The Paradox of the UK in the EU

On the 23rd June, Britons will be asked to choose whether the UK should remain a member of the EU or whether it should leave. Both the “Remainers” and the “Leavers” are now ramping up their campaigns to sway the electorate to support their respective views.

I support the “Leavers”.

In particular, I am very impressed by the efforts of two organisations that are promoting the “Leave” option. The first of these is the “Business for Britain” organisation.

Business for Britain was founded some time ago to support the UK government’s intention to seek a better deal for the UK in the EU. However, their support was conditional. If a better deal was not forthcoming, then they would rather see the UK leave the EU than remain in a flawed union. As it turned out, the outcome of the “renegotiation” of the UK’s EU membership terms has not been positive and therefore they have affiliated themselves to the ‘Vote Leave’ campaign.

Business for Britain based their position on an extensively researched report titled “Change, or Go” (link to the complete report or Introduction & Chapter 1 here). This comprehensive, half a million word, thousand page publication was produced by a group of top business leaders, aided by a dedicated secretariat of experienced researchers. The report sets out why the UK must not remain in the EU on the present terms since, given the push towards greater political integration, this development represents the worst situation for Britain. This is how they describe it:

“Britain’s relationship with the EU is at a crossroads. [Soon], the British people will have their say over whether their country should remain a member of the European Union. The upcoming renegotiation offers a once in a generation opportunity to deliver the change we need. ‘Change, or go’ has been written for those who, like the authors, have not yet made up their minds on whether Britain should be inside or out of the EU.

The current terms of membership are unacceptable and are only going to get worse. The extensive research outlines the changes needed for Britain’s EU renegotiation to be successful, and for the first time ever, lays the vital and long needed intellectual groundwork for how Britain would prosper outside an unreformed EU, should the EU fail to change.

The report is divided into three distinct strands:

  1. The challenges faced by the EU and the dangers posed to Britain by the current terms of its relationship with the EU
  2. The changes that Britain could pursue to address the deep rooted problems with the current terms of its relationship with the EU
  3. How Britain could gain influence and prosper outside of an unreformed EU”

Part one of the report discusses how the EU is likely to evolve in the near future, with the expansion of the Eurozone and the possibility that, in the absence of fundamental reform, Britain may end up being continuously outvoted by Eurozone members with a more integrationist agenda. Part two explains what a better deal between Britain and the EU could look like, while parts three and four show how Britain would gain both influence and prosperity outside an unreformed EU. Part five is the conclusion.

The second organisation that I wish to draw your attention to is called “The Leave Alliance“. This organisation has only recently been formed and its members currently are:

  • Campaign for Independent Britain
  • EU Referendum.com (Dr. Richard North)
  • Bloggers’ Army (Peter North)
  • The Harrogate Agenda
  • The Bruges Group
  • Futurus
  • Restore Britain’s Fish

The Leave Alliance are advocating that Britain can and should leave the EU according to a comprehensive and well researched EU exit plan called Flexcit. Summary here or the full plan here:

“Flexcit is the most comprehensive, up to date Brexit plan in circulation. We are united in the view that Brexit cannot be seen as a leap into the dark thus our side must present a comprehensive Brexit solution to overcome the Remain campaign’s message of fear, uncertainty and doubt.

In Flexcit we set out a six stage plan recognising the political realities of globalisation, regulation and matters pertaining to trade. We do not discuss why we should leave the EU. That is for others. Flexcit answers the question of how.

We argue that Brexit is a process, not an event and that Brexit represents an opportunity to reshape all of Europe. The three main alternatives to the EU have already undergone intense scrutiny in the media and online and do not stand on their own merit. Thus we argue for an interim “departure lounge” as the initial solution, in order to minimise the immediate impacts and reduce risks to business. The eventual destination is a new market settlement on a continental scale.”

“Flexcit

Leaving the EU will have significant geopolitical and economic consequences. But we believe it is unrealistic to expect a clean break, immediately unravelling forty years of integration in a single step. Following a vote in a referendum and an Article 50 notification, therefore, we have set out a process of phased separation and recovery.

In all, we identify six phases, where we expect progress to be driven by political realities. In the first phase, which deals with the immediate process of leaving the EU, we believe that an agreement must be sought within the initial two year period allowed in the formal Article 50 exit negotiations. We also believe continued participation in the EU’s Single Market will be necessary, for the short to medium term.

The six phases involve both short-term and longer-term negotiations, to achieve a measured, progressive separation. In the first phase, there are three possible ways of securing an exit. One is by rejoining the European Free Trade Association (EFTA) and trading with the remaining EU member states through the European Economic Area (EEA) – the so-called Norway Option. Another is the “shadow EEA” and the third we call the “Australian process”.

As part of the first phase, we would repatriate the entire body of EU law, including that pertaining to agriculture and fisheries. This would not only ensure continuity and minimise disruption – and reduce what would otherwise be massive burdens on public and private sector administrations – but also buy time for a more considered review of the UK statute book.

We would continue co-operation and co-ordination with the EU at political and administrative levels, where immediate separation of shared functions is neither possible nor desirable in the short term.

These would include the research programme (Horizon 2020), the Single European Sky and the European Space Programme, certain police and criminal justice measures, joint customs operations, third country sanitary and phytosanitary controls, anti-dumping measures, and maritime surveillance. Such issues are in any event best tackled on a multinational basis, and there is no value in striking out on our own just for the sake of it.

Thus, the first phase is limited to a smooth, economically neutral transition into the post-exit world. It lays the foundations for the UK to exploit its independence, without trying to achieve everything at once. Subject to a referendum to approve the initial exit agreement, the basic framework for a withdrawal could be in place within two years of starting negotiations.

Even before exit, we would initiate a second phase – the regularisation of our immigration policy and controls. This will include action at a global level to deal with the Geneva Convention on the Treatment of Refugees, and the 1967 Protocol, as well as at a regional level, modifying or withdrawing from the European Convention on Human Rights.

We then propose a third phase, which involves breaking free of the Brussels-centric administration of European trade, building a genuine, Europe-wide single market, with common decision-making for all parties. This will be fully integrated into the global rule-making process, through existing international bodies.

The aim would be a community of equals in a “European village”, rather than a Europe of concentric circles, using the Geneva-based United Nations Economic Community Europe (UNECE). It would become the core administrative body, on the lines proposed by Winston Churchill in 1948 and again in 1950. Thus, the exit from the EU becomes the start of an ongoing process, the means to an end, not the end itself.

Simultaneously, we identify and explore some key areas where independent policy development is required. In phase four, we make a start on this, the work eventually leading to divergence from the EU and the emergence of unique UK policies.

Phase five comprises a coherent programme to define our wider, global trading relations. This comprises eight separate initiatives. The withdrawal settlement has now receded, having served its purpose as the launch pad. The way is now open for the UK to break out of the EU cul-de-sac and rejoin the world.

Sixth, and finally, we embark on a series of domestic reforms, by introducing elements of direct democracy and the other changes embodied in The Harrogate Agenda – the immediate aim being to prevent ever again a situation where our Parliament hands over our powers to an alien entity.

In its totality – the sum of the parts being greater than the whole – we call our exit plan Flexcit, standing for a flexible response and continuous development. As a market solution, it is a process, not an event, and provides a template for the next twenty or so years of our national development.”

Notably, both of the above organisations are critical of the professionalism, methods and attitudes of many of the British politicians regarding this important decision facing the nation. A most surprising development has been that both the Conservative and Labour parties have divisions within each party regarding the Remain/Leave decision.

Which brings us to the subject of this post: The Paradox of the UK in the EU.

One key factor of Britain’s EU membership, that the “Remainers” and their supporters seemingly refuse to acknowledge, is that Britain and the EU have been, and continue to be, on divergent paths. And when you are in a “club”, supposedly working for the common good, this aspect of membership is never going to be beneficial for the “odd man out”.

Britain’s uneasy relationship with the European Union has a long history. In 1950 only 10% of Britain’s exports went to the six countries that formed the European Coal and Steel Community (ECSC). Concerns about the Commonwealth, the welfare state and sovereignty led it to miss the boat at the Messina conference in 1955, when the ECSC countries decided to form the European Economic Community, the precursor of today’s EU. Instead, in 1960 Britain cajoled six much smaller European countries into forming the European Free-Trade Association (EFTA). But in 1961, a Tory government under Harold Macmillan, impressed by the EEC’s superior economic performance, decided to submit the first of several British applications to join the EEC. Britain was eventually admitted in 1973 under Edward Heath.

However, from the start, Britain constantly sought to obtain exclusions from the various provisions of the treaties that were concluded and that eventually formed the basis of the EU.

  • All EU member countries must join the Economic Monetary Union and are expected to follow through to the final third stage that culminates in the adoption of the Euro as its currency – but not Britain!
  • All EU member countries are expected to be part of the Schengen Agreement – but not Britain!
  • All EU member countries are expected to sign the Charter of Fundamental Rights of the European Union, a part of the Treaty of Lisbon – Britain has not yet signed!
  • All EU countries are expected to comply with legislation regarding the “area of freedom, security and justice” – but not Britain!
  • In 2011, Britain vetoed the “fiscal compact” EU treaty that would confer rights of European institutions to enforce budgetary policy in countries breaking the euro’s debt and deficit rules, as well as quasi-automatic penalties for delinquents. All other EU countries agreed to the new rules, Britain did not!
  • New EU banking rules agreed in 2014 – Britain exempted!
  • When the Eurogroup meets to discuss and decide Eurozone economic policy, something which has an important impact on all EU member countries, Britain is NOT invited!

Treaty opt-out is a unique kind of defection from international negotiations. On the one hand, it is not a failure of the negotiations altogether that precludes the conclusion of a new treaty. Most opt-outs were negotiated at the various IGC summit meetings when any new treaty among the Member States was finalized. Indeed, opt-outs are usually given in order to allow for the complete ratification of the new treaty.

On the other hand, the existence of an opt-out indicates a failure to unanimously conclude a treaty between all the Member States on a specific integration policy. It means that at least one EU Member State defects from a new common policy, is exempted from it, and is not obliged by the community decisions and legislation in this field for an indeterminate period of time.

The negative side of opt outs is obvious. The unity of the integration process among the Member States is discontinuous and it creates “Europe á la carte”, a menu of integration policies from which Member States can “pick and choose” in which policy field to participate and in which to stay out of. Such a polity tool stands in contrast to the most sacred principle of European integration process – the Acquis Communautaire – the entire body of EU law, which obliges all Member States and binds them together within the EU. Opt-outs fracture this unity, and decrease the level of integration from common to all Member States to common only to most of them.

The positive side of opt-outs is stressed less. Opt-outs enable the rest of the Member States to advance in the integration process. If an opt-out would not have been given from a specific policy field, then the leader of the Member State who requested it would have had the power to veto the policy. By vetoing it, the integration process would then not advance in this field. Therefore, although an opt-out is undesirable, it does assist in advancing the integration process.

Moreover, the UK under the leadership of David Cameron is seen as a wearisome antagonist across much of the continent, having frustrated Bulgarian and Romanian governments over his anti-immigration rhetoric, spurned Southern and Eastern Europe with his efforts to limit the EU budget, and obstructed Eurozone consolidation when he wielded the veto over the “fiscal compact”. George Osborne, the Chancellor of the Exchequer, has attracted similar ill-will through his opposition to EU plans for a financial transaction tax, a cap on bankers’ bonuses and hostile rules on bond trading.

The UK has openly expressed concern about its current terms of membership, some of which are directly connected to the euro crisis and the resulting uncertainty about the structure of the Eurozone and the EU. These include Britain’s contribution to the annual budget, which is perceived to be too high; the repatriation of powers across a wide range of areas, including labour-market rules; and the possibility that the Eurozone will behave as a single entity, thereby undermining the single market and the EU. Ideally, Britain wants to continue to remain outside of the Eurozone but wishes to have a veto over major decisions taken by its members.

The recent renegotiation deal on the UK’s European Union membership is a package of changes to EU rules. This deal was agreed to by the leaders of all EU member countries on 19 February 2016. However, there is a strong feeling among experts that none of these changes will have any effect unless amendments are made to the existing treaties or a whole new treaty is agreed to with these “opt-outs” included.

Will-the-EU-deal-stick

One area is specifically important since it goes to the very fundamental objectives and aims of the European Union. The proposed new British EU deal would exempt the UK from aspiring to “an ever closer union among the peoples of Europe”. This phrase has a strong symbolic political impact, but has little or no legal effect. Saying that it no longer applies to the UK doesn’t change anything about how the EU works, or the powers that it has.

“It is recognised that the United Kingdom, in the light of the specific situation it has under the Treaties, is not committed to further political integration into the European Union. The substance of this will be incorporated into the Treaties at the time of their next revision in accordance with the relevant provisions of the Treaties and the respective constitutional requirements of the Member States, so as to make it clear that the references to ever closer union do not apply to the United Kingdom”

The new deal also implies three new EU laws, all dealing with the free movement of EU citizens (the emergency brake on benefits, the status and rights of EU citizens’ non-EU family members and export of child benefits).

For those proposals to be passed, they must be approved by the EU’s Council (by a qualified majority) and the European Parliament (by a majority of the vote, under most variants of the EU legislative process).

How have things ended up like this?

The EU wanted/allowed Britain “In” because Britain, being one of the trading and financial powerhouses in the world, needed to be “managed”, much like what France did to West Germany in the European Coal and Steel Community (ECSC) in the 1950’s. In addition, the British “membership fees” would add some considerable funds to the EU coffers. To gain these benefits, the EU was prepared to grant Britain a set of privileges that no other EU country got.

Britain, on the other hand, thought that they would miss out on some future benefits if they stayed outside of the club. But they were never committed club-members from the start. Now that things in the EU are not going so well anymore, the British politicians believe that they can choose to opt out of anything that they don’t like, while reaping the benefits (if any?) of the things that they do like!

So it all boils down to this – Britain does not fit properly into this EU “club” and they have no intention of doing so either.

In February 2016, Martin Schulz, president of the European Parliament gave a speech at the London School of Economic. He painted an honest but gloomy picture of some of the challenges facing the EU. He was also trying to re-assure the British that their concerns would get a positive hearing at the European Parliament (ha!ha!..big deal!). Whilst he was trying to make the case why being in the EU was such a good thing, he was also stressing where various EU “red-lines” might be:

“……This is why personally I am a strong supporter of the UK remaining in EU. And this, despite the fact – and I admit this quite frankly – that the British often test our patience and good will with their continuous demands. They are demanding. They push hard. They insist. They just don’t let go. Many of my colleagues say behind closed doors: “Don’t stop a rolling stone. If the Brits want to leave, let them leave.”

I do not support this line that just because the UK can be frustrating it would be in our interest to let it go. I believe we need the UK to make the EU stronger and better. And to make something stronger and better sometimes it’s necessary to push hard and be critical. When the UK says it wants to make the EU more democratic, more transparent, more competitive and less bureaucratic – I am in!

Anyone with ideas on making the EU better is pushing on an open door with the European Parliament Anyone who comes with proposals which are in the best interest of all is welcome with open arms. But proposals which cater to narrow self-interests, risk undermining the common good, or would set dangerous precedents for a Europe à la carte will meet with resistance from the European Parliament.

Earlier this week, President Tusk presented his paper, which will serve as a basis for the UK’s renegotiation. We are now studying it carefully. As the saying goes: the devil is in the detail.

Therefore, I want to raise my concerns not in some bid to be sensationally controversial thereby putting the European Parliament centre stage. Rather, I do this because the European Parliament needs to see its concerns addressed early on to avoid a serious roadblock later on when legislation will need to be debated and adopted in the European Parliament.

The European Parliament stands ready to act as an honest partner in the renegotiation process. That being said, there are concerns and we will defend the fundamental principles and objectives of the EU.”

Soon we will see how Britain intends to deal with this paradox that they have found themselves in.

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About Peter Smith

A "foot-soldier" in the wider Post Capitalism Movement. First task - keep spreading the words of change, hope & inspiration.
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