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L'Europa del liberalismo / Il rischio di diventare «fortezza»

The Europe of Liberalism / The Threat of "Fortress Europe"

Anno XXVI, n. 112, gennaio-marzo 1991
Centro Einaudi


Abstract disponibile solo in lingua inglese

The Single Market project, launched in 1985, was to be based on the principle of mutual recognition of differences, an inherently market-friendly approach. Not only firms, but every institution of society are subjected to the most intense competition. Two aspects of the modern industrial state are particularly at risk: the discretionary power of governments and the monopoly power of organised labour. Will they not in the end resist this pressure and turn on the system which has generated it? Back-sliding from the principles of mutual recognition is most evident in the EC Commission's current bid to introduce at Community level a strong dose of "approximated" social policy. The potential gains of the Single Market would be drastically reduced if a strongly interventionist and redistributive European super-structure were put in place. Furthermore, this type of policy breeds protectionism, giving an extra twist to the downward spiral of low growth and economic stagnation.
A further protectionist twist would be hard to avoid. In a world of fewer but larger firms, it is vital indeed to keep markets contestable via imports and foreign direct investment. Otherwise the scale economies will soon be internalised by the industry itself and dissipated in X-inefficiencies. The current scale of acquisitions, mergers and joint ventures in anticipation of 1992 suggests that this is a very real possibility. In short, a seemingly minor policy mistake at this stage in the Single Market process could easily end in disaster.