Seismic Faults in the European Union

Brexit is generally regarded as a possible step towards the disintegration of the European Union. Actually the EU crisis is much more serious: the Union has a series of fault lines, with its institutions and policies equivalent to tectonic plates sliding over each other and colliding. Currently there are at least a dozen fault lines crossing EU and European borders: Brexit, trade policy (e.g. Wallonia/CETA, TTIP), migrations, austerity, tax competition (e.g. Ireland/Apple), the tiny EU budget of 1% of EU GDP, the divergence of welfare policies, neglect of civil rights (Hungary, Poland), the ECB tied hands (with respect to the Fed, the BoE, BoJ), the recapitalization of banks, foreign policy (Russia, Ukraine, NATO), military policy (Libya, Syria, IS). Many of these faults are inter-connected. In principle, the virtual tectonic plates that constitute the European Union, unlike the real physical ones that are uncontrollable, should be subject to EU governance. The remedies to secure the EU entire system are available, in many cases even without amending the Treaties, but clash with the hyper-liberal design that has gradually perverted European policies, as well as with conflicts of interest between states, ideologies, welfare regimes, classes, bureaucracies, memories and expectations. Rebus sic stantibus, there is an increasing probability of an institutional earthquake that sooner or later will disrupt and destroy the EU: the only uncertainty concerns the date, unpredictable as for all earthquakes. It is essential to imagine, investigate and assess the likely consequences of an exit from the Euro and Europe, on the part of Italy and other Southern countries, because (1) they might be required to leave; (2) it should not be taken for granted that, in terms of present value, the large cost of leaving should necessarily be higher than the large cost of remaining; and (3) the exploration of large mutual costs of disintegration would strengthen the negotiating position of those seeking to reduce the risk of a catastrophic implosion.