布鲁盖尔-One-market,-two-monies_-the-European-Union-and-the-United-Kingdom_8页_249kb

Summary of "ONE MARKET, TWO MONIES: THE EUROPEAN UNION AND THE UNITED KINGDOM"

Core Content

This policy brief discusses the relationship between the European Union (EU) and the United Kingdom (UK) in the context of the single market and the euro. It emphasizes that the single market is a key benefit of EU membership and that the UK's position is unique due to its opt-out from the euro. The paper explores how reforms to strengthen the euro could affect the single market and how the UK's interests must be protected in such a scenario.

Main Views

• The Single Market is Central to UK Interests: Access to the single market is a core benefit of UK EU membership, and the UK seeks to ensure that any reforms to the euro do not undermine its position within the single market.
• Euro and Single Market are Not Incompatible: The paper argues that the single market can function with multiple currencies, and that the euro has not yet caused significant economic friction with non-euro countries.
• Reforms to the Euro Require Governance Integration: Strengthening the euro necessitates deeper integration in areas such as banking, capital markets, and labour markets, which in turn may impact the single market's structure and governance.
• Differentiated Integration is a Feature of the EU: The EU operates with varying levels of integration across member states and policy areas. The UK, as a non-euro country, has a special position and may require specific safeguards.

Key Information

The Single Market Then and Now

• The single market was established to ensure free movement of goods, persons, services, and capital.
• When the UK joined the EU in 1973, the single market was not yet fully realized.
• The single market has advanced, but significant barriers remain, particularly in services.
• The Services Directive (2006/123/EC) did not fully eliminate barriers due to concerns about unfair wage competition.
• The UK has historically been a supporter of the single market but has opted out of monetary union.

The Euro and the Single Market

• The euro was introduced in 1999, and the single market has been a key component of European integration.
• The UK has been skeptical of the "one market, one money" logic, fearing it would lead to excessive integration and loss of sovereignty.
• The euro area has faced crises that have led to governance reforms, which may affect the single market.

Banking Union

• Banking integration has been affected by the euro's development.
• The UK has significant interests in the banking sector and may resist measures that could fragment the EU banking market.
• A more integrated euro-area banking market may lead to new regulatory initiatives that could affect the UK.

Capital Markets Union

• The capital markets union is a key project for deeper integration, but the UK's role in this is significant.
• The UK's financial system, particularly the City of London, is central to the functioning of capital markets.
• A single European capital markets supervisor is seen as a potential obstacle to the UK's interests, and may be a red line in negotiations.

Labour Markets

• Labour mobility is a key element of the single market, but the UK seeks to limit social benefits for non-nationals to prevent welfare tourism.
• The Five Presidents' Report suggests deeper integration of labour markets, which may require changes to the EU treaty.
• Equal treatment of domestic and foreign citizens is essential for the integrity of the single market.

Governance and Future Scenarios

• The EU is likely to undergo further reforms to strengthen the euro, which may affect the single market.
• The UK and other non-euro countries need legal safeguards to protect their interests.
• The paper suggests that a new legal status for the UK could be negotiated if it leaves the EU, with access to the single market for goods but more restrictions on services and labour mobility.
• The relationship between the euro area and the single market is complex and requires careful management to avoid conflict.

Conclusion

• The euro and the single market are not inherently incompatible, but the process of strengthening the euro may lead to changes in the single market that could affect the UK.
• The UK's special position requires protection, and the EU must ensure that reforms do not undermine its interests.
• A UK exit from the EU would not eliminate the need for access to the single market, and the UK would still be a key player in European economic integration.
• The paper concludes that the UK and the euro area must agree on legal safeguards to protect their respective interests in a reformed EU.

References

• Asdrubali, P., B. E. Sorensen and O. Yosha [1996]
• Baldwin, R. E. [2006]
• Bank of England [2015]
• Bean, C. R. [1992]
• Cameron, D. [2015]
• Claeys, G., Z. Darvas and G. Wolff [2014]
• European Commission [1990]
• Feldstein, M. [1997]
• Giulietti, C. [2014]
• Hill, J. [2015]
• HM Government [2014]
• Juncker, Jean-Claude [2015]
• Mourlon-Druol, E. [2015]
• Pisani-Ferry, J., A. Sapir and G. Wolff [2012]
• Piris, J. [2015, 2016]
• Santos Silva, J.M.C and S. Tenreyro [2010]
• Sapir, A. and G. Wolff [2013]
• Stubb, A. C. G. [1996]
• Van Rompuy, Herman [2012]
• Véron, N. and G. Wolff [2013]