Cameron’s EU Deal: The Deckchairs Have Been Shuffled, Now We Decide
The debate in the UK has been held as if Europe did not exist
For an economist, there is precious little in the UK/EU renegotiation as agreed by the Council of Ministers that really changes anything. Fiddling with the language and introducing benefits caps and brakes will not do much to the economy as long as the UK remains in the European Union.
The focus of economic analysis has rightly been on the impact if Britain were to leave. Independent of views about the medium-term consequences of exit, the initial transition costs of an exit would be high. And an examination of the medium costs and benefits can wait until voters go to the polls in June or July.
So now we know the deal David Cameron has struck on the UK’s renegotiation of precise terms of EU membership at the summit, there is one economic curiosity.
The debate so far in the UK has been held as if Europe did not exist. It has focused solely on whether the UK would sink or swim if we left Europe - as if the EU will carry on calmly unchanged.
Really? If the Europe’s second largest economy left that would deal a body blow to the scale and depth of the world’s economic and trading bloc. The impact would probably be negative and would in turn have an impact on the UK economy too.
Then there is the bizarre behaviour of British politicians trying to rearrange the furniture as the entire Brussels houses looks to be burning down amidst the chaotic response to the refugee crisis (which will not improve if the UK leaves).
Britain looks rather like a bunch of Nimby households who successfully campaign for the closure of the admittedly ugly but also rather cheap and convenient supermarket and then find that other retailers steer well clear and the only places left are a couple of corner shops.
There’s an exciting, expanding world beyond European Trivialities… Time to go
Should the European Union lose Britain in the forthcoming Brexit referendum it will only have itself to blame.
And if there is a theme to the tortured relationship between Brussels and London it’s “missed opportunities.” Cameron’s deal is another one. Times changed but the European Union didn’t change with them.
Accounting for about 4% of world GDP, Britain remains one of only four globally significant economies in the European Union and the only one outside the euro. In thirty years’ time demographics suggest there will be two - Britain and France. Brexit or not what price the EU then, when lynchpin Germany vies with Japan for the title of “World’s Largest Old Folks’ Home”?
For the British the EU was always about practical concerns. We’ve never cared for the spiritual side. You can’t get many of us to identify as “European” when asked.
The reasonable thing to do when it became obvious that the UK was never joining the euro, never warming to the union and holding its own economically would have been to offer a well-planned “associate membership”. This could have offered the UK access to the single market and assurances on sovereignty in return for its vast monthly tribute and sending a high profile minister to summits and things.
Had that happened we might all be reasonably jolly little Europeans by now. But no.
“Ever closer union” is not simply an option or an aspiration for those who joined the single currency. It is an absolute necessity. Without a common fiscal framework, the thing is going to fail one day. It may fail in any case.
Under Cameron’s deal EU courts still override British ones, EU border policy remains paramount and, in any case, none of the little on offer will be legally binding unless there is the treaty change which both France and Belgium are resisting. And who seriously thinks that a “brake” on benefit payments won’t prove more costly to police than just paying up?
In the end, the real sign of Europe’s failure is that even a set of modest reform proposals, put forward by the democratically-elected premier of the second largest economic power in the EU, proved so problematic. The EU has not been ‘reformed’ because whatever Cameron and the “In” campaign will allege, it is incapable of reform.
Look, there’s an exciting, expanding world out there beyond these wearying trivialities. Time to go.
Cameron’s parochialism offers no potential foreign policy gains for the UK
An exasperated German policymaker recently told the Financial Times, “The European house is burning down and Britain wants to waste time rearranging the furniture”.
This quote encapsulates why David Cameron’s referendum on the UK’s EU membership is bad foreign policy, even before the result is known. By prioritising appeasement of the “Stop the world, I want to get off” cranks in his party over behaving like the leader of a major nation at a time of crisis, Cameron has exasperated our closest allies and damaged Britain’s status as a serious power. His renegotiation is a trivial distraction from the crucial economic, refugee, Middle East and Ukraine issues that other European leaders are desperate to tackle at this week’s summit. Talk about fiddling while Rome (and Athens, Aleppo and Donetsk) burns.
Such parochialism is characteristic of Cameron’s time in office. His governments have run-down Britain’s foreign policy capacity and repeatedly failed to engage with the critical international issues impacting the country.
His domestically-driven referendum is a prime example of this insularity and offers no potential foreign policy gains for the UK. As history shows, whatever happens economically, socially, politically and militarily on mainland Europe will affect Britain anyway. Voluntarily discarding our influence over events will not change that. Indeed, solving the current international crises affecting Britain requires more, not less, cooperation with our neighbours; from refugees to handling the maniac in the Kremlin.
Nor, if the UK leaves the EU, will its marginalisation be limited to Europe. Eurosceptics fantasise that Britain can somehow be towed across the Atlantic to form an “Anglosphere” with the North Americans and others. But this “Anglosphere” is a figment of their imaginations and no-one else recognises its existence. The US, for one, has made it clear that leaving the EU will only increase the UK’s irrelevance to them.
The “leave” campaigners also exhibit a dangerous amnesia. Before dismantling the system of cooperation that has been built in Europe over recent decades, we should remember why it exists in the first place.
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