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The Brexit vote result will change, if it hadn’t already started to, the way in which the EU will approach the most controversial topics – among which, the highly politicized issue of trans-European taxation, where transfer pricing and profit allocation are the key words. The two parties’ position regards after all, the profit allocation – the winners are those who have claimed that UK is losing rather than winning, from being a part of the EU.
I wrote this article on Friday, 24th of June. Naturally, I was impressed not only by the vote results but also by the picture posted on this very morning on the EU website – the picture’s unintentional irony reminds us that we live in a Union which seems to be stuck in the middle of its very own project, overwhelmed by the real life struggles.
”Never let a good crisis go to waste”
This is the message we must get from the event across the Channel. The wit of Churchill, the savior of Europe seventy years ago, should haunt us, the Europeans left on the other side. There's no time to think what happens to 'poor' Britons, to threaten them they'll be 'killed' in trade talks, like a French minister dramatically warned. No one can say who's now more lost in the fog - the Europe, or the UK?
Right now, all I want to say is, the English humor is immortal; it perfectly works on our side. What do I find right now (I'm writing on Friday, 24 June, around noon) on EU's news web page, in the highlights? "International divorces: new rules on whose courts settle property disputes". The European Parliament tells us it just set new rules to decide what international courts should settle property disputes in divorce or death in an international couple or partnership (the picture chosen, with two quarrelsome fingers, is also sensational)
This is façade Europe, curing details, from easier divorces (they even calculated savings of 1.1 billion euros) to the size of eggs, curvature of bananas, to whether plums are laxative or water actually hydrates (beware of the dog days!). Such details have shattered the proverbial English reserve/calm.
Beyond these, however, is the great European project, whose reach is hard to fathom. I think this was the essence of Brexit - how far we want the EU to go, how much Europe is too much?
It's no surprise England (especially, as the others in the UK seem more European than ever) avoided excessive integration, asking for several derogations from the very beginning. It's just that both the EU and the UK have changed lately, most of all in economic terms. The home of the Industrial Revolution is no longer much industrialized, and it relies on services. Such discrepancies deepened with the crisis (I recall France's Sarkozy saying Britons are more vulnerable as they have no industry anymore)
In brief, new times call for new politicians. Indeed, with astonishing virulence, Brussels recently began pushing matters that were taboo not long ago, such as the common tax policy, which ultimately touches the hot potato of state aids. This is a sensitive topic in the EU since forever, because it ultimately limits the levers used by national economies to act on specific sectors. All this background talks are more visible as the Common Consolidated Corporate Tax Base (CCCTB) has been addressed exactly one year ago.
Brussels resumed this idea last year, but since the beginning of this year there was practically no month without a warning from some European institution - you'll see, when the CCCTB comes, it will settle everything.
Don't think this week brought just the note on divorces; we also had a draft directive "laying down rules against tax avoidance practices that directly affect the functioning of the internal market." It exceeds the usual norm of Brussels lingo, with several proposals and declarations in January that compelled the officials to draw up a table with document titles - a 'chapeau' communication, they called it (hat, in english). Well, if we flip this hat and turn it into a (life)boat, we could find the node emphasized by EU itself: Did the EU need this Anti Tax Avoidance Package if the CCCTB is to be re-launched this year?
The answer is, the big guys still have to cut a deal on percentages and algorithms; the idea was, they will, eventually. Why 'was'? Because I think everything changes in the EU after Brexit. Even bananas might keep their natural bend.
Guess what - the UK was quite squeamish about the CCCTB, precisely because it has several interest of its own, not perfectly matching the others'.
Do you think now, as the UK leaves the Union, Brussels will insist as viciously on sensitive issues? Not because others might think of their own exits (there are few as confident as Brits to even consider walking alone), but because there will be increased focus on pragmatism. Many will muster their courage and raise their hands (see the fingers in EU's picture linked above) and ask, more or less shyly, 'what's in it for me?' Here I see the manual of pragmatism Romania must study, too, now, while it still has a say; no blackmail, just arguments on table; no hysteria, but realism. Honestly, I'm one of those who want more Europe; I believe in Europe, but in one that takes in the Brexit lesson.
Who knows? After years we might thank the Britons who walked through yesterday's storms to change Europe. Good luck, everyone, and remember everything is "As You Like It": "All the world's a stage, and all the men and women merely players".
Aticle by Adrian Luca, TPS - June 2016