Politics : European Union : Entry 10 : My Opinion

This is my entry and my opinion for staying or leaving the European Union. My next entry will be unknown. This is to be used as a guide to make a decision and to further discussion.

European Union

untitled

Introduction

I will be talking about the European Union and to see if I think the UK should leave or continue staying in the EU.

History

The EU is a unique economic and political partnership between 28 European countries that together cover much of the continent.

The EU was created in the aftermath of the Second World War. The first steps were to foster economic cooperation: the idea being that countries who trade with one another become economically interdependent and so more likely to avoid conflict.

The result was the European Economic Community (EEC), created in 1958, and initially increasing economic cooperation between six countries: Belgium, Germany, France, Italy, Luxembourg and the Netherlands. Since then, a huge single market has been created and continues to develop towards its full potential.

What began as a purely economic union has evolved into an organisation spanning policy areas, from development aid to environment. A name change from the EEC to the European Union (EU) in 1993 reflected this.

The EU is based on the rule of law: everything that it does is founded on treaties, voluntarily and democratically agreed by all member countries. These binding agreements set out the EU’s goals in its many areas of activity. [1]

Decision-making at EU level involves various European institutions, in particular the European Parliament, which represents the EU’s citizens and is directly elected by them the European Council, which consists of the Heads of State or Government of the EU Member States, then there is the Council, which represents the governments of the EU Member States, then there is the European Commission, which represents the interests of the EU as a whole. The European Council defines the general political direction and priorities of the EU but it does not exercise legislative functions. Generally, it is the European Commission that proposes new laws and it is the European Parliament and Council that adopt them. The Member States and the Commission then implement them.

The argument for staying in the EU:

  1. Jobs

Around 3.5 million British jobs are directly linked to British membership of the European Union’s single market – 1 in 10 British jobs.

Britain’s large, foreign-owned car industry would be particularly at risk. “The attractiveness of the UK as a place to invest and do automotive business is clearly underpinned by the UK’s influential membership of the EU,” said a KPMG report on the car industry. The financial services sector, which employs about 2.1 million people in the UK, also has concerns about a British exit. “The success of the UK financial services industry is to a large extent built on EU Internal Market legislation. To abandon this for some untried, unknown and unpredictable alternative would carry very significant risks,” said global law firm Clifford Chance in a report by think tank TheCityUK.

  1. Exports & investment

The EU buys over 50 per cent of UK exports (54 per cent of goods, 40 per cent of services). Over 300,000 British companies and 74 per cent of British exporters operate in other EU markets. American and Asian EU firms build factories in Britain because it is in the single market.

  1. Trade

The EU negotiates trade agreements with the rest of the world. Outside the EU Britain would have to renegotiate trade deals alone. While the EU is the world’s largest market, a UK outside the EU would not be a high priority for other counties to negotiate a trade deal.

The EU is the UK’s main trading partner, worth more than £400bn a year, or 52% of the total trade in goods and services. Complete withdrawal from the EU would see trade barriers erected, with car exports to the EU, for example, facing a 15% tariff and imports a tariff of 10%. “The idea that the UK would be freer outside the EU is based on a series of misconceptions, that a medium-sized, open economy could hold sway in an increasingly fractured trading system dominated by the US, the EU and China; that the EU makes it harder for Britain to penetrate emerging markets; and that foreign capital would be more attracted to Britain’s economy if it were no longer part of the single market,” the pro-EU Centre for European Reform said in a recent report.

  1. Consumer clout

British families enjoy lower mobile phone roaming charges, lower credit card fees, cheaper flights and proper compensation when flights are delayed or cancelled. These sorts of benefits could not be achieved by Britain alone.

  1. Clean environment

Through commonly agreed EU standards, national Governments have achieved improvements to the quality of air, rivers and beaches. Good for Britain and good for Britons holidaying or living abroad!

  1. Power to curb the multinationals

The EU has taken on multinational giants like Microsoft, Samsung and Toshiba for unfair competition. The UK would not be able to do this alone.

  1. Freedom to work and study abroad – and easy travel

1.4 million British people live abroad in the EU. More than 14,500 UK students took part in the European Union’s Erasmus student exchange scheme in 2012-13. Driving licences issued in the UK are valid throughout the EU.

  1. Peace and democracy

The EU has helped secure peace among previously warring western European nations. It helped to consolidate democracy in Spain, Portugal, Greece and former Soviet bloc countries and helped preserve peace in the Balkans since the end of the Balkans War. With the UN it now plays a leading role in conflict prevention, peacekeeping and democracy building.

  1. Equal pay and non-discrimination

Equal pay for men and women is enshrined in EU law, as are bans on discrimination by age, race or sexual orientation. This benefits Britain and British people who live in other EU countries.

  1. Influence in the world

As 28 democracies, and as the world’s biggest market, we are strong when we work together. Britain is represented in many international organisations in joint EU delegations – giving Britain more influence than it would have alone. The EU has played a major role in climate, world trade and development.

  1. Cutting red tape

Common rules for the common market make it unnecessary to have 28 sets of national regulations.

  1. Fighting crime

The European Arrest Warrant replaced long extradition procedures and enables the UK to extradite criminals wanted in other EU countries, and bring to justice criminals wanted in the UK who are hiding in other EU countries. It helps UK authorities work with other EU countries’ to tackle international organised crime such as drug smuggling, people trafficking and money laundering.

  1. Research funding

The UK is the second largest beneficiary of EU research funds, and the British Government expects future EU research funding to constitute a vital source of income for our world-leading universities and companies. [2]

  1. Economical preservation

An “amicable divorce” is a pipe dream, pro-EU campaigners argue. France, Germany and other leading EU nations would never allow Britain a “pick and mix” approach to the bloc’s rules. Norway and Switzerland have to abide by many EU rules without any influence over how they are formed and have to pay to access the single market. Negotiating a comprehensive free trade agreement could take years and have an uncertain outcome. And if Britain went for a completely clean break with the EU its exports would be subject to tariffs and would still have to meet EU production standards, harming the competitiveness of British business. The end result could be a trade war between Britain and the EU, some have warned, which could cripple Britain’s export industries. [3]

The Centre for Economic Performance, at the London School of Economics, says the worst-case scenario is a 6.3% to 9.5% reduction in GDP, “a loss of a similar size to that resulting from the global financial crisis of 2008/09”. The best case, according to their analysis, is a loss of 2.2% of GDP, although it does not take into account as wide a range of factors as the Open Europe study. [4]

  1. Immigration

Britain might have to agree to allow free movement of EU migrants as the price of being allowed access to the free market. In any case, pro-EU campaigners argue, immigration from the rest of the EU has been good for Britain’s economy. The UK’s growth forecasts are based, in part, on continued high levels of net migration. The independent Office for Budget Responsibility says the economy relies on migrant labour and taxes paid by immigrants to keep funding public services.

A lot would depend on what kind of deal was reached with the other EU nations. Britons may have to apply for visas to enter EU countries and those already living there may face integration rules, such as proving they can speak the language before gaining long-term residency rights. There would also be uncertainty for many EU workers now paying taxes in the UK – what benefits, if any, would they be entitled to?

The Argument for Leaving the EU:

  1. Democracy

The EU undermines British democracy – Because the European Parliament makes laws on an EU-wide basis, we are in the bizarre situation of non-British representatives making laws which affect the UK and likewise British representatives are helping to make laws affecting other member states. For many people opposed to Britain’s EU membership, this is a matter of principle – the UK should be governed by British representatives only and the only way to achieve this is by leaving the EU.

  1. Trade

Leaving the EU will not stop Britain from trading with Europe – A common argument against leaving the EU is that it will shut us off from the European market but this claim is not borne out by the facts. Iceland, Liechtenstein, Norway and Switzerland for example are not members of the EU but have access to the single market through the European Free Trade Association. Furthermore, the UK is a huge market for many EU member states so it would make little sense for European exporters to cut off such a large market.

The EU is not as important to British trade as it used to be, and continuing turmoil in the Eurozone will make it even less so. Even if Britain did not manage to negotiate a free trade deal with the EU it would not be as disastrous as EU-enthusiasts claim, argues economist Roger Bootle in his book The Trouble with Europe: “It would place the UK in the same position as the US is currently in, along with India, China and Japan, all of which manage to export to the EU relatively easily.” The UK would be free to establish bilateral trade agreements with fast-growing export markets such as China, Singapore, Brazil, Russia and India through the World Trade Organisation.

  1. Greater trade freedoms

Leaving the EU will allow the UK greater trading freedom – If the UK were to leave the EU, we’d be allowed to pursue our own wide-ranging bilateral trade agreements with other economic powerhouses such as the US, China, India, Brazil and Japan far more easily.

  1. Wasteful spending

The EU is wasteful – Vast sums of money have been spent on unnecessary and inappropriate projects such as £760,000 for a “gender equal” cultural centre which was never built, over £350,000 for a project to get European children to draw each other and £155,000 for a Portuguese golf resort. Of course, the UK government too wastes money but why subject ourselves to more waste than we have to, particularly in the age of austerity?

  1. No transparency

The EU is not transparent – Many EU laws are discussed and drafted in informal meetings held between the “trilogue” – representatives of the European parliament, European Commission and EU Council. No public records are published on the content of these meetings.

  1. Irrelevant

The UK does not need the EU to be relevant on the world stage – Supporters of the EU often argue that we must remain in it to stay relevant but much of our clout does not come from our membership of the EU. We are one of only 5 permanent members of the UN Security Council, we are members of the world’s most powerful military alliance in NATO and we are key players in the IMF and the World Bank. On the other hand, the EU’s Common Foreign and Security Policy is toothless and requires unanimity before new policy stances can be adopted. The EU is credible because states like the UK and Germany are members, not the other way around.

  1. Immigration

There can be no fair, controlled immigration policy while the UK is a member of the EU – Because of the EU’s free movement of people policy, member states are unable to place any meaningful controls on EU migrants, meaning that member states may only set a limit on the number of non-EU migrants that are able to enter the country. As a result, the UK has had to turn away skilled immigrants to the UK this year at the same time as being powerless to turn away non-skilled EU migrants. If you believe in controlled immigration, it can only be fair with Britain outside the EU.

Britain would regain full control of its borders, say anti-EU campaigners. UKIP wants to see a work permit system introduced, so that EU nationals would face the same visa restrictions as those from outside the EU, which it says would reduce population growth from current levels of 298,000 a year to about 50,000. This would create job opportunities for British workers and boost wages, as well as easing pressure on schools, hospitals and other public services.

  1. Defence

The EU has done little to ensure peace in Europe – It is often argued that the only reason why Europe has largely been at peace since World War II is because of the EU, but this ignores the fact that it was NATO and the American nuclear umbrella, not the EEC (as it was then known) which was responsible for stopping an East-West conflict during the Cold War, for example. Furthermore, the EU did little to stop the conflicts on its doorstep in the Balkans during the 90s. Even if the EU were to disintegrate, war between European states would be no less irrational and unlikely than it is now.

  1. Subsidies

The Common Agricultural Policy (CAP) – This policy is essentially a gigantic EU subsidy for the agriculture industry and takes up around 40% of the entire EU budget. Because the UK has a relatively small agriculture sector (approximately 0.6% of the economy compared to 3.6% in France for example) this means that CAP costs the UK rather than benefits it.

  1. More integration

For the EU to properly work, even more integration is required – The crisis in Greece demonstrates that for the EU project to really work, there needs to be complete political and economic integration. Only through passing even more powers to the EU Commission, can the union overcome many of its efficiency problems. However, further integration is not something many people in the UK are comfortable with, including this author. Free trade and the common market are good things but we must not let our country be absorbed into a “United States of Europe” where the European interest trumps the British interest. [5]

  1. Models of adoption
  • The Norwegian model: Britain leaves the EU and joins the European Economic Area, giving it access to the single market, with the exception of some financial services, but freeing it from EU rules on agriculture, fisheries, justice and home affairs
  • The Swiss model: Britain emulates Switzerland, which is not a member of the EU but negotiates trade treaties on a sector-by-sector basis
  • The Turkish model: The UK could enter into a customs union with the EU, allowing access to the free market in manufactured goods but not financial services
  • The UK could seek to negotiate a comprehensive Free Trade Agreement with the EU, similar to the Swiss model but with better access for financial services and more say over how rules and standards are implemented
  • The UK could make a clean break with the EU, relying on its membership of the World Trade Organisation as a basis for trade
  1. Jobs

There would be a jobs boom as firms are freed from EU regulations and red tape, say those arguing for an exit, with small-and medium-sized companies who don’t trade with the EU benefiting the most. In its recent paper, the EU Jobs Myth, the free market Institute for Economic Affairs seeks to debunk the claim that 3-4 million jobs would be lost if Britain left. “Jobs are associated with trade, not membership of a political union, and there is little evidence to suggest that trade would substantially fall between British businesses and European consumers in the event the UK was outside the EU,” it argues. “The UK labour market is incredibly dynamic, and would adapt quickly to changed relationships with the EU.”

  1. Economy

The best-case scenario, according to think tank Open Europe, is that the UK would be better off by 1.6% of GDP a year by 2030. That is assuming the UK carried out widespread deregulation after its exit and managed to strike favourable trade deals. The think tank adds: “A far more realistic range is between a 0.8% permanent loss to GDP in 2030 and a 0.6% permanent gain in GDP in 2030, in scenarios where Britain mixes policy approaches”.

The EU has limited power over tax, which is largely a matter for national governments. The exception is VAT, which has bands agreed at the EU level. Outside the EU, the UK would potentially have more flexibility. [6]

My opinion

There is good and bad arguments on both sides but for now at least I am for staying in the European Union although this might change nearer the voting day through more conversations and discussions.

References

[1] http://europa.eu/about-eu/basic-information/about/index_en.htm

[2] http://www.proeuropa.org.uk/twelevereasons

[3] http://www.bbc.co.uk/news/uk-politics-32793642

[4] Ibid

[5] http://www.nakedpolitics.co.uk/home/10-reasons-why-the-uk-should-leave-the-eu

[6] http://www.bbc.co.uk/news/uk-politics-32793642

Advertisements

Tagged: , ,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: