March 1, 2017 / 4:20 PM / 9 months ago

Factbox: EU outlines five post-Brexit scenarios to keep bloc together

BRUSSELS (Reuters) - The head of the European Union’s executive arm, Jean-Claude Juncker, will present on Wednesday his ‘white paper’ on the future of the bloc following the departure of Britain.

Here are the details of the five “scenarios for Europe by 2025”, according to the document, which was seen by Reuters ahead of its official release.

It is meant as food for thought for the remaining 27 EU leaders who will ponder their future as they mark the 60th anniversary of the union with a meeting in Rome on March 25.

“The starting point for each scenario is that the 27 Member States move forward together as a Union,” the document reads.

“In an uncertain world, the allure of isolation may be tempting to some, but the consequences of division and fragmentation would be far-reaching. It would expose European countries and citizens to the specter of their divided past and make them prey to the interests of stronger powers.”

It is a call for unity. However, Juncker’s stated goal of allowing more integration among the willing member states has caused alarm among the likes of Poland, which does not want to pull closer together but is equally wary of being left out on the margins.

SCENARIO 1: CARRYING ON

The EU “sticks to its course”, focuses on jobs, economic growth and investments in digital, transport and energy infrastructure. It strengthens financial supervision and develops capital markets further.

The euro zone sees “incremental” reforms to drive growth and prevent shocks. Brussels changes state aid rules to leave 90 percent of such measures in the hands of national authorities.

The bloc shares more intelligence to better tackle the militant threat. It deepens cooperation on defense research and joint procurement, tries to overcome the fragmentation of the European defense industry. EU pools some military capabilities.

The bloc cooperates more on protecting external borders and seeks “progressive trade agreements” with third countries.

“The unity of the EU27 is preserved but may still be tested in the event of major disputes.”

SCENARIO 2: NOTHING BUT THE SINGLE MARKET

In case of a lack of agreement on closer cooperation on areas from migration, to security, to defense, the EU focuses solely on the economic benefits of its single market of 500 million people. It reduces bloc-wide regulation significantly.

The paper warns this would allow differences in consumer, social, environmental and other standards to linger or grow. The euro zone cooperates less and, the paper says, is made more vulnerable that way.

The right to free movement of workers and services is not guaranteed and the bloc gets more systematic checks of people at internal borders, complicating business and tourism.

More issues are resolved bilaterally as the EU abdicates from representing member states in the global arena, including in areas of climate, trade, or humanitarian and development aid.

“Decision-making may be simpler to understand but the capacity to act collectively is limited.”

SCENARIO 3: THOSE WHO WANT MORE DO MORE

A more ambitious version of scenario 1. The EU goes on as it has been but makes it easier for “coalitions of the willing” to advance cooperation further in areas from defense and internal security to taxes and social matters.

For defense, it means stronger common research and industry, joint procurement, more integrated capabilities and military readiness for EU missions abroad.

On security and justice, those members interested step up cooperation between their police and intelligence services, share more information on fighting terrorism and organized crime, chase fraud, money laundering and trafficking.

They can build common justice areas in civil matters. The euro zone - and others willing - align tax, business and labor rules. Decision-making becomes more complex.

“The unity of the EU at 27 is preserved while further cooperation is made possible for those who want... The status of other Member States is preserved, and they retain the possibility to join those doing more over time.”

SCENARIO 4: DOING LESS MORE EFFICIENTLY

EU focuses on priority areas such as innovation, trade, security, migration, defense and border management. It brings about a European Defense Union but does far less on regional development, public health, employment and social policies.

Member states have more freedom at national level to deal with areas that are left out of the EU joint priority list.

But for those identified as common goals, common EU institutions have more powers than they do currently to ensure delivery, with ideas including creating a European Telecoms Agency and a European Counter-Terrorism Agency.

“To start with, the EU27 has real difficulty in agreeing which areas it should prioritize or where it should do less.”

SCENARIO 5: DOING MUCH MORE TOGETHER

The most ambitious scenario which assumes EU states pulling much closer together across all policy areas.

The EU is represented internationally as one and trade is dealt with only at EU level without national ratification. A European Defense Union is created, common humanitarian and development aid is strengthened.

EU presses ahead with more common rules on energy, digital and services. The euro zone integrates further on fiscal, social and tax matters, as well as supervision of financial services.

The European Stability Mechanism - currently the euro zone’s bailout fund - is beefed up to become the European Monetary Fund, an EU version of the International Monetary Fund.

“There is far greater and quicker decision-making at EU level... However, there is the risk of alienating parts of society which feel that the EU lacks legitimacy or has taken too much power away from national authorities.”

Writing by Gabriela Baczynska; Editing by Ken Ferris

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