Regions of Europe: A Feasible Status, to Be Discussed

Regions of Europe Jacques Drèze A new concept is proposed, that of ‘Regions of Europe’ which do not have full statehood and belong not to any state but to the Community directly. Without endorsing this possibility, and limiting itself to its economic aspects, this article discusses the various dimensions of its economic desirability. It appears that, in general, autonomous regions will not find it advantageous to insure each other. Investigating how assets and liabilities should be apportioned at the time of secession, it argues in favour of distributive neutrality: net incomes are unchanged by the secession itself, in both the seceding region and the rest of the nation. How distributive neutrality could be implemented is explored through a number of suggestive examples. In general, a region receives a share of the public debt related to its share of the public primary deficit, with corrections to account for growth, unsustainability of the public debt, and so on.