Britain can never rejoin the EU, it might join it.

I have passionately supported European integration since I first became aware of the European Economic Community around 1962. I am as die-hard a Remainer as you can find. Despite that, I consider calls within our Party asking our leaders to campaign for re-join to be naïve.

To re-join something means basically to restore what existed before. If I fail to pay my subscription to the Chartered Institute of Taxation, I will be expelled. If I pay the missing subscription in a reasonable timescale, I can re-join and do not need to take any membership examinations; examinations that must be taken by new members seeking to join.

To put it very simply, the UK has left the EU. If it wishes to become a member, it needs to apply for membership. The EU has a detailed process for dealing with membership applications, and of course every single EU member state has a veto.

If the UK does in future apply for membership, how is the EU likely to react?

For most of its historic period of membership, the UK was a somewhat curmudgeonly EU member. There were exceptions. For example, before she became anti-EU, Margaret Thatcher was probably the greatest European impetus behind the creation of the single market in goods. Overall, UK governments and most UK voters have not believed in the vision of an ever-closer union between the peoples of Europe that underlies the “European Project.”

That is why the EU has functioned noticeably better since the UK departed. (It also helps that the UK has provided the EU with a nearby “adversary”.)

If in future the UK does apply for EU membership, I would expect a rational EU to respond as follows.

Firstly, to insist that the UK signs up for membership in full. This requires signing up to join the euro in a relatively short and fixed timescale from which the UK cannot resile. When the UK was a member, much of its uncooperative behaviour derived from its monetary independence. (The other major source of uncooperative behaviour was the UK’s collective memory of imperial grandeur. The simple passage of time and generational change is slowly dealing with that problem!) Replacing the pound sterling with the euro is something I regard as a minimum level of commitment to EU membership by the UK. Similarly, I would expect the EU to require the UK to join the Schengen travel zone.

Secondly, to require evidence that the desire for the UK to have EU membership has widespread support within the UK and is not a transitory outcome of the UK’s peculiar politics. If there is a referendum, I think the EU should require an approval threshold of about 75%. Furthermore, if any major political party (meaning the Labour Party or the Conservative Party) opposes the EU membership application, or any of the devolved governments opposes the membership application, the EU should tell the UK “to get its act together” first and only then think about applying.

When do I think this might happen? In my view only when there is almost universal UK acceptance that Brexit has been an unmitigated disaster with no redeeming features. Given the speed of the UK’s decline post Brexit, this might be the case around 2030 or 2035. If we work hard, by then our Party might have succeeded in replacing the Conservative Party as one of the two major political parties in the UK!

* Mohammed Amin MBE is a member of the Liberty Network board. He is writing in a personal capacity.

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68 Comments

  • Chris Moore 22nd Jan '23 - 3:30pm

    You are absolutely right that there’s no easy way back.

    I note – in the previous discussion – the enthusiastic over-interpretation of limited evidence of buyers’ remorse in the electorate at large. As you say, we will need to have overwhelming acceptance that Brexit has been a disaster – not merely a negative, to initiate any step back into the institutions in Brussels.

    So far with the confounding impact of Covid, then the Ukraine War, it’s not clear to many voters that Brexit has even been a negative. I appreciate none of them turn up on this bulletin board; but remember, we are a political party: we need to win over Leave voters to make electoral progress; so we need to respond to their reality, not just have comforting consensus amongst ourselves.
    I regularly speak to family members and friends who voted Brexit. Some say, it’s going OK, others say, no, Brexit isn’t going well up till now, but that’s down to the Tories. And in any case, we now have control of our own decisions. For example, we could control our borders, if the government got it’s act together. before, we couldn’t even in theory. BTW none of the said friends and family are stupid, racist, uninformed etc. A fair number are themselves immigrants.

    This is the reality of opinion amongst Leave folk. Only a small minority have seen the ears of the wolf so far. That is to be welcomed. but we have a long way to go.

  • Jenny Barnes 22nd Jan '23 - 3:37pm

    While I voted remain, and deeply regret Brexit, I would not support joining the EU conditional on using the Euro. Loss of our fiat currency would be a disaster waiting to happen – see Black Wednesday when the UK had to withdraw from the EMS. Sterling was effectively linked to the DM and heavy speculation against that link caused the withdrawal. However, had Germany wanted to keep the UK in that system, they could have printed DMs and bought sterling till the speculators gave in. They didn’t. And then look what happened to Greece when they elected a slightly socialist government. We were well off with the deal we had, but it won’t come again.

  • There is zero chance of the UK public accepting the euro. Nor should it. Nor is it clear the EU would demand it. There would be huge benefit to the EU having the UK part of it again. There is no pan European drive for a USE but there is for cm/cu/fom and combining on human rights and security issues. The euro is not the future for the UK.

  • I would not accept the Euro or Schengen however it is not a requirement of joining the EEA, single market and customs union to accept those so that option should be the immediate priority in my view.

    I don’t think that arguments along the lines of “not every leave voter accepts Brexit is a mistake” are relevant. We are not trying to win every voter. Poll after poll suggests that the majority of voters now think Brexit was a mistake yet no other party except the Greens is talking about it.

    So now is the time to seize the moment. At the moment we are like a footballer who has an open goal but misses on purpose!

  • Lorenzo Cherin 22nd Jan '23 - 4:16pm

    A very good piece, from someone I know as realistic.

    Too many in politics are either one thing or the complete reverse.

    We need to be a centre ground party. Labour is now claiming it though half of that side are farther left of any in this party.

    It is the polarised attitude that leads to the sensible but sad conclusion of this article. The EU are also on one farhter side, of the UK.

    There is every reason to have a varied EU, like all my advocating for public services, being a mix. But oh, no way, far left, far right , want everything one way or the other.

    Therefore the UK shall not rejoin the EU.

  • Peter Watson 22nd Jan '23 - 5:22pm

    An interesting article, but what does it mean for Lib Dem strategy?
    If the party looks as reluctant to join/rejoin the EU as Labour and the Tories, why would voters turn to the party in the event of “the speed of the UK’s decline post Brexit”? How will the party distinguish itself from Starmer’s or Sunak’s vanilla versions of their parties in order to replace either one of them?
    Several years ago, someone posted on this site the analogy of three ice-cream sellers on a beach. The one on the left and the one on the right will always attract those customers from further out who can’t be bothered to walk past, and the closer the three come together, the fewer customers will be available to the seller in the centre. But it strikes me that this is only the case if they all sell the same ice-cream!
    Perhaps join/rejoin could be a chocolate sundae policy for Lib Dems! 🙂

  • Paul Barker 22nd Jan '23 - 5:37pm

    This article says clearly what I have been thinking. If we are asked, then We should say that we would like to see The UK in The EU again but we need to stress that its not going to be quick or easy & when we are asked if that includes Schengen & The Euro We need to say Yes.
    I find it hard to see why The eu would want us until The Tories are reduced to Third Party Or we get PR. As long as The UK might get another Tory Government the threat of a second Brexit will remain.

  • Agree with this article’ partial premise that for UK to become part of the EU again, it’s not simply about internal UK politics, but how things look from the EU’s perspective, which will have a higher threshold for the UK to join the EU.
    @Russell-the EU simply aren’t desperate for the UK to rejoin. Key Financial institutions have been leaving London and moving their Head Offices to Paris and Frankfurt, so London & the UK’s South East’s allure is starting to fade. There were senior people in the Commission like Michele Barnier who really hoped that the UK didn’t leave, partly knowing that it wouldn’t be a good economic outcome for either, and who were very much aware of the UK’s important structural contributions to the EU such as with the SIngle Market.
    But there’s a view, still common in the UK, that somehow the world owes the UK a living, and that everyone loves the Brits. The truth is the ones who understand the UK and have closest common interests are our neighbours, not former colonies of the Empire, which are cutting their own future path in the world rather than recalling past glories they don’t even actually always share like many Brits think they do.

  • James Fowler 22nd Jan '23 - 7:23pm

    I liked this article. I agree with all those who say that there is no chance of re-joining the EU, but in a generation’s time we could be a member of a much changed European institution probably not called the EU.

  • Brian Rogers 22nd Jan '23 - 8:21pm

    I think a key premise of this article, the idea that a weakened economy will dissolve all eurosceptic attitudes, is incredibly optimistic (from the perspective of wanting euroscepticism to end)

    This misreads the situation in 2 ways: 1) The consensus negative effects are forecast to be around 4% drop in GDP long term; this is bad but it just isn’t catastrophic enough; there are a number of countries that have been per-capita richer than the UK and now aren’t, (e.g. Italy, Japan) which haven’t had any revolutionary political shift as a consequence. 2) Brexit will be softened over the years, particularly with a likely Labour government and probably without much fanfare (so as not to upset Brexiteers); mini-deals that are likely to further reduce the negative impacts to a level that just isn’t socially harmful enough to shake off all euroscepticism, any time soon at least.

  • Mick Taylor 22nd Jan '23 - 8:36pm

    There is an argument that the party has not yet had about whether or not a fiat currency controlled by the UK is either desirable or necessary.
    In general I think the Euro has been far more successful than anyone thought it would be and is now a far more desirable currency to hold than the pound.
    The nostalgia for the pound harks back to times long ago when Britannia ruled the waves and the pound was a reserve currency, something it is not now. In my lifetime the pound has declined from something like $4.50 to the pound to $1.24 now. It has gone from being a strong currency to being a weak one,
    There is only one cogent argument for keeping a fiat currency and that is given by Modern Monetary Theory, which argues that a fiat currency allows the government to spend freely as long as it controls inflation. This is not a policy currently supported by the Liberal Democrats, who still talk about deficits and burdening our children and grandchildren with debt and who supported austerity during the coalition.
    I am not sure why Jenny Barnes is so in favour of the pound, but I suspect it is nostalgia rather than economics.
    I do want to join the EU and think it’s time our party was open and honest about that. We can’t do so wholeheartedly unless we first resolve our approach to the pound.

  • Peter Watson 22nd Jan '23 - 10:00pm

    @Mohammed Amin “The main goal of our Party is to get more MPs elected in the next general election …”
    When it comes to getting more Lib Dem MPs elected in the next general election, the Tories seem to be doing all the work 😉

  • Richard Bird 22nd Jan '23 - 10:56pm

    Agreed that “joining” the EU as a full m member would be a very hard path to complete in the forseeable future, due on the one hand to entrenchec public opinion in the UK, and on the other hand to distrust of the UK in the EU community.

    The most likely scenario. Is a new non-Tory government in 2024-5 and then steps toward a Swiss or Norwegian style concoction of adhoc agreements on trade, customs finamce and movement. This will repair most of the damage done by Brexit. Having repaired the damage, I believe there would be little incentive to apply for full membership. Ever.

    Regarding some of the comments:
    Article 49 has no requirement for a referendum although that would certainly be necessary internally.

    Joining the euro zone might be demanded but would never be enforced. Look at Sweden.

    On the other hand …. a cap in hand begging by UK to be re admitted would be 1. a powerfully propaganda boost for the EU project and 2. Mutually beneficial economically. Legally any single member could veto an application but the EU itself if keen on the idea could persuade any such member to agree to an application, for suitable ” recompense”.

    However if I had my way I would make any application subject to the right of the EU Parliament to expel any MEPs that behave like the parasitic UKIP trouble makers !

  • Colin Bloodworth 23rd Jan '23 - 2:12am

    Judging by the enthusiastic response to this subject it is clear that re-establishing strong ties with Europe should be a top priority for the Party. A firm and uncompromising position on Europe will pull many disillusioned voters from both the Tories and Labour.
    It will also attract a large majority of the 3 million or so new overseas voters who have lived overseas for more than 15 years and who will have the right to vote again thanks to the 2022 Elections Act which the Lib Dems supported.
    During decades of living abroad I took little interest in British politics until I saw the disaster of Brexit approaching. That’s when I joined the Lib Dems Overseas due to the Party’s strong pro-Europe stance. I could see perhaps more clearly from afar that it would be a commercial disaster, it would cause serious political problems for Northern Ireland and it would encourage pro-Europe Scots to seek independence. In short, the break-up of the UK as we know it today.
    Boris Johnson had the backing of Donald Trump who liked to see strong competitors such as Europe weakened.
    Worse, Brexit was music to the ears of Putin and no doubt emboldened him to think Europe was falling apart and would not interfere with his ambitions to restore his lost Soviet empire.
    Call it join or rejoin, if the Lib Dems are going to play a bigger part in British politics an aggressive and united front on Europe is the only way to go.

  • Joining sm/cu/fom is no brainer. Joining euro/shengen will never happen.

  • @ Mohammed Amin I’m afraid voters don’t vote for a vacuum.

  • Jenny Barnes 23rd Jan '23 - 1:58pm

    mick taylor “In my lifetime the pound has declined from something like $4.50 to the pound to $1.24 now”
    exactly. Now, before the Greeks joined the Euro, every year their prices went up, and every year your £ bought more Drax, so for the tourist, Greek prices stayed more or less the same and cheap. After the Euro, it became as expensive to eat out in Greece as in London. Maybe that’s positive?
    Anyway, l have no nostalgia for the £, but I certainly wouldn’t want my currency to be tied to the DM with no exit. Classic economics says that in this case, you can achieve the same ends by reducing pay rather than inflation, but public opinion – especially now – just won’t put up with that.

  • Peter Martin 23rd Jan '23 - 2:45pm

    @ Mohammed,

    “This is not the place to debate the pros and cons of European monetary union” ??

    This is a place where you are firmly linking any future UK EU membership to an acceptance of the euro and so EMU itself. So, I’m afraid I can’t make much sense of your comment.

    Accepting the euro wouldn’t be quite so bad if the dominant economy in the EU, Germany, wasn’t quite so mercantilistic. However, it likes to run a huge trading surplus. This means goods and services net flow out of Germany, but euros net flow back into Germany. Naturally the other euro countries run short, they can no longer issue their own currencies, their economies slump, and are forced to borrow them back to try to keep their economic wheels turning. This is nominally via the ECB , but really euros are from Germany and other surplus EU countries. At least this is the way German voters see it.

    This however is contrary to EU rules! So conflict arises. This is the reason, in a nutshell, why many economists argue the architecture of the eurozone to be fundamentally flawed. You will need to convince voters otherwise if the EU insists on some commitment to the euro, which I agree they almost certainly will.

  • Mick Taylor 23rd Jan '23 - 3:26pm

    @Jenny Barnes. “After the Euro, it became as expensive to eat out in Greece as in London.”
    I live in Greece and it’s most definitely cheaper to eat out here than almost anywhere in the UK. For example today I had chicken in mustard sauce along with mixed grilled vegetable for around £7.50. Even a large beer would only have added £2.65 to the bill. Find me anywhere half decent in the UK where you can do that?
    Certainly Greece had a struggle adjusting to the Euro and being forced to actually pay tax rather than continue the national pastime of tax avoidance, but I have noticed a distinct improvement in the Greek economy and a real pickup of restaurant trade over the past 3-4 years.
    As I said, the only doubt in my mind is the MME suggestion of the Euro limiting the government’s freedom to spend on services, because we would no longer have a fiat currency and since the party resolutely refuses to sign up to MME I don’t think that argument is relevant.
    So we’re left with nostalgia, never a sound way to make economic decision.
    What we LibDems have to do is think how we would sell the Euro not continue to defend a declining and evermore weak pound.

  • Jenny Barnes 23rd Jan '23 - 3:50pm

    “so we’re left with nostalgia”
    Oh no we’re not.
    whatever, I would not vote to join the EU if it was conditional on using the Euro.

  • Mick Taylor 23rd Jan '23 - 4:01pm

    @Jenny Barnes,
    So if we’re not left with nostalgia, please enlighten me as to what we are left with that justifies defending the pound.?
    I cannot understand your hostility, on no defined grounds to giving up the pound.

  • Peter Martin 23rd Jan '23 - 4:41pm

    @ Mohammed,

    Now that you’ve established that we would be joining rather than rejoining the EU, and I wouldn’t disagree , maybe you would like to write a future article on the merits and desirability of the Euro/ERM. This is a far more important issue. You seem to have an understanding of most of the pros and cons.

    The euro would work fine if the EU had one Federal government, with a sizable chunk of the the EU budget, to administer it. You say the USA Federal Government has about 16% of GDP. The US Federal Government also has political supremacy over the States. The EU would need to have the same political structure, but can you see German voters ever agreeing to that?

    You are right to link rejoining, or joining as you prefer, to the acceptance of the euro but you’ll need to show that the architecture is viable first and so far you haven’t done that.

  • David Howarth 23rd Jan '23 - 6:05pm

    In the interests of clarity it is worth looking at the precise wording of the accession criteria on the subject of economic and monetary policy and the euro. See https://neighbourhood-enlargement.ec.europa.eu/enlargement-policy/conditions-membership/chapters-acquis_en
    What the EU says is: “The acquis in the area of economic and monetary policy contains specific rules requiring the independence of central banks in Member States, prohibiting direct financing of the public sector by the central banks and prohibiting privileged access of the public sector to financial institutions. Member States are expected to co-ordinate their economic policies and are subject to the Stability and Growth Pact on fiscal surveillance. New Member States are also committed to complying with the criteria laid down in the Treaty in order to be able to adopt the euro in due course after accession. Until then, they will participate in the Economic and Monetary Union as a Member State with a derogation from the use of the euro and shall treat their exchange rates as a matter of common concern.”
    That is, new members do not have to adopt the euro. They simply have to put themselves in a position in which they could adopt the euro if they wanted to ‘in due course’.

  • “Government by fax” is not an accurate description of how the process works for EEA member states as the EEA Joint Committee has an input into EU legislation from an early stage. The UK joining would strengthen their hand.

    Of course it would be better to rejoin the EU if we don’t have to accept the Euro. Richard Bird makes an excellent point about Sweden and there is also the Czech Republic, a more recent accession state who have made no plans to join the Euro due to public opposition.

  • Paul Barker 23rd Jan '23 - 7:25pm

    Our Polling went down from August to November, after the boost we got from the last Byelection wore off. Since then we have been steady on 9%. If we get a Snap Election I would expect our average to rise over The Campaign, it usually does. Failing that I expect Our Recovery will be slow, maybe 2% a Year with temporary boosts confusing the picture.

    I don’t believe in silver bullets.

  • Peter Martin 23rd Jan '23 - 7:45pm

    @ Mick Taylor,

    “I cannot understand your hostility, on no defined grounds to giving up the pound.”

    The grounds are pretty much the same as they are for Canadians, who could in principle use the US dollar but instead choose to have their own dollar. Or the Kiwis who could use the Australian dollar but instead use their own.

    An ability to issue your own currency is possibly the defining feature of an independent state. Sure, a currency can depreciate in value but everything is relative to the level of inflation. A loaf may have cost a penny in years gone by but it would have taken a hour or more to earn that penny. Give me 2023 wage and price levels any day!

  • Peter Martin 23rd Jan ’23 – 4:41pm:
    [Mohammed says] the USA Federal Government has about 16% of GDP.

    It’s 25%…

    ‘How much has the U.S. government spent this year?’:
    https://fiscaldata.treasury.gov/americas-finance-guide/federal-spending/

    The federal government spent $6.27 trillion in FY 2022. This means federal spending was equal to 25% of the total gross domestic product (GDP), or economic activity, of the United States that year.

    …you’ll need to show that the architecture is viable first…

    Not even the euro’s architect, Otmar Issing, thinks it’s viable….

    ‘Now He Tells Us, Architect Of The Euro Says It Will Never Work – So Milton Friedman Was Right’ [October 2016]:
    https://www.forbes.com/sites/timworstall/2016/10/23/now-he-tells-us-architect-of-the-euro-says-it-will-never-work-so-milton-friedman-was-right/

    To make the euro work it is quite literally necessary (no, not desirable, or nice, but necessary) that German taxes pay Greek pensions. This is not something that is going to happen–therefore the euro isn’t going to work.

    ‘Otmar Issing on why the euro ‘house of cards’ is set to collapse’ [October 2016]:
    https://www.centralbanking.com/central-banks/economics/2473842/otmar-issing-on-why-the-euro-house-of-cards-is-set-to-collapse

    Realistically, it will be a case of muddling through, struggling from one crisis to the next one. It is difficult to forecast how long this will continue for, but it cannot go on endlessly. Governments will pile up more debt – and then one day, the house of cards will collapse.

  • Mohammed Amin 23rd Jan ’23 – 11:07am:
    The EU regards the Switzerland arrangements as so problematical that they are never going to do that again.

    Indeed. And those arrangements didn’t cover services, showing how little influence the UK had over EU trade policy when a member (the UK is the world’s second largest exporter of services). As with our other trading partners we can do much better by negotiating our own bespoke trade agreement…

    ‘UK kickstarts work on new trade deal with Switzerland’ [April 2022]:
    https://www.gov.uk/government/news/uk-kickstarts-work-on-new-trade-deal-with-switzerland

    Switzerland is already an important partner for the UK, with bilateral trade worth nearly £35 billion annually. Many UK businesses benefit from tariff free trade on most goods under our existing trade agreement rolled over from the EU, but the current deal does not cover services, which account for over half of our bilateral relationship.

    As two services powerhouses globally renowned for their expertise, both the UK and Switzerland are keen to negotiate an ambitious, unprecedented free trade agreement that will boost both our economies and show the world what is possible between two like-minded and innovative democracies.

  • Mohammad is basically right, the UK has missed the boat on “rejoining the EU”; that was only possible if the UK had acted before January 31st, 2020.
    The EU is now sailing on a course independent of the UK and will in coming years put in place things that it continental members see as being of benefit to them. Thus the UK will, if it desires, be joining a different EU – it might even have by then a single central bank (obviously not located in London) etc.

    I therefore think those who argue pro’s and con’s based on where the EU was when the UK was part of it and where it is now – directly after the UK’s departure are being a little disingenuous.

  • Excellent article about what is involved with joining/rejoining (not going to argue about semantics) the EU.
    Too many, even on the ,”Remain” side still have a UK exceptionalism outlook that thinks the EU should simply roll over and accept us back as before just because some in the UK want it.
    The EU members (and any member can veto a UK application) were scared by Brexit and will have no wish to let’s us back in until any chance of a rerun has disappeared. Also, for them, a positive outcome of Brexit has been to kill off anti-EU movements all member countries.
    The EEA is a cooperation between EFTA & the EU. As we are notbin the EU & not in EFTA, we can’t be in the EEA. We might be able to negotiate an agreement to access the SM/CU, either formally or informally, but that means we would have to agree to accept all the associated rules (including freedom of movement of workers) and any changes made by the EU in the future.
    Whatever road to getting back into the EU we take, it will be hard & long. We need to recognise that and not be fooled by those who say we can get back soon.

  • Mick Taylor 24th Jan '23 - 9:32am

    Dear me Jeff, US economists have been predicting the downfall of the Euro since it started and it’s still here 23 years later and is much stronger than the pound.
    Keep on taking the tablets mate, your analysis is flawed and relies on dodgy assessments by dodgy economists. I imagine you know that Friedman ignored all the data that didn’t fit his theories and he’s not alone in sidestepping inconvenient truths.

  • Leon Duveen 24th Jan '23 - 9:36am

    Great article and absolutely correct. We must face up to the fact that we are out of the EU and to join/re-join (I am not going to argue the semantics) we need to apply afresh and as part of the conditions for becoming a member again, we will need to accept the conditions of entry as apply now. That includes accepting the Euro & joining the Schengen Area within a defined timetable. As some of the comments show, I am not sure if even all Lib Dems are willing to accept that yet.
    What we must get away from is UK exceptionalism (prevalent among former Remainers almost as much as Brexiteers) that thinks the EU will simply do what ever the UK wants. It or its members won’t. Indeed, the big benefit of Brexit for the EU has been to virtually kill of the anti-EU movement across Europe, so there will be no rush to let us back in.

  • I suspect we will not be rejoining the EU anytime soon but common sense and less right wing bias, should dictate that we have a much closer working relationship than is being revealed at the moment, with our close allies!

  • Peter Martin 24th Jan '23 - 10:24am

    @ Mick,

    The euro started trading during the mid 90s when it was pretty much the same level as it is now. However the level of any particular currency isn’t an indication of its longer term viability. There are times when the pound needs to be lower to assist our export sector. The problem in the UK is that we have a “higher the better” mentality about the currency value whereas many countries choose to have a lower value, than they could have, to help their export sector.

    David Howarth, in an earlier comment, quotes the EU rules as: “……the independence of central banks in Member States, prohibiting direct financing of the public sector by the central banks…” The prohibition of direct financing is hardwired into the EU treaties yet it is routinely flouted by the intervention of the ECB in the bond markets of the deficit EU countries. It buys up Italian bonds, for example, in the secondary market to keep the price in the primary from collapsing.

    This is much to the consternation of the political right in Germany who see it as the ECB spending German taxpayers’ money to support the likes of Italy and Greece. So far the German courts have found enough wiggle room to prevent legal cases getting very far.
    The surplus countries are accumulating financial assets they can never realise and the deficit countries are accumulating debts they can never repay. So what happens when German taxpayers decide they have had enough?

    https://www.euractiv.com/section/economy-jobs/news/german-top-court-rejects-complaint-against-ecbs-bond-buying-scheme/

  • People who are continuing to assert that new member states *have* to join the Euro please do read David Howarth’s post and link above. Professor Howarth knows what he is talking about.

    Notwithstanding my comments re: the EEA I am increasingly convinced we should just call to rejoin the EU rather than any halfway house as it is a clear and easy to explain message.

  • In one of Mohammed Amin’s comments he gave a link to an article on the Euro in which he states that the USA Federal budget is about 17% of US GDP (25% according to Jeff) while the EU’s central budget is only 1.1% of EU GDP. And he points out that ‘the eurozone has much less scope than the USA for redistribution between regional economies that are performing well and regional economies that are performing badly’. He continues, ‘This means that a poorly performing region is likely to experience extended periods of high unemployment even though there may be unfilled job vacancies in well performing regions in other countries’. This is why it is not a good idea to be in the Eurozone. The Euro would only be acceptable if the European Central Bank was the ultimate guarantors of each nation’s national debt and can create more Euro’s when required like the Bank of England can with pounds , and the limit on government deficits was changed to 3% of GDP plus the expected decline in the economy. (So for example if it was forecast that a national economy was going to decline by 2% next year the national government would be able to run a deficit of up to 5%.)

    For me the price of unemployment in the UK for membership of the Euro outweighs any benefits to businesses that export to the Eurozone from being in the Euro. It is nothing to do with nostalgia, it is about how the economy is managed.

  • Lorenzo Cherin 24th Jan '23 - 1:39pm

    I think Peter Martin, Michael BG, are correct. It is not nostalgia it is reality that reveals why it is better to keep the pound.

    Funny how some can be so defensive of the NHS, disliking changing it or offering better utilisation of integrated private sector elements, but so radical about tearing up our economic independence in favour of a complete change. This party is conservative with a small c as is Labour often, say on pr or basic income.

    Labour under Starmer is now a party of realism and reality on the NHS and EU. As is this one under Ed Davey. If this party returns to its fanatical obsession with how great the EU is and at the moment Labour is obviously doind well, it is asking to be on two or three points in polls.

    Why debate that which is not going to happen, for reasons this excellent piece reveals, plus sensible comments.

  • Gordon Brown’s 5 tests are still the criteria for assessing UK entry to the Euro Gordon Brown’s 5 Economic Test for Joining Euro
    I expect Mohammed is right to say there would be no opt out should the UK reapply.
    I believe that the EFTA option is the most likely route for reestablishing a more stable relationship with the EU and one that the party should be promoting.

  • Barry Lofty 24th Jan '23 - 2:20pm

    It perhaps it is too obvious to state that we had our currency and much else until we through it away with the disastrous Brexit referendum!

  • Barry Lofty 24th Jan '23 - 2:54pm

    Apologies, should have checked before sending “threw it away”!

  • John Littler 24th Jan '23 - 6:24pm

    Personally I would find it very convenient and useful to join the Euro. For far better currency stability, less ability for speculators causing runs on the currency and shorting it, less bank charges and inconvenience changing money, but an economist friend tells me it removes one or two economic tools, although that means basically debasing the pound by producing more of it, such as QE, or borrowing more and again risking debasement.

    But Denmark and Sweden have stayed out of the Euro forever and Poland is no closer to going into it as a newer member. The EU is aware the public sentiments can be trouble and would not push the issue beyond the mañana principle.

    After endless austerity, public services falling apart, a lack of pay rises, shortages in shops, supply chains not working for factories, flat GDP and productivity, collapsed exports and investment, people are increasingly fed up with it. I suspect public opinion is ahead of the politicians and it is only FPTP voting and the way the remaining Leave support is spread that keeps Brexit alive, just, for now. It will end.

  • Adrian Bagehot 25th Jan '23 - 1:49am

    Part the First

    QUOTE
    But Denmark and Sweden have stayed out of the Euro forever
    UNQUOTE

    Is not Denmark effectively in the EURO (but has no say in Eurozone policy) although using Danish bank notes?

    Before the EURO, the Danish Krone was pegged to the Deutsche Mark, and is now pegged to the EURO at 1 € = 7.46038 kr +/- 2.25% in the ERM2 system.

    For the past 5 years the value of the krone has been kept between €0.1325 and €0.1345 although for most of the time the range has been the in the much closer range of €0.1337 and €0.1344.

    In order to maintain the band, the National Bank of Denmark lowers or raises interest rates in tandem with the changes made by the ECB.

    The Mises Institute (Austrian School) describes the independence of the Danish krone under current arrangements as only an illusion.

    Sweden did not join ERM2 following the Treaty of Maastricht, claiming that it was a voluntary requirement and not compulsory.

  • Adrian Bagehot 25th Jan '23 - 1:51am

    Part the Second

    It must also be remembered that in order to join the EURO, a member state has to first meet the convergence criteria required. Joining the EU (post Maastricht) indeed requires a commitment to convergence and adopting the EURO but the obligation lacks an enforceable timeline,, hence Poland is still on the journey at a speed of their own choosing.

    From the Official web site of the European Union:

    QUOTE
    The zloty is not yet within the exchange rate mechanism (ERM II).
    Poland does not have a target date to adopt the euro, but aims to do so as soon as possible. Adopting the euro is one of the top priorities of the Polish government.
    UNQUOTE

    A top priority since 2004 and still is nineteen years later; a goal still to be reached sometime in the future …

    I would suggest that it is the ability to devalue the currency as well as the manipulation of the interest rates which have been the real reasons why there has been so much opposition to the EURO from the economic naysayers on both the left and right of the political spectrum. Nothing to do with nostalgia about bank notes which have only had the monarch’s image on them since 1960. To get back to that 1950s vibe that is so beloved of Brexiteers, the image of Charles III should not be printed on the bank notes.

  • Peter Martin 25th Jan '23 - 6:36pm

    @ John Littler,

    “……it removes one or two economic tools, although that means basically debasing the pound by producing more of it, such as QE, or borrowing more and again risking debasement.”

    No it doesn’t. The ECB has been doing the same thing as the BoE and the US Fed. This has not pleased the German political right as mentioned in a previous comment. The difference is that the BoE and US Fed are at least under the democratic control of all those who use the £ and $.

    ” The EU is aware the public sentiments can be trouble and would not push the issue beyond the mañana principle.”

    The EU cannot wait around for ever. The EU needs to have one Federal government in charge of one currency. This is what works fine in the USA and would work well in the EU too. It isn’t realistic to leave it all to a central bank.

    “The Mises Institute (Austrian School) describes the independence of the Danish krone under current arrangements as only an illusion.”

    The krone can be decoupled from the euro just as easily as we decoupled the pound from the US$ in the early 70’s – if the Danish Govt chooses to. The loss of independence, caused by any currency peg, although not ideal, is nowhere near what it would be if the krone were to be replaced with the euro.

  • Peter Davies 28th Jan '23 - 10:27am

    The petition to have the consequences of Brexit

  • Peter Davies 28th Jan '23 - 10:28am

    debated has reached its threshold. Will our MPs take the opportunity?

  • Peter Hirst 28th Jan '23 - 2:54pm

    If our economic woes continue there will be an irresistable desire to rejoin. It will be a matter of survival as a democratic freedom loving country. The actual terms will be negotiable as previously. It will be as much a no brainer as PR is to increase the number of Lib Dem MPs.

  • john littler 28th Jan '23 - 10:54pm

    “BoE and US Fed are at least under the democratic control of all those who use the £ and $.”
    How is the BoE under democratic control? It was specifically made independent so that it could not be messed about with by politicians eager to manipulate the economy to meet electoral requirements. Who did they ask before stepping in to prop up UK pension funds with £60bn? Democracy would not work in this context.

    The Federal Reserve is also removed from the political pressures., so why should the ECB be made democratic. That would be counter productive.

    Your comment is predicated on the right wing view that the EU is not democratic while western nations are. The EU has a Parliament elected by PR, whereas the Uk Parliament does not reflect votes cast. The EU Council is elected heads of government. But the EU Commission cannot initiate legislation and is their Civil Service. It is appointed by an open process by their elected. Our Civil Service is a lot more closed and secretive.

  • Richard Bird 30th Jan '23 - 10:07pm

    @Mohammed Amin
    You wrote in reply to my post “the EU regards the Switzerland arrangements as so problematical that they are never going to do that again”. Who in the EU has said that? Adhoc arrangements are already being discussed for example re Northern Ireland and other regulatory issues. I don’t see how the size of the country concerned makes much difference to the principle.

  • Richard Bird 30th Jan '23 - 10:08pm

    @Mohammed Amin
    You wrote
    “The EU will want to be sure that the UK if admitted to membership is not going to start talking about leaving yet again, and therefore wanting rock-solid evidence of overwhelming popular support in the UK for EU membership.” Agreed. But since there was 67% support in 1975 I wonder what criteria could be applied to satisfy the EU next time. (!) In any case no UK government could conceivably make a move towards membership without an internal referendum. IF – IF there were to be a referendum, there would need to be thresholds set, such as 60% supermajority of the votes cast, or a vote equal to 51% in number of the entire UK electorate. The absence of such thresholds in 2016 due the ‘smoke and mirrors act’ by David Lidington in Parliament in 2015 is the reason why the Brexit farce occurred.

    I doubt that adoption of the euro would be a deal breaker for the EU. Sweden joined in 1995… and still using the kronor. What could be a condition is monetary support for the euro/eurozone, something that the UK was specifically exempted from, but may not be so in any new deal.

    However, most of this discussion is academic, at least the next UK government is established. I would hope for a LibDem/Labour coalition to get some common sense back into Uk politics.

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