United States of Europe?

A United States of Europe has been advocated for centuries as a means of preventing European War. Even after the US Civil War demonstrated that war between federated states was by no means impossible, prominent European figures continued to argue for such a project.

The devastating wars of the twentieth century gave fresh impetus to the idea, and in the 1940’s the federalists effectively gained the upper hand over those who favoured looser associations such as the Council of Europe and EFTA. Recognising however that their ideas were well ahead of European pubic opinion, they agreed to a step by step approach towards “ever closer union”. The most recent step was the Lisbon Treaty of 2007, which effectively reintroduced the previously down-voted European Constitution under another name. It is under Article 50 of this constitution that the UK is currently negotiating withdrawal from the EU. A number of notable politicians have endorsed a United States of Europe in recent years.

However recent years have also seen a significant push back against the centralising tendencies of the European Commission in particular. Heavily indebted members of the Eurozone have been forced to accept major deflationary measures despite consequent heavy unemployment and popular discontent. Migratory waves have placed the open borders Schengen system under intolerably heavy political strain. Nationalist political forces have grown stronger in various member states.

To all of this the Brussels answer is more Europe, not less. For example the single currency won’t work properly without a common fiscal policy and to save the single currency from the pressures it has come under we must therefore remove the individual fiscal freedom of member states. The absence of a popular will for this is not considered an obstacle.

To some, European federalism is yesterday’s answer to yesterday’s problems. Aloof, remote government is no longer acceptable to populations who, in the information age, are far more in touch with alternative thinking on how their needs may be met.

This is not to say that the ideal of fraternity is not a fine one. However, if fraternity is to be realised, ways need to be found of making it compatible with liberty and democracy.

Quora Question: Why did Britain vote to exit the EU?

EU organisation diagram

I must reduce the number of questions I answer on Quora. One of these days I need to write something somebody will pay for. But meanwhile:

I can’t speak for my country.

I personally think the proximate cause was the unwillingness of the EU during Cameron’s negotiations to offer even minimal gestures towards reforming those policy areas that raised concern in the UK. They did this in the full knowledge that Cameron needed a deal he could sell to the electorate. Instead, he was humiliated. After a widely-derided effort to suggest that he’d obtained worthwhile concessions, he effectively had to drop the whole subject of the supposed reforms from the referendum campaign.

In respect of immigration, the critical issue was the way the economically-unsound idea of free movement of people had quietly replaced the economically-sound idea of free movement of workers in EU treaties. The latter is about allowing factors of production to move to areas of gainful employment; the former only makes sense as part of a political project and throws intolerable burdens on to the public and social services of richer member countries. It’s worth noting that other members subsequently adopted restrictions they’d refused to Cameron.

Let us also for a moment consider the alternative to the UK leaving. Remainers argue their position was the status quo; it was not. The EU has two major projects that define its objectives; these are the Schengen Agreement on open borders and the Euro single currency. The UK had already decided to opt out of both. We had no influence on these two central issues. Hence we could only ever have been a fringe member going forward.

In particular the Eurozone members collectively outvote the non-members in the EU. They meet together, without the non-members, in order to agree a common position before EU Council meetings. One Eurozone meeting even decided to commit EU funds to a bailout scheme despite the UK, a major contributor to EU funds, not being present at the table.

In summary, I rather think the EU left the UK.

Enemies at Home and Friends Abroad

Setting Sail

One might have hoped the UK's  triggering of  Lisbon Article 50 would at least put a stop to Cassandra-like prophecies of doom at home. Surely the country would come together to make the best of the situation, like it or not?

Too much to hope for, I fear. The Scottish Government still wants to undermine the UK's negotiators with plaintive noises off, while many Remainers seem far more anxious to be proved right than they are for the country's wellbeing.

It might help if Remainers remembered the referendum campaign featured a dodgy prospectus on both sides and that Leavers weren't all ignorant and gullible; in fact we included several high-powered economists. The surging exports and solid economic growth since last June don't really resemble the catastrophe Remainers predicted, nor was a punishment budget required.

Moreover it would make more sense complaining about the Brexiteers' failure to deliver if the Brexiteers actually controlled the government, which they don't.  When did Theresa May promise loads of money for the NHS?

Let us consider the two biggest projects of the EU. (Since we opted out of both of these, we could only ever have been peripheral members henceforward anyway.)

• The Euro is an economic disaster which can't be admitted because of the political fallout that would result, so they just let it cause thirty percent unemployment and chronic financial crisis in southern Europe instead. If we lived in Greece we might learn what it really means to have something to feel pessimistic about.

• The Schengen Agreement is collapsing under the weight of uncontrolled migration and frontier fences have gone up all over Eastern Europe.

I have said before that political will is not enough to support a project to link so many economies by a common currency. The fudging of membership criteria did not begin with Greece, it goes right back to the foundation of the single currency when Italy's debt was almost twice the permitted percentage of GDP and France only qualified for the fiscal deficit criterion by a one-off privatisation of Thomson.

The point politicians failed to appreciate then and now is that the Eurozone membership criteria were not mere inconveniences to be circumvented but genuine economic convergence indicators. If you link divergent economies by a single currency you deprive weaker economies of the disequilibrium-corrective possibilities offered by the balance of payments and by currency devaluation, leaving only rising unemployment to provide a quite inadequate escape valve.

This is why it is not just Greece that has experienced severe dislocation but also Cyprus, Italy, Spain, Ireland etc. Even France has suffered. Although Germany has seen benefit from an undervalued currency it is now paying the price in terms of ever-increasing transfers to the hopelessly indebted zone members.

Does anyone really think the EU will return to being an economic powerhouse anytime soon? On the other hand outside the EU we have huge potential to develop new trading relationships with parts of the world that are enjoying rapid growth. The UK is not trying to make enemies or wishing ill to the continuing EU. We are simply seeking a wider circle of friends.

Though peevish voices in Europe may declare the UK must suffer 'pour encourager les autres' it is to be hoped that economic sanity will be allowed to prevail over political pique. Beggar your neighbour is not a good strategy for a continent that needs all the boost from trade it can get. 

And really - can they think of no better arguments for membership of the EU than to show how horrible they can make it for those who want to leave?