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This is what Europe could become after Brexit

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The European Union has been contemplating its future after the U.K leaves it. And one of its options could see the 27-country bloc stripped bare of its essentials and unable to guarantee all of its fundamental freedoms.

The scenario - one of a possible five unveiled Wednesday - is called "Nothing But The Single Market" and would mean that the EU as we know it would change dramatically and no longer guarantee all of four of its "fundamental" freedoms, including free movement of workers.

So instead of promoting economic and social welfare across Europe, the very thing that got the EU the Nobel prize for peace, the region would only focus on trade relations - which is the only aspect of the EU Prime Minister Theresa May appears to be interested in.

"In a scenario where the EU27 cannot agree to do more in many policy areas, it increasingly focuses on deepening certain key aspects of the single market. There is no shared resolve to work more together in areas such as migration, security or defense," the European Commission said.

"As a result, the EU27 does not step up its work in most policy domains. Cooperation on new issues of common concern is often managed bilaterally. The EU27 also significantly reduces regulatory burden by withdrawing two existing pieces of legislation for every new initiative proposed," the EC outlined in the white paper released Wednesday.

Carsten Brzeski, chief economist at ING, said in an email that focusing solely on the single market could mean the collapse of the euro area.

"Stripping the EU to the basics of the Single Market could, according to the European Commission, mean that decision-making might be simpler to understand 'but the capacity to act collectively is limited'," Brzeski said.

"Consequently, the EU could also become a network of bilateral agreements and deals, which might 'widen the gap between expectations and delivery at all levels.' If the EU would be stripped to the basics of the Single Market, the entire euro zone could also be at risk."

Though the scenarios outlined by Brussels are weak on detail, one of the consequences of the single market scenario is that the EU budget would be refocused to finance essential functions solely related to the single market.

At the moment, the EU budget is used to support agriculture, fishing and environmental projects within the union, but also to provide humanitarian aid abroad and cover administrative expenditure of all the European institutions, pensions and European schools.

The other four scenarios are:
carrying on – which would mean deepening of the single market and a pooling of military tools, but all the other areas would be nationally governed
those who want more do more - some members could move ahead in certain areas without the need for an approval at 27
doing less more efficiently – the EU would only focus on a small set of policies;
doing much more together – further integration and work in as many policy areas as possible.

According to Brzeski, these five scenarios are a "rough sketch" and give "a vague assessment of possible negative and positive implications."

But it "is the first official step since the Brexit vote and should lead a new declaration of European leaders at the European Summit in Rome on 25 March… This Summit will give a first indication of how far European leaders could be willing to go with Europe after Brexit," he added.

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