After Ireland, Malta will be the EU country whose economy will suffer the most in the event that Britain leaves the EU. That is the conclusion of a study commissioned last year by Bertelsmann Stiftung in collaboration with the Centre of International Economics at the Ifo Institut, University of Munich.
In a Europe currently faced with multiple challenges, it is tempting for some to see the British renegotiation and subsequent EU referendum as an unnecessary irritation. That would be a mistake. The outcome of the British negotiation will define the future shape and direction of the EU and will determine the success or relative failure of the European project.
Let me explain.
There are broadly two visions for the future of the EU. The first is a vision of the EU as a model built for the challenges of the 20th century. A Europe at war with itself and challenged by a globalising world spawned an economic community that has moved rapidly to a more centralised organisation seeking to act as one political and economic entity. The role of individual member states became largely subordinate to the needs and wishes of the majority. A Europe where 28 nation states move together in lock step irrespective of their wide cultural and economic differences.
The second vision is a Europe of nation states where the role of EU institutions is to oil the wheels of collaboration between different nations. Rather than a federal Europe, such a model envisions a confederation of individual sovereign states. A common framework would allow variable collaborations between different nations on matters of common interest. As these collaborations are shown to work (or not) others may wish to join. If any particular type of collaboration doesn’t work for some, it can be modified so some can retreat as and when they wish. This is a Europe that operates more to an à la carte menu rather than a prix fixe, set menu. The role of Brussels would be to help craft the menu and provide the know-how and infrastructure to make such alliances work.
The outcome of the British negotiation will define the future shape and direction of the EU and will determine the success or relative failure of the European project
The first vision is based on the 20th century, centrally managed bureaucratic organisational model as used, for instance, by multinational corporations. Politically it is more in line with French dirigisme than with, say, the Swiss political model. I suggest that this model is too unwieldy, too resistant to change and largely unmanageable. It will fail in the 21st century – a time that calls for flexibility, opportunities for experimentation in an uncertain world, and the ability to change and respond quickly to rapidly changing circumstances.
Many multinational corporations have realised that this centrally-planned bureaucratic model no longer works. Hence the rise of the organisation as a self-organising network – flexible, organic and able to respond better to new challenges that nobody ever predicted. Applied to Europe, this would create an EU that grows organically and in unpredictable but flexible ways. It will create an EU that is stronger and more resilient: culturally, politically and economically.
At some stage Europe will need to make an explicit choice as to which broad direction of travel it will choose. The British renegotiation is the first major event that tests this choice. Is the EU able to embark on a process of institutional reform or is it unable to adapt to the 21st century even as it expects and imposes the most aggressive reforms on its own member states?
A recent analysis in The Guardian characterised Malta as one of the countries less likely to support Britain in its renegotiation. If correct, that would represent a historic misjudgement. Not only for Malta, but for the EU as a whole. Choosing the bureaucratic rather than the flexible model would indicate an EU that is more obsessed with the ghosts of its past than with meeting the challenges of the future. Such an EU will fail – with or without Britain.
Beppe Zammit-Lucia is a leadership adviser and business and political commentator. He is based in the Netherlands.