The Road to Brexit

The Brexit campaign continues to be one of the most hotly debated issue within Europe. On the Guardian, David Cameron joins forces with former trade union leader Brendan Barber for a joint appeal against Brexit. While they disagree about many things, they both claim that leaving the EU will damage British workers, by threatening their jobs and their wages: the prices they will have to pay are going to be high. Matthew Goodwin, on Politico.eu, gives advice to the Remain side. In order to win the final ballot, its supporters should double down on the economic risks, watch their NHS flank, and mobilize people to vote. Andrew Duff, on Policy Network, observes that is wishful thinking to suggest Britain’s relationship with the EU will go “back to normal”, even if the referendum turns into a vote against Brexit.

Due to the effects of the polarizing political debate, the UK is going to fight back EU integration even more from inside. On the New York Times, Vernon Bogdanor agrees that Brexit in fact already succeeded in changing the EU. Due to the opt-outs granted to Britain, Denmark, Ireland and Poland as well as to the now implicitly accepted possibility of leaving the Union, the EU is moving towards an intergovernmental “Europe des Etats”, rather than a federalist common polity. John O’Farrell, on the Guardian, puts forward the provocative argument that you do not even need to understand the arguments. Just looking at Brexit supporters like Marie Le Pen, Vladimir Putin and the Islamic State should be enough to make up your mind. Nick Dearden, on the Guardian, argues against those favouring Brexit to undermine the TTIP. Unfortunately, every scenario for Brexit is premised on extreme free trade agreements coupled with looser regulation to make the UK more competitive.

Turkey and Child Refugees

The Economist observe that the deal with Turkey hinges on the Commission’s approval of visa free travel, due on May the 4th. They may either propose safeguards or delay their decision, but it will be difficult to approve it on all the 72 benchmarks required to be eligible, particularly when some of those includes political rights. On ConservativeHome, Mark Wallace considers whether to grant UK access to the refugee children in Calais. A negative answer is justified on the fact that picking people up in Syria instead helps those most in need and does not outsource migration politics to smugglers; it ensures that those helped are actually Syrian and not economic migrants; and does not require people to risk drowning to find safety. A Comment on the Dailymail claims that these children must be offered sanctuary, even if the newspaper itself claims to be hardly lenient with refugees. While there are many arguments for hardening one’s heart, it would be immoral to do so, given the exceptional circumstances of the crisis.

State of the Economic Union

Peter Goodman, on the New York Times, remarks that finally the Eurozone countries are technically recovering from the crisis, but this fact hides the dramatic state of the worst-hit countries. On Euractiv, Eight EMPs call into question the “European madness” when dealing with Greece. New demands for austerity are absurd and unnecessary, in the face of today’s consensus among leading economists regarding the unsustainability of Greece’s debt.

The Economist discusses northern Europe’s angry savers. German and Dutch citizens tend to save much more than others and are thus angry at the low interest rates necessary for avoiding Eurowide recession, which they see as bailing out dubious southern countries. However, this saving tendency has more to do with economic regulations than with moral superiority. The real target of German voters’ anger should be their own government, which has hesitated to reform laws which make small banks highly reliant on interest rates.

Lucrezia Reichlin, on Corriere della Sera, comments Weidmann’s emphasis on preserving restrictive fiscal rules in countries with high public debt. While he is right in thinking that generic solidarity can’t solve the problem, fiscal discipline is no solution either. A better way would be to reforge an economic system based less on rules and more on market mechanisms. However this reform cannot be instantaneous, we need a long term transition pact based not on moral solidarity, but on the mutual interest of creditors and debtors. Waltraud Schelkle, on Europp, criticises Paul Krugman’s recent argument that the EU is not an optimal currency area. No country in fact fits all criteria required in this economic theory, not even the US. However, governments can and do use fiscal, social and regulatory policies to overcome these difficulties.

Anatole Kaletsky on Project Syndicate, the Guardian and Social Europe believes Italy to be the only country in the EU able to counter Germany’s economic worldview. Most famously, Draghi saved the Union by circumventing Maastricht regulations. In addition, Tommaso Padoan, Italy’s finance minister, presented at the IMF the strongest case for fiscal stimulus, implemented it by cutting taxes while maintaining public expenditures and created, without ECB approval, an imaginative public-private partnership to finance a desperately needed recapitalization of Italy’s banks. Dalibor Rohac, on Politico.eu, sees in Italy’s Renzi government a true reformist revival and appreciates some of his more liberal politics, now being emulated in France and even in Greece. There is hope that this convergence reflects a growing demand for sensible pro-growth reforms from the public.


This Ideas Monitor is by Giulia Bistagnino and Carlo Burelli


Photo Credits CC: tmeier1964


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