European Union Membership

Well, this is the hot topic of the moment, and probably will continue to be so for 4 more years until the in/out referendum.  It is one that many people have fixed opinions about, and both sides are quite happy to be selective about which facts they consider and which historical arguments they draw upon.  I don't expect many people to change their minds, though I could be wrong.  That means we shall be leaving the EU.

I think that is a mistake.  I don't expect my views to change any ones mind, and I don't expect you will change mine but now is a time for people to be clear about what they think and why so that the small number of people who do want to form (rather than express) their opinion have a range of points of view to consider.

Many of the standard arguments both for and against are rehearsed and reheated constantly, so let me throw in a few perhaps less common points of view.

Firstly, people are not clear what the EU actually is.  The media has carried out a fairly constant war against "Europe" for a generation, with scant regard for truth or accuracy.  It is trivially easy to find examples of blatant lies portrayed as truth by the tabloid press - try here for a start.  So people in the UK do not have a realistic view of what they will be voting about and hear a constant diet of negative stories about the EU. 
The politicians are no better, and claim EU successes as their own, whilst blaming "Bruxelles" for anything they don't want to be criticised for.  None of the major parties has been honest and clear about what they stand for (UKIP is of course an exception), and why we are members.  Remember historically the Conservative party was pro-Europe, and the Labour party was against.

Second, the argument for a referendum because this generation has not had a chance to vote on the EU is facile.  We have also not had a chance to vote on the act of Union, Universal enfranchisement, or the repeal of the corn laws.  We do not need approval in each generation for previous acts of parliament - otherwise parliament would do nothing but spend each session re-approving old laws.  The argument is made by people who don't like us being in Europe.  If they win the referendum they will regard the argument as settled for all time.  If they lose in another 20 years they will start the same "chance to vote" rhetoric.

Thirdly, all the arguments for leaving the EU seem to me to apply Scotland leaving the UK, though curiously few people seem to want to point that out.  I think the EU referendum increases the risk that Scotland will vote to separate from the UK to remain in the EU - which I am not in favour of.  I think the Union is good for both countries.

Fourthly, some of the discussion about the negotiation before the referendum does not take account of basic negotiation strategy.  To get something you need to have something to trade.  It is far from clear that the other EU countries actually want the UK to stay enough to allow us to wreck the existing accords.  You have to look to the BATNA or Best Alternative to a Negotiated Agreement.  For the EU the BATNA is to allow us to have our referendum - if we vote to stay in we are hobbled for the future.  If we vote to leave, they carry on with the Union of 27 (Croatia will have joined taking us up to 28 states) and nearly half a billion people without a big but difficult state - the French and Germans will love it.  For the UK the BATNA is a vote where leaving becomes a more attractive option because we will be humiliated if we stay, and if we vote to leave we shall effectively have to start negotiating again from day one to secure our exit and our place in the world.  That is a terrible place to start a negotiating position.  They hold a much better hand than we do, so why would they give us any more than they already have?

On top of all that there are the economic benefits of being part of the EU (we already have the most flexible labour laws in the EU - do we really want to go down to Asian sweatshop standards?), which is the richest economic block in the world (yes, richer and more populous than the USA).  Immigration (including economic migration) I see as a good thing that has allowed us to avoid the worst to the ageing population/pensions crisis - I recognise that this is a very minority view in the UK, but I still hold to it.

So I don't expect to have provided any food for thought, and certainly not to have changed your mind, but I think we all have an obligation to state our positions and views clearly at what is going to be a defining time for our nation.  For good or ill we are unlikely to be the same after the referendum.  What I fear is that as a nation we will vote for our national decline and irrelevancy.

The Death of the Euro

I am at heart pro-Europe and pro-Euro.  Both positions that require some defending in the UK.  At least if you read the Daily Mail, Telegraph, or Express.  However I believe that European countries have more in common than we realise, and more than our differences.  (I am writing this in Kuala Lumpur, a wonderful westernised city that is more different to, say, London that any city in Europe)  I also have a historic view that says that the main purpose of the European Union is to prevent a further major European war - in which it has so far been very successful.

The principle of the Euro is easy to see - a single currency for a trading bloc larger than the USA, providing a potential counterweight to the US Dollar, making it easier to trade across borders and promoting a single European identity. 
Through the travails of the Eurozone, as first Portugal, Ireland, Greece and Spain, and now Greece, Italy, Spain and even Belgium, struggled to escape the current crisis I was hopeful that the Euro would survive.

As I now talk to my delegates from the Gulf on my course in KL, I find that my beliefs have changed and I no longer think that it is going to survive.  The problems appear to be both economic and political.  The politics rather over rides the economic, because in some ways they are the cause of the economic problems.  In setting up the Euro the EU governments allowed countries into the Eurozone for political reasons that had no purpose in being there (Italy, Greece) and then ignored its own rules to allow the big countries (France and Germany) to flout the rules with no consequence.  These were political decisions.  Meanwhile across Europe politicians played narrow, local political games without attempting to persuade a sceptical European public of the benefits of the EU.  Countries that were beneficiaries of EU largesse (such as Eire) were in favour - the funders were more sceptical (particularly GB).  Robert Peston of the BBC, the usual harbinger of doom, has a lot of information about how the cost of borrowing in the Eurozone is going to pull it apart (in fairly short order).  Michael Lewis's new book "Boomerang" is also very informative about how the economic markets are now likely to bet against Eurozone countries and the Euro.  Link here


Gordon Brown's 5 economic tests now seem wise in ensuring we did not join.  They were;

1. Are business cycles and economic structures compatible so that we and others could live comfortably with euro interest rates on a permanent basis?
2. If problems emerge is there sufficient flexibility to deal with them?
3. Would joining EMU create better conditions for firms making long-term decisions to invest in Britain?
4. What impact would entry into EMU have on the competitive position of the UK's financial services industry, particularly the City's wholesale markets?
5. In summary, will joining EMU promote higher growth, stability and a lasting increase in jobs?

The Eurozone countries did not have equivalents, and now are living with the consequences.  However for all the potential benefits of saving the Euro, the European public has not been convinced to do so.  Politicians have failed to prepare the ground for such an eventuality, and so there is no support for any action.  And the inaction is pulling down the Euro in an irresistible slow train wreck.  In order to protect the Euro, it seems necessary to move strongly towards a United States of Europe - which is unpalatable to voters.  Acting in ways that might allow the Euro to survive is pretty much electoral suicide in any Eurozone country (and indeed in GB).  So the inevitable outcome now seems to be the death of the Euro.

The resulting chaos will not be pretty (and not for the UK either - we don't seem to realise how dependent we are on the EU for our own economic well being).  At the end of it the Euro as a single currency will be unthinkable for a couple of generations (at least).  It is possible that it may even lead to a break up of the EU itself (the only way for Greece to leave the Euro at the moment is to leave the EU as well), at least of peripheral countries which will fundamentally change the nature and role of the EU.

The fantasy of some is that this breakup will be easy and simple and lead to the reinstatement of a simple European free trading zone, with very little in the way of legislation slowing down public sector procurement.  My feeling is that this is far off the mark - we are likely to retain much of the restrictive legislation for years as a hangover (at least), whilst restrictions on free trade will be quickly imposed by any country leaving the EU.   But I could be wrong - after all, I was on the Euro.  (I think).