What is our aim and what is our plan?

Our aim is for the UK to leave the political, judicial and monetary structure of the European Union (EU) as well as the Customs Union and other Common Policies, but the UK would stay in the Single Market by retaining its European Economic Area membership and would propose to rejoin EFTA.

What would happen?

It must be emphasised that EU membership and Single Market membership are two different matters.
In this plan, entitled FLEXCIT – the work of eureferendum.com and The Bruges Group – the UK would stay in the Single Market by retaining its European Economic Area [EEA] membership and joining EFTA. In due course, it would then make further policy changes as any normal country. Ultimately, the long term aim would be to change the UK’s relationship to the EU to ‘joint membership of a European free trade area’. This goal is within reach and will be attained more easily if the political and monetary aspects and other Common Policies of the EU are jettisoned.

In the short term the UK would be in the position of Norway or Iceland. This is not a perfect strategy, nor is it the end of a process – which will go on for many years – but it is an existent, proven platform which will secure an amicable and stable exit.

How would the UK stay involved with the EU?

a) The Four Freedoms – which are part of the EEA agreement. It should be noted that EU governments (including the UK) in reaction to the ‘sweetheart’ tax deals agreed by Juncker in Luxemburg, have actually reduced freedom of capital movement. In the case of Cyprus (and soon to be Greece?) full capital controls have been imposed by the EU Troika. It should also be noted that the provisions of the EEA agreement are more restrictive on freedom of labour movement than the EU membership and also allow further restrictions in exceptional circumstances, unlike the EU.

b) Horizontal policies associated with the Single Market, such as consumer protection, company law, environment, statistics.

c) Co-operation in development, training, culture, tourism, etc.

d) The Single Market.

In addition, the UK would continue to be involved with the EU in intergovernmental matters, may agree to participate in some EU programmes and, in some cases, sign up (inter-governmentally) to EU institutions where they offer better value than going it alone.

What would trigger this?

A referendum to leave the EU having a positive vote, the UK would then serve an Article 50 notice in accordance with the EU treaties, giving two years’ notice to leave the EU and start to agree the terms of departure.

What parts of the EU would the UK leave?

The UK would repatriate the ‘acquis’ (the system of EU law). Just as Ireland
and India did when they became independent, bringing the whole acquis into
British law allows a seamless transition. Once repatriated, the British parliament
would then repeal EU involvement in the following areas:
– The Common Agriculture Policy
– The Common Fisheries Policy
– The Customs Union
– The Common Trade Policy (and regain the UK’s seat at the WTO plus the ability to make its own trade agreement with other countries)
– The Common Foreign and Security Policy
– The Common Policy on Justice and Home Affairs
– The Charter of Fundamental Rights
– EU Economic and Monetary Union (the UK is signed up for Stages 1 and 2 but not Stage 3 (the euro) of EMU.)
– No involvement in direct or indirect taxation
– The EU Commission
– The EU Court of Justice
– A substantial reduction in contributions to the EU budget
– The ‘joint and several liabilities’ of all EU members for all EU debts
– Extrication from specific risk exposure to the liabilities of the EU, the ECB and the EIB as soon as possible.

In short, Britain would then be in approximately the same relationship to the EU as the EFTA/EEA countries: Norway, Iceland and Leichtenstein. Of course, it may be decided that certain functions should be ‘bought in’ from the EU and also that the UK may decide to participate in some EU programmes,
such as in Eastern Europe, on a voluntary intergovernmental basis. Clearly, there must be negotiation with the EU in certain areas and, equally, there will be transitional policies required in some areas such as extrication from debt guarantees.

The advantages of this strategy?

a) It attains the aim of leaving the political, judicial and monetary structure of the EU.
b) All those who wish to leave the EU, whatever their ultimate goal, will be able to support Flexcit and the UK staying in the Single Market as a platform to move to future long-term trading arrangements which will take a long time. These arrangements can be debated after exit.
c) Of all options, it is likely to engender the least hostility from the EU institutions since this option can be traced back to proposals fromPresidents de Gaulle and Giscard D’Estang. Indeed, de Gaulle’s press
conference in 1963 outlined a sensible free trade relationship for the UK to the then EEC.
Further, in December 2012 former head of the EU Commission and the main driver of the EU in his day, and a man highly respected in Brussels, Jacques Delors, told Handelsblatt newspaper:
“If the British cannot support the trend to more integration in Europe, we can nevertheless remain friends, but on a different basis. I could imagine a form such as a European economic area or a free trade agreement.”
This correctly stated the alternatives for the UK, “Supporting the trend to more integration in Europe” or ‘friends’ on the basis of membership of the EEA.
d) Having looked at many speeches by business which purport to support the UK remaining in the EU, the only reasons given are the asserted benefits of the Single Market. There are many business speeches in favour of the Single Market but none in favour of the parts of the EU identified above where the UK will leave. No business has ever asked for EU control of justice and home affairs, an EU foreign policy,
massive financial transfers from the UK to Brussels or increased exposure to the losses of the eurozone.
Staying in the Single Market removes all business objections. At one time it is true that many businessmen and business organisations pressed the British government to join the euro. It is now
realised that this would have been a disaster on a grand scale.
e) By staying in the Single Market and reassuring business, the electorate is also reassured that there will be no economic change. The electorate will be comfortable that jobs, investment and trade will be
unaffected and business will continue exactly the same as before.
f) Once a referendum is won this plan sets out a clear and simple plan for action on Referendum Day +1. There can be no doubt about what ‘leaving the EU’ actually means. It is a clear instruction from the
electorate and a clear plan for action. It is not an expression of wish which the Executive can implement in the way it chooses.
g) In the 1975 referendum, a number of outside leaders in the Commonwealth were quoted by the pro-EU leaflet circulated to the electorate as stating they wanted the UK to remain in the EU. This
pattern of outside advice was repeated in the recent Scottish referendum. As the move from EU membership to EFTA/EEA membership is less dramatic, there is little reason for outside leaders to comment or to parse the exact differences between EEA and EU membership.
h) To win a referendum with a cacophony of options is unrealistic and, even if won, would simply hand the initiative to the ‘more integration’ forces in Westminster who would negotiate as they saw fit. In 1975, the pro-EU literature devoted a great deal of space to describing and disparaging the great variety of alternatives to the EU offered by the anti-EU side.

The FLEXCIT plan, taking up approximately the position of Norway, is available, off the shelf, and is a proven and existing solution while long term trading arrangements are debated and implemented over several years.

Making a drachma out of a crisis

A letter from our Chairman, Edward Spalton, to the Derby Telegraph

We would be suffering a similar fate to the people of Greece if our politicians had taken us into the euro as many of them wished. We were and still are lumbered with massive government and private indebtedness but have been able to dodge many of the ill-effects because we still have our own currency.

The so-called “bail-outs” are essentially transfers of unrepayable debt, owed originally to German and French banks but now transferred to the public sector. Whatever the result of yesterday’s referendum, the outlook for Greece is bleak.

They already have real austerity. In the Greek NHS, infant mortality has increased massively – up 40%. With the return of the drachma, there would be a prospect of fairly rapid eventual recovery but probably even more hardship in the short term. So it’s a hard choice.

The euro is a political project to create political union. To avoid more countries threatening to leave like Greece, the countries of the Eurozone will have to form themselves into a single, economic, monetary government – in effect becoming one country with a permanent majority of votes within the EU. Such a treaty will take around four years to conclude under EU rules, so could not come into force before 2020. It will make permanent and formal the UK’s existing status as a second-rate member, paying a first-class subscription.

To repatriate any powers from the EU to a member state requires treaty change. Mr Cameron appears to have dropped this demand. Harold Wilson dressed up some very minor administrative alterations as a fundamental renegotiation” in 1975. It was enough to win him his referendum. No doubt Mr Cameron will follow that example.By the second half of 2017, the UK will hold the presidency of the EU and be in charge of issuing all the press releases which follow EU meetings, giving much increased scope for media manipulation. This is the reason for the Government’s abolition of the “purdah” rule, which prohibits it from using its resources to influence the outcome of the referendumThe best he could hope for is that other member states and the EU Commission promise to take his concerns into account when they make their big treaty some time from 2020 onward. This is not a happy precedent. Mr Blair surrendered some of Mrs Thatcher’s rebate in exchange for a promise to reform agricultural policy. That reform never happened.

So Mr Cameron’s referendum is not really about giving people a choice but a manipulative ploy to lock us into the EU permanently in advance of major, impending, centralising change of which he must be well aware.

A despatch from Athens

There is no shortage of media coverage on Greece’s current financial crisis. This piece, however, paints a different picture from most. It is written by Thanasis Laskaratos of EPAM, the Greek People’s movment. EPAM is a cross-party campaigning organisation, similar to CIB.

Alexis Tsipras, the Greek Prime Minister, announced a referendum on creditor’s bailout demands, and even called for NO. It has been at least 30 years since Greece last held a referendum, so the decision was welcomed by the majority of Greek people.
Two days later the government decided to impose capital controls by shutting banks for a week and imposing limit on cash withdrawals (60,00€ per cardholder, per day).Public officials were paid normally on the 27th and the 28th of June, unlike pensioners, who need to line up at specific banks, open exclusively for them, to withdraw a maximum of 120€. The private sector was equally left at its fate. The ECB embargoed Greece but the government didn’t take any measures whatsoever to calm down the people who were left suddenly without any cash or to find a solution for paying the country’s pensioners.
To ordinary people voting YES equates to staying within the EU and Eurozone and NO equates to the opposite. This is indeed the real meaning of this referendum despite the Greek government’s intentions and efforts to persuade people otherwise. No wonder why the percentage planning to vote NO, although initially standing at 54% at the beginning of the week. has tended to fall these last few days according to the EuObserver newspaper. Unsurprisingly, there is an unprecedented amount of propaganda in favour of YES by just almost all media within the country as well as by a bunch of singers (like Nana Mouskouri), actors, university professors, TV-starlets and other celebrities.
As expected, the tactics of the YES campaign have been characterised by fear and distortion of the truth. There were two big rallies in Athens last weekend – on 29th June by NO supporters and on 30th June by YES supporters. The NO gathering received 8.43 minutes of news coverage as oppposed to 46.83 minutes for the YES gathering. No one in the media wil admit that voting YES means more unemployment, more suicides, more taxes, more homeless people and more misery. They just call it the bail-out program’.
And meanwhile, what has the government done? Besides letting the pensioners line up at the banks – thus causing deliberately panic – it has offered extra guarantees of 1.91 billion Euros to Eurobank and another 4.92 billion euros to Ethniki Bank. So on the one hand, the government is happy to protect bankrupted banks at the taxpayers’ expense, but on the other, when it comes to pensions and salaries the government does nothing.
At the same time Mr. Tsipras has submitted a new proposal to the creditors. The new proposal aims ‘to settle the ESM financing so that the debt becomes sustainable while emphasis is given on the growth perspective’. In other words, Greek taxpayers will pay off the IMF with ESM’s money at at least double the interest rate, thus putting Greece under ESM, a mechanism that works like a super-state which is able to dismantle the entire country.
For all his efforts, Mr. Tsipras really sides with the YES campaign even though he publicly supports NO. IN this , he is just like the communist party, KKE, who suggest spoiling the ballot papers. This coming referendum will make many masks fall down and reveal where the politicians and their parties really stand.
Thanasis has also confirmed a report that the Greek government destroyed its printing presses in the run-up to joining the Euro. If it is forced to return to the Drachma, the banknotes will have to be printed in the UK or France.

Photo by Kristoffer Trolle

Some Restriction on free movement of people is possible within the EEA agreement

Remaining in the single market as an interim option after leaving the EU does allow a country to place restrictions on immigration. The so-called “Norway Option” is being widely debated at the moment, but it has received a good deal of criticism from those whose prime reason for supporting withdrawal from the EU is their desire to see immigration reduced. Nevertheless, although this arrangement may not satisfy everyone seeking an “out” vote, not only it is the best way of ensuring we win a sufficient number of votes to leave the EU, but it does at least allow some restrictions on immigration, as Robert Oulds from the Bruges Group explains:-

It is possible to impose restrictions on immigration whilst remaining in the European Economic Area. Liechtenstein, an EEA member with less potential influence than Britain, continues to use clauses in the EEA agreement to restrict the movement of persons. Article 112(1) of the EEA Agreement reads: ‘If serious economic, societal or environmental difficulties of a sectorial or regional nature liable to persist are arising, a Contracting Party may unilaterally take appropriate measures under the conditions and procedures laid down in Article 113.’ The restrictions used by Liechtenstein are further reinforced by Protocol 15 (Article 5 – 7) of the EEA agreement. This allows Liechtenstein to keep specific restrictions on the free movement of people. These have been kept in place by what is known as the EEA Council.[1]

There will also be greater latitude to restrict non-British EU citizen’s access to benefits and to deny residency to those who are deemed to not have sufficient resources to support themselves. The current debate in Britain on immigration largely ignores the role of the European Court of Human Rights and the European Convention. Article 3 of the Convention (inhuman or degrading treatment or punishment) and Article 8 (private and family life, his home and his correspondence) would also be relevant to the issue of immigration. These two article are often taken together; especially in cases of repatriation.

EEA/EFTA states are outside of Article 6 of the EU’s Treaty on European Union which states; 2. The Union shall accede to the European Convention for the Protection of Human Rights and Fundamental Freedoms. Such accession shall not affect the Union’s competences as defined in the Treaties 3. Fundamental rights, as guaranteed by the European Convention for the Protection of Human Rights and Fundamental Freedoms and as they result from the constitutional traditions common to the Member States, shall constitute general principles of the Union’s law.

 There is already a great deal of flexibility in the EEA agreement. This goes beyond the ability to restrict immigration and opt-out of areas of EEA rules. Iceland even unilaterally imposed capital controls after its financial crash in 2008. This is permitted within the EEA safeguards Article 112.[2] There is also no enforcement mechanism to prevent this from happening even if such flexibility was not contained within the EEA. Whist this paper does not advocate such a policy it shows that radical steps that run contrary, even to the four freedoms of the EEA, can be implemented.

The EEA relevant rule relating to freedom of movement, Directive 2004/38, has qualifications, conditions and limitation. (10) Persons exercising their right of residence should not, however, become an unreasonable burden on the social assistance system of the host Member State during an initial period of residence. Therefore, the right of residence for Union citizens and their family members for periods in excess of three months should be subject to conditions. (12) For periods of residence of longer than three months, Member States should have the possibility to require Union citizens to register with the competent authorities in the place of residence, attested by a registration certificate issued to that effect. (22)

The Treaty allows restrictions to be placed on the right of free movement and residence on grounds of public policy, public security or public health. Article 7, 1 b) (b) have sufficient resources for themselves and their family members not to become a burden on the social assistance system of the host Member State during their period of residence and have comprehensive sickness insurance cover in the host Member State.[3] No right is absolute, and neither is freedom of movement within the EEA. What is more, EEA rules only apply to EFTA nations after they have assessed the relevant legislation and applied it according to their own interpretation of what freedom of movement means.

Footnotes:-
[1] EEA Council Decision No. 1/95, Official Journal of the European Communities, 20th April 1995, pages L 86/58 and 86/80
[2] Official Journal of the European Communities, 3rd January 1994, pages L/28, 176-8 and 562
[3] DIRECTIVE 2004/38/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 29 April 2004

Robert Oulds: Independent from the EU

Last October, Robert Oulds of the Bruges Group delivered a presentation entitled “Independent from the EU and into the wider world” at a CIB-hosted meeting at Chelwood House, Somerset. Robert explained how we could exit seamlessly from the EU by invoking Article 50 of the Lisbon Treaty and negotiating to re-join EFTA. No other exit option is viable for, if we left the European Economic Area (which we would not under this secenario), the barriers to trade with the EU would take years to address, thus putting many UK businesses at risk.

Although much has happened since Robert gave this presentation, the arguments he set out last year still form the basis of the EU exit strategy most likely to command sufficient popular support to secure the all-important “out” vote in the forthcoming referendum and the only one which can answer all the concerns of the business community. The video can be accessed here.

 

What planet is he on?

As Greece prepares for a referendum which could determine whether it leaves the single currency or not, Sir Richard Branson, well known for his enthusiastic support for our membership of the EU, said that he was “not particularly” happy that we were out of the single currency. “I think that if we were part of the euro right now our currency would be a lot cheaper,” he told the Andrew Marr show. “Great Britain would be doing that much better in trading in Europe because the pound is a lot stronger than the euro, it makes it more difficult for us.”

Here, Branson once again proved the point that for business, the only real issue as far as our EU membership is concerned is trade. He also revealed his ignorance of the flawed nature of the single currency project. Had we been part of the single currency, we could not have cut interest rates to rock bottom at the height of the Great Recession allowing our currency to depreciate in value in relation to those of other nations. That is how things work with a “fiat currency” – i.e., where there is no peg to an asset such as gold. Countries in financial difficulty are encouraged to rely on exports (which will become cheaper with a weaker currency) as a way of rebuilding their economy. It is the textbook approach of the International Monetary Fund. Unfortunately, it is not an option available to Greece at the present time because it does not have control of the interest rates set for its currency – the Euro. If we had been part of the single currency, we would not have had that option either during that critical period five years ago.

So while UK goods might indeed be a bit cheaper now if they were denominated in the euro, which has fallen in value against a number of other major currencies recently, they would have been too expensive during the critical period when the recession was at its worst and a boost to our exports was desperately needed. We would have been entirely at the mercy of the European Central Bank. In other words, the exchange rate for the currency we would have been using would have been ultimately determined by decisions made in a foreign country and not therefore seeking the optimal rate for UK business. Perhaps the pound may be overvalued at the present as far as Branson’s business empire is concerned, but this is a price worth paying to preserve the freedom to control interest rates and thus – to a degree, at least – exchange rates. The terrible recession in Greece is an object lesson to the tiny handful of influential people who bemoan our absence from the single currency. Branson, however, is not alone. Martin Sandbu, an economics writer for the Financial Times, maintained that Greece would not have suffered its current crisis had we joined the Eurozone, as we would have ensured that the financial discipline written into the Maastricht treaty and thus prevented earlier Greek governments from over-borrowing when money was cheap. A rebuttal to this rather fanciful idea was provided by Raoul Ruparel of Open Europe. Even this pro-EU think tank has sufficient wisdom to see the lack of substance to Sandbu’s argument. With the UK experiencing economic difficulties some time before the Eurozone, “the UK would have found itself in a similar position to Ireland, with the rest of the eurozone (which had yet to be hit by the sovereign crisis) lecturing it on economic and financial policy”, said Ruparel. “The fallout would probably have been the UK leaving the euro and possibly the EU, precipitating a potentially even deeper crisis for all involved. In the end the fundamental flaws in the Eurozone, clear for all now to see, would probably have been exacerbated by having another large country with different needs inside the single currency.”

Yes, the single currency is a flawed project. Professor Tim Congdon highlighted the vulnerability of European monetary union to depositor runs on the banking system (such as we have seen recently in Greece) over 25 years ago. “When I spoke to them at conferences, dinners and such like, the euro’s architects….. dismissed my concerns as of no importance”, he wrote recently. Branson and his ilk regrettably remain as blind to these flaws as ever. Indeed, his blindness to the nature of the whole European project is quite staggering. During the same interview with the Andrew Marr show, he also said, “If we go back to being Great Britain again we will have our hands tied behind our back and I think Europeans will rightly punish us and we’ll be back to where we were fifty years ago.” Branson clearly has no concept of the EEA/EFTA exit route – the so-called “Norway Option”, which, far from tying our hands behind our backs, would be a benefit to our trade in the longer term. He then repeated a really basic howler in claiming the EU had helped preserve relative peace in Europe. Oh really? What has it done to preserve peace in Ukraine? It has in many ways fermented the conflict. What about Serbia? What did it do to end the conflicts with ETA or the IRA? The credit for over seventy years of peace within Europe belongs to NATO, not the EU.

Branson then claimed it would be “catastrophic” if we left. Nonsense; it would be catastrophic if we didn’t leave. It would be the end of our great country. It would be the final nail in our Common Law legal system and the sovereignty of our Parliament. Deceived by our political leaders, we made a wrong turning over forty years ago and locked ourselves into a project which we have never really supported. The referendum offers us a chance to right a great wrong.

Branson is no politician and should keep his big mouth shut over issues about which he is plainly pig-ignorant. He should instead stick to being an entrepreneur, which he clearly does very well. After all, his Virgin empire even includes a commercial space travel programme, Virgin Galactic. While it appears on the surface to be a long way from offering space travel for tourists, judging by the silly words he spoke to Andrew Marr about the EU, which seem so far removed from reality, one is tempted to wonder whether Branson does already inhabit another planet, if not some parallel universe.