Since the EU heartland has not done well in economic terms over the last quarter of a century, particularly as regards both growth and full employment, those who most strongly advocate Britain's EU membership are not nowadays inclined to stress too strongly the economic case for our role in the EU. Instead, they concentrate on politics and social issues. They see the tide of history moving in the EU's direction and fear that we will lose influence if we are not on the inside track of an emerging world power bloc. Some of them fear the almost unchallenged dominance of the USA and believe that an alternative centre of influence is needed, especially in the light of the Iraq War. Others tend to admire the socially cohesive policies underpinning most EU economies, contrasting them to the harsher Anglo-Saxon model exemplified in the USA. All of them appear to share a sense that Britain cannot survive in safety and security outside the embrace of the EU. What should we make of these arguments?
One can only conclude, on reviewing the evidence, that the proponents of EU membership are wise to gloss over the economic arguments for membership. The EU economy, taken in aggregate, has now performed significantly worse in growth terms than the rest of the developed world for three decades. Unemployment has been a constant problem, peaking at over 10% of the insured population, though there is ample evidence that the real percentage of those willing to work but without a job is at least 50% higher than this, at something like 15% of the total potential labour force. Inflation among the euro-economies is higher than it is in almost all other developed countries. The fiscal balance is deteriorating in one Single Currency country after another, with major economies such as France, Germany and Italy being among the worst cases. The euro-economies desperately need a substantial reflationary boost both to revive internal activity and to help protect the world economy from inadequate demand and retrenchment. Instead, the baleful influence of the Stability and Growth Pact, though undermined by the unwillingness of major countries to obey its rules, still stops the Single Currency countries from expanding. At the same time, the European Central Bank, which has no other legal remit than to keep inflation as low as possible, refuses to provide the monetary boost which is so badly needed. In these circumstances, it is hardly surprising that attempts to improve the situation with doses of increased job insecurity, privatisation and cut backs have fallen on stony ground.
We should not forget that the main reason why Britain joined what was then the Common Market in the first place was because the original Six countries had been much more successful economically than we had been during the first 25 years after World War II. Unfortunately, just as we joined, their economic performance began its long deterioration. While a majority of the British people voted in 1975 to stay in what they were assured was no more than a Common Market, it is unlikely that they would have done so had they been fully aware of the political nature of what the leaders of the main constituent countries planned. What has actually happened, therefore, is that the supposed economic benefits of Membership never materialised whilst the political and social outcomes were those that the British people never wanted.
EU proponents argue that in the current globalised world, only large agglomerations of populations can hope to exert sufficient influence on the world stage. This argument is suspect, however, on a number of counts. First, power is largely a function of economic success, which is not currently the EU's strong point. Second, even if it is true that large populations carry more weight than small ones, the EU heartland population is set to fall dramatically over the coming decades compared to nearly all the rest of the world. Third, the larger the population, the smaller the influence of each component part of it. For these reasons, if influence in the world is what is desired, it is those with the greatest income per head who are much the most likely to accomplish this goal, not by any means necessarily those in the largest state. With a population of 59m and the fourth largest economy in the world, it is hard to believe that we need to merge our sovereignty with other countries to enable us to exercise as much control over our destiny in world affairs as we can reasonably expect to achieve.
There is little doubt that there is a widespread view among nearly all the political classes in the EU that there are dangers presented by the overwhelmingly powerful role of the USA in the world, with the EU being the obvious counterweight. Again, however, this argument is suspect on a number of counts. First, if the EU continues with its current poor economic performance while China continues to grow as rapidly as it has done recently, it will be the Chinese and not the EU which will become the second most powerful state in the world before long. Second, the lack of unity on many issues combined with its lack of military preparedness, leaves the EU in a far weaker position to exercise power on the world stage than more unified and cohesive states such as the USA and China. Third, it is not clear that a policy stance generally geared to opposing the USA wherever possible makes any sense especially for Britain. Many people on the left oppose the Iraq War and the current US administration's role in promoting it, but this should not blind us to the fact that we have far more in common, including culture, language and investment, with the USA than with almost any other part of the world.
A more immediately appealing argument is that the traditional emphasis in much of the EU on social cohesion, based on relatively well financed welfare states, is far preferable to the harsher and more competitive climate found elsewhere, particularly in the USA. Many people, not all of them on the left, would support this view. The high levels of unemployment and slow growth especially in the euro economies make it clear that their approach, as currently practised, has serious deficiencies, but even if this was not the case, there is no reason at all why we need the EU to choose such policies for us. The British people, through Parliament, are perfectly capable of deciding whatever balance they think is most appropriate between the benefits of market forces and the social and economic protection needed from their less attractive consequences.
If we were no longer within the EU, would we be bereft of influence in the world and incapable of securing our future? Clearly, we would find ourselves in a weaker position to control what happens within the EU, though as one of twenty five Member States our ability to exercise a high degree of influence on EU policies is already strictly limited. In almost all other respects, however, our capacity to control events would be improved. We would regain our seat at the World Trade Organisation. We would be much more likely to retain our current status at the United Nations. We would put ourselves in a much stronger position to achieve reforms in the way our agriculture and fisheries are run, thus ridding ourselves of the baneful influence both domestically and internationally of our involvement with two of the worst aspects of the EU, the Common Agricultural Policy and the Common Fisheries Policy. Free of the very heavy direct costs to Britain of EU membership, our economy would almost certainly do better, thus providing us with the capacity to achieve more rapid growth and increased living standards, which is the best guarantee of security for the future, as countries such as Norway and Switzerland have found.
All these consideration bear on whether the supranational organisation the EU has become, with its aspirations to become a European equivalent of the USA, really provides the successful model for the future to which Britain ought to bind itself ever more tightly. The EU's poor economic record, its declining population, its lack of cohesion, and its poorly managed military policies all make it likely that being involved in it will depress rather than enhance Britain's economic and political prospects for the future. There is also a deeper malaise. The EU has become a web of self-interest, leading to less and less efficient use of resources and worse and worse government. There is a simple reason for this: lack of democracy. Because of its bureaucratic structure the EU provides no real scope for electoral pressures to force out the incompetent and to insist on radical change. The consequences are everywhere to be seen in compromises achieved through horse trading which lead to far from optimal outcomes. The advantage of the nation state, with the unification of purpose that it can provide combined with representative democracy to keep its rulers under control, appears to have overwhelming advantages over the EU model of governance. That is why the choices which the British people are going to have to make over the coming period on the Constitution and the Single Currency are so important. Provided that both are rejected, hope will remain that Britain can forge a relationship with other states in Europe, inside and outside the EU, which will preserve our capacity for self-government and our ability to move ahead with the times. The alternative, which in practice means ever greater submission to the whims of unelected Commission functionaries, central bankers and judges at the European Court of Justice, is all too likely to involve our being enmeshed in a structure singularly poorly orientated to deal with the future. All the available polling evidence suggests that the British people are increasingly aware of the nature of the choices in front of them, with all the implications this has for the way in which they will very probably vote when the time arrives for a referendum on the proposed new Constitution - and perhaps one on the euro too.
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