Gibraltar, the egalitarian shared sovereignty and the
financial system
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:
- the equal right to participate (egalitarian consensus principle);
- the nature and degree of participation depends on efficiency of accomplishing the particular objective/area/activity at issue (principle of efficiency);
- 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
- 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 analyzed. 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:
This post is based on Jorge Emilio Núñez, “Territorial Disputes and State
Sovereignty: International Law and Politics,” London and New York: Routledge,
Taylor and Francis Group, 2020 (forthcoming)
Previous
published research monograph about territorial disputes and sovereignty by the
author, Jorge Emilio Núñez, “Sovereignty Conflicts and International Law and
Politics: A Distributive Justice Issue,” London and New York: Routledge, Taylor
and Francis Group, 2017.
NEXT
POST: Gibraltar, the EGALITARIAN SHARED SOVEREIGNTY and government
Tuesday 26th November 2019
Dr Jorge Emilio Núñez
Twitter: @London1701
No comments:
Post a Comment