An agglomerative equilibrium -Another Brexit implication.

Updated: Dec 30, 2018

Among endless facets of Brexit, more or less contemporary or focused on the UK and Brussels, some vulnerable questions in the background may remain invisible for broader audience. UK’s decision has directly led to a problem of deglomeration. In other words, the issue of how the EU will reorganize centres of decisions. The idea of deglomeration is interpreted in this article as an attempt to prevent concentration of too much economic and political power in one place (geographically), for example by relocating institutions to other cities. The definition of “institution” is to understand broadly and encompasses any political centre of power.

It is more than just one more bureaucratic competition between members of the EU. A geographical apportionment of institutions and its power affects identity issues in an impactful way. The division of power in territorial sense resembles other acts of sharing an authority. Unjust and misguided policy in that area leads to centralization and separates peripheries from the political centre. A lack of balance and forcible dependence rely more on a symbolic level and economic changes than on the factual institutions’ work – it is not the point that decisions made by those institutions are apparently wrong or taking sides.

The offices of main institutions tend to form a homogeneous neighbourhood along urban substance, small district of decision-making places. That is the first level of centralization; however, not even harmful as long as there is a harmony in general urban-planning. In larger scale, solely the chosen city or the participants of oligopoly are granted the power, regardless the balance and the real economic ratios of relevant indicators among cities. Final step on this ladder belongs to international issues which exist in that form only within one structure – the European Union. All of the abovementioned degrees of centralization – unique for different types of cases and public power – have important consequences, even for anti-European discourse. National and international mechanisms of institutional exclusion are similar and bring the same output. In very few words, process of agglomeration that extended too far has significant impact on labour market and other economic mechanisms. The centralization in public sector causes centralization in private sector. This effect is seemingly harmful for balanced regional development, because bureaucratic metropolis drains capital and human resources from other regions. Economic tensions based on inequality in that kind of distribution lead to plain divisions which are easily noticeable in a language matter. The most famous example lies at the EU level. Usually, to describe conflicts between a European institution and certain country, journalism uses the phrase that involves “Brussels”. That catchy style serves only one purpose – to abase union’s affairs in favor of national interests. It precisely demarcates antagonistic sides and simplifies a complexity of disputes.

Nowadays, most countries in the EU have introduced policies in that area in order to deglomerate their capitals and appreciate other municipalities. For example, Sweden decided to relocate seven central institutions from Stockholm to other places, including nuclear security, sustain development and higher education[1]. In Germany, deglomeration has been implemented since decades (of course, it was easier due to historic division, however they are constantly pushing forward this path). Nevertheless, some countries still haven’t introduced even the most basic actions. Poland still establishes the vast majority of its new public institutions in Warsaw.

In order to realize how the EU is far from implementing deglomeration policies, the analysis of last post-Brexit is a must. London has two European agencies, which will be relocated in 2019: the European Banking Authority (EBA) and European Medicines Agency (EMA). Who won the competition to acquire EBA and EMA? Paris and Amsterdam, two capitals of old EU countries. It is worth noticing that both countries have beaten populist movements during last elections, with the widely commented victories of Macron and Rutte.

Paris already hosts other EU institution focused on finances - the European Securities and Markets Authority. There is a clear connection between EBA and ESMA - both belong to the European System of Financial Supervision. In their promotional leaflet France mentioned it as an advantage, what is concerning. Take a brief look at other candidates for European Banking Authority: Brussels, Dublin, Frankfurt, Luxembourg, Prague, Vienna, Warsaw. At least three of those cities already provide a shelter for main EU institutions. Brussels and Luxembourg’s cases are obvious. Frankfurt hosts the European Central Bank (which is not an agency, although counts as a centre of power) and the third part of the European System of Financial Supervision: the European Insurance and Occupational Pensions Authority. What is the point in these candidacies? Strengthening Brussels with another powerful institution may be beneficial for the EU bubble of bubbles and only in that case. The message is clear: the pinnacle of career in public financial sector (and related) waits for you to cross the Brussels’ or Frankfurt’s borders. Other candidates descend from countries which are closer to the EU’s external borders. Warsaw currently holds Frontex, a crucial power in our times, but Prague is the place of the European Global Navigation Satellite Systems Agency, which plays modest role and employs relatively small staff (121 employees).

However, despite whether certain institution are very important or not, the fact that every candidacy for the European Banking Authority has already at least one EU’s agency (Dublin hosts European Foundation for the Improvement of Living and Working Conditions and Vienna is the place of residence for the Fundamental Rights Agency) is disturbing and important to highlight. It’s not the exclusive problem between countries. The centre of gravity is measured also at the level of regional and national density of EU’s agencies.

It is naturally associated with the second institution, the European Medicines Agency. Before EMA there was no other EU’s agency in Amsterdam, what deserves approval from the perspective of deglomeration. However, the list of candidacies was much broader in this case – and many of those cities also aren’t a host, like Athens, Bonn, Bratislava, Bucharest, Milan, Sofia, Porto and Zagreb. Among them there are cities from countries which don’t have any EU’s agencies at all: Bucharest, Sofia and Zagreb. Other candidates came from well-established environment with know-how and settled EU’s institutions: Barcelona, Brussels, Copenhagen, Dublin, Helsinki, Lille, Warsaw, Vienna and Stockholm. Poland remains here an interesting example – despite Warsaw being already the host of Frontex, government chose it as a candidate for both EBA and EMA, instead of proposing a strategy of diversification (which could include, for instance, Cracow). Amsterdam did not have a EU agency, but the Netherlands already has adopted in Hague the European Union Agency for Law Enforcement Cooperation and EUROJUST.

We should create opportunities in order to attract specialist to work in different cities and avoid the process of gathering all experts of certain field in one place. In the opinion of the author, the concept of deglomeration in the area of EU’s institutions and agencies could be constituted as a tool for keeping European identity stable, an example of equality of partners. Moreover, it can be used as an economic instrument to boost less developed areas. Factors based on merit are very important – can’t doubt that Paris and Amsterdam will serve well – but we have to keep in mind that EU agencies work in broad framework, which is never limited strictly to their appointed tasks. After Brexit relocations, many questions remain: is the EU ready for critical approach for a deglomeration? Furthermore, should we constrict this idea only to crisis like Brexit?


Marcin Kozak

Recent Posts

See All

Is the transatlantic partnership in decline?

written by Carl Michel Reischel, Sciences Po Paris Transatlantic relations have considerably shaped international relations in the post-war international system. Their economic, political and military

  • Blogger Social Icon
  • Twitter Social Icon
  • Facebook Social Icon
  • LinkedIn Social Icon
  • Instagram Social Icon