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.

Another question is how long the EU and, more specifically, such a key representative of European values as the European People’s Party, is willing to tolerate among its ranks Orbán’s Fidesz which has become an extreme organization as well as an active destroyer of the said European values and unity? 

The necessary EU reforms will definitely take these factors intoaccount, and these reforms must also be viewed from the aspect of the EU’s peripheral member states. That’s what is proposed by an excellent study published by the Vienna Institute of International Economic Studies (Wiener Institut für Internationale Wirtschaftsvergleiche WIIW) in November 2019, which states that the EU’s Central and Eastern European region is unsustainably underdeveloped and will lag behind even more. So the researchers recommend implementing such infrastructural development projects that could connect Central and Eastern Europe’s underdeveloped  regions into the European bloodstream in a sustainable manner. These projects could more efficiently link the underdeveloped regions to Western Europe’s most advanced areas, thus promoting the development of the underprivileged belt and preventing the westward migration of the highly-skilled and young labour force, which is already taking alarming dimensions. 

This idea is further supported by the voices urging for setting up a South Eastern European centre for the EU in addition to the existing North Western hubs.

Instead of just hosting a few EU institutions, this new centre could be a real “second Brussels” with the seats of major EU institutions, thus replacing Strasbourg, for example. According to several analysts, the most likely candidate would be the Triest-Rijeka region which offers all the features that Brussels has and even far more. Lying on the border of South, Central and Eastern Europe, it is a multinational seaside location with a great historical heritage that connects the Germanic, the Slavic and the Latin cultures and has been functioning as a key junction of land and marine trading routes for millennia. It could become a genuine connective link for the EU, not only to the Balkans and the Mediterranean but to Northern Africa and the Middle East as well, which may have significant implications for the future. The establishment of such a new and truly important EU capital would be far more than just a gesture to the EU’s peripheral member states or partners and neighbours wishing to join the Union ; it could also promote the EU’s long-term sustainability and survival. 

Guest author: Dr István Teplán President, Prosum Foundation