A Collaborative Europe?

JR Max Wheel

4 August 2016

Open Europe, the think tank, today floated the EEA route as a potential transitional measure for the UK whilst the country clarifies its post membership aims. This is a position that was proposed by Dr. Richard North (and others) pre-referendum as being a logical route, but it is slow and ponderous and falls far short of the “take back control” leaver stance as:

  • UK contributions will continue
  • Free movement of people will continue
  • EU law making will largely be the same
  • Free trade agreements can be negotiated in principle but EU regulations inhibit necessary flexibility

It has the merits of avoiding a direct clash with the Scots and Northern Irish voters, but as with all transitional arrangements they begin to take hold as a new “status quo” and they most certainly do not reflect the leave vote ambitions.

Article 50 is however so badly drafted as to be a near unworkable part of the Lisbon Treaty, presumably because it was never envisaged that in reality any member state would wish to leave, so it is there almost for completeness sake. It is also extraordinarily one sided, with any negotiation being subject to the Council and Commission acting as judge and jury. No trade or international agreement would put its interlocutor member in the “dock” or make it jump through so many hoops. This much should be made clear in negotiations. The UK has indicated it would not trigger article 50 until 2017, this is a key year with both French and German elections looming and with considerable possibility for upset. Since both the EU Commission and many member states resent the implicit threat to the “European Project” by the UK vote, there is a rawness to the current debate which inhibits proper dialogue. And dialogue is needed if the process is to be both facilitated to the benefit of all parties and to establish the necessary post membership collaboration whether on matters of security, defence, scientific research or similar cross border issues.

The Project itself is threatened by some serious internal disconnections of which the currency is the most serious and the democratic gulf between citizens and the EU governance entities. As Yannis Varoufakis, the former Greek Finance Minister has argued, talking of an EU democratic deficit is comparable to arguing  of an oxygen deficit on the moon- there IS no oxygen on the moon!

This political deficiency is however only part of the problem, the EU has evolved since the 1950s, when many of its ideals and aspirations were relevant e.g., the 4 pillars or freedoms:  without amendment, movement of people and capital especially, now look to be frankly unworkable and not just for the UK.

At the core of the EU is the Franco-German axis. This was always rather cynically designed as a German cart with a French rider. This quid pro quo, rehabilitating the German people following the horrors of war is a power game, where French diplomacy would triumph as the German economy recovered via the economic miracle. Far from being the end of the nation state  subsumed into a more “equable“ supranational body, there have been a series of brutal trade-offs between both parties, made explicit following the reunification of Germany. 1989 should be seen as a seminal year and not only for the EU.

What were the parties’ objectives? There was a trade-off between an enhanced global role for France in exchange for the curtailment of the monetary discipline of the Bundesbank and an increasingly dominant German economy. The genesis of the single currency was a naive ploy to force political union via economic means and in swapping a stable DM for a inadequately structured new single currency and the establishment of a “non-German” dominated Central Bank, the ECB. Like many other “orthodoxies” this hit the buffers with the crash of 2008, but a short backward glance to the behaviour of the Exchange Rate Mechanism in the late 1980s/1990s would have shown how dangerous this experiment is. This error was compounded by the eastward expansion of the EU to include countries who naturally enough wished to share in Europe’s democracy and economic opportunity, but whose level of development was markedly backward thanks to years of Communist or autocratic misrule.

The EU still has not undertaken the proper political calculus as to why Britain voted out, as it is a confused and multifaceted issue. A major albeit not sufficient reason is the stalled economic prospects of the many and the inequalities engendered by policy failure and rapid change. Equally important is the real sense that decisions are taken remotely and without consideration of societal consequences- immigration being the obvious one. Add to that the malign effects of globalization, the rise and rise of a wealthy and disconnected elite which has created a truly toxic brew roundly rejected by a significant part of the electorate. Over focus on Remain/Leave campaigning positions is both misleading: neither side emerges with any credit, that however is to miss the point.

The EU needs an overhaul and a redesign if it is to ever properly engage its citizens and to prosper, the UK needs and wants a collaborative approach to its European neighbours, whichever route offers the greatest real benefit to both-this is the prize and one is not at the expense of the other.