What should we do with the Benelux?

By Arnout Nuijt

logo_Benelux_topOn the last day of the previous year an interesting bit of news floated around in the Low Countries, but it may have been lost in the loud bangs of the New Year’s Eve celebrations. According to Luc Willems, deputy secretary-general of the Benelux Union, the Benelux would like to see a single market for mobile telephony in the three countries. The Benelux in 2013 will study the possibilities for creating such a single market, without roaming fees. That is of course good news for consumers as well as businesses, and it could also serve as a test for a similar move to a single EU market.

Yes, it has been a nuisance for years when, traveling between Belgium and The Netherlands (or between any two given EU nations), you loose your mobile connection the very moment you are crossing the border. While you wait for the text message coming in from the local provider saying that you are now on their network, you may wonder what it actually means to live in a EU single market. Once you have crossed the border – which is an increasingly diminishing concept within the EU, especially in the case of the one between Holland and Belgium -, the cost of your phone calls will rise significantly, because telecom companies say you are “roaming”.

Wow, after decades of deepening European economic integration and years of an EU single market, the ups and downs of the Euro Zone and a plethora of other treaties, telecom providers are still free to charge their customers more once they cross a border? Yes, somehow they can and they are getting away with it all the time… But where the EU has apparently not been capable of bringing change and helping its citizens and businesses to bring down cost, the Benelux has now taken an initiative. The Benelux, the Benelux, you are saying, yeah, I have heard about it, but do they still exist? Yes, they do, and they may be making a comeback of sorts.

For those who do not remember (and we don’t blame them), the Benelux is a union of three neighboring countries in northwestern Europe: Belgium, the Netherlands and Luxembourg. Its origins lay in a customs agreement formed in London exile, way back in 1944. The Benelux has a small but full blown bureaucracy, composed of a Committee of Ministers, a Parliament, a Council of the Union, a Court of Justice, a Secretariat-General and an organization for intellectual property. The Benelux Secretary-General is located in Brussels.

When the original establishing treaty expired in 2010 it was replaced by a new legal framework, that came into effect on January 1st, 2012. The new treaty changed the name of  Benelux Economic Union to Benelux Union to “reflect the broad scope on the union”. The main objectives of the treaty are “the continuation and enlargement of the cooperation between the three member states within a larger European context”. The new Benelux cooperation focuses on three main topics: internal market and economic union, sustainability, justice and internal affairs.

Now, in these days of European stagnation, government austerity programs and Euro-skepticism, nobody is waiting for another layer of transnational government that does not do anything that is visually or financially appealing to its citizens. So, will the renewed Benelux bureaucracy turn out to be just a re-invention of itself or will it make itself useful and become a dynamic defender of the interests of the people it represents? Mr Willems’s remarks may be an indication of the latter, at least we hope so.

Besides the practical problem that there are no telecom operators active in all three countries (which will make the talks more challenging) the Benelux initiative to “study” the abolishing of roaming costs in three small countries may be a winner. If successful, it might get the Union a standing ovation and establish some sort of raison d’être in the eyes of the citizens of the three countries. It might even inspire the Union to go on cutting more real business cost among its member states. Other (groups of) EU-countries may even follow suit.

How could the Benelux be more useful? Well, a successful Benelux Union is good for all three countries. Economically stagnating, their combined GDP still makes them richer and as important to the world economy as many emerging powers. It may be worthwhile to integrate the Benelux a step further, work together on a number of economic and international fronts and present itself to the outside world with one voice only.

While especially the Netherlands, but also Belgium, have seen their position in the world slip relatively in economical terms over the last few years, together the three neighbors would be putting themselves back on the map with a combined GDP of around 1.400 billion USD. Thus they would be ranking 14th among the world’s largest economies (in 2012 figures), ahead of Indonesia, Mexico and South Korea and (presently) on a par with Australia’s economy. Population wise however, the Benelux would still be a dwarf among giants, with just over 28 million people.

Yes, a high ranking would be nice and it would be harder to ignore the Benelux as a member of the G20 for instance, giving it access to the closest thing there is to a world government these days. But given the likely continued rise of emerging powers with larger populations like Mexico, South Korea, Indonesia and Turkey, the Benelux might lose its new higher ranking within a couple of years again.

Nevertheless, the Benelux countries have many economic trump cards among themselves, holding Europe’s fourth airport (Schiphol), the EU’s political decision making center (Brussels), its two biggest ports in combination with top notch logistical infrastructure as well as holding huge overseas investments.

The Benelux looks set to remain a large trading power for the foreseeable future, because that’s where the strength of both Holland and Belgium’s economies is. The Netherlands already counts as a great trading nation (ranked 7th place in 2011), but together these two countries account for around 1.750 billon USD international trade. But that figure includes the heavy trade among the Benelux members themselves, so if presented as a single block, the figures will have to be adjusted. Anyway, that would still put the Benelux position among the world’s great trading powers at a fifth place (behind the U.S., China, Germany and Japan, but ahead of the UK and France). Not bad for just 28 million people!

But nice ranks and lists do not really matter that much to most individual citizens and businesses of the Benelux. They will rightly ask themselves: what’s in it for me? It is clear the three governments must strive together to defend the common interest of their highly internationalized economies within the EU and in the rest of the world with concrete actions. High rankings will only be the result of good policies and well organized economies, not vice versa.

So far we have only touched economic cooperation, but other forms of integration on the Benelux level have been taking place as well, for example in the military field. Some 15 years ago, the Belgian and Dutch navies agreed to a wide scale integration. A joint command was set up, the Admiral Benelux or ABNL. That did not just provide a nice career opportunity for navy officers, it was also a very cost effective operation. The Belgian Navy took over two former Dutch frigates and, while it already operated the same type of mine hunters as the Dutch, practical things like maintenance could be pooled.

Last year talks were started between the Netherlands and Belgium in order to achieve more cooperation between the two Air Forces as well as between both countries’ Special Forces and other crack units. There clearly is a lot to win with more Benelux defense cooperation and – as all countries are ardent NATO members – there is no political problem. Reductions in size of both forces can be partly offset by cooperating and by sharing equipment for instance. But a true integration of both militaries would require more political integration.

And why not? Former midsize powers like the Netherlands and Belgium must anyway redefine their place in a fast changing world. Working together as equal partners is a very good idea. Further and deeper European integration seems a bridge to far to many at the moment. People do not want to drown in a sea of other European nations, but integrating as just three small ones together is much easier to accept.

Pooling defense assets is simply a good measure to maintain force while scaling down. The Benelux might also opt for sharing its embassies abroad (Scandinavian countries already do), especially at a time when Foreign Ministries are downsizing and closing diplomatic posts. And trading nations need foreign representations!

The Benelux at the moment does not generate warm feelings among the citizens of its member countries, mainly because it is hardly known. On the other hand, there is no visible opposition against further cooperation and certainly not of the hard political kind of opposition there is (especially in the Netherlands) against more integration within the EU.

An integration process of the Benelux countries could also work to defuse another development: the creeping disintegration of Belgium. If that country would further split aspects of its government structure or even if it would split completely, the Benelux could be the framework or home for the future of the successor countries. Flanders, Wallonia and Brussels could simply continue as member states of a (better integrated) Benelux. That is, if their citizens would want that.

That brings us to another point. Would it be necessary to consult the populace to get widespread backing and kick start further Benelux integration? It probably would (that’s why we already put up a poll for our readers), if only to see how the people of the three countries view further Benelux cooperation or integration. The last thing the Benelux should do is to repeat the mistakes of the EU and become detached from the public. So consult them first, Benelux, but only after you bring down those mobile roaming costs. And whatever you do, do it for us, the people.

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