I received several calls today from clients doing business in the EU about the Lisbon Treaty and what it means for their European business operations. In the short term—absolutely nothing. The Lisbon Treaty is essentially just a clarification and simplification of previous European treaties into one single document.
In the long term, however, the Treaty is a boon for business. Why? Because it will galvanize and embolden the EU to rise again as a major global player in an arena currently dominated by China, India and Brazil. Until now, Europe has been largely stagnant in comparison to these economic juggernauts. In fact, Gross domestic product in the EU is expected to rise by only about 0.7 percent in 2010 and official data show unemployment is expected to rise above 10 percent next year.
The immediate aim for the Lisbon Treaty is to streamline EU decision-making, which had become increasingly unwieldy as it took on an additional 10 countries in the past five years. The long term aim of the Treaty is to lay the foundations for the EU’s efforts to wield more economic influence in today’s globalized environment.
Fredrik Reinfeldt, the Swedish prime minister who is currently steering the EU presidency said earlier today:
A new era of European co-operation begins today. With the Treaty of Lisbon, EU citizens get a union that can meet the demands of the 27 member states for transparency, democracy and efficiency; a union that can better meet the challenges of globalization."
These are great words, but it will take more than a speech to bring the EU in line with the rest of the world’s competitive prowess.
From a judicial standpoint, the Treaty makes some minor changes. The Court of Justice has published this very useful short guide to the changes that the Lisbon Treaty makes to the Court of Justice itself, the General Court, as the Court of First Instance is now known, their jurisdiction and their procedures.
Overall, the Lisbon Treaty is simply a matter of form over substance for the time being and it will have marginal effect on business in the upcoming year.
Trend to Watch: Look for Europe to Wield More Economic Force in Late 2010 and Early 2011.