Tuesday, July 15, 2014
What kind of Europe
Now that a new European Commission will be appointed, it may be the right time to ask what kind of Europe do we want to build from an institutional point of view. It is more and more clear to many people that a confederal Europe based on the sovereignty of the nation states is not feasible any more, although some (like the British or French sovereignist right) may not like it. To me, the kind of Europe that we need is one that solves Rodrik's trilemma by progressively reducing the importance of the nation state. National and jurisdictional fragmentation has been the biggest problem of Europe since the fall of the Roman Empire, a problem that culminated in the devastating wars of the XX century. The European Union is precisely an attempt to overcome such fragmentation and make war unthinkable in our continent. Thus we need a Europe that avoids market and infrastructure fragmentation, and that reaps the economies of a scale of an appropriately regulated large market. But it must also be a Europe that allows institutional diversity in a common framework. Markets have fuzzy borders, and jurisdictions should be fuzzier than the dominant nationalistic rhetoric allows. Some aspects of the idea of the Swiss economist Bruno Frey and his co-authors about Functional Overlapping and Competing Jurisdictions are worth paying attention to. Leagues of euro-cities, euro-regions, jurisdictions that transcend traditional borders to address specific problems and internalize externalities, are ideas that should be promoted by the new Commission to create a new European demos that helps build a democratic federalism.