The stakes of the Summit are not necessarily those that come to mind!

 

 

The agenda of the February 18/19 EU Summit covering the future of the relationship between the UK and the EU and the question of immigration appears already sufficiently challenging. The absence of strong agreements (highly unlikely) on either of those subjects will have deep repercussions on a third crucial topic which will not be addressed: the uncertainty weighing over the world economy as reflected by financial market turbulence and the threat of a global financial crisis against which – despite the impressive measures taken since the 2008/9 debacle – the political and monetary authorities of the planet seem largely powerless. It should be evident that all three topics are inextricably intertwined.

 

The summit’s priority should be enhancing the Union’s cohesion and the touchstone of success, its capacity to deal with the challenges of immigration and terrorism. The relationship between the UK and the EU is a secondary matter that should be considered – whatever the British may think – only once the future of “an ever closer Union” is assured.

 

The question of immigration is exemplary to illustrate the point: indeed if the “uncontrolled” (or uncontrollable?) arrival of over one million immigrants in 2015 is – or is on the point of – creating unmanageable situations in several Member States, this challenge should not be insurmountable if tackled at EU level.

 

Absorbing annually between 1 and 2 million immigrants in a territory of 550 million people with an ageing population, needing desperately immigrants to bolster growth and preserve living standards, should be eminently feasible for the wealthiest region of the world! This reality should spur renewed political will to accelerate European integration, bringing simultaneously a sharp rebuke to the sirens of national-populism that surf happily on the indecisiveness of politicians and the fears created by immigration within the context of a fragile economic environment.

 

This situation should lead the summit to consider establishing a Common Immigration Policy (CIP). It should be entrusted with the responsibility for: the control of the exterior borders of the Union; relations with the countries of origin or transit; the care of new arrivals; the processing of asylum requests (within the framework of international law); the settlement or repatriation of candidates. All these actions should be financed by the EU budget, requiring therefore the unanimous approval of Member States. Nothing should prevent taking demographic factors into account by settling more immigrants in countries affected most by ageing but who would also receive compensatory support.

 

It is only by such an “European” approach that it is possible to maintain the “acquis communautaire”, in particular the advantages of the single market, the free movement of people, goods and capital as well as the preservation of the Schengen area. Non-Union Members associated with Schengen would have to share in parts of the burden.

 

The alternative, consisting in re-establishing permanent controls at the internal borders of the Schengen area would entail prohibitive economic costs as well as proving ineffectual. In addition, as was shown by the necessity of Germany and Sweden to curtail their initial generous stance due to the total lack of solidarity expressed by several other Member States,

 

the autonomous management of immigration would automatically lead to conflicts between neighbouring States, reminiscent of the worst periods of the 1930’s.  It would inevitably lead to the accelerated dismantling of both the EU and EMU.

 

A demonstration of European solidarity in this matter would establish a solid foundation for revitalising the European project and, in particular, the further integration of the Eurozone, a key requirement to pre-empt the risks of a new financial crisis. Indeed, it is urgent to create a “political” authority for the Eurozone, capable of coordinating monetary and economic policies with the ECB. The current situation, where the ECB appears to be the only “acting” authority within the Eurozone is particularly fraught with dangers. The Bank is statutorily limited in its actions so that an abusive use of tools at its disposal – negative interest rates, quantitative easing – can lead, in the absence of alternatives over which it has no say (structural reforms in EMU members or budgetary policy), to a loss of control over events. Indeed, the addiction to the drugs of low interest rates and QE appear (like morphine) to be less and less effective while reversing the process is becoming more and more difficult, as demonstrated by the effects of recent decisions taken by several Central Banks. The latter have become today, together with their respective Presidents, most likely against their will, the undisputed heroes (and tomorrow the reviled culprits) charged with assuring single handed the stability of the world financial system.

 

The United Kingdom, whose demands are in part directly connected to the matters discussed above, should in the first instance demonstrate its solidarity within the Union and participate loyally in resolving the questions of immigration and financial stability. It is only within such a context that complementary reforms requested by Britain, become conceivable.

 

Despite the apparent goodwill of the parties involved, there is a significant risk that whatever the outcome of the summit may be, it will complicate rather than facilitate the task of meeting the legitimate aspirations of 550 million European citizens.

 

 

Brussels, 17th February 2016

 

Paul N. Goldschmidt

Director, European Commission (ret.); Member of the Steering Committee of the Thomas More Institute.

 

 

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