George Alogoskoufis

The Fletcher Forum of World Affairs, Winter 2017, 41:1, pp. 27-33

The vote by a majority of the UK electorate to withdraw from the European Union is an event that poses an extremely serious threat to the successful sixty-year process of economic integration in Europe. The removal of barriers to trade goods and services, the promotion of competition in product and service markets, and the free movement of people and capital in Europe have served the European and the world economies well.

However, this is a time when economic nationalism has been staging a political comeback in many of the advanced economies, as suggested by both the resurgence of nationalist parties in a number of countries in the European Union and in the arguments put forward by the eventual winner during the 2016 presidential election in the United States.

This resurgence of economic nationalism threatens to derail seven decades of progress towards a more open global economy not only in Europe but also in the rest of the world. Both the European Union and the North American Free Trade Agreement have been questioned during this resurgence of nationalism. How can the resurgence of nationalism be stopped?

In this article, we review the progress of the European Union in these last sixty years, and demonstrate how well the liberalization of European trade, the opening up of financial markets, and the free movement of people have served the economies of Europe. However, we also argue that the evolution of the EU, like the globalization process itself, has resulted in both winners and losers both among and within European countries. On the basis of this analysis, we suggest that a lasting effective response to the resurgence of economic nationalism requires policies that would redistribute income to partially compensate the losers from the process of European integration.

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