Post-Brexit EU unsustainable in its present form - S&P
Published 26/07/2016 | 02:30
The European Union, as it's currently constructed, is unsustainable in its current form, a global ratings agency has warned.
Standard & Poor's said the Brexit referendum result "dramatically raised" the level of uncertainty about the future not only of the UK, but of the EU itself.
In a new report, the ratings agency suggested that the solution is in a realignment of the sharing of the various dimensions of sovereignty into a more "natural, coherent and consistent" form.
"The problem is this: the EU, as it's currently constructed and operates, doesn't embody a coherent 'pooling' of the various dimensions of nation-state sovereignty, and therefore it's unsustainable in its current form," said S&P global chief economist Paul Sheard.
"The EU's leaders - and no doubt many of its citizens -widely accept this."
The ratings agency proposed two visions for its future. The new post-Brexit EU must either be a looser form of political and economic federation, in which member states take back some sovereignty, or a stronger form, in which aspects of sovereignty that aren't currently shared are ceded to EU level, S&P said.
"The time has come for Europe to 'think big' and to convene a 'constitutional convention'," Mr Sheard said. He said it should seek input "from a wide range of stakeholders and social partners, including opposition parties, business groups, trade unions, academics, think-tanks, and representatives of civil society (nonprofits and nongovernmental organisations), with a view to coming up with one or more recommendations for the future state of Europe and the outline of treaty changes necessary to bring it about".
If this were to occur, S&P suggested the UK may want to delay triggering Article 50, and take part in the convention.
"The Brexit vote will have far-reaching consequences for the future of the UK economy, society, and polity. But it's also a wake-up call to the rest of the EU. One can only hope that this wake-up call will be answered - and answered in a way that calls forth an abundance of clear-mindedness and statesmanship."