An improvement in the Eurozone economy, but its politics remains fragile

The launch of a progamme of quantitative easing by the European Central Bank does seem to have revived business confidence across the Eurozone after a long period of stagnation which saw a sustained fall in bank lending to businesses. Consumers are also now becoming less reluctant to spend, with both retail sales and car registrations up. The weakening Euro is helping Eurozone exporters and with the overall Eurozone annual inflation rate still negative, the increase in the cost of imports (which is the other side of the coin to currency depreciation) does not seem to be causing too many problems. Of course, broad-brush macroeconomic data do not reflect conditions on the ground for some struggling individuals – or indeed, in the case of an 18-country bloc, for some struggling member states – but things are definitely looking up on the economic front after a damaging double-dip recession.

Politically, it is a different story. Greece remains a concern, with still no sign of an imminent agreement with its creditors. The country’s Deputy Prime Minister Yannis Dragasakis told one national Greek daily yesterday that the option of holding a referendum or snap elections exists “in the back of our minds…in the event of an impasse” in talks with creditors. “There’s no way we would cross the red lines that we have set,” he went on to say. EU politicians want to keep Greece in the Eurozone, but not at any cost. In Germany especially, the behaviour of the new Syriza-;led government, with its talk of claims for war reparations, had not gone down well. Since 2011, when “Grexit” last appeared to be a real possibility, banking reforms have been implemented which, so many across the Eurozone believe, would prevent contagion in the event of Greece going bust and its banks collapsing. It is a small player in the Eurozone. If it were to leave or be forced out, life would go on across the rest of the single currency bloc without anyone losing much sleep.

Fair enough, but an important principle will have been violated. Eurozone membership was meant to be irreversible. Suppose it isn’t. At the moment, no one is talking about any other countries reverting to their national currencies and the remaining PIIGS (Portugal, Italy, Ireland and Spain) are not in such dire financial straits as Greece, but what if another crisis flared up? In particular, what if Greece with a new drachma, thrived economically outside the single currency bloc and the weaker countries within struggled? This would make Pexit, Spexit or whatever a more attractive possibility, thus undermining the whole project.

That may be for the future. However, in the present, a General Election was held in Finland on Sunday 19th which saw the eurosceptic Finns (formerly True Finns) become the second largest group in the country’s parliament. It is possible that they may be invited into coalition with the winners, the Centre Party. The Finns oppose any further bailouts to Greece, which could make life interesting given the deteriorating economic situation in Athens. They are also not too keen on immigration, like the Sweden Democrats and the Danish People’s Party. Quite how much influence the party’s 38MPs will be able to influence remains to be seen, but the strong showing of a eurosceptic party, even in a country with serious economic issues, is a reminder that unease at the direction of the EU isn’t going to go away any time soon – in this country or elsewhere.

Photo by Matti Mattila

“Stronger Together” – highlights of CIB’s annual rally, 11th April

The Campaign for an Independent Britain held a public rally at the Emmanuel Centre in Westminster, London on Saturday March 11th.

The rally featured speakers from a number of affiliated eurosceptic groups – highly appropriate given the title of the meeting was “Stronger together, looking forward. Bringing the Eurorealist groups together”. The meeting was chaired by CIB’s chairman Petrina Holdsworth and both George West, CIB’s President and our Hon. Secretary Edward Spalton, gave addresses. The other speakers came from organisations affiliated to CIB – John Mills from the Labour Euro Safeguards Campaign, Simon Richards from The Freedom Association and Robert Oulds from the Bruges Group.

The prospect of a referendum if David Cameron is returned to power in next month’s General Election dominated the meeting and has unquestionably been a factor in encouraging eurosceptic groups to recognise the need to work more closely together. The speakers agreed that a referendum before 2017 looked to be highly improbable, but it was pointed out that Cameron has selected the second half of that year deliberately to coincide with the UK presidency of the EU. Although a Conservative victory is by no means a foregone conclusion, it is most likely that Cameron’s team have agreed on the choreography with the main players (such as Germany’s Chancellor Merkel) that will enable him to claim a significant concession that will pull the wool over the electorate’s eyes. In other words, he is seeking to repeat Harold Wilson’s trick in 1975, where nothing of any significance was really agreed.

All the speakers acknowledged that we start as the underdogs, although underdogs have a long history of pulling off surprising victories. Simon Richards suggested that several different campaigns to suit different sections of the electorate may be one way forward. John Mills mentioned his involvement with Business for Britain and the importance of winning support from the business community. He mentioned the slogan used by the “out” campaign of 1975, in which he played a prominent role: -“Out of Europe, into the world”. Given the gradual re-orientation of our trade away from the EU in recent years, this ought to have resonance forty years later.

Robert Oulds emphasised the need to be able to sell an exit model that will not cause job losses. He explained the reasons for his support for the EEA/EFTA model as used by Norway, Iceland and Liechtenstein. He also explained why the “Swiss”, “Turkish” and “WTO” options would not be feasible as an immediate exit route, although he also stressed that while EEA/EFTA would be the only route to a seamless exit, it is not an ideal long-term relationship between an independent UK and the EU. He emphasised the volatility of public opinion. Euroscepticism tends to increase in times of economic downturns.

However, the cause is not lost. Bruges Group surveys indicate that when the voters are offered a choice between the EU and EFTA – in other words, between a political Europe and a trading relationship – the result is overwhelmingly in favour of EFTA. He stated that both Richard North and Hugo van Randwyck have met with senior officials from EFTA, who indicated that the UK would be very welcome to re-join. We must be positive, said Mr Oulds – emphasising joining something rather than leaving something.

A series of videos of the day’s proceedings will be posted to the website in the next couple of weeks. However, as a post script, Edward Spalton mentioned that, in the 1975 referendum, his father voted to stay in because although he felt distrustful about the whole Common Market business, “If that man Tony Benn is against it, there must be something good about it!”

Given that Tony Blair has come out so strongly in favour of us staying in, could history repeat itself and a thoroughly mistrusted politician once again act as a recruiting sergeant for the side he opposes? We can but hope.

UK’s trade deficit in goods with the EU hits a record high

According to the Government’s Office of National Statistics, the trade deficit in goods with the other 27 member states of the EU reached £21.1 billion in the three months to February, a record high since comparable records began in 1998 and an increase of £1.5 billion on the previous three months.

The statistics provided further evidence of the growing reorientation of UK trade away from the EU.  The EU now accounts for 47.6% of UK goods exports – a figure that is probably overstated by 3-4% due to the “Rotterdam/ Antwerp effect” – the practise of recording goods shipped to these two large ports as exports to the EU even if they may well be then shipped on to a third country outside the EU.

Given that the demographics of the EU suggest a dimishing role for the EU as a a destination for UK exports and given that a tit-for-tat trade war would clearly hurt the other member states more than the UK because of the trade imbalance, these figures only strengthen the case for a new relationship between the UK and the EU where we can preserve our access to the Single Market while being free to strike our own trading relationships with the growing economies of the world.  For all its inadequacies as a long term relationship between the UK and the EU, a move to join Norway, Liechtenstein and Iceland in the EEA and EFTA would clearly be beneficial for our country’s exporters.

(with thank to Open Europe’s daily briefing service)

Photo by John D F

Putin poses us a question

This week’s visit to Moscow by Alexis Tsipras, Greece’s newly-elected Prime Minister, did not go down well in most other European Capital cities. Admittedly, very little of substance was agreed. Russia would not exempt Greece from its trade war with the rest of the EU, so Greek farmers remain shut out from an important export market for their produce. No financial loans to Greece’s stricken economy were agreed either. This is hardly surprising as Russia has been equally affected by capital flight, not to mention to fall in the price of one of its most important exports – oil. It is hardly awash with spare cash to loan to anyone else.

So the fruits of the meeting between Tsipras and Putin amounted little more than a commitment to work more closely together, including on a number of energy projects. Nothing to get hot under the collar about?

Actually, the very fact that Tsipras even went to Moscow when Putin is being demonised as the big baddie by the West meant that he received a lot of flak from a number of European politicians. For instance, Martin Schulz, the President of the European Parliament, warned Athens in advance of the visit not to put at risk the common EU position regarding sanctions towards Russia. However, Tsipras spoke of a new “spring” in the relations between the two countries and stressed that Greece was a “sovereign state” with the right to pursue a “multifaceted foreign policy”, not just what other EU states would like. He also reiterated his opposition to sanctions against Russia. Of course, this may all be bluff, with Greece using the Russian connection to frighten the EU and the IMF into being more flexible.

On the other hand, however, there could be more to this visit than mere posturing by Tsipras. In recent years, Putin has been keen to probe and test the idea of a “common EU position.” Greece looks a likely weak link for some obvious reasons. There is a deep historical bond between the peoples of Russia and those of both Greece and Cyprus, built on their shared Eastern Orthodox faith. In spite of Tsipras’ atheism, he was happy to accept a gift of an ancient Greek icon from Putin, an icon stolen from Greece by a German soldier in the Second World War. Russia has used the religious connections to help establish a naval base in Cyprus, just a short distance from the British base. However, Russia’s tactics go deeper than building ties with co-religionists within the EU. A number of reports in the media claim that the country’s banks have apparently provided financial support for a real mix of EU-critical parties in several member states, including the Front National in France and possibly the far-right Jobbik in Hungary. Russian media happily offer a platform for EU-critical groups, including the withdrawalist movement within the UK. It is very clear that Russia doesn’t like the EU and therefore supports anyone from within the member states with euro-critical leanings.

This poses a question for those of us seeking to withdraw the UK from the clutches of the EU. The old adage that “your enemy’s enemy is your friend” needs considerable qualification. Let’s face it, Russia under Putin is a long way from the small-government, free-speech accountable democracy which we desire to see the UK become once again. While it is economically a pretty minor player and is not driven by an ideology that sought to conquer the world like the old Soviet Union, it has flexed its military muscle in Ukraine and is causing great concern in the Baltic states that it may also seek to take over some of their territory under the pretext of protecting the ethnic Russians. Do withdrawalists really want to cosy up to Russia under its present leader?

EU foreign policy, ineffective as it is, has been built around the premise that Putin is a dangerous man and a threat to peace. The counter argument, as far as Ukraine is concerned, is that the EU, and Germany in particular, has provoked Russia by supporting the removal of the pro-Russian Ukrainian premier Viktor Yanukovich last year. Faced with two thoroughly unpleasant opposing forces, it is all too easy for the UK withdrawalist movement to say “a plague on both your houses” and keep silent over this subject. However, the drumming-up of support for the pro-Western side in Ukraine will be used, if it has not been used already, as a reason why we must stay within the EU. We must, in other words, show solidarity with those the EU likes to characterise as “the good guys” and if we become independent we will be out on a limb with no influence anywhere – the sort of argument that Tony Blair used in his recent speech.

The counter argument is that what goes on in the Ukraine, or even in Estonia, is of little strategic importance to the UK. We rightly are far more interested in talking about trade links with the Commonwealth or China than being sucked in to a conflict between two parties neither of whom we feel much sympathy for. We don’t like Putin, but we don’t feel any enthusiasm for EU meddling in the former Soviet bloc either.

Unfortunately, this isn’t good enough. To counter Europhile arguments, the withdrawalist movement needs to articulate the sort of Europe it wants to see when we leave. What do we think of the prospect of closer links between Russia and the likes of Greece and Cyprus? Would and independent UK really be happy to see the EU fall apart? And if so, what should arise in its place? This last question in particular needs careful consideration. Contrary to what our opponents might think, we do not want to pull up any sort of drawbridge, but more to the point, we aren’t able to do so anyway. The world has become a lot smaller in the age of jet aircraft and the internet. What happens across the channel, and not necessarily only a few miles across the Channel, does affect us one way or other.

We can argue for giving a boost to NATO – one of the most successful organisations to emerge from the deliberations following the Second World War. We could also seek to reinvigorate EFTA as a trade-only alternative to the EU and one that therefore will not go sticking its nose into the affairs of other sovereign states, but this is only a start. A well-articulated vision for Europe and what our role may be in shaping it from outside the EU will be as essential as a sound economic argument if we are to win the argument for withdrawal.

Photo by theglobalpanorama

Can we trust Tony Blair?

So many ghosts from British politics past have returned from the dead to make some idiotic comment about the EU in the last few months that it has not been worth the effort to give our readers a resumé of all their drivel. After all, keeping track of Nick Clegg’s daft statements about the EU is almost a full-time job, as he makes so many of them.

However, one cannot let Tony Bliar’s intervention pass without comment, as it illustrates perfectly the utter contempt that some senior politicians feel for the people who elected them into office and explains why disillusion with politicians is so widespread in the country.

Blair said that he fully supported Ed Miliband’s decision not to offer the UK electorate a referendum on whether we should leave the EU or not.”This issue”, he said at a speech in his former Sedgefield constituency, “touching as it does the country’s future, is too important to be traded like this.”

Let’s unpack these words. What he is saying is that, essentially, the general public – you and I, in other words – cannot be trusted to make an informed decision about whether we should stay in the EU or not. He pointed out how the Scottish independence referendum had proven “the fragility of public support for the sensible choice.” What arrogance! “If I, the great Tony Blair, think a certain course of action is right, any opposing views must be dismissed as stupid.”

He also claimed that if we were to have a referendum on EU membership simply because it was now 40 years since the last one, then we should have a referendum on our NATO membership as well. This is a completely spurious argument. We were not led into NATO under false premises, being told it was one thing when in reality it was another. Furthermore, while NATO has enlarged to take in some of the former Soviet bloc nations, it still remains what it always was – a defensive alliance. On the other hand, the EEC/EU has changed beyond all recognition since 1975. Forty years ago, there was no directly elected European Parliament, no single currency, far less use of qualified majority voting and so on. In 1975, you could believe, if you didn’t look too closely beneath the surface, that we were just part of another trading bloc like EFTA.

No one can be under any illusions now about our subjugation to the unelected bureaucrats of the European Commission – a subjugation Blair himself facilitated by signing the Nice Treaty of 2001. We have never been asked if we wanted to join an embryonic superstate and, for all his faults and in spite of his rather dubious motives, David Cameron was right to reply to Blair by saying that, “You can’t stay in an organisation unless it has the full-hearted consent of the people.”

Blair went on to say, “If Britain left, the rest of Europe will be vigorous in ensuring the UK gets no special treatment.” Has he never read Article 8 of the Lisbon Treaty? It states that “The Union shall develop a special relationship with neighbouring countries, aiming to establish an area of prosperity and good neighbourliness”? While it has to be admitted, the EU hasn’t been doing too well in relating to its large neighbour to the East, it is unlikely that on independence, our country will elect as leader an awkward, aggressive brute like Vladimir Putin.

He took the all-too-familiar line about the damage which Brexit would allegedly do to the economy. While we can take it as read that he has never studied the informed analyses of supporters of withdrawal such as Robert Oulds, Richard North, Ruth Lea and Tim Congdon, all of whom have pointed to economic benefits from withdrawal, is it too much to think that he has never studied Open Europe’s work? As we recently pointed out, this pro-EU think tank claimed that a free trading deregulated UK would actually be better off outside the EU if the exit was handled well.

Equally tedious was Blair’s claim that we would be “diminished in the world” and “out of the leadership game” if we left the EU. In what way? We would still a member of NATO, we would still occupy one of the permanent seats on the UN security council (for all that is worth); we would still be a world leader in financial services, we would still be one of the largest economies in the world. In fact, we would regain our own seat at the World Trade Organisation instead of having to be represented by the EU. It gets better. We would not be having to compromise in every foreign policy decision and need not get sucked into conflicts such as in the Ukraine in which we have no strategic interest. Unfortunately for the likes of Tony Blair, it would provide fewer opportunities for future UK prime ministers to strut around in front of the world’s media at those twice yearly tedious EU summits, posing as some sort of great world leader.

However, the most irritating of all his comments in this thoroughly irritating speech was his caricature of anyone who loves their country. He is correct in saying “national pride is a great thing” but to call UKIP (and presumably by extension anyone else who wants out of the EU) “mean-spirited” is a typical Europhile tactic. He said that “Nationalism is a powerful sentiment. Let that genie out of the bottle and it’s a Herculean task to put it back in.” This statement was made in the context of comparing the Scottish independence referendum with David Cameron’s proposed referendum on EU membership. It is all too apparent from the surge in support for the SNP that last September’s vote has not put the issue to bed for a generation as had been hoped at the time. Blair’s fear is that whatever the result of a referendum in 2017, a similar surge in support for withdrawal may develop into an unstoppable momentum. He will hopefully be proved right. After all, let’s face it. Will CIB give up if we don’t get the right result in 2017? Will Global Britain? Will UKIP? Will Get Britain Out? What is wrong with loving our country to the point when we would prefer to be run by our own elected representatives and governed by our own laws? It is all too apparent that the EU is losing popularity across a number of member states and with good reason. It is a failed project that, like Tony Blair himself, belongs to a bygone era.

Photo by Chatham House, London

Encouragements and challenges from the latest social attitudes survey

On Thursday 26th March, the 32nd British Social Attitudes survey was published. After the recent YouGov poll giving supporters of continuing EU membership a 10% lead, this survey, which took a larger sample size of 3,000 voters as opposed to less than half that number in the YouGov survey, provided some welcome encouragement for supporters of withdrawal but also some serious challenges.

There is no question that the EU is unpopular with the British electorate. However, the Telegraph’s headline “British more anti-EU than last two decades” only tells part of the story. Given a referendum now, more than half of those surveyed (57%) would choose to remain in the EU, while only 35% want to withdraw. This only confirms the findings of the YouGov Survey that the withdrawalist movement has a lot of ground to catch up. However, when the renegotiation option is brought into the equation, 24% of those surveyed indicated an unequivocal wish to leave the EU with 38% wanting to stay in a reformed EU where Brussels would exercise considerably less power. There is indeed, in a sense, a Eurosceptic majority but herein lies the challenge. How many of those 38% could be won over to an outright withdrawalist position if they could be convinced that Cameron’s renegotiation is only going to be mere window dressing which does not address their concerns?

The answer to this question depends on identifying why so many people who are clearly uncomfortable with our EU membership do not wish to pull the plug altogether. This, of course, means asking them some questions. Not wishing to presume to anticipate what replies we might be given, there are a few obvious areas worthy of investigation.

  1. How aware is the electorate of the alternatives? Hugo van Randwyck and Robert Oulds both claim that when voters are given the choice between EU membership and re-joining EFTA (i.e., adopting a purely trade-based relationship with the EU) the balance comes down strongly in favour of EFTA.
  2. How well-informed are most voters concerning the degree to which the EU interferes in our lives? Or the cost?
  3. How many of those reluctant to support withdrawal have been misled by such nonsense as the “Three Million Jobs” myth and believe that we would sink without trace if we withdrew?
  4. How many are still unaware that the objective of the EU always was, is and always will be the creation of a federal United States of Europe?

It is the conviction of all the CIB Committee that if the UK electorate was presented with a clear picture of the aims and costs of the EU and the positive options for our country as an independent nation that the vote for withdrawal would be overwhelming. Furthermore, even though we and most of our supporters are firmly committed to the preservation of the UK, we nonetheless take heart from Scotland.

When David Cameron announced that a referendum on independence was to be held, supporters of the Union appeared to have an unshakeable majority. A poll by Lord Ashcroft in May 2013, less than 18 months before the vote took place, claimed that only 26% of those surveyed supported independence with a massive 65% against. However, the Independence campaign came within a whisker of pulling it off and barely six months after the referendum, it is all too apparent that the vote to stay in last September did not settle the issue. “Half of Scots think we will be independent by 2025” claimed The Scotsman earlier this month and research from the University of Edinburgh suggests that about half  English voters agree with them.

A similar momentum in favour of withdrawal from the UK is therefore a distinct possibility. The challenge is to build a team and devise the right strategy to make this happen.

Photo by Iker Merodio | Photography