A counterweight to France-German power

It was only a matter of time before the Franco-German drive to reshape Europe’s “economic governance” met with a counter-proposal. In international politics, a powerful state or group of states tends to lead others to band together in or order to provide some form of balance. This is now happening in Europe.

David Owen and David Marsh are proposing the creation of a “Non-Eurogroup” (NEG), corralling the 10 EU countries outside the Eurozone into a group. Writing for the Financial Times, they argue that such an NEG would bring many benefits. They say:

“Setting up the NEG would establish rights and responsibilities for non-eurozone members, ending the long-held European position that non-membership of the euro represents a form of second-class EU citizenship. It would protect these countries from political and economic discrimination. It would allow a formal mechanism for countries to move between the two groups, calling a halt to to the absurd interpretation of many eurozone governments that if a country such as Greece were to leave the euro, it would have to quit the EU altogether. A separate group for the non-euro states would not mean that they would remain permanently outside the euro, but it would recognise the reality that, in most cases, this state of affairs will last for longer than many had previously thought.”

This is a really interesting idea. Such a group could become the place where the argument for a liberal Europe – of less regulation and more trade – is developed. Years ago, the Lisbon Agenda promised that Europe would become “the most competitive and dynamic knowledge-based economy in the world” by 2010. This has proved a laughable proposition. The Internal Market remains stymied. For example, services account for nearly 70 per cent of employment in EU member countries, but regulatory barriers have prevented the creation of a Europe-wide market in services.
 
With Franco-German domination of the Eurozone, there has been too little attention to the growth agenda in Europe. If a UK-led NEG could put this back on the agenda, then so much the better.