By Pieter Cranenbroek – International Politics Blogger
The current British administration is hardly in love with the EU.
Prime minister David Cameron proposed an ill-considered referendum on Britain’s future in Europe while Chancellor George Osborne has been reported saying that the EU is ‘killing’ the UK economy.
It is yet another error of judgment on the part of the Tory government, and two recent reports confirm what we already know: the UK needs Europe. Not only is it preposterous to suggest that the British economy is being killed by European co-operation, it thrives on it. Britain’s ‘out’ of the EU is therefore out of the question.
Earlier this year Japan warned the UK that an exit from the EU would have substantial economic consequences. Two influential reports, one by the UK’s leading business organisation CBI and one by Regent’s University, subscribe to this observation.
The drift of both publications is that even though Britain would profit from certain reforms, the economic importance of EU membership is indispensable and there is certainly no alternative that would improve this inevitability.
The EU accounts for half of the UK’s exports and simply having access to the EU’s internal market has made the island an attractive location for foreign investment. In all their wisdom, the Tories’ star students Cameron and Osborne have publicly questioned EU membership, but this desperate attempt to appease hard-line Eurosceptics in the Conservative party is not going to benefit the country in any way.
House of cards
The thing that both Cameron and Osborne fail to understand is that the British economy is a house of cards. An important part of the UK’s economy relies on trade with Europe and foreign investment, which, in turn, is high due to the UK’s access to the European single market.
Right now, the UK is doing exceptionally well in terms of foreign direct investment, well above the average of first world countries. Many firms outside Europe consider the UK a gateway to the European market but isolating itself from the continent would undeniably cause foreign investors to relocate business elsewhere.
Moreover, being part of the European community has been instrumental in establishing the UK as the financial centre of the world, which is incidentally another reason for the high rate of foreign investment. In addition to punishing the less fortunate through cuts in welfare and public sector expenditure, the British government is now jeopardising its economic future by hanging its EU membership in the balance.
The current administration’s dedication to further restrict migration may be another factor leading to Britain’s demise. UK conservatives are on the prowl for ‘benefit tourists’ that are often attributed to the EU’s free movement clause. This naturally excludes Chinese businessmen with big money in their pockets who are welcomed with open arms.
Hypocrisy has never been so thinly veiled. What’s more, a recent study by University College London found that EU migrants were less likely to claim benefits than natives while immigrants contributed £25 billion in taxes. Bastards! An EU exit would, similarly to current British migration policy, come down to state level self-infliction and it is becoming increasingly hard to watch the UK cutting its own throat.
An important conclusion from the reports is that the UK has no alternative. Considering the catastrophic economic consequences of Britain leaving Europe all together, the only possibility left would be to quit the EU whilst remaining part of the European Economic Area.
This would allow the UK access to the EU’s internal market without EU membership, but EEA members are still required to adopt practically all EU legislation related to the single market without having a say in the formation of this regulation. This model may work for countries such as Norway and Iceland but the UK adopting restrictive measures without input in the process is inconceivable.
The irony is that if the UK were to actively participate in the EU and stress once more that European integration should be on economic co-operation as opposed to political unification, it may even gain considerable support from other member states. The economic crisis and Eurozone bailouts have made many member states proponents of a smaller role for Brussels.
For the first time in the history of European integration, the UK could be a leader rather than the odd man out among its European peers, but the Anglo Saxons do not appear ready to seize this opportunity.
The UK and Europe are stuck with one another, for better and for worse. The sooner people realise this the better. Britain had better start playing a constructive role in Europe. It cannot complain that its interests are not being adequately served in Brussels when its citizens insist on voting clowns like Nigel Farage and other Ukip jesters into the European Parliament; that is like sending a five-year-old to the supermarket to do your groceries and complain that all he bought was candy.
Instead, British politicians should take responsibility, accept that its future is in Europe and promote that image to the public. Britain might still consider itself a vibrant young woman reluctant to commit itself to others, but it is time she realises she can no longer afford to stay single. Time to settle down.