THE BREXIT FIASCO AND THE FAILURE OF ARTICLE 50 OF THE TREATY ON THE FUNCTIONING OF THE EUROPEAN UNION
Keywords:Brexit, game theory, Treaty on the Functioning of the European Union (TFEU), economics of federalism, optimal EU constitutional framework
Modern game theory and the economic theory of federalism may offer an alternative view on the Brexit fiasco, in which the British government should not bear exclusive responsibility for current disaster. Moreover, the design of Article 50 of the Treaty on the Functioning of the European Union (TFEU) contains an intrinsic dysfunctional mechanism that generates irrational strategies. Article 50 is underdeveloped and should be redrafted. The twoyear deadline provision should be replaced with a reasonable time period and should provide for a third-party dispute resolution mechanism in instances where free negotiations between the EU and the withdrawing Member State in the reasonable time period fail to achieve a winwin solution. This article also argues that the current sub-optimal institutional framework on the vertical and horizontal division of competences might be an additional generator of Euroscepticism. In order to prevent the decline of public support the EU should do less in current fields and should do much more in fields where it failed to exercise its authority and which cannot be addressed effectively at the local levels. The EU should redesign itself as an institution that mitigates broad potential sources of negative externalities, reinforcing the rule of law, protecting liberal democracy with all related civil liberties, reinforcing its political-global dimension, protecting its common cultural heritage, and combating destructive nationalisms, isolationisms and cultural introspections.