Brexit may look like the most urgent problem the EU faces but only since last Friday. The last two years have seen a series of crisis situations in Europe which have not (could not be) been tackled effectively and coherently. The stand-off with Russia over the Ukraine, the Greek debt problem, terrorism and the immigration furore have fundamentally tested the EU’s resilience. The backdrop was one of relative economic stagnation in the single market, especially the eurozone, underpinned by the ongoing controversy regarding austerity policies. Were they taken too far? Are they still necessary?

The political fallout was equally grim. Mainstream parties of centre right and centre left have been losing credibility and votes to new formations or old-style, so-called populist or extremist parties on the right and left. Certain member states resisted and defied common positions drawn up by the Union, notably in the field of immigration. EU institutions have been extensively criticised, the latest in line being the European Commission and its president, Jean Claude Juncker.

The EU itself is increasingly being perceived as a channel to transmit commands about what must be done, from Germany to the rest. The feeling is that Europe has not really shaken offthe effects of the 2008 financial crisis and its aftermath.

Before considering Brexit options, one needs to understand how the crisis points accumulated. They seem disparate and unconnected with each other, so one could conclude that the EU has been hit by a prolonged bout of bad luck. On closer analysis, however, they can be related to developments of the past 20/30 years.

Following the fall of the Berlin Wall, the EU adopted an enlargement-deepening strategy. The expansion of its domains went on apace. A large store of soft power enabled it to attain its objectives step by step but fast. Every step forward would bring at a later stage the need to take another step till the objective of “ever closer union” could come closer.

The EU expanded to cover more and more members. Likewise the eurozone, likewise Schengen. The interests, traits, expectations of member states became increasingly heterogenous. The inherent genius of Europe is the nation, or nation State, if you like. As enlargement and deepening progressed, common management institutions were crafted that kept in line with national expectations.

This made them less than fit for purpose, a defect that could be remedied at a later stage, so the belief was, in order to make them really effective. By implication, management institutions would be federalised even if, for many members, that goal was a very distant one.

With time this approach which had been very successful initially, began to encounter difficulties. Already, during the first half of the previous decade, a proposal to establish a constitution for Europe was negatived by national referenda in member states.

The interests of the UK and the EU remain convergent, Brexit or no Brexit

Meanwhile, the common institutions being set up functioned adequately when conditions remained like when they were set up. But once political and economic discontinuities emerged, the institutions could not cope.

They failed when the eurozone was hit by the 2008 financial crisis; when radical Islamic terrorists struck (Schengen); when Russia took over Crimea (security and neighbourhood policies); when immigration surged in unforeseen ways (Schengen, among others).

Moreover, as expansion proceeded, structural economic divergences between member states actually grew with time. A north-south divide became apparent and, more recently, an east-centre one.

In this context, Brexit has further complicated the issues. To be sure, it has highlighted the dissatisfaction of many millions of European citizens with their EU “dividend” payout.

One fear now is that it will crystallise the disaffection felt in various member states, prompting moves towards exits on the British model. “Populist” parties have already proposed this in Holland, France, Finland and Italy (vis-a-vis the euro).

Two main options are being mentioned to contain the Brexit fallout:

One, launch tough talks with the UK. Out is out. Insist on a fast negotiation and concentrate on making Europe more coherent since the UK, always a dissentient voice, will no longer be around.

The problem here is that, out or in, the UK is still the second most important market in Europe. EU exporters need easy access to it, a point already made by German industry. Also, continental Europe and the UK share deep economic, political and security affinities. It makes no sense to create antagonism between the two sides.

Two, play option one alongside a fast renegotiation of the European treaties in order to make the eurozone better able to face up to emergencies on its own (such as by allocating own resources to it, to be run by its own “finance minister”). Reforms would aim to “democratise” the single market by electing the presidents of the European Council and of the Commission on the basis of a universal suffrage.

Much fancied in Brussels, option two has the disadvantage of being incomprehensible to most EU citizens. It prods one and all further towards a federalist scenario.

Both options leave two major queries open. Has the time for austerity passed so that the public sector should intervene to trigger new economic activity?

On this, the cleavage between centre-right and centre-left is unresolved.

The second query is whether, with Brexit, the EU will become subject to German control. To be fair, the German authorities seem uncomfortable with the power that their predominance gives them. Yet, they use it. Can you blame them?

Post-Brexit, Europe’s options have become limited. It would be folly if the UK were “punished” for Brexit, no matter what one may think about how the whole issue was allowed to develop by the Tory government. The interests of the UK and the EU remain convergent, Brexit or no Brexit.

Nor should the EU be afraid of possible further attempts by member states to leave the Union. European states are democracies. What people in Europe democratically decide needs to be respected, period, though I, for one, am sceptical about the use of referenda to judge what people want, but it was the EU itself which first promoted the practice.

It would be even greater folly if Brexit is used to push further the federalist agenda as of now.

True, the eurozone will need federalist structures if it is going to eventually stabilise. But this should not be done before structural divergencies are eliminated. Otherwise, new problems will be created, among which a proliferation of referenda, allegedly mounted to ratify changes being proposed.

The best option for Europe at present is to reflect on the way forward and prepare for realistic negotiations over Brexit.

The EU should concentrate on consolidation. A good move in this regard would be the containment and reversal of the deep economic disparities that have built up within the Union as a result of the enlarge-deepen policies of the 1990s.

Alfred Sant is a Labour MEP.

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