Following the launch of the Balance of Competences review of EU powers last week, the next major debate within the coalition looks set to be over Britain’s relationship with Europe. Nick Clegg has emphasised that the review should not be used as a way to exploit the eurozone crisis and carve out a special EU deal forBritain. However, many Tory eurosceptics will no doubt view it as a platform to push for a significant repatriation of powers, in the run-up to an eventual referendum on EU membership.
Membership of the EU has clearly become a major issue for the public, especially the perception that British business is being held back by burdensome EU red-tape. Many people wish to maintain free-trade with the EU but to opt out from many of its regulations. Tellingly, in a recent YouGov poll 48% of respondents said they would vote to leave the EU in a referendum, but this dropped to 34% if theUK’s relationship with the EU was renegotiated to ‘protect British interests.’
In truth, this position is simply untenable in today’s world. Free trade is no longer just about lowering tariffs; it is about achieving common product standards, upholding environmental and consumer protection, and ensuring that government interventions do not distort competition, all of which require an independent regulatory body. The idea that theUK could somehow maintain its free-trading relationship with the EU while opting out of many of its rules is a convenient myth, other members would simply ask why we should be entitled to so many unfair exemptions.
Meanwhile, if we chose to leave the EU the best we could hope for is a situation like Norway’s, accepting European regulations whilst having no say in how they are formed – or else we would just have to forego the massive economic benefits of European free trade. Our voice on the world stage would also be significantly diminished, making it harder to negotiate favourable trade deals with the world’s major emerging economies such as the upcoming EU-India free-trade agreement.
Of course, there are some areas where the EU has overstepped its mark and where the principle of subsidiarity must be reasserted. The Liberal Democrats have already helped to negotiate significant EU-wide reforms to devolve powers in fisheries policy, and to cut unnecessary red-tape on small businesses. Significantly though, such successes are best achieved by working together with our European partners, not by constantly trying to push for preferential treatment, which just leads to resentment and our being excluded from negotiations.
Ed Davey recently suggested that the Liberal Democrats should press for greater cooperation with the EU on tackling climate change and trans-national organised crime. However, there is another issue we can make progress on – the EU’s democratic deficit. A lot of the vitriol aimed at EU leaders stems from the fact that they are unelected and therefore seen as unaccountable to the public.
One improvement would be for each European political party to propose a candidate for Commission President in the run up to the European Parliamentary elections, as the Socialists and Democrats have already stated they will do in 2014. Each candidate would outline a manifesto and state clearly what they stand for, creating political debate and competition, and giving voters a real electoral choice over the direction of European policy. Furthermore, if the proposed idea of merging the Council and Commission Presidents into one ‘double-hatted’ role goes ahead, one single elected figure could help give the EU a more coherent leadership, as well as a more unified presence on the world stage.
The Liberal Democrats should therefore work with ALDE to nominate a candidate for Commission President in 2014, and campaign more on an EU-wide manifesto. While it is not inBritain’s interest to push for a fully renegotiated relationship with the EU, we can at least try to make its institutions more democratic, and hence more legitimate in the eyes of the electorate.
* Paul Haydon has recently completed an MSc in European Public Policy at University College London.
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36 Comments
Paul, interesting piece. However, many countries have a free trade deal with the EU. Even Mexico. See http://ec.europa.eu/trade/creating-opportunities/bilateral-relations/countries/mexico/. Why is it a “convenient myth” that this is beyond our capability, should Britain wish to go down that route?
As you say, exports would have to meet the EU’s product rules and we would no longer have a say over those, just as we don’t over the USA’s, with whom we manage to trade just as successfully. But there are of course upsides, not least redirecting billions in annual EU contributions to public services (£5.8bn this year alone) and EU rules not burdoning the vast majority of the economy that is not involved in exports. We can also continue to co-operate with the EU where it is in our interests to do so. My view is that this would be a better arrangement.
You mention Norway, but have you looked at the Swiss option? Also I think our historical links might be rather more favourable to negotiating trade deals with India than having to go via the EU. With our being a relatively small island, it’s easy to forget that Britain is something like the 6th largest economy in the world. That speaks for itself when it comes to trade.
On the democratic question, I would suggest that the existence of a European demos needs to come before positions, titles and institutions, if we are ever to have truly democratic decision-making at European level. Or the legitimacy will only be a veneer. At the moment, the EU’s development has been pushed way ahead of this by the political elite and that is not an acceptable balance.
It seems to me unlikely that Britain will remain the 6th largest economy for long. In 50 years I see global living standards converging so that wealth and trade rankings will come to look more like population rankings. This in itself will push the UK down the size rankings, making us more dependent on others’ decisions.
I also see world trade primarily between several free-trade areas with large populations, and a few smaller “independent” but relatively powerless nations whose economices will either be isolated or else in effect controlled by the decisions on standards and finance made in the larger areas.
“The idea that theUK could somehow maintain its free-trading relationship with the EU while opting out of many of its rules is a convenient myth, other members would simply ask why we should be entitled to so many unfair exemptions.”
If that is true then the answer is simple: we must leave.
The British public is not interested in being sucked ever further into political union, which can be the only way to legitimise the economic union you describe.
However, I’m not at all sure you are correct, it may well be possible to keep the Common market strictly under the suprnational gurdianship of the Commission while hiving off the broader eurozone economic convergence into more democratic structures for those nations that choose to remain in the fast lane.
But let me be very clear; the only way that the eurozone will survive is via a signifiant economic & political integration which Britain will NOT entertain, so you either come up with a clever way for Britain, Sweden and Denmark to retain a viable Commission dominated single-market, or we will leave.
A common market that becomes a plaything for the eurozone is not a viable proposition, but fortunately north-eastern europe views that potential with equal horror so they will work to find Britain a compromise.
@ Richard – “It seems to me unlikely that Britain will remain the 6th largest economy for long. In 50 years I see global living standards converging so that wealth and trade rankings will come to look more like population rankings.”
All the readings of the runes indicate that Britain will remain well within the top-ten for both GDP-nominal and GDP-percapita to 2050 and beyond. We’ll do just fine!
@Mike Hanlon I’m not saying we couldn’t maintain a free-trading relationship with the EU, but that if we did we would have to continue to accept the majority of EU regulations and make a contribution to the EU budget. The Swiss option is an interesting alternative, but ultimately it continues to apply the vast majority of EU law and also makes a significant contribution to the budget. Also, the relationship is pretty cumbersome and Switzerland has come under increasing pressure from the EU to automatically adopt the EU acquis in recent years, as in effect it currently retains the illusion of sovereignty whilst being a virtual member of the EEA.
It’s true that we could go it alone and negotiate our own trade deals, but the EU has significantly more leverage being the world’s largest single market and accounting for 20% of global GDP. And while we may still be the world’s seventh largest economy, that will inevitably decline in future as countries such as India, Russia and Mexico catch up.
I agree with you that there is an issue concerning the lack of a European demos that is unlikely to change in the short-term. However, having a more open political debate and democratic input might at least help give voters the sense that there is a real connection between their vote and the direction of EU policy.
I absolutely agree that the Lib Dems/ALDE should run on an EU-wide manifesto, with an ALDE candidate for Commission President, in 2014; MEPs tend to vote along party and ideological lines, so it makes sense for each party group to fight European Parliamentary elections on its own common legislative agenda. It would help break the tendency for European Parliamentary elections to be used as a mid-term assessment of the national government’s performance, and focus them on those issues that are actually discussed in the European Parliament. I think the lack of a European demos is partly due to the lack of coordinated campaigning by EU party groups. It is also due to the UK media conspiracy of silence over EU affairs, but this could also be broken down by the sight of parties campaigning on
*European* manifestos.
One thing that tends to be forgotten is how much power the European Parliament actually has (due to the Lisbon treaty). It can tell the “political elite” to s*d off, and did so earlier this month on ACTA, which had been negotiated in secret by the European Commission and waved through by EU national governments.
Any renegotiation of the UK’s EU membership is of course a separate issue officially from European election campaigning. Unfortunately there is every chance that the 2014 EP election will focus on this, even though MEPs have little if any power over it. If our European Parliamentary candidates are asked questions about UK membership, referendums and the like, they should always preface any answer with a statement that it is not part of the competency of the legislature for whcih they are seeking election.
Nice to hear that British planners still read runes, tea leaves, stars, tarot cards, consult mystics, crystal balls, …. a great way forward!
richard, let me introduce you to:
1. HSBC
2. The Carnegie Institute
3. Citigroup
4. Arbuthnot Group
http://jedibeeftrix.wordpress.com/2011/03/09/britain-in-the-world-%E2%80%93-a-long-slide-into-oblivion/
Would that be
1. the HSBC that is being investigated for money laundering?
2. The Carenegie Institute whose mission is to promote the US of A?
3. The Citigroup that is next in line after HSBC and Bob Diamond?
4. The Arbuthnot group that is so important that it doesn’t have a website?
@Richard Dean
“4. The Arbuthnot group that is so important that it doesn’t have a website?”
3 seconds on google:
http://www.arbuthnotgroup.com/economic_perspectives.aspx
Thank you Chris_sh. Google beats Bing. So that would actually be
4. The Arbuthnot BANKING Group, the “inclusive private bank that offers a carefully crafted expert private banking and … wealth planning and discretionary investment management service. Clients receive a bespoke service … by your Private Banker”
Bob Diamond’s next employer, perhaps?
http://www.arbuthnotgroup.com/AboutUs.aspx
yup, that is the very chaps.
since we love evidence based policy, are there any contrary reports of note that we should be aware of? 🙂
We should perhaps be aware that bankers have agendas that are not necesarily everyone else’s, and that their agendas can cause them to distort their findings and recommendations in ways that others might characterize as “lies”.
As indeed is being revealed through the Treasury Select Committee. Today Paul Tucker did not challenge the idea that “deliberate misrepresentation” by a bank may sometimes be code for “dishonesty” by bank staff.
sure, everyone has an agenda, that is why we seek multiple sources to corroborate primary evidence.
solid practice!
is there anything that is substantially contrary that might cause us to re-evaluate the sources above?
The idea that “redirecting billions in annual EU contributions …. (£5.8bn this year alone)” is an upside is not unchallengeable, and the idea that “EU rules … burden … the vast majority of the economy that is not involved in exports” is also open to question.
What are those billions actually doing? One of the things they may be doing is helping our export markets to grow. If so, re-directing them may actually cause us long-term damage.
What do those EU rules really do? One of things they may do is make industry safer for workers and more reliable for customers. If so, dropping them may decrease our quality of life by injuring more workers and making us tolerate bad products and services, which also further damages our export prospects.
A lot of the vitriol aimed at EU leaders does seem to stem from the democratic deficit, and it also seem to be fanned by politicians and businesspeople misdirecting blame away from themselves. Banks, of course, will just go with the flow.
“A lot of the vitriol aimed at EU leaders does seem to stem from the democratic deficit”
For sure, for those countries willing to embrace what the survival of the euro requires (political union), then democratizing eu governance goes some way to legitimizing it.
However, you first need the peoples of europe to embrace the concept of a common Demos, which I can readily see happening between Benelux, Germany, Austria, and perhaps Finland.
However, the British electorate wants none of this.
So talking about democratizing the EU (whilst also demanding a single economic entity), in reference to Britain is merely so much hot air.
The British electorate is being misinformed, misused, and misrepresented by the British politicians, media, and commentators. We should all campaign to correct this, and to free the people to see their best way forward.
Is this a false-consciousness argument, because i have to say i don’t have much truck with that?
The fact of the matter is the British public are quite content to remain British, and very averse to becoming european, so we won’t be joining the euro in the near future, and we certainly won’t be joining the enhanced political-union that is the only successful future for the single-currency.
Given that, we either ensure that there is a formalised two speed EU with the common market under the control of the commission on behalf of the larger group…………….. or we find some extra-EU solution.
I would opt for the former, but if it isn’t achievable then I will accept the latter, for the worst of all worlds is having common market policy dictated by the eurozone with us outside that decision-making group.
People who have been fooled completely often cannot see that, yes. They “don’t have much truck”. That is why we need to campaign hard to free people’s minds so that they can understand.
One of the interesting symptoms is that almost everyone who objects to Europe does so on the grounds that someone else objects to Europe! Hardly ever do they say why they themselves object. Usually it is the British people who are said to object. Or else some supposed “authority” that is cited, such as a bank whose agenda is not mentioned or even visible. Very rarely does anyone put forward anything like their own argument, rational or otherwise.
We are presently contracted to join the Euro when our economy has satisfied some convergence criteria. I suggest we bring this forward, and announce now that we will alter things fast and join within a year. This will save the Euro, since it will mean that if the London financial markets cause the Euro to crash, we will crash too, which means they will. As long as we keep our nerve and call any bluff, everything will be fine.
As well as safeguarding our economic futures for decades to come, we will reap the rewards of respect and gratitude that will lead to increased acceptability of our export products, as well as central particpation in democratic European decision making. And we will have taught the banks a useful lesson.
@jedibeeftrix I agree that the move towards greater fiscal integration in the eurozone and the emergence of a ‘two-speed Europe’ has massive implications for the future of the EU. There’s obviously a difference between the level of integration required for the proper functioning of the single market and for the proper functioning of the single currency. What we need are more formal parallel governance structures for the Eurozone, kept separate but in dialogue with the current EU institutions.
However, whatever form the future Eurozone takes, we still need to address the issue of the democratic deficit in EU as a whole. The governing of the single market also has huge political and redistributive implications, and I don’t think we need a common demos to encourage people to vote on policies more relevant to what the EU actually does. As Alex Macfie suggests, if parties campaigned more on such policies that would make a big difference. You could say there is no Belgian demos, or even Spanish demos, yet Flemish, Walloons, Catalans and Basque still vote on national issues during elections.
“One of the interesting symptoms is that almost everyone who objects to Europe does so on the grounds that someone else objects to Europe! Very rarely does anyone put forward anything like their own argument, rational or otherwise.”
Let me provide a breath of fresh air then:-
The crucial feature of indirect democracy is the perception of representation, the collective trust in shared aims and expectations that allows the people to put their destiny in the hands of another, safe in the knowledge that even if ‘their’ man doesn’t get the job then the other guy will still be looking after their best interests.
The manner in which this trust is built is the knowledge that you and ‘he’ have a history of cooperation, and that your respective families likewise have a shared social and cultural history of cooperation, all of which allows you to trust that when adversity strikes ‘he’ will act in a predictable and acceptable way.
What this is leading up to is this:-
I am British, I recognise a shared social and cultural history that allows me confidence in our shared aims and expectations resulting in a culture of governance and policy that is acceptable. I therefore [consent] to indirect governance……………….. rather than waging war against what i might otherwise percieve as illegitimate governance.
I am not european in any useful political sense, and thus i do not recognise sufficient shared aims and expectations to breed a system of governance and policy that is acceptable to me. I will not, therefore, consent to indirect european governance…… for it would, in my opinion, be illegitimate. That opinion would appear to be widespread in Britain.
In short; democratise the EU all you want, but i do not recognise a common Demos to whose collective will i am willing to submit via indirect democracy.
“However, whatever form the future Eurozone takes, we still need to address the issue of the democratic deficit in EU as a whole.”
Following on from my reply to Richard above; yes, by all means democratise the workings of the EU, our desire for harmonious cooperation and collaboration between european nations will be best served by the peoples of europe being content that the governance they [consent] to be ruled by is [both] repreentative [and] accountable.
The lack of both of those factors above is the reason for much of the discontent across europe, for the actions they are forced to accept are the result of a governance lacking legitimacy.
@JediBeeftrix. You have constructed a peculiar illogic which starts with the idea that you want to end with, that Euopean peoples are naturally diverse and antagonistic. In fact, British and European history of the last thousand years demonstrates your error.
In that history, some form of unification has been a core aim of almost every European country. William the Conqueror saw that unifying Britain with Normandy would be beneficial to both, and it was. What was the Hundred Years War about, if not unification? Why does the English langiage contain so many “foeign” words? For a thousand years we have wars to unify, essentially until the Second World War that led to the recognition that doing it by conquest was the wrong way. It is telling that very very soon after that, the UK and all of the victors promoted the idea of peaceful unificatiion, excemplified in the Europen Charter of Human Rights which the UK pushed for and signed as soon as it could.
So our shared European culture has always been about unification, and about developing the trust that is needed to work as one. It is only the intellectual failings of historians that have led to people being indoctrinated with the recent idea of irreconcilable difference. Perhaps this came about as the other, faulty conclusion of what the Second World War had meant. As a party our duty is to fight against this ignorance, and fight to achieve what our ancestors and parents have strived for for so long.
@jedibeeftrix
That is quite an optimistic view of British politics. To what extent do David Cameron and George Osborne really have a “shared social and cultural history” with the average voter? Also, do FTTP and an unelected Lords not create a democratic deficit in the UK? There is already widespread mistrust of British politicians and a sense that our votes do not really count for anything.
Similarly, the central issue with the EU is the perception that unelected and unaccountable Brussels bureaucrats are imposing their views on Britain without us having a proper say. In terms of shared aims though, a farmer in Somerset has more in common with a farmer in France than with a London hedge-fund manager. There are many political and social cleavages running across the EU, but these are not mobilised as parties continue to campaign along national lines.
Our duty, if one is to call it that, is to harmoniously cooperate and collaborate with our neighbouring countries in a manner improves the welfare and wellbeing of all the peoples involved.
None of this necessitates creating a single european state, or coercing people to adopt an invented european idenity as a mechanism to legitimise common governence.
Now, some european nations do recognise a sufficiently converged identity (resulting in sufficiently compatible aims and expectations), that they might succeed as a political union. And yes, we should encourage them to democratise those governing institutions in order that this new political union be as representative and accountable as possible.
However, the British people do not recognise a sufficiently converged idenity with any useful plurality of eu nations, and i sincerely doubt that all of the eurozone nations recognise that necessary sense of kinship with all of their euro partners.
So, while it is nice that we encourage whatever crawls from out the euro-wreckage to be as democratic as possible, what really matters is the British national interest, and in this instance that means ensuring that the common market does not become the plaything of the freshly converged survivor of the euro-wreckage. That is what should concern Lib-Dem MEP’s!
Another sort of ‘Democratic Deficit’ is the failure of the EU to have it’s accounts accounts passed by it’s auditors for many years. I am strongly pro -EU but I find the relaxed attitude of EU towards this situation impossible to defend.
@ Paul – “That is quite an optimistic view of British politics. To what extent do David Cameron and George Osborne really have a “shared social and cultural history” with the average voter? Also, do FTTP and an unelected Lords not create a democratic deficit in the UK?”
The real test of these things is how society copes in the bad times, not the good. The level of public anger and resentment at the political system as seen in Portugal or Spain is very different.to that seen in Britain. And yes, this in part results from the severity of the countries plight, but also from the perceived legitimacy of the body imposing the ill-tasting cure. Even Germany is not immune to this given rising dissatisfaction with the cost of the euro.
A single demos to which governance can be both representative of and accountable to, that is what matters.
Not a hard and fast rule, viz farmers and Osborne, but one that exists nonetheless.
I’m told that some UK government departments have similar problems with accounts! But that it doesn’t necessarily indicate fraud. The perceprion of a democratic deficit seems enhanced by so few UK MEPs telling the British public what is happening, why it matters, and how it is decided. The one that does appear on our TV screens often seems to be presenting something of a distorted picture!
@Leekliberal: What on earth makes you think you should have to defend EU accounting practice just because you are pro-EU?!!? I woul d hope that we would condemn ANY bad accounting practice, wherever it arose. You seem to have bought into the Eurosceptic propaganda that one has to either uncritically support everything the EU does, or oppose the whole concept of the EU. Just s/EU/UK/ in your sentence, and see if you think it would make sense.
Once upon a time, while on a sailing holiday in the Mediterranean, a beautiful young German princess fell in love with a handsome young Greek boat captain, and they decided to settle down and have a family. They chose a really cosmpolitan place where there were lots of houses that had been built a long time ago by French and Italian aristocrats. The local postmistress hailed from the Bavarian Alps, Lower Saxony to be precise, and the place seemed filled with angels, at least according to Wkipedia. The Russian mayor was actually a Swedish refugee whose Irish mother had married a Kenyan tribal chief and fathered a second son who has gone to America. All the cooks were Spanish. Everyone thought that only a palace would be suitable for a prince and princess, so they called the place Buckingham, and the rest in history. http://en.wikipedia.org/wiki/Anglo-Saxons
thos anglos eh, a troublesome bunch with their common law and free-wheeling capitalist ways:
http://en.wikipedia.org/wiki/Anglo-Saxon_economy
@Richard Dean
Gosh, what an excellent story, showing a country that can live in harmony not only with it’s near neighbours, but also with nations from across the world.
Just to think, most of this was happening over such a long period of time prior to the 1970s, so why does that country need the EU then to do something that it was obviously already good at, perhaps they should just leave and carry on with their global interaction rather than be stifled in such a small area of the world? 😀
One day, my dearly beloved sons and daughters, I shall tell you of the time of Great Convergence, when mystic giants with a thousand eyes walked the Earth, and all of the World’s Economies, from the small ones with pointed noses to the vast ones with vacant stares, flew into a huge commotion chanting
Debt and Deficit
Debt and Deficit
We gotta fix the
Debt and Deficit
There then appeared, out of the rising steam, the Marching LibDems, all sorts of the most wonderful people, from the gaily attired to the severe, from the bearded to the nude, led by two Great Wise Owls, Cleggie and CableDumpkin, and everyone with their heads held high and singing pied-piper-like an enchanting melodious message
Euro Euro Euro
Euro it makes sense!
The socialists began a Humungus Groan, the likes of which had never been heard before, but it soon revealed itslef to be Inconsistency and Internal Strife, and disintegrated into Laughable Confusion. The Blue People sighed as they melted, butter-like in the heat, the Green People celebrated the return of Oxygen, and the 27 stars of Europe danced in Ecstasy as the Dawn broke through and Growth rose up from his Hole and initiatied the New Age of Wonderful Prosperity!
a much better story:
http://lindleyfrench.blogspot.co.uk/2012/07/will-someone-please-save-europe-from.html
I don’t know, I’ve always had a healthy respect for the author of the Oxford book on War. Seems like a clever chap. 😉
Ah, a warmonger! 🙂 The military mind at work, not at all the same as the civilian one. Apologies if my plonker remark fell short of clear political insight. But I do wonder what’s going on when someone needs to make fun of a small nation like Belgium, when there is so much to gain from a sensible and constructive approach to joining the Euro.
And so much to gain by joining! The UK will soon be small economy compared to many others. If there is a floating pond/euro exhange rate, 40% of our exporters will face exchange risk costs that they would not otherwise pay, and our entire economy will be open to manipulation and attack by pound/euro speculators. This will also be true for pound/dollar exchange, but the euro/dollar rate involves larger currency blocks and so would seem to be less prone to these dangers. By joining the euro we will reduce export costs and speculator risk.
I am reading an Economist publication that describes how the Euro was a bastion of stability in the 2008 and early 2009 financial crisis. I suppose the subsequent revelations show that the internal controls were far too lax. But once these issues are satisfactorily addressed the Euro will be stronger than ever. I agree that the EU need to better address the democratic deficit and the role of competitive national interests within a coopertive framework, but that’s no reason to stay out. We need to be in there if we are to reap the benefits.