EU superstate: All members should unite and form ‘one economic nation’ says expert

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Fabian Zuleeg, chief executive of the European Policy Centre said that COVID-19 triggered “unprecedented” government interventions across the EU. Mr Zuleeg stressed that because of this, it was making the Single Market vulnerable.

He said: “To avoid further internal divergence, the Single Market must upgrade to a Single Economic Territory that incorporates a common microeconomic approach.

“At times, it has been the crucial glue keeping the member states engaged, even in difficult times.

“With this in mind, it almost seems sacrilegious to call for the EU to move beyond the Single Market (SM).

“Yet, the EU should do so by establishing a Single Economic Territory (SET).

The new economic territory would include all EU member states’ land area, airspace, territorial waters, including jurisdiction over fishing rights and rights to fuels or minerals.

All these functions would be administered and managed by a single government, which in this case would be Brussels.

Mr Zuleeg stressed that it was time to update the policy approach to the SM to make it future-proof.

He added: “Addressing the ongoing global structural economic shift requires creating a substantive common macroeconomic and sectoral policy framework to accompany the four freedoms, going beyond state aid and competition policy.

“The Single Market has been based on the provisions of the European Treaties, which stipulate an internal market characterised by the abolition of obstacles to the free movement of goods, persons, services and capital, embedded in a wider framework of a customs union, common competition and commercial policy, horizontal and sectoral flanking policies, as well as policies to strengthen economic and social cohesion.

“The overarching logic has been to remove barriers between member states while ensuring that there is a level playing field for European firms and an, admittedly limited, compensation mechanism for the potential losers of additional economic integration.

“This approach has produced spectacular successes: substantially increased cross border flows and competition; trans-European supply chains; and the limited ability of EU countries to distort economic development through state intervention by, for example, using state aid to influence companies’ location decisions.”

He stressed that the economic benefits of the Single Market amount to 8.5 percent of the EU’s GDP with 56 million European jobs depending on the trade within it.

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Mr Zuleeg added: “This reactive approach based on prohibitions and overcoming barriers was already failing to deliver even pre-COVID-19, given the global challenge Europe was facing.

“It is no longer sufficient to strictly regulate the interaction of EU firms with each other, as they all increasingly compete with firms from all over the world, in a globalised market.

“It is not leading to the necessary digital and sustainability transformation, nor is it able to deal with the international dimension of the SM effectively in a world where multilateral global economic freedom is threatened, even before the COVID-19 crisis struck.

“The pandemic is, in many ways, an accelerator of pre-existing trends.

 

“Arguably, the pre-COVID-19 approach is even less able to deal with current geo-economic changes, nor the fundamental shift in market structures resulting from the pandemic.”

The EU Commission has however pledged to protect the Single Market and its main freedoms through a series of measures.

This week, it presented immediate short-term measures to strengthen EU health preparedness for COVID-19 outbreaks.

This included increased testing coverage, contact tracing and surveillance and ensuring the smooth supply of personal protective equipment, medicines and medical devices.

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