Triest and the future of a post-Brexit EU

The year 2020 and the Brexit will increasingly focus public attention on the need for certain long overdue and inevitable EU reforms that are vital for the survival of the European Union.

After the UK’s exit, the German-French “steamroller” will be (hopefully at least) in full swing and take a tighter grip on the EU’s rein. This could comprise several different concepts and measures, such as the “two-speed” Europe, the Eurozone and disciplining recalcitrant member states. In the long run, staying out of the Eurozone will mean being left out of the European Union as well. However, even the survival of the Euro has its own special conditions.  At this point, let me refer to the “Father of the Euro” Alexander Lámfalussy, who soon pointed out that if the monetary union was not coupled with a fiscal union (i.e., a harmonized EU financial policy), the ECB monetary political tools would be insufficient to handle the repeated crises and the EU would be destined to a permanent crisis, which would prevent any persistent currency. However, such harmonization requires reforms that some “illiberal-leaning” EU members will have difficulty accepting since having their “own currency” is a key instrument for sustaining their clientèle and, ultimately, their power.

Many analysts are convinced that the real token of the EU’s survival lies in a shift from the intergovernmental union towards a federal European model, which is most probably true for certain areas, such as foreign and defence policy, financial policy, development policy, environmental policy and the labour market.

Interestingly enough, the hero of the 1848-49 Hungarian freedom fight and war of independence, Lajos Kossuth already conceived of the concept of a European confederation by the second half of the 19th century, being the first to raise the European confederation “of the nations living along-the-Danube” . By doing so, he largely acknowledged the truth of his intellectual opponent Count Széchenyi (the great patriotic aristocrat, who established the Hungarian Academy of Science which is being destroyed by the illiberal Orbán regime at this very moment).

• Governor of Hungary’s central bank: Introducing the euro was a mistake!
• Eurobarometer: Two-thirds of Hungarians would welcome euro

Beside the inevitable EU reforms, the Union’s geopolitical structure must also be reconsidered: the Brexit will cause an even more intensive weight concentration along the Franco-German axis (Strasbourg-Brussels-Luxembourg-Frankfurt). Being unsustainable in the long run, it will most certainly cause problems and decelerate the integration of the member states situated on the periphery. It will serve as a hotbed for “anti-Brussels” sentiments as well as “anti-Brussels” rhetoric and instigation.

Hungary’s example shows how realistic this scenario is: one of the key themes of the 2018 elections (won by the incumbent by a two-thirds majority) was how to “suppress Brussels’ power” and “fend off Brussels’ attacks”.

Orbán’s party flooded the country with such outdoor media posters where Brussels and EU leaders were depicted as the enemy.  Orbán, who has become Putin’s, Erdogan’s and China’s quartermaster, might sound like an extreme example but the danger is real: always being more exposed to crises by default, peripheral countries may very easily develop an extremely anti-Brussels sentiment which demagogue politicians will be more than ready to further incite for their own benefit.