The human cost of the Single Currency

The chart below is  a powerful rebuttal of the so-called blessings of being part of the EU – and the single currency in particular. Germany is doing very nicely from the €uro, but the human cost of the single currency in other countries is immense. Two in five young people are still out of work in Greece. At one point, the figure was more than three in five.

Although not a “Club Med” member, Finland has youth unemployment of over 20% and non-Eurozone Denmark and Sweden have higher overall and youth unemployment levels than non-EU Norway. The USA, also included for comparison, is doing better still, although Switzerland has even lower unemployment.

The UK comes out pretty well. Keeping control of our own currency has definitely helped us weather the Great Recession better than the major €urozone economies, Germany excepted. Had we never joined the EU, who knows, we may have had a better economy than Switzerland

Photo by Sinn Féin

Cough, cough, but no new insights on Brexit

There were at least two statements about Brexit during the Tory conference which show that some at least within the party appreciate the seismic change that Brexit involves. Firstly, Philip Hammond, the Chancellor, said that Brexit was “one of the most challenging tasks ever faced by a peacetime government in Britain.”  He is quite right there. Secondly, Jacob Rees-Mogg  challenged Theresa May’s assertion that her government would not be “defined by Brexit.” It “is the defining political issue of our time and and to pretend otherwise…is absurd”, he continued, comparing the changes Brexit would bring to the Great Reform Bill or the Glorious Revolution of 1688.

Again, all well and good, but we were expecting something more from the Prime Minister in her keynote speech, particularly more detail on what the route to Brexit was going to look like. Sadly, we were to be disappointed.

Mrs May reiterated that we would leave the EU in March 2019. No back-pedalling here or she is toast – and she knows it. She then continued “I know some find the negotiations frustrating, but if we approach them in the right spirit – in a spirit of cooperation and friendship, with our sights set firmly on the future – I am confident we will find a deal that works for Britain and Europe too. And let’s be clear about the agreement we seek.”

Oh no! Next came that awful phrase again “deep and special” – twice, in fact.  Please bury this one, Mrs May. It’s just as bad as “strong and stable” which the voters found so unconvincing in June.  It doesn’t reflect reality and sounds rather soppy. Mind you, what came next as she fleshed out this overworked cliché sounded rather familiar too:- “A partnership that allows us to continue to trade and cooperate with each other, because we see shared challenges and opportunities ahead. But a partnership that ensures the United Kingdom is a sovereign nation once again. A country in which the British people are firmly in control.” Once again, her statement begs the obvious question, “yes, but how are we going to get there?”

What is more, Mrs May ignored the unfortunate reality that negotiations on this partnership are not even going to be started any time soon. Yesterday, the European Parliament passed a resolution which stated that the “absence of any clear proposals has seriously impeded the negotiations”. The Parliament is “of the opinion that in the fourth round of negotiations sufficient progress has not yet been made” in the three key areas. Of course, the resolution is significant but merely a non-binding expression of opinion, not having been introduced by the EU Commission.

Maybe a speech at a party conference is  not the best occasion for announcing a new initiative on Brexit to unblock the talks, but when exactly will the moment come? Her words on Brexit today could have been cut and pasted from the Florence speech, which was received politely by the EU’s leading lights who then pointed out that it gave little idea about the sort of deal Mrs May is seeking, both for the interim and longer term.

To be fair to the Prime Minister, she wasn’t at her best, having to deal with a persistent cough and – as if that was not enough – a moronic intruder who somehow gatecrashed the meeting, handed her a P45 saying “Boris made me do it.” However, the issue goes deeper – and affects not only the Prime Minister but, it seems, a considerable number of Members of Parliament – they still fail to understand what the EU project is all about.

During the German General Election, one politician, when asked about Brexit, said he regretted that the UK always viewed the EU as an economic rather than a political project, this failing to see its value – at least in his eyes. This man, whether by accident or not, has hit the nail on the head. It explains why we are  getting two different pictures from the UK and the EU side whenever they report on the current negotiations.

To put it simply, the UK negotiators (and, I would suspect, Mrs May), are viewing  these negotiations through this same historic mindset. The EU must want a trade deal with us because surely it would be foolish not to. Look at how their businesses would suffer without one. Therefore, if we complete the repatriation of the acquis by Brexit day, there should be no reason why should we not trade as before – well, more or less – as there will still be regulatory convergence.

The EU’s reply, reiterated ad nauseam by Michel Barnier, is that we will be a third country on 29th March 2019. We will be outside the EU’s political bloc, whose ongoing integrity matters far more than trade deals. If the EU was prepared to reduce Greece to poverty – and Greece wasn’t even talking about leaving the EU – why should it put trade before politics in the Brexit negotiations? To repeat, for us, it’s all about trade whereas for the EU, it’s all about politics. Even discussion of any interim arrangement needs to be viewed in that light.  The EU simply will not let us enjoy two years as an honorary member of the club while outside the jurisdiction of the ECJ  and refusing to continue to abide by the EU’s free movement rules. It is another terrible and overused cliché, but only when our politicians can learn to see how the EU project is understood by the likes not just of Barnier, Juncker and Verhofstadt, but also of national leaders such as Merkel, Macron and even Varadkar – and realise that they are all more or less of the same opinion – will we be able to escape the “having cake but eating it” mindset which has so bedevilled the negotiations from the very start.

There are grounds for hope that at least some MPs are belatedly beginning to understand the nature of the EU, so I have been told, but they need to spread the word among their colleagues pretty quickly if we are to have any hope at all of leaving the EU in March 2019 with any sort of deal worthy of the name.

 

Photo by EU2017EE

Reasonable or unreasonable?

It will have come as no surprise to many keen observers of the Brexit process that the fourth round of talks ended this week ended with Jean-Claude Juncker, the Commision President, saying that it would take a “miracle” for Brexit talks to progress quickly enough to persuade the EU to start discussing a trade deal any time soon. This follows on from Michel Barnier saying the same thing a day earlier.

It is the usual story. An optimistic David Davis speaking of encouraging progress followed by a more negative slant from the EU side.

The divergence in assessing the state of play goes right back to Davis and his team agreeing to the EU’s negotiating schedule, which demanded that progress had to be made on the rights of EU citizens living in the UK, the Irish border question and the financial settlement, or so-called divorce bill, before the issues of trade would be discussed.

Was it reasonable or unreasonable for the EU to take the initiative in proposing a schedule? Hard to say. After all, they never wanted us to vote to leave. On the other hand, we were not bound under Article 50 to agree to their schedule, but for better or worse, we did.

So what of the three demands? The size of our divorce settlement was always going to be a contentious issue. Some would argue that we shouldn’t pay a penny after Brexit day while others are willing at least to concede that we should honour our obligations up to the end of the EU’s seven-year budget cycle, which takes up up to 2020. There is a even a huge gap between the EU’s demands and the generous figure which Mrs May has indicated she is willing to pay – £50 billion – and this is higher than the carefully-researched study by the Institute of Chartered Accountants of England and Wales, which comes out with a figure of  £28 billion, including  spending which has been authorised but not incurred. The EU is unhappy with our foot-dragging, but given that Mrs May’s alleged offer was a generous gesture to try and unblock talks, if it doesn’t satisfy the EU, they are definitely the side who are being unreasonable.

The most unreasonable of all demands is that any agreement regarding the legal status of EU nationals living in the UK after Brexit includes a role for the European Court of Justice. This is quite frankly absurd.  If the UK insisted on UK law and the UK courts determining any aspect of the lives  of UK expats in, say Saudi Arabia, the Saudis would tell us, to quote Boris Johnson (or was it Philip Hollobone?), to “go whistle”. English Common Law means just that – it gives common treatment to all UK residents including non-nationals. We did make an exception in the Middle Ages, with the clergy subject to Canon Law instead and the general population didn’t like it one little bit, especially as monks and priests were able to get away with crimes for which the rest of the population wold be punished. There is no need to create another exception now. Our legal system is fair, with plenty of checks and balances. No EU citizen living over here should feel they are living in a tyrannical, unjust country

The question of the Irish border, however, is another matter.  The Irish republic joined the EEC, as it was, along with the UK in 1973. The two countries’ economies were – indeed, still are – closely linked and for the Irish to have kept out while we joined the European project would have caused immense problems. When the Irish joined the €uro, they did so in the expectation that we would follow suit. We did not, nor have we abandoned imperial measurements as they have. They have consistently elected governments which are led by EU enthusiasts. By contrast, most of our Prime Ministers since 1973 have been at best lukewarm towards the EU apart from Ted Heath and Tony Blair. In spite of these divergences, however, we share a common language, a common genetic ancestry and several hundred years of common history. More importantly as far as Brexit is concerned, we will soon be sharing the only land border between an independent UK and an EU member state.

It is true that the EU as a whole would suffer proportionately less than the UK from our crashing in March 2019 without a trade deal, but some individual states would take a big hit, with Ireland topping the list. No one wants a “hard border” and everyone wants trade to continue to flow freely between the Republic and Northern Ireland but, as Michel Barnier keeps pointing out, we become a “third country” in 18 months’ time. It is one thing to insist that we cannot go back to the days before the Good Friday Agreement but quite another to come up with a workable arrangement which is acceptable to Dublin and Brussels. So far, the EU negotiators have not head anything from their UK counterparts which provides the basis for a future agreement. Their impression is that, 15 months after Brexit, the UK has not got to grips with the issues involved in striking a deal on the Irish border question.  If this is true, there are good grounds for the EU to say we are being unreasonable.

There are other areas, however, where the EU – or at least, some of its senior figures – is being very unreasonable. The over-the-top reaction to Michael Gove’s denunciation of the 1964 London Fisheries Convention is one good example. Another  is the behaviour of José Margallo, the former Spanish Foreign Minister, who has been ramping up the Gibraltar issue, claiming that  Gibraltar will eventually have to welcome dual sovereignty for Spain and  spreading misleading statements about a proposed meeting with Fabian Picardo, Gibraltar’s Chief minister.

Of course, if, as claimed by one reliable source, staff are quitting the Department for Exiting the European Union “in their droves”, this isn’t getting us any closer to address the issues where some work is obviously needed by the UK side.  There is a good argument to be made that some EU demands are very unreasonable, but equally, a strong case can be made that thus far, our side’s approach to these difficult negotiations has left a lot to be desired.

 

Meanwhile, what of the union which we’re leaving?

Amidst all the kerfuffle of the Labour Party conference and the German General Election, a most important speech has rather slipped off many people’s radar.

France’s President Macron set out his vision of the future of the EU in a speech lasting nearly two hours.  It echoed in many ways the vision articulated by Jean-Claude Juncker, the President of the European Commission, in his “state of the Union” address earlier this month.  More Europe, inevitably, is the way forward, said M. Macron, at least in as many words.  “At the beginning of the next decade, Europe must have a joint intervention force, a common defence budget and a joint doctrine for action,” he said, adding “The Europe that we know is too weak, too slow, too inefficient, but Europe alone can give us the ability to act in the world faced with big contemporary challenges.”

The most bizarre statement, however, was his assertion that “”In a few years, if it so wishes, Britain could regain the place that belongs to it.”

At the moment, there is much wishful thinking going on in remainiac circles, even though 75% of the electorate, so we were told at last Monday’s Labour Euro Safeguards Campaign fringe meeting, just wants the government to “get on with it.” I believe that Brexit will happen, for reasons stated in this piece, and  therefore at the very earliest, it is likely to be the middle of the next decade at the earliest before the UK electorate could ever be asked if it wants to re-join.  By this time, Macron hopes that the EU will have been re-launched – to be more precise, possibly in 2024, when Paris hosts the Olympic Games. It’s hard to see any enthusiasm for re-joining an EU re-launched according to the Macron/Juncker vision. as it consists of a beefing up of every aspect of EU which we will be the most delighted to leave behind.

Macron advocated a European rapid reaction force, a European common Asylum policy, a European carbon tax, Europe-wide lists for candidates in the 2019 European parliamentary elections  and deeper €urozone integration.

Given that the UK would not be guaranteed its opt-outs from the Single Currency or Schengen and would also lose the Fontainebleau rebate negotiated by Mrs Thatcher, it is hard to see what the appeal of re-joining could possibly be.

But let’s not jump the gun. Before M. Macron’s speech ever gets translated into policy, it will face a number of hurdles. Eurozone economic data points to an improving picture across the 19-nation bloc, but political differences, which could pit north against south and east against west are still lurking beneath the surface. Juncker stated in his speech that some from of treaty change will be necessary. If this change means closer integration, as it probably will, it will face a rough ride in Hungary and Poland for starters. Angela Merkel’s less than resounding election victory means that any talk of debt mutualisation within the €urozone will face a very rough ride in the German Parliament. It’s not just AfD who don’t like the idea – some in her own party are none too keen either. Without €urobonds, however, closer integration across the single currency area will make little progress.

Furthermore, even before Mrs Merkel has sorted out her coalition, the forthcoming election in the Czech Republic is likely to provide a further harsh dose of reality for federalist dreamers like Juncker and Macron. It is widely expected that Andrej Babis, a billionaire who heads up ANO, a strongly Eurosceptic party, could become the next Prime Minister. Mr Babis has said, “We don’t want the euro here, it gives Brussels another area for meddling” and only one third of his countrymen view the EU as a good thing.  Czech opposition to accepting refugees is likely further to intensify. Indeed, in a recent Europe-wide survey, the Czech Republic stood out  as the only other member state apart from the UK which would vote to leave altogether in the event of an independence referendum being held.

Macron is none too popular in Italy either, whose press cynically refer to him as “Micron” or “le petit Napoléon.” The country faces a general election next year which could see an assortment of eurosecptic parties win a majority of the vote.

While no one should expect the EU to implode any time soon – or indeed, any other member state to secede, it is quite obvious that even reviving the Franco-German integrationist engine is going to be hard enough for M. Macron given the weakened position of the German Chancellor. It will be child’s play, however, compared with encouraging some other member states to get on board.  The gap between the Macron/Juncker vision of the EU’s future and the predominant vision in Warsaw, Budapest and – even before its general election – Prague,  shows no sign of narrowing.

Paved with good intentions?

If Mrs May hoped that her speech in Florence would unblock the Brexit talks, she must be feeling somewhat disappointed. Yesterday, Donald Tusk, the President of the EU Council politely welcomed its “constructive and more realistic tone” but then went on to say, “As you know, we will discuss our future relations with the United Kingdom once there is so-called ‘sufficient progress’. The two sides are working hard at it. But if you asked me and if today Member States asked me, I would say there is no ‘sufficient progress’ yet.”

Mrs May’s speech, as we mentioned recently, was  optimistic in tone and stated very clearly that the EU had never really worked for us. It “never felt to us like an integral part of our national story” although she stressed her enthusiasm to work closely with it once we leave.

But what exactly would this new partnership look like? “The question is then how we get there: how we build a bridge from where we are now to where we want to be,” said the Prime Minister. Unfortunately, she failed to answer her own question, apart from stating that a transitional period would be needed and ruling out ongoing membership of the European Economic Area, even in the short term.

The speech encapsulated the problem with which the Government is struggling. Like Boris Johnson, Mrs May sounded very hopeful about the UK’s prospects post-Brexit. She is right to do so. We potentially have a great future as an independent nation. The problem is reaching this point with our economy intact. Daniel Hannan has recently joined in the trade debate. enthusing about the prospects for free trade once we’re out of the EU, but we keep coming back to the same question:- how are we going to leave?

It isn’t helping that our team, led by David Davis, accepted the EU’s preconditions that discussions on a wider future relationship, including trade, cannot begin until “sufficient progress” has been made on the Irish border issue,  the “divorce bill” and the rights of EU citizens currently living in the UK. Mrs May stressed that the EU needed to “be creative” in working out its future relationship with the EU, while David Davis insisted that there should be  “no excuses for standing in the way of progress”.

But even if the outstanding issues are resolved, and there is little sign of any meaningful agreement as yet, what sort of agreement exactly does the UK want? Michel Barnier, the EU’s chief negotiator, has called  for  “a moment of clarity” from the UK’s side. He is quite right to ask this question as there are plenty of us this side of the Channel who can’t wait to see the UK safely out of the EU but at the same time are in a quandary regarding how the Government proposes to  get us there. The hints in Mrs May’s speech about the sort of transitional arrangement she would like suggest somehow more or less staying in the EU but somehow not being subject to the European Court of Justice – in other words, still in “having cake and eating it ” territory and thus unacceptable to the EU.

Scan through our website and read the comments on earlier articles and you will find a few people doubting if Brexit will ever happen and fearful that Mrs May is going to betray us and call the whole thing off.  While fully appreciating the anxiety of such people, I do not believe this to be remotely possible. The slightest hint of back-pedalling on Brexit and Mrs May would immediately face a leadership challenge. What is more, the Tories garnered much of the leave vote in last June’s  General Election because they promised to deliver on Brexit. Following the better-than-expected showing by Labour under Jeremy Corbyn, a botched or half-baked Brexit means electoral meltdown for the Tories and they know it.

Mrs May and her team are therefore under great pressure. There is no turning back, whatever some sections of the press may say – or indeed, secretly wish for. One possible scenario is that Mrs May and David Davis may pull out of the talks, blaming EU intransigence and falling back on the “no deal is better than a bad deal” position – in other words, the so-called WTO option. Iain Duncan Smith, among others, has been urging the government to prepare for no deal.

It probably won’t come to this, but we can expect a rocky road ahead in the next few weeks, especially as much of the business world does not share the optimism of Mr Duncan Smith or Professor Patrick Minford that the WTO option, coupled with a more or less total elimination of tariffs, is going to be beneficial. In the long term it may be, but the shock it would deliver to UK businesses in the immediate post-Brexit period would be immense with, among other things,  the likelihood of a massive stack of lorries on the M20 building up the moment we leave, unable to clear French customs due to a lack of the necessary paperwork.

So the Brexit clock keeps ticking and M. Barnier keeps reminding us that we will become a “Third Country” in just over 18 months time. Given it’s now more than 15 months since the Brexit vote, we are only six weeks or so away from the halfway point between the referendum and the result we sought. We can but hope that some sort of clarification or change of tack will take place soon or the dream for which so many of us campaigned for so long may turn out, in the short term at least, to be more of a nightmare. The road to Hell, they say, is paved with good intentions. The road to Brexit may turn out to be very similar.

 

Lessons from recent history at the Labour Euro Safeguards Campaign fringe event

With a Conservative government fully engrossed in the Brexit negotiations and dominating the newspaper headlines, Labour’s take on Brexit has received comparatively little coverage beyond the divisions among its MPs in the recent vote on the European Union (Withdrawal) Bill and complaints that the party leadership stifled any debate or vote on its Brexit policy during its party conference.

Yesterday evening, the Labour Euro Safeguards Campaign held a fringe meeting in which a pro-Brexit position was articulated as clearly as in any Tory  – or even UKIP – gathering. In the chair was John Mills, a long-standing member of CIB’s Committee. The speakers were not as advertised, with Kate Hoey and Brendan Chilton being unavailable, although Tom Bewick, a Labour Councillor from Brighton & Hove City council who chaired the local  vote.leave group last year, was a perfectly acceptable substitute.

Kelvin Hopkins MP, the first speaker, informed the meeting that he had led Luton’s “No” campaign in the 1975 referendum. It is all too easy to forget that, in the history of euroscepticism in our country, Labour has a longer and in some ways, a far more distinguished record than the Conservatives.

The claim that Brexit was dreamed up by a set of public schoolboys who thought that “ruling Britain was their prerogative; they didn’t want outsiders muscling in,” as suggested by Simon Kuper in the Financial Times is revisionism pure and simple.  Tony Benn, Kelvin Hopkins, Nigel Spearing and, indeed John Mills himself were all campaigning for the UK to leave the EU when the likes of Boris Johnson and Jacob Rees-Mogg were still at prep school.

Labour Brexiteers have different emphases from their Tory counterparts. Yesterday, several speakers pointed out that their party’s 2017 General election manifesto contained a number of re-nationalisation pledges that would not be possible to honour if we had voted to remain in the EU. No one mentioned Jacques Delors, but as far as LESC and its supporters are concerned, his “Social Europe” is dead and buried. The EU, we were told, is a neo-Liberal project committed to eroding workers’ rights and responsible for the hollowing out of UK’s industrial base.  More than that, the EU is anti-democratic and would not allow a democratically-elected socialist government to implement its agenda, as evidenced by the savage treatment meted out to Greece.

There was no enthusiasm for remaining in the Single Market, in spite of the ambivalence of Labour’s shadow Brexit spokesman, Keir Starmer. Free movement of people, said one speaker from the floor, dehumanised human beings, treating them as mere commodities. There was no love lost for free movement of capital either, which was blamed for the economic decline in some poorer member states, notably (again) Greece.

The meeting recognised that many young Corbyn enthusiasts were strongly pro-EU, but felt that they could be won round by pointing out that the socialist agenda set out in the manifesto – which they enthusiastically supported – can only be implemented from outside the EU. Likewise, the leaders of many trade unions, who predominantly supported remaining in the EU, were not behaving logically considering that workers’ rights were better likely to be protected in an independent UK compared with the EU whose supreme court, the European Court of Justice, had sided with the employers rather than trade unions in the Laval and Viking Ferry disputes.

Both platform speakers and audience members recognised the challenges they faced in putting forward pro-Brexit arguments to fellow party members, with several people admitting that their stance has lost them friends. What is more, as one speaker pointed out, more people voted to leave the EU than have ever voted for anything else, so does Labour respect democracy or not? It’s not just ordinary party members who have faced criticism for raising this important issue. Caroline Flint, a former Europe minister, was heckled in Parliament for taking this stance. She represents a strongly pro-Brexit constituency and said “Since the result, I have argued leave and remain supporters should bury our difference and get on with it.”  Even if some of her parliamentary colleagues did not like her words, her principled stance was strongly endorsed by the speakers at yesterday’s meeting.

The timing of this meeting was particularly interesting coming less than 24 hours after the announcement of the result of Germany’s General Election. The headline story has been the success of Alternative für Deutschland, but another equally important development was the very poor showing of the German Socialist party, the SPD, who won a mere 20.5% of the vote. This comes in the wake of Benoît Hamon, the candidate from the equivalent party in France, the PS, polling a mere 6.36% in the first round of France’s Presidential election. In the second of the two General Elections held in Greece in 2015, PASOK, the socialist party, came fourth with only 6.3% of the vote. In each of these countries,  new left-wing parties of a more eurosceptic and radically socialist nature are making significant inroads into the traditional vote of the mainstream social democratic parties.

This hasn’t happened in the UK, but the leftward shift in Labour under Jeremy Corbyn has brought a surge of new members into the party. Last night’s meeting highlighted the common factor in this growing sense of alienation among traditional left-wing voters across Europe towards the historic socialist parties – the EU. How could a man like Martin Schulz, the former leader of the Socialist group in the European Parliament, have campaigned so fervently for TTIP, the now abandoned EU-US trade deal?  TTIP was widely criticised on the left for the power it handed to multinationals, so to repeat, why were the socialists supporting this deal? The answer is simple:- Europe’s “mainstream” socialist parties, including our own Labour Party in the years from Kinnock to Miliband, saw commitment to the EU project as a far greater priority than fighting for workers’ rights – or indeed, preserving our national democracies.

Add to this the depressing effects of mass migration from Eastern Europe on the wages of the working classes in the more affluent western European nations (including the UK) and it is unsurprising that white working classes have started to look elsewhere when casting their ballot.

The white working classes were instrumental too in securing the Brexit vote.  Last year’s Leave campaign was in many ways an unlikely and at times, awkward coalition, if coalition it can be called, but the distinctive feature of the UK is the substantial right-of-centre “Thatcherite” support for withdrawal, which has no parallel in any other EU member state. This unique combination of hatred of the EU on both the left and the right of the political spectrum was necessary to clinch the vote. Left and right have differing visions of what a post-Brexit UK should look like, but last night’s meeting was a healthy reminder that without a willingness to put aside these ideological differences and work together to secure our independence,  such debates about the future shape of our country would not have been possible at all.