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What is the EU good for and British influence

(4 Posts)
Photosythesis Wed 22-Jun-16 12:32:52

There's a lot of negativity about the EU all over the forum, often with good reason (problems caused by the Euro and so on). But what is good about the EU, what are some positive things that are happening and progress being made? Here's my attempt to distill some of it, plus an brief overview of the role of the Bureaucrats...

Sovereignity – what are all these laws and who makes them?

Despite frequent exaggerations, it's true that there is an important role played in the making of EU legislation by "unelected bureaucrats"- The European Commission – people appointed by our elected national governments and approved and scrutinised by our elected MEPs. The legislative job of the Commission is to develop concrete proposals for laws to implement the policy directions and priorities set by the national goverments. But these are just proposals - no EU legislation can pass without being voted through by the elected politicians, who can also amend them and request further proposals for legislation. The job of the European Court is to enable the agreed treaties of the European Union to be enforced when we or other countries are alleged to infringe the treaties we have signed up to.

When you look at lists of EU directives, you can see that they cover areas that are best tackled by our countries working together. By sharing some sovereignity in these areas, we have a net gain in control over many things that matter to us. A stronger economy also gives us more influence on the world. These directives can be put into a few categories, some into more than one:

Cross border issues like airlines, fighting international crime, anti-fraud, anti-money laundering, tax evasion, intellectual property.

There are single market rules like harmonising product standards to ease trade and improve safety and energy efficiency standards for consumers, and other rules to make the single market function more effectively to boost trade and economic growth.

Many things are aimed at preventing a race to the bottom by setting minimum standards in areas like environmental protections, employment protections, health and safety, pollution. Developed nations around the world face the issue of multinational corporations playing one country off against another for weaker regulation. There have been many high profile cases recently where the EU has stood up against monopoly abuses by American firms in particular.

There are also some miscellaneous directives such as implementing sanctions we all agreed to take against Iran and were very effective in bringing that country out from the cold.

Despite these worthwhile measures, Britain is widely acknowledged as one of the most lightly regulated developed economies.

Britain opted out of the Euro, as well as the Schengen passport free area on the continent, so our EU interests primarily concern the single market. We have various other opt outs such as in the areas of justice and home affairs (including asylum policy – and the Dublin rules allow us to return asylum seekers to their first safe EU country of arrival). We are also opted out of Eurozone bailouts – the Leave campaign tell a half truth to deceive the public into believing that we bailed out Greece last year. We have a very customised relationship with the EU, and everyone accepts that differing levels of integration is the only sustainable future for the European Union.

British influence

A major reason that the USA and other allies are so keen on us staying in the EU is because we are so influencial in shaping policies there. We have been the main drivers of EU environmental legislation, and led the EU negotiating bloc at the UN climate talks last year. British MEPs have chaired the powerful Internal Market Committee for the past 12 years. Many improvements to the single market that Britain has pushed for many years are in progress now including:

Completing the single market in services – overall we are net importers from the EU. We import more goods, but are net exporters of services to the EU. Non-tariff barriers to trade in services are still a big hindrance, so we stand to gain substantially if the European market in services is liberalised, as well as in the external free trade agreements that the EU is using its clout to negotiate, such as with America, Japan, Mercosur (the South American trade bloc), and India.
Digital single market – will help us sell our world leading creative services and telecoms.
Internal Energy market - increasing competition and improving efficiency, as well as better resiliance against any future winter gas crisis triggered by Russia
Reducing regulatory burden - especially for small businesses, as well as the 2014-20 real terms reduction in the EU's budget, both of which we pursuaded the rest of the EU to support
Capital Markets Union - to ease the movement of capital across the EU and increase investment in businesses and infrastructure to boost growth. Britain's EU Commissioner has responsibility for this area as well as financial services issues.

Trade deals with the rest of the world

We've heard a lot of stuff that we'll leave the EU and make free trade agreements with the rest of the world, but there's been virtually no discussion in the media about what's being done now.

I've attached a map of current and pending trade deals.

Through the EU we already we've just signed free trade deals with Canada and South Korea, removing 99% of their import tariffs (removing the non-tarrif barriers to trade even more important, and the more recent deals have more priority on removing services protectionism). We have trade deals agreed with most Commonwealth countries. Others are in progress, including with India, though that one is currently stalled with some outstanding issues.

A free trade agreement with Japan, the world's 3rd largest economy, is targeted for completion this year. A free trade agreement with the United States is at an advanced stage. Mercosur (the South American trade bloc) is a work in progress.

China is an important exception at present, but is a longer term ambition after the current EU-China Investment Agreement negotiations are complete.

It's not just quantity of trade deals that matters – it's quality. EU trade deals are far more ambitious than individual nations achieve. They take longer, are less certain to complete, though when they are completed, open up overseas markets faster and more comprehensively. Our combined economic clout with our neighbours in the European Union gets us better deals, opening up much deeper access to world markets and increased investment opportunities.

The EU, Britain and the world – a bigger picture

It's easy to take for granted the influence and economic clout that the West has on the world stage, but in the 21st century with the rise of China and other large countries and trade blocs, Asia and other regions are growing much faster than us, both economically and in population terms (Europe, unlike other continents, is projected to have a falling population this century). The key players in international negotiations in recent times are the USA, China, and the European Union.

With so many common values and interests with our neighbours, the whole point of European legislation is that there are benefits to be gained and problems that are best solved at a European level. A negotiating bloc like the EU gives us a stronger voice to further our common interests on a global stage. We would be leaving the EU just as many of the things Britain has been pushing for are coming to fruition.

A British exit from the European Union would not only be a massive step backwards from the progress we've made, but could also be very distabilising for the continent at a delicate time. If it results in a wider unravelling of the EU, we will not be insulated from the consequences, both foreseeable and unforeseen on a continent with a long and turbulant history.

Photosythesis Wed 22-Jun-16 16:12:59

And some thoughts on the economics

We would surely get some kind of post Brexit trade deal with the EU, but it will not offer the same ease of access as the single market, which goes far deeper than just removing tariffs. While we are net importers from the EU, we must ask do we want to risk making the trade deficit worse when we instead currently have the prospect of growing services exports, and consider that while 45% of our exports go to the EU, less than 15% of their exports go to the UK, and that any deal will require ratification by every parliament in the EU.

Each year of lower growth has a cumulative effect on the size of our economy and tax revenues. A survey of 100 economists by the Financial Times this year found that none believed our economy would benefit from Brexit in the near term, and just 8% thought we'd benefit economically in the long term by Brexit. A larger survey of 600 economists by Ipsos Mori found a similar consensus that Brexit would harm economic growth. Economists rarely agree on anything so much!

Survey after survey of businesses of all sizes, particularly larger employers, finds a majority in favour of remaining in the EU. It's not just those firms that export directly to the EU that will be affected by Brexit, but those in the supply chain too. It would be hugely disruptive to them and their investment plans, as well as to the UK's civil service and government dealing with enormous bureaucratic upheaval for years to come.

Photosythesis Wed 22-Jun-16 20:09:57

And some Immigration considerations...

5% of the UK population comprises other EU nationals, and half our net migration comes from EU countries: 184,000 people last year. Forecasts project a fall in the coming years. Eurozone unemployment has fallen from a peak of 12% in 2013 to 10% now. Hopefully high youth unemployment will follow this downward trend. The Eurozone is growing faster than us in the first half of 2016. In the longer term, Eastern European economies are growing faster than ours, reducing the pull factor.

In the UK we have an aging population because we live in a period of rising average life expectancies. This average won't keep rising forever, but for now we need some net migration. The "dependency ratio" currently is 3.2 working age people for every pensioner. That's projected to fall to 2.7 in the next 20 years even with existing migration projections.

If we do leave the EU, how much will immigration be cut given that half of net migration is non-EU and businesses and economic growth depend on it? 50,000 people fewer per year on average is 1 million fewer over 20 years, maybe 300,000 fewer homes. Population growth is inevitable and will require serious investment to manage, but we'll have a bigger economy to pay for the infrastructure investment needed. At least our population is growing less proportionally than the world in general, though interestingly, the Europe's population, unlike all other continents, is expected to shrink over the course of this century.

Photosythesis Wed 22-Jun-16 20:12:37

I forgot to mention that the Eurozone has grown even faster than the UK in the first half of 2016 according to the BBC post debate reality check last night. Here's the story for Q1 2016 at least:

www.cityam.com/240002/eurozone-grows-by-06-per-cent-in-first-quarter-faster-than-us-and-uk

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