EU after Brexit.

EU after Brexit.

It is very interesting how Brexit is seen (or sold by newspapers) as a phenomenon with a mainly economic impact, but not a political one, to be evaluated in terms of exports. We are wondering which and how many customers have left the EU, without asking what kind of policy is leaving the EU.

So we have to look back to the EU, to see things in perspective. The EU that was born, passing from the ECSC and then the EEC, still without the UK, was a place that I would define "stataleggiante".

It was the EU of milk quotas, sugar quotas, asphyxiating regulations. And it was for a reason: it was the union of states that were all extremely statist. In Italy there were still IRI and the state giants and the southern cash register, in Germany almost all the companies were co-owned with the state, länder and kreis, there were still laws that obliged practically anyone who wanted to do anything to have a license. France had an omnipotent and very ramified state, as well as centralized, and the same was true for all members.

When did Europe become so market-driven as to have a competition commissioner, and to force states to sell to "open the internal market for services?".

We can go back in history and notice that at some point UK joins the European Union. And he's a pretty big beast, because he has a Mr. PIL. The problem is that it is such a liberal and market-oriented country that it can sell liberalism to the EU. When I say “sell” I mean that it cost a lot, in the sense that the opening of the internal market for services has gone so far as to have EDF (Electricite 'de France) control the London electricity grid. So the British present themselves in Europe, and in exchange for some (sometimes salty) counterparts they manage to give the EU a liberal and market-oriented trend, at the expense of the statists. In exchange they have the opening of the financial services market and the stop of state aid.

After Tatcher, the trend continued with New Labor, which saw the British always do the same job in the EU: vote against any "nationalizing" measure and vote in favor of any liberal and market-based measure, often bringing with them a crowd of allies of the moment.

After years of this pressure, the EU is the liberal and market-oriented body we know.

But now they are gone. The "supplier of liberalism and marketism is out". To stay inside, they have always had a very strong tendency towards nationalization, regulation and the intervention of the state on the market.

Of course, there are some European nations that are still liberal: Holland, Denmark, Luxembourg. And then? Um… nothing. Even the nations that the UK had brought into the EU as allies, the countries of the old VArsavia bloc, are frenzied statists.

In short, with Brexit the EU has lost the largest supplier of liberalism and marketism. A generalized statist turn is therefore foreseeable, and a “state” behavior of the European institutions. Not for nothing, we are seeing:

  • an attempt to nationalize the Telecom Italia network, while DTelekom is now at forty and broken percent of the German government, and the French are in turn starting to enter the telco world again. CDP in Italy is increasingly assertive (think of the direction of the operation of the sale of the Milan stock exchange, or of the negotiation with Autostrade) and the same (also with the excuse of Covid) was already in place in all countries Europeans, since Brexit became clear.
  • state interventions "in support of companies affected by Covid", from Lufthansa to Alitalia, bank rescues ", and at a higher level, aid to companies (Il SURE) and the establishment of funds for infrastructures such as ESM and Recovery fund.
  • the EU budget, which instead of decreasing as the UK wanted, remained high, despite their exit.

All this stuff has NO correspondent in ANY British politics: companies are not being helped by the state if not in an insignificant way, social safety nets from Covid are at zero (or almost), nationalization is not seen on the horizon.

We must prepare for an EU that abandons the market-oriented and liberalist demands, and if anything, limits itself to harmonizing the nationalizing action of individual countries. In fact, there is no longer any relevant country that pushes in the opposite direction.

For this reason we see states think (and sometimes implement, as with the Milan Stock Exchange and Autostrade) operations that were previously unthinkable.

And that is why everyone is so intransigent with the UK: in reality all European countries want more state, and they don't want a hyper-liberal country 40km from the sea, which starts to deregulate everything. The Spaniards don't want it, the French don't want it, and the Germans don't want it either. Even the Italians, who today care about prosecco, know very well that they would have big problems if the British liberalized the prosecco market, allowing any company (Italian or not) to call it a wine made with freeze-dried powder.

The wonderful “unity of purpose” that animates the EU in the Brexit negotiations is none other than this: the possibility of returning to the previous regulatory state, and of rebuilding internal markets. These are policies that today take place in almost all non-EU countries, which due to the English influence have been banned in the EU, but now that there is no longer a cat there is a row of mice that want to dance.

The problem is that these are normal practices: almost no country in the world, except the UK and the USA, have problems accepting that the state is so present in the economy. What I mean is that if the US and UK also screamed for a new EU state protectionism, the rest of the world (for example China) would be perfectly comfortable with an EU creating its own IRI, the its CDP, and with a whole instrumental set of laws and regulations that keep international competition out of the box.

In any case, however other countries will react, it is certain that without a push towards liberalism and marketism (which came from the UK, which always voted for resolutions in this direction) and without an allergy to European-style statism, which always saw the British vote against and drag along some allies, the EU is destined to become an increasingly less liberal and market-oriented place, and much, much more statist.

Then, whether it does so in person with its institutions or as a place to harmonize different statisms, it is to be seen and depends on the political form it will take.

If I were you I would not bet so much on liberalism on the European continent. He doesn't seem to be a promising horse anymore.

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