The
financial system presents much controversy. In TERRITORIAL DISPUTES, it is
often the case that different parties will introduce very different financial
realities. Gibraltar, the United Kingdom and Spain are a clear example. The
latest financial global crisis with still visible results in Spain and Brexit
in the United Kingdom paint an uncertain future. Assuming the three parties
settled the dispute and decided to apply the EGALITARIAN SHARED SOVEREIGNTY, what
financial system should apply in Gibraltar?
The
possible choices that could be taken in relation to this financial system are
many: a financial system anchored to one of the sovereign states, an
independent financial system or one linked flexibly to both sovereign states.
As it is highly improbable that any of the sovereign states would agree to the
third territory having its financial system anchored or linked flexibly to only
one of them, these options are discarded for instrumental reasons—ruling out
extreme options. However, it is possible that they would accept a more conservative
scenario.
The
egalitarian shared sovereignty states that the allocation of sovereignty is
given by: a) the equal right to participate (egalitarian consensus principle);
b) the nature and degree of participation depends on efficiency of
accomplishing the particular objective/area/activity at issue (principle of
efficiency); c) each party receives a benefit (in terms of rights and
opportunities) that depends on what that party cooperates with (input-to-output
ratio principle); and d) provided the party with greater ability and therefore
greater initial participation rights has the obligation to bring the other two
parties towards equilibrium (equilibrium proviso).
In the
case of Gibraltar, there are several differences in relation to the financial
system of the parties—e.g. strength of the currency, international credit
rating, international debt, Brexit, etc. As in all the previous elements and
sub-elements, the shares of sovereignty are represented as bundles of rights
and obligations, benefits and burdens. Therefore, all the parties have both the
right and obligation to participate and support the financial system of the
third territory (egalitarian consensus principle).
The EGALITARIAN
SHARED SOVEREIGNTY will work in two ways: first, following the most efficient
combination in relation to contributions (principle of efficiency): e.g., the
currency of the third territory could be anchored to the strongest currency (input-to-output
ratio principle) or anchored to a basket of other currencies. Second, as the
application of the principle does not imply any investment from the two
sovereign states in the third territory, the latter has no obligation to divide
with them any internal or international revenues—unless a form of compensation
was agreed, e.g. investments, exclusive privileges. There is efficiency in the
financial system but without allowing any form of domination (equilibrium
proviso).
What
is specific to regulating the financial institutions is introduce next time when
law as an element is analysed. It may imply either the creation of a higher
financial institution that regulates Gibraltar with equal representation
granted to the three parties; or a procedure in which the financial institutions
of the three parties will have the opportunity to be equally involved in the
creation, amendment or cancelation of financial policy.
NOTE: based on Chapter 7, Núñez, Jorge Emilio. 2017.
Sovereignty Conflicts and International Law and Politics: A Distributive
Justice Issue. London and New York: Routledge, Taylor and Francis Group.
17th
April 2018
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