<DIV> A good friend of mine, Vlad Sobell, has just released an interesting white paper on the EU. Below are the main points. If interested, I can send the complete 7 page PDF report. <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" /><st1:place>Europe</st1:place> disunited<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /><o:p></o:p> With enlargement consummating its historical purpose, the EU has “nowhere to go”, heralding the demise of federalism<o:p></o:p> Vlad Sobell<o:p></o:p> The completion of the EU’s enlargement has re-united the continent on the surface. However, enlargement has also deepened the underlying tensions between the federalist “hub”, represented by the Franco-German axis, and the Union’s “rim” lead by the UK. The conflict is likely to come to a head with the likely rejection by the British electorate of the European constitution.<o:p></o:p> While the hub occupies the strategic position, the rim owns the future, as its economic models and culture are more in tune with the global climate. Its economies are more flexible and have displayed superior growth rates. (See our recent note by Don Egginton, “Long-run Growth: Could the <st1:country-region><st1:place>UK</st1:place></st1:country-region>’s GDP surpass <st1:country-region><st1:place>Germany</st1:place></st1:country-region>’s?”, DIR 5 th May 2004).<o:p></o:p> This paper argues that, unless the EU dramatically and expeditiously abandons its protectionist philosophy (a highly unlikely scenario), it is bound to grow increasingly irrelevant. With the completion of its enlargement, it has consummated its historical purpose of post-war reconciliation and maintenance of regional stability and now has “nowhere else to go </DIV> <hr size=1>Do you Yahoo!? Yahoo! Movies - <a href="http://movies.yahoo.com/showtimes/movie?mid=1808405861">Buy advance tickets for 'Shrek 2' </a>