XXI century utilities – states

More than one week later than expected, this third article will start not from the point where the first one ended, but some of its implications (a second article was published yesterday).

Specifically: I referred to the potential side-effects of initiatives such as the enforcement of mobile number portability and SEPA, the not-so-new-but-yet-ill-known first step toward a EU-wide unique financial space extended beyond the corporate world.

A missing piece of the puzzle is the increased need, due to obvious security concerns, to be able to share information that used to be accessible on a national level within our EU- and I enclose the recent announcement of other structural changes to increase the internal and external cohesion.

Of course, including the introduction of the normative and structural changes due to the Lisbon Treaty.

Following yesterday’s article about the downsizing of utilities, or, better, the streamlining of the supply chain from the producers to the final consumers, a jump into the future.

This article is focused on potential long-term structural changes that could produce significant direct and indirect benefits- extending way beyond our current and foreseen borders.

As I explained in the first article, I consider that States are gradually becoming service providers.

You can expand an organization through a multiplying factor (and you will always underestimate the multiplying factor).

Or you can grow it organically, by finding new ways to expand without exploding, and finding that, with a larger scale, sometimes you can deliver new services while reducing the overall costs.

Introduction: of States and Nations

Somebody says that the Lisbon Treaty is a step back from the European Constitution- but look at the history of other Constitutions: they represented both the acknowledgement of a shared perspective about the future- and a common understanding of the recent and not so recent past.

And it will still be some time before in the EU we will really have a shared culture.

Over the last 50 years, brick upon brick the perimeter walls of the EU have been built- but we are still disagreeing on the interior design.

A first step: as we are still transitioning, and it will take some time before just what is inside the Lisbon Treaty will be fully implemented.

If you are (like me) an Italian, you know that agreeing on the rules is just the first step: in Italy, the negotiation continues beyond the last day- and it extends to describing what we experienced.

You would think that this is a diversion from the original theme- but it is a short way to outline the background of our current and ongoing changes: too often we talk about individuals representing new institutions, and we forget the context.

The common thread is the same, from the Treaty of Rome on: streamlining and increasing cohesion, while balancing the constant tension between further integration and re-asserting sovereignty (refer to my prior article on statehood, for a reference to an early ECJ ruling).

Anybody can observe the thinning of the regulatory hurdles required to resettle within EU, by creating a “de facto” normative convergence across EU, coupled with the increased transparency/traceability associated with the acceptance of trading some privacy for increased security.

At a time when significant resources are committed toward shaping up (EU-wide) the economy, the benefits produced are often part of the initiatives to make the “value added” of the European project more visible for ordinary EU citizens,, while some interesting benefits can be foreseen for the usual engine of growth and resilience through crises in Continental Europe: small and medium enterprises.

An interview with Mr. Westerwelle in today’s International Herald Tribune adds another potential benefit of the current crisis management activities: getting used to manage public deficit with the resources of the generations that reaped the benefits, instead of leaving to future generations to sort out the results of our financial mismanagement.

It is interesting to see how the aggregation of interests is actually reshaping the relationships between EU Member States- and within each Member State.

The next few sections will first discuss what anybody can observe through current news, and then try to jump into a (potential) future- or a different kind of European Union.

Virtualizing the EU member state

In parliamentary systems traditional laws are designed thinking about the local constituencies.

Yes, I am an old fashioned reader of “A Theory of Justice”.

And I believe that part of the role of a directly elected Parliament is to avoid a dictatorship of the majority, what you obtain by creating laws that satisfy the short- and long-term interests of a qualified majority, while creating permanent negative externalities for the minority.

But what happens when laws are not associated to a national constituency, but to an undefined “European” constituency?

Moreover- what happens when increasingly laws limiting the national sovereignty on security, economic development, freedom of movement are the side-effects of international frameworks?

Also before the Lisbon Treaty, various checks and balances influenced the creation of a “variable geometry” majority within the European Union.

The current Euro crisis and the security issues are making partially irrelevant the checks and balances that we were used to, originally created in the Cold War era, and based on our pre-WWII shared history.

The paradox? By forcing to create mechanisms to influence decision making at the national level for the sake of EU-wide stability, the two current parallel crises are removing from the table the old “controlling the purse and the sword”, coming across five centuries of internecine wars from Machiavelli down to us.

Once created, these changes will stay with us- whatever evolution the external and internal relationships in EU will have.

The title of this section is misleading- on purpose.

As a more appropriate one would be “moving from national Member States to associations of interests”.

And this is the main theme of the next section.

The dialectic of the European Union

Years ago (2003-2005), when I was deciding if I wanted to get back in Italy or not, I started again to study what had happened in my own country while I was abroad (you must read Italian newspapers on a daily basis to understand what they are talking about).

It was interesting to see that what was called formally “federalism” did not look at all what I had studied and looked forward to.

Some Regions started to develop their own foreign policy, focused on economic development, and some shrewd foreign operators knew that they could run a “beauty contest” based on credit facilities, land, etc, pitting Region against Region.

An interesting consequence of the diminishing value of distance was that the competitors weren’t next door, but scattered around the country (in some cases, around Europe or beyond).

A more positive side-effect was that at least regions started looking beyond the national borders as a unit, instead of following the customary individualistic approach.

Thanks also to few changes to enable also SMEs and smaller local authorities to be involved in EU-cofinanced projects, it became easier to look around and sometimes consider bypassing the national government.

The feed-back? They discovered (and keep discovering) that is not impossible to find other areas worth working with, and started comparing the existing legislative frameworks, and join the “push” toward EU-wide normative convergence.

And, incidentally, those experiences reinforced the dialectic between regions and the Member States.

If, as I wrote in the previous section, you transfer at the EU level security, foreign relations, economic and financial planning and oversight, why regions should not try to have a direct access at the EU level?

Building the EU implied also “freezing” national borders, and removing from the table one of the constant sources of internecine wars.

When I see the EU, including the forthcoming new Member States from the Balkans and beyond, I see that we are trying to build at the European level the typical vertical structure that we are used to identify with the name “state”.

But if you look at history (and not only in Europe), can you identify any State whose borders were static for a significantly long (centuries) period of time? Let me know- I could not.

The COR, giving structured and significant voice to the regions is but a first institutional step, and maybe the EU is evolving into something different from what somebody called the “United States of Europe”.

In the next section, a brief outline of what could be a different future- not a dream or a plan, just a potential scenario, conveniently set into a yet-undefined future date.

A different kind of union?

Remove the currency, the armies, the “power” to sink into debt, the freedom to do as you please in foreign affairs- do you still have an independent State? Doubtful.

And let part of a State cooperate with part of another State, and build organic cultural, economic, political relationships, such as creating a political party based on shared issues instead of territorial contiguity- who will they identify with?

Representing abroad the EU in the second half of the XXI century seems sometimes a miracle, but it is actually a “back to the future”, when diplomats did not have the luxury of real-time communication, and had to start with the limitation of their mandate- and use their own professional skills.

Instead of feeling sometimes as a ventriloquist’s puppet or just a mouthpiece, as in most of the XX century.

Nowadays the EU is a different kind of union.

You have the overall interests of the EU, defined by consensus; you have the national interests, mainly representing a cultural perspective; and the communities built around interests linked to specific issues.

Each negotiation outside is prepared by negotiations inside, and it took some time to build the internal discipline required, once an agreement is reached, to avoid the temptation to get better terms for just one of the components.

The major change was the restructuring of the Parliament into three chambers, representing the Citizens, the Regions, and the States- and converting the Commission into a bureaucracy supporting a European Government.

The most dynamic chamber is, as usual, the Chamber of the Regions, as at each election cycle the regional political parties create a platform around specific issues.

While the States’ one is always acting as the umpire, with a longer-term perspective.

After the first EU-wide census, reducing the translation services to just the three top languages, while leaving the others for national uses and publication purposes, generated significant savings.

Also because this allowed to have the translation from the three official languages done if, when, where needed- creating centres of competence and knowledge scattered across the territory of the EU, as when not translating, they could be local subject experts and advocates.

It took some time to convince our external partners that we were serious about this unusual approach- certainly also because it defused the usual “trick of the trade”, trying to use the sometimes diverging interests to weaken our overall negotiating position, by tossing some “poisoned negotiating pill” on each table.

But even more contentious has been our new approach to immigration- who would expect that a network of travel and work agencies linked to our external embassies could almost solve the issue, while ensuring coverage of the security and welfare costs, and dynamic visa quota management?

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