IN, STRONGER TOGETHER
BY COLIN DOUAY JERNE, 03/05/2016
”We are with you but not of you”. Churchill’s words still resonate in today’s political speeches.
After returning from EU negotiations in Brussels in February, Prime Minister David Cameron has now settled the date for the future referendum on the British membership in the European Union: the 23rd of June. Negotiations have since Mr. Cameron’s letter to President of the European Council Donald Tusk on 10th of November 2015 revolved around four main demands to reform the European Union: economic governance, competitiveness, sovereignty and immigration. In light of these concessions, this article critically analyses the arguments of the Leave campaign.
The Myth of Free-Trade and Closed Borders
Arguments for Brexit can broadly be placed into two categories. On the one hand, some advocate for a closed fortress of Britain, particularly on issues such as refugee uptake and the ability of foreigners to receive welfare benefits. On the other hand, often as part of the same discourse, proponents of Brexit seem to dream about a free-trade and open Britain, able to negotiate its trade deals with big economic powers such as the US, China or even the EU itself. However, this stance bears a strong paradox.
First of all the attempts to build a clear and coherent discourse have been undermined particularly on the issue of migration. Britain is very unlikely to be able to negotiate a free trade deal with the European Union without simultaneously committing to the free movement of people. Pro-Brexit campaigners have often insisted on the model of Norway or Switzerland as a viable alternative to continued membership. Yet it is worth noting that although these two countries have managed to negotiate free trade deals with the EU, they have had to contribute to the EU budget as evidenced by the fact that Norway contributes roughly 90% of the UK’s net contribution per head (Economist 2015). Additionally, as a component to these negotiations, there has also been a requirement to accept the free movement of people: since 2012, Switzerland has welcomed around 4,5 times as many EU migrants as the UK in per capita terms (Stephen Booth 2014). Norway as part of the European Economic Area has to comply with the same rules of free movement as the other EU states without having a say on it. In 2012, all EEA countries accepted more immigrants per head than the UK in gross terms (Stephen Booth 2014). In advocating the ‘Norway option’, the VoteLeave campaign is thus yearning for a model that arguably entails less influence and the same responsibility, then continued membership of the EU.
The Price of Uncertainty
It could well be, that as the think-tank, Open Europe, has predicted, the United Kingdom would suffer a GDP loss of 2.2% by 2030 following Brexit if it fails to secure trade deals with the EU particularly and thus revert to protectionism (Swidlicki et al. 2015). Indeed, while the Leave position relies on rapidly signing bilateral free trade agreements, this may not be as straightforward as imagined. As Michael Froman, US Trade Representative, said: “We’re not particularly in the market for FTAs with individual countries. We’re building platforms that other countries can join over time.”
While it may be difficult to assess what may happen in the event of Brexit, it is possible to judge how markets view the prospect of a potential Brexit. The pound sterling is at its lowest since 2009 and could lose up to 20% of its value against the dollar warns a report of the 24th of February from HSBC (Guardian 2016). While the focus of the debate has hitherto centred on whether international trade deals could be renegotiated in the event of a British exit, the fall of the pound, if left unabated, is likely to cause a rise in the general price level of about 5 percentage points and stagflation says the research note of HSBC on the EU referendum (The Guardian 2016). This level of uncertainty has clear and negative implications for the private sector.
“With or without you”
It is unquestionable that the European Union is today facing the deepest crisis of legitimacy in its entire history. The debate over the sovereignty of the British nation has confronted the contradictions of other claims such as economics or migration. The price of shrouding the nation in uncertainty and potential economic turmoil is not worth paying for the sake of leaving the EU, only to face conditions that much resemble the status quo. The subjacent Brexit claim about sovereignty and democracy bears a strong irony as the Brexit debate is itself a construction by traditional parties to counter the electoral threat of UKIP.
Britain’s strongest hand is to stay and play a role in shaping the future of a prosperous peaceful Europe.
OUT, THE CASE FOR BREXIT
BY ERICA HUTCHBY, 03/05/2016
At the time of writing the European Council is yet to meet to discuss the United Kingdom’s settlement within the European Union (EU), as proposed by President of the European Council Donald Tusk earlier in February.
The proposal, which reinforces the current framework of reassessment of the EU-UK deal, emphasises the different statuses of Euro and non-Euro countries, and takes a stance of “clarification” (Tusk, 2016), is bound to accomplish very little. It doesn’t offer the changes needed to appease the Eurosceptics; it prohibits the questioning of any “principles on which the European Project is founded”(Tusk, 2016) and analogises a country’s future to the behaviour of an unruly football player, with ‘red cards’ and ‘emergency brakes’ as inconsequential blocking mechanisms.
Furthermore, remaining in the EU does not mean choosing stability and the status quo: the EU will not be ‘the devil you know’, as there is no status quo for an organisation whose core goal is to pursue “an ever closer union” (Lisbon Treaty, 2007). It is impossible to know what Europe will look like in the future: as the EEC developed into the EU, the future EU will be completely different to the EU the British people are called to choose or abandon in June. David Cameron has lost the opportunity to use the negotiations to achieve the best settlement for the UK’s future, as demonstrated by the fiasco of the key promises he pledged to defend in November 2015 (Cameron, 2015).
The discourse between Tusk and Cameron does highlight the main contentions of this debate:
Economic governance, competitiveness, sovereignty and immigration. I will therefore use these parameters to outline why Brexit is the only option.
On Economic Governance:
In basic terms, the EU costs the UK £18.2billion per year, the equivalent of running the NHS for two months (Department of Health, 2015) or half of England’s schools for a year (Department of Education, 2015). A country should be able to make these spending decisions in accordance with its priorities. Furthermore, whilst the UK managed to steer clear of the “flawed” (Begg, 2015) Euro, it was still affected by the aftershocks of European Central Bank (ECB) decisions. The arena of European economic governance is unforgiving and damaging by association, as it has been clearly demonstrated by the deficit crisis that hit Greece in July 2015.
To ensure the UK competitiveness is preserved, policies geared towards easing business transactions, supporting start-ups and assisting trade are necessary. However, EU regulation imposes an onerous red-tape requirement on businesses, which has cost £9,500 per minute since 2011 (Chorley, 2013). Furthermore, claims that Britain will be harmed by withdrawing from the EU’s agreements of free movement of goods and services are nonsense. In an era of globalisation, the UK will still be able to trade with European countries while striking exclusive deals with the US, China and many Commonwealth countries without the restriction imposed by European policies.
Britain prides itself of a democratic system that is emulated worldwide, yet by being part of the EU, representation, democracy and tradition are superseded by the European bureaucratic apparatus. An unelected commission proposes all EU legislation and can introduce regulations which are automatically binding, overriding the law of all member states. On these grounds, the UK has the fundamental duty, for the sake of its own democratic tradition, to oppose an organisation which can in no way be held accountable by individual British citizens.
The refugee crisis, and in particular the events at Calais (Culberston, 2015), has brought to the forefront the issues of immigration and highligted the fragility of British border control. Yet, the EU administration budget is still five times larger than the amount spent on Security and Citizenship to enforce the stability of European frontiers (European Court of Auditors, 2014). Nonetheless, no independent change is possible under current European legislations. To call for ‘Brexit’ on these grounds is not anti-European: British cosmopolitanism alone is enough to counter such an accusation, yet more autonomy of member states in controlling immigration policies is undoubtedly needed.
The entire debate on British membership in the EU comes down to considerations over the economic and political role that the UK can play within the global and European scene. It has been demonstrated, however, that by reducing its focus on its place in Europe and embracing a more open position informed by the values of freedom and globalisation, the UK will thrive in the world economy.
References – OUT
Ashworth-Hayes, S. (2015). The EU has shrunk as a percentage of the world economy. Full Fact. https://fullfact.org/economy/eu-has-shrunk-percentage-world-economy/
Begg, (2015). The UK in a changing Europe initiative. European Economic Governance http://www.esrc.ac.uk/files/research/the-uk-in-a-changing-europe/executive-summaries-of-the-europe-scoping-reports/european-economic-governance-begg/
Cameron, D. (2015). A new settlement for the United Kingdom in a reformed European Union. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/475679/Donald_Tusk_letter.pdf
Chorley, R. (2015). EU Business Regulations. Business for Britain. http://businessforbritain.org/eu-excessive-business-regulation-2.pdf
Culberstone, A. (2015). Theresa May announces new “secure zone” to keep migrants out of Britain. Daily Express. http://www.express.co.uk/news/uk/591018/Theresa-May-Calais-secure-zone-keep-illegal-migrants-out
Department of Education, (2015). Budget after 2015. https://www.aoc.co.uk/sites/default/files/The%20Department%20for%20Education%20budget%20after%202015.pdf
Department of Health, (2015). Resettlement at the Spending Review. https://www.gov.uk/government/news/department-of-healths-settlement-at-the-spending-review-2015
European Court of Auditors (2014). EU Audit in brief. http://www.eca.europa.eu/Lists/ECADocuments/auditinbrief-2014/auditinbrief-2014-EN.pdf#page=9
Lisbon Treaty (2008). Consolidated Text of the EU Treaties as amended by the Treaty of Lisbon https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/228848/7310.pdf
Students for Britain, (2016). Campaign Declaration. http://studentsforbritain.org/
Tusk, D. (2016). Letter to the Members of the European Council on his proposal for a new settlement for the United Kingdom within the European Union.