Would Great Britain be better off if it left the European Union?

The European Union is and remains an experiment in unification. Not a conquest of nations in the classical sense, rather a unification of systems to create one simple system for everyone. The ultimate aim of which is to create a United Europe.

It was born out of the need to harmonise trade between nations in the post-war economies of Europe, but the idea was hijacked by countries like Belgium and the Netherlands and turned into a means of political co-operation between countries which had once been enemies. As the idea augmented itself in a series of treaties (most notably, the Treaty of Rome (1957)) additional political and sociological institutions were created. Trade between countries was legitimised in the creation of the European Economic Community, a sphere of influence which allowed for the free movement of people and goods across the burgeoning number of member states.

A European Parliament was created, made up of directly elected MEP’s. These individuals were elected by the populations of the member states every 5 years. An attempt was made to create a single market to reinforce the European Economic Community, which encountered more issues, issues which were not resolved for many years.

Together with the Economic and Political codes, civilian laws were created. The European Court of human rights was created to protect these laws and legal rights of its citizens by enshrining them in the European Convention on Human Rights.

Over the years, other countries joined the union as its influence increased. The collapse of communism in the east of Europe resulted in a large number of nations finding common cause with the European Union as it embodied many of the rights and responsibilities which had so long been denied them under the yoke of the Communist Soviet Union. These fledgling nations, while still finding their feet have been largely taken under the wing of founding members like Germany and France.

These newly freed Eastern European nations who had suffered under the oppression of the communist party were ill equipped to enter such a union of powers and many struggled in poverty.

The EEC was quick to see this and proposed the creation of the European Economic Area, a twofold system which would replace the existing EEC with a much more powerful European Union and create a single market, allowing for the free trade of goods and services, as was attempted previously.

In the economic life of any business, there are four distinct cycles, Expansion, Boom, Recession and Contraction. The EU had experienced its expansion and was midway through its boom as the twentieth century drew to a close.

Mindful of the potential for economic recession and the need to pursue a more federalised European Union, the EU created the European Monetary Institute, the forerunner to the European Central Bank. The other part of this two pronged federalisation was the creation of the Euro.

A new single currency for the entire European Union, the Euro was rolled out in several stages with referendums being held in the member states of the EU confirm their acceptance. Of these countries, only the UK, Denmark and latterly Sweden refused to adopt the new currency. Historic currencies such as the Deutschemark and the Franc were removed and replaced with the new European Currency.

For a time, this brave new world was successful, but economic union brought with it a very obvious and detrimental problem. The Euro relied on the economies of its member states, economies which would and could be manipulated by opportunistic accountants and governments.

This cooking of the books, is no more obviously illustrated than in the economic recession in Greece in 2008. A weak economy, combined with the onset of the larger global economic crisis, caused a debt crisis in Greece where the country could not be counted on to repay its sovereign debts. This economic distrust caused the government to vastly overspend, become corrupt and it was the population of Greece which suffered. The extent of the creative accounting was only revealed two years later in 2010.

The global economic crisis of 2009, magnified the problems that the EU faced in creating a fiscal union. Many economies in the Euro Zone suffered the same problems as Greece, having to draw on funds directly from the Eurozone Bailout Fund, set up to prop up countries which encountered these problems. The pockets of the Eurozone Bailout Fund, while deep were not infinite and more and more the better performing economies like France, Germany and the UK were called upon to provide more money to fund the failing economies.

One can argue that the global financial crisis has not ended as yet, but with debt levels rising across all the member states of the EU the need for greater austerity has never been more prevalent. The UK especially, as one of the first EU members to emerge from the crisis has been quick to attempt a re-think of its obligations and responsibilities as an EU member.

Enlivened by this need for austerity, political debate in the UK has never been stronger and the European Union remains a central issue to the policies of many political parties.

The UK government mindful of the will of its people has offered to stage a referendum on EU membership in 2017. Attempting to get ahead of the curve, I will now ask the question:

Would Britain be better off if it left the European Union Entirely?

To analyse the effect of such a clean break, we need to consider the practicalities of removing an institution which has loomed large over Britain in the last 30 years, magnified especially in the last 10.

The immediate effect of the removal of the EU from Britain would mostly likely be a devaluation in the value of Sterling. Short term economic uncertainty would devalue a lot of UK based shares but these devaluations will probably only be temporary. The markets and sterling would eventually recover, though damage would be caused to the overall economy.

The removal of the EU does not mean that trade would cease irrevocably, it instead means the removal from the industrial constraints of the EU. Trade would continue albeit in a changed fashion than previously existed.

London, as the chief financial port of Britain would struggle with the withdrawal of foreign investors as the EEA would be substituted for a UK centric sphere of influence. Multinational companies which have bases in the UK would most likely withdraw their offices from the UK or failing that, employ more resources to meet this new import/export market. The extent of multinational company involvement in the UK would seem to push the latter course of action as the most suitable, as the cost of withdrawing from the UK entirely would dwarf any potential expenditure on meeting the new market.

The creation of the new independent financial market would allow the UK to position itself as a competitor to the EU and other countries. This competitiveness may lead to many companies relocating to the UK’s newly attractive economy. A stronger economy would in turn increase the UK spending power in its dealings with the rest of the world.

Additionally, Britain would be free of its financial obligations to the EU, chief among them the EU Budget, which drains over £7 billion from the UK economy and is set to rise in 2015. It would also be able to determine its own agricultural and industrial quotas which would dovetail the economic expansion and cash injections into the economy.

The need to create new institutions to meet this change would not be as necessary in the legal sector because the UK has pre-existing institutions set up to meet the resultant demand from the loss of the EU. The Supreme Court of the United Kingdom would now become the highest court in the land, replacing the European Court of Human Rights.

Additionally, the European Convention on Human Rights would cease to be valid in the UK, prompting a realignment of many institutions which have dealings with the population of the UK such as the police service. A new UK only convention on human rights would have to be drawn up, which would in all likelihood would need to be by existing legal entities in the UK. It would then only be passed into statute by parliament after a referendum of the population.

Speaking of referendums, the hot potato of any UK referendum on EU membership would be Immigration. It is the sole preoccupation of this nation’s press and recently the political parties of the UK. The rise of the UK independence party, which bases most of its manifesto on immigration has shown the other parties that immigration is central to the winning of the next general election.

The European Union, in its provision of the European Economic area prides itself on the free movement of individuals between member states. It is this movement of individuals that has overwhelmed the welfare state, polarising the opinions of UK Citizens and allowing UKIP to gain a foothold where it would previously have been ostracised.

Removal of the UK from the European Economic Area would rid it of the need to accept individuals from those countries. However migrants will always find ways to enter the UK, such as claiming asylum and these ways must be better regulated to ensure that this system is not abused and is used by individuals who actually deserve to be there. This absence would allow the welfare system to sharpen up its act, refining its processes to ensure maximum efficiency with the excess funds being ploughed back into the systems themselves.

Historically, the end of the EU in the UK would be a turning point in world affairs where the old would end and be replaced by something new. This change in direction may prove the start of a perceptual change of how the UK is perceived globally. Alliances would need to be redefined to suit this change, but would this affect the membership of the UK in NATO? Probably not, as this is a mutual co-operation organisation rather than a mutual dependency organisation.

Ironically the biggest political casualty of the UK leaving the EU would be the UK Independence party, which currently holds 24 Members of the European Parliament and only one British Member of Parliament. Its biggest political campaign selling point is leaving the EU, if we left the EU the party would be forced to reinvent itself. Disturbingly, this reinvention could take a more Nationalist turn or alternatively removal of the EU from British politics could destroy it completely.

Parliamentary speech writers in the UK would struggle to write speeches for the remaining political parties without the EU. However, without the EU to serve as scapegoat for many of this countries failings the buck would stop with them and the British people could be less than forgiving.

A thorough examination of the perils and pitfalls of exiting the EU would need to be conducted and is most likely already being conducted at the highest levels of the UK parliament. Contingency plans are already being created should the UK vote positively to leave the EU. Likewise, a negative vote is being considered where the UK would need to pursue a more aggressive approach in its dealings with the EU. We have two years, let’s hope they are ready either way.

So, would leaving the EU be the right thing to do for the UK? Undoubtedly, yes it would. As I said at the start the European Union is an experiment in unification and in any scientific experiment there are failures and side effects. The side effects of conducting this experiment in unification are ultimately causing detriment to its overall validity. Simply put the EU is the cause of its own problems, problems which the UK can ill afford to endure. Going solo, could remove its susceptibility to these issues and herald the beginning of a new era of prosperity for the UK as it strikes out on its own.

© R Simmons. All Rights Reserved.

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