’ option or ‘muddling along’ as some commentators have described it. This scenario poses challenges even if on paper the EU27 would retain the same structure.
First, there will be the impact of Brexit on the EU budget and the multi-annual financial frameworks (MFF). This is estimated by some reports to be an annual loss of €10bn[i] which over the duration of a seven-year financial framework would be upwards of €70bn of the total MFF. This could be exacerbated further depending on the negotiations over the UK’s ‘leaving bill’, which certain reports estimate to be around 60bn euros[ii], and how this bill would be shared out among the EU27 in the case of a default by the UK.
Second, there is the call for further EU action to address new and emerging challenges, including the migration/refugee crisis, security and defence. Hard choices would have to be made with potential implications to the biggest budget lines, particularly Common Agricultural Policy, Common Fisheries Policy, Cohesion Policy, Research and Innovation (Horizon 2020), and Erasmus+. Or the EU27 would have to commit to increased contributions to absorb the loss of the UK or consider new and alternative methods of financing the EU,which would take us away from a ‘carrying on’ scenario per se.
Scenario 2 – Nothing but the Single Market
This approach would in theory refocus the EU’s co-operation around the Single Market, meaning activities in other areas such as external co-operation, international action on climate change, neighbourhood policy, justice and home affairs, migration and refugees, would be dropped unless a clear case was made linking such policies to the functioning of the Single Market.
In many of these areas reduction of EU level action and co-operation would have a major impact on the CPMR regions, given the territorial dimension and risks associated with many of the challenges in these areas. One such example is migration and refugees, and the importance of this issue is seen in the response in early April from seven Member States in the Mediterranean calling for a consolidated and shared response at EU level to dealing with this crisis. A retreat in such areas would leave significant gaps, and it is difficult to see how this could lead to a stable environment given the serious external pressures facing the EU. It would necessitate some sort of international co-operation in response.
The White Paper also paints a very specific picture of how the EU would re-focus around the Single Market: based on a ‘non-interventionist’ approach through reduction of regulatory burden (repeal of two existing pieces of legislation for every new legislative proposal). It concludes that this would lead to persisting or increasing disparities in regulatory standards.
This is, however, a simplistic and unrealistic picture of how the Single Market works, and assumes agreement would be reached among Member States on removing existing standards. We would argue this is not a given at all, and that the setting of common and consistent regulatory standards across the EU is essential to the functioning of the Single Market, encapsulating environmental, employment and social policy, consumer safety, health and safety at work.
Similarly, the Common Agricultural Policy and Common Fisheries Policy are fundamental elements of the Single Market and would continue to be key priorities under such a scenario. The Cohesion Policy is an essential component of the Single Market to ensure that the EU takes co-ordinated action to address disparities resulting from market failures and to invest in competitiveness, research and innovation, education and training. These elements constitute the lion’s share of the EU budget, so the budgetary questions posed in scenario 1 would need to be addressed under Scenario 2 as well. The White Paper does not address these at all.
Scenario 3 – Those who want more do more
This scenario, the so-called multi-speed approach, would see formal recognition of differentiated levels of co-operation within the EU.
To a certain extent a multi-speed Europe already exists, seen in the Eurozone and Schengen, as well as opt-outs/opt-ins within the area of justice and home affairs, although the departure of the UK and British exceptionalism would take away one of the strong proponents of ‘different treatment to the others’. One of the challenges of multi-speed will be to ensure that it does not lead to the unintended consequence of further fragmentation within the EU.
Therefore, we agree with the Commission’s White Paper that multi-speed should strengthen the Single Market, and should also maintain common standards in employment, competition, social and environmental legislation across the EU, as well as reinforcing the four freedoms that are at the basis of the Single Market. It also means a central role for Cohesion Policy, delivered at EU level and across all regions, on which we comment further in our consideration of scenario 4 below.
Scenario 4 – Doing less more efficiently
This scenario would need to define which areas would be prioritised within an EU for strengthened co-operation, whilst other areas would be dropped where EU intervention was considered less efficient. The ultimate goal would be to clarify where the EU is responsible and where national governments are responsible, hence closing the gap between ‘promise and delivery’.
The CPMR has already highlighted one of its major concerns with this scenario: the backhand attack on Cohesion Policy (described as regional development) as one of the areas where EU intervention ‘is perceived as having more limited added value, or as being unable to deliver on promises’. We would argue that Cohesion Policy is a fundamental pillar of the EU and a necessary compliment to the Single Market, providing the glue that keeps the EU united. Therefore, any scenario focusing on doing less must include Cohesion Policy as a central element.
Scenario 4 also poses uncertainty about the status of other areas of special interest for the CPMR such as research, innovation, mobility in education, maritime affairs, climate change or transport. Would these be considered part of the core? Or would they be left to national governments? And what about the Common Agricultural Policy and Common Fisheries Policy?
Finally, scenario 4 (echoing elements of scenario 2) sees a more limited role for the EU in some aspects of the regulatory framework for the Single Market with social and employment policy identified as one of the areas where regulation would be left to national governments to determine. To conclude, therefore, this scenario as described raises many worrying questions, and is one of the least attractive options for the CPMR regions given the real threat it poses to policies and priorities of central importance to regions.
Scenario 5 – Doing much more together
Viewed as the least likely of the five scenarios, the final scenario presented in the White Paper would lead to a deepened union, with a strengthened role for EU action across many areas. The key issue for the CPMR would be to see how such a process would take place and what it would mean for regions.
The Commission notes that this scenario would raise questions around the ‘legitimacy’ of the EU to act, and from our perspective the role of the regions within this new approach would be a fundamental concern for CPMR member regions to ensure that concerns around disconnect or remoteness of Brussels and the EU Institutions were addressed. Similarly, it would pose questions around the place and role of territorial cohesion, the implications of strengthening economic and monetary union for the regional level and several other issues directly affecting regions.
Furthermore, given the current weak voice for regions within the EU Institutions and the structures and policy/law-making process, we believe this would also need to be addressed for a deepened Union to work properly.
[ii] Centre for European Reform, February 2017, Article ‘ The 60bn Brexit Bill : How to Disentangle Britain from the EU Budget’; Report ‘The 60bn Brexit Bill : How to Disentangle Britain from the EU Budget’