by Stephen Tall on July 11, 2012
I took part in a fascinating discussion on Voice of Russia UK radio yesterday. The subject: Britain’s future in the European Union: In or out? You can listen to the 28-minute programme on YouTube below, and here me alongside former UK-ambassador-turned-blogger Charles Crawford; Robert Oulds, Director of the eurosceptic Bruges Group; and Petros Fassoulas of the pro-EU European Movement.
I found it interesting to do some quick research prior to the discussion, and thankfully stumbled across three terrific, briefish-but-in-depth articles which offered just the right balance of pragmatic, non-starry-eyed pro-Europeanism I was looking for…
First, most recent and probably best — Economist journalist David Rennie’s terrific tours d’horizons, The Continent or the Open Sea (PDF), published by the Centre for European Reform this last May. It’s well worth reading in full, but here are the concluding paragraphs:
A powerful new theme in British euroscepticism involves dreams of the country roaming the world as a swashbuckling, globalised, stand-alone trade power, untethered from the rotting hulk of a continent in decline.
But such visions are just that, a dream. Several European economies are in better shape than Britain. Nor can Britain roam the world’s oceans: the country will always lie 21 miles off the coast of France, profoundly affected by European rules. Getting those rules right is the hard work of all EU governments.
Cameron accepts that, just as every British prime minister has since Thatcher.
But Cameron’s government operates under important new constraints, as will all British governments for the foreseeable future. A combination of the ‘referendum lock’ enshrined in the EU Act of 2011, together with pressure from public opinion, the press and Parliament, makes it hard to see the country signing up to any further transfers of powers from Britain to the EU.
Yet at the same time, if eurozone integration proceeds without Britain, and so deeply that the single market starts to fragment into inner and outer cores, the strongest argument for British membership will be undermined.
The situation is stable and unstable, familiar and unfamiliar. How this ends is unknowable, and is only partly in Britain’s hands.
Secondly, I wanted to get my head a little more around the failure of the Eurozone to operate as single-currency enthusiasts (including many in my own party) expected, so I turned to John Springford’s Strengthening the Stability and Growth Pact with a common eurozone bond (PDF), published by Centre Forum in August 2009. It’s a terrific piece of work, and terrifyingly — almost exactly three years on — remarkably undated:
Eurozone governments should act now to create a system which is based upon incentives, rather than rules – which have proved too easy to break. Governments should agree to issue debt jointly in a common instrument, which would give countries like Ireland, Greece and Portugal access to a larger and cheaper debt market.
However, countries should be given access to the common debt instrument only when they have created large enough budget surpluses to make their debt to GDP ratio start to decline. If member states act now and agree to the system, those countries that are struggling with their finances will be given an incentive to reduce their debts and return to balance once recovery starts.
Over the next economic cycle, eurozone government finances will remain closer to balance, as governments will have an incentive to consolidate during an upswing. A bond-rules combination would also allow governments to expand their balance sheets to stabilise their economies in the next recession – but will have to pay for it through their own national debt.
Finally, Conservative MP Jo Johnson (yes, Boris’s brother) has written a really insightful essay, Britain must defend the single market (PDF), published again by the Centre for European Reform last month. Jo analyses the fall-out of David Cameron’s impotent veto of the fiscal pact in December, before noting:
Although other countries value British membership of the EU, they do not do so at any price. It is important for Britain to realise that it is no longer seen as bringing as much to the European table as it once did.
The UK therefore needs to clarify, both to itself and other EU countries now extending an olive branch, what its vision is for the EU and what sort of a relationship it wants with it. If Germany and the Nordic countries think the UK is heading for the exit or for a form of semi-detached relationship – modeled perhaps on that of Switzerland, which is a member of the European Free Trade Association, or that of Norway, a member both of EFTA and of the European Economic Area – then they will cease to see Britain as a key ally in their attempt to promote a liberal economic agenda inside the EU.
If the UK were to be marginalised within the EU or excluded from its decision-making, London would lose its attraction as a pole in the continent’s economic and political development. The single market would lose one of its strongest and most reliable champions. And the deregulation agenda would suffer. Many member-states (including Germany) would regard this as a regrettable development. Countries with more protectionist instincts might regard such a development as a positive blessing. But that would be a minority viewpoint, even in Southern Europe. …
Europe as a whole knows that it needs to reform the old model of l’Europe sociale and to build a new one, for which Germany’s Agenda 2010 reforms represent a decent blueprint. Indeed, there has never been a more propitious moment for Britain to work with Germany and other like-minded countries to promote the reforms that will fend off sclerosis and ensure that the EU continues in aggregate to produce sustainable economic benefits for all its citizens.