Hail readers!
Previously, I promised that I would address the troublesome matter of the EU referendum. Well; here I am. My essay is one I shall attempt to keep reasonably brief, although the complexity of the matter will inevitably require substantial argument. No matter.
Broadly speaking, there are will be two main themes in my essay. Firstly, I will make a positive case for EU membership; and secondly, I will disabuse the Brexit case of its claims. But before that, allow me to ask a different question…
Why is the Referendum Important?
You may be wondering why, in the midst of my exam revision, and in the process of important work on my novel, I have decided to write on this. Well; this is because the EU referendum is very important—to me personally and to the country as a whole.
Firstly, allow me to be blunt: Brexit would be damaging to me personally. I hold Romanian citizenship; this confers to me both advantages and disadvantages. One advantage is that I can study in the Netherlands under EU tuition fees—typically around €2000/annum or so. If Brexit occurs, the significant number of British students intending to study in Holland would very likely have to pay non-EU fees. These are about three times the EU fees. (Suckers!)
Unfortunately, the current government is not very accommodating of foreign people. Theresa May, our dear Home Secretary, is already planning on deporting NHS nurses (as well as teachers and other non-EU workers) that earn less than £37,000 £35000 (Independent, apparently the exact figure has changed) a year—for no other reason than that they’re not EU/UK citizens. EU rules make it illegal for her to do the same to EU workers. However, if Britain were to leave, there’s no telling what she would do once free of her legal shackles.
If I were to leave for Holland, May’s antics would be of no personal consequence. If I intend to study here, however, I would be more concerned. Although it’s rather unlikely that she’ll be deporting me—considering that I’ve lived here since I was a child, speak English fluently and will be a university student soon—she and the Tory government may remove EU employment protections. This might affect my parents (who also hold Romanian citizenship although they do also hold Right to Work), it might affect me, and it will certainly many British workers who will see their already threadbare employment rights weakened further.
Anyway, the argument I will be presenting here will not be about personal circumstance, or indeed the people who will suffer if Brexit occurs (although there will be many, both British and non-British, they will be a minority).
No: my argument will be about Britain as a whole. And more importantly still, about Europe as a whole.
The Case for Bremain
If you haven’t already realised, I don’t think very highly of Brexit. In fact, I think it’s a staggeringly stupid idea—on par with austerity and selling off council housing. Maybe worse (and that’s saying something).
But why, you wonder, is this?
Firstly, I’ll say that I am not in the minority. This is not to employ an ad populum argument; it is merely to highlight the fact that Brexit, and more broadly Euroscepticism, is actually a minority view held by people convinced that others share their view. I don’t just mean in Britain—although EU membership is advocated by both the trade unions and big business (a rare feat!), the majority of small businesses, most political parties, and the majority of the population when polled. I also mean in the rest of Europe: in most EU countries, Euroscepticism is the view of about 20% of the population; the rest of the population thinks breaking up the EU is madness. Even the Americans think Brexit is a bad idea.
Anyway, back to Britain. None of this is not to say that Brexit is impossible—it’s because of a thing called differential turnout. The majority of people may agree to EU membership as a whole (leaving aside one or two specific issues) but they may not bother to vote. The leave brigade, on the other hand, is obsessed with leaving.
Once you understand that Britain is in serious danger of letting a minority make a decision affecting the entire country, you begin to understand why Brexit is a bad idea on purely democratic terms.
You may of course argue that people have the right to vote and that not voting is a choice they make. However, this argument is rather naive for two reasons. Firstly, some of us actually don’t have the right to vote even though the referendum affects us a great deal (more than anyone, perhaps). Secondly, the reality is that for a democratic system to actually be meaningfully democratic, people have to vote—it’s a constitutional responsibility.
Leaving this aside, why does Britain need to stay in the EU and why is the Leave campaign wrong?
Trade
The economics of Bremain have been hashed out a number of times. They are not, in my opinion, the most compelling reason to remain; but nor can they be ignored, and it would be silly for me—an economics student—to fail to address them in this essay.
Let’s start with an obvious one: trade. The rEU accounts for half of the UK’s exports:
Note: you may need to allow your browser to display HTTP content over HTTPS in order to view the above graphic. If you can’t, see the original link
If the UK left, it could see a return to before EU conditions—to tariffs, regulations, quotas, and other measures inhibiting exports. The UK could renegotiate its trade deals, but anyone who has studied the history of trade deals will tell you that such negotiations are likely to take decades.
It is also rather unlikely that the UK could negotiate terms that are as favourable as they are now, let alone more favourable. The EU isn’t stupid: it knows that favourable terms under Brexit would bolster similar isolationalist parties in other countries, like FN in France. If the UK leaves, you can count against favourable terms.
Also, look at Switzerland and Norway: they still have to agree to EEA regulations—and these in fact make up the bulk of EU regulations (about 80% according to most estimates). And: they have no say in how these regulations are decided. They have no MEPs, no commissioners, and nobody on the European Council.
It is also extremely unlikely that the UK could realistically avoid trading with Europe. For one, geographic proximity is still a reality when it comes to trade. Shipping heavy objects or time-sensitive goods vast distances does add to cost.
But more importantly, the UK simply wouldn’t have the clout to negotiate the kind of trade deals the EU can. It is a simple question of numbers. The largest and strongest economies have the greatest bargaining power and secure the best deals. The US has a GDP of $17.4T (that’s trillion); China’s is $10T; and the EU’s is the largest, at. $18.5T. The UK? Our GDP is $3T. That’s a fraction of other nations (All stats from Trading Economics, 2016 data.)
Nevertheless, there is more to this fiasco than trade. Yes, trade is nice, but trade alone doesn’t have a massive overall impact on the UK economy.
There are other economic issues that are more significant, however. One such is to do with standards and regulations. Now, for anyone not familiar, the EU has numerous regulatory powers when it comes to what goods can be traded in the EU and how. The EU sets standards on car safety, food safety, and on how consumer goods should be built. It sets consumer rights; firms operating in the EU know their legal duties and know that the EU will enforce them.
The EU, believe it or not, makes consumer goods cheaper. This is because firms spend a not-insignificant amount of money on testing and meeting all of these regulations. (Obviously this is more expensive than no regulations, but do you honestly want your hairdryer to electrocute you? Do you want to be sure that the food you buy at the supermarket is safe to eat?) Now: in the instance where a multinational organisation like the EU sets standards, every firm operating in Europe can have one standard to worry about. Not 28.
If the UK were to leave, consumer prices would begin to rise; it is simply the nature of standards to diverge. The UK would have one standard, the EU another, and any firms intending to sell goods in the UK will have to charge more in order to pay for their testing and possible redesign.
Other economic arguments centre around immigration. These I won’t address because there’s no significant evidence either way.
Anyway; it’s pretty obvious that Brexit would have economic consequences. Only the most obstinate Eurosceptics deny this. It is the view of the vast majority of economists. But as I say: this has to do with more than just economics. Let me present some big-picture arguments for the EU.
Global Warming
Anthropogenic global warming is scientific consensus. (See this Meta Analysis published by Skeptical Science.) I’m not going to bother debating this, since it’s not worthy of any debate. Nor is there need for convincing—the vast majority of the people of Europe accept it.
Now the question becomes: how do we tackle anthropogenic climate change? Obviously this is a complex topic. But a few aspects do emerge.
Global warming is caused by greenhouse gases (GHGs) like CO2 and methane. Reducing these emissions is extremely challenging from a technical standpoint; generating energy, and storing it for use in transport applications, from non-polluting sources is difficult. Wind power is somewhat variable, and unable to provide all of our energy demands—although it is relatively cost-effective. Solar power is promising but is currently expensive. Carbon-neutral resources like rapeseed oil are limited by supply. But you know what? These problems are gradually being resolved.
Nevertheless, alternative energy tends to have a few key problems. One of these is cost: although the cost of these technologies is generally not great, the cost difference between them and a polluting technology is significant enough to be political.
That’s the thing about global warming; it is political as well as technological. And when it comes to the political, countries have shown that they are willing to pollute if it means obtaining an economic advantage over countries that do not pollute.
And this is where the EU comes in. Why? Because the EU is supranational; it can actually enforce regulations on member states. (Do I need remind anyone of the Kyoto protocol?)
Indeed, the EU has been a key driver in tackling climate change. It has subscribed to some of the toughest climate targets of any large economy (Europa); and of the large economies, it has seen one of the largest reductions in CO2 since 1990 (Eurostat). This is better than the US—which saw no significant decrease (EPA)—despite per-capita emissions being lower to begin with.
Furthermore, the EU has an effect that is less easy to quantify but no less significant: it is a role model for the rest of the world. It shows that emissions can be cut, and in particular, that Westerners are not hypocrites. This is important; China has long complained by hypocrisy on the part of the US. It can’t use that argument against the EU. Indeed, one may plausibly claim that the EU contributed to China’s recent drive towards decarbonisation.
A few Eurosceptics, particularly those left-inclined, may wonder whether the UK could achieve similar things without the EU. But this attitude is rather naïve, for several reasons. Firstly, the EU is much larger than the UK; if the UK remains a member state, it has greater power to influence other member states (which it would lack were it to leave) and it can influence the world by helping set EU foreign policy.
Secondly, as I’ve pointed out before, there is a conflict of interest here between states. Suppose, for argument’s sake, the UK were to support lowering carbon emission. Now suppose that the EU did not in fact exist. If we, say, introduced tough regulations on industrial pollution—would other countries follow? Or would firms pack up and move towards countries with more lax regulation, harming us and benefitting them?
And most of all, would we be able to continue our political support for CO2 reduction in these circumstances? If we can’t, global warming will continue. And that hurts all of us.
International Tax Avoidance and Tax Evasion
The Panama leaks, and many instances of global tax evasion before it, should give us an indication of what kind of money is being laundered; what effect that money would have had on our deficit-enduring, cash-strapped governments; and how difficult it is to deal with tax evasion of this sort alone.
The EU has undertaken numerous projects to combat tax fraud, evasion and avoidance. One example is the recently-approved bill to force multinationals to release country-by-country financial reports—a move which our own government initially resisted. Considering our own dear Prime Ministers’ interesting operations in Panama, this may not come as a surprise.
In any case, the situation here is much the same as with climate change. The EU is big; it can secure deals with tax havens like Monaco and Andorra (Europa). And once more, the EU is a stalwart against what, in economic parlance, is known as ‘fiscal competition’. In other words, if we—for whatever reason—decide to raise taxes on income, VAT or (most importantly) corporate tax, other European nations cannot take advantage of us. This is because of numerous EU laws, such as the minimum 15% VAT threshold and various regulations regarding corporate practice within the EU.
The EU has also clamped down on various clever tax avoidance schemes. One has personally affected me.
You see, some months ago, Amazon—being quartered in Luxembourg—was able to pay 3% VAT on ebooks sold within its marketplace. Then the EU brought in regulations requiring digital goods to be subject to taxation in the country of purchase. Now people have to pay 20% VAT when they buy the Necromancer, instead of 3%. And the UK government gets the money, not Luxembourg. I may not be pleased, my readers may not be pleased, but we all have to pay tax.
To quote Jeremy Corbyn: there cannot be one rule for the rich and another for everyone else.
Think of the Big Picture
Finally, there’s the old bugbear of national security to think about.
If the UK were to leave, the EU and the UK would weaken their ability to influence world events. Putin would be delighted: the EU is his worst nightmare. It’s right on his doorstep; and it has allowed several Eastern European countries (Romania, Poland, Bulgaria) to escape Russian political, economic and military dominance.
Of course there’s NATO. But NATO isn’t an economic union; it’s not even a political union outside of the purely military aspect of it. NATO hasn’t bought human rights to Europe—or at least not beyond overthrowing a few unsavoury dictators (cough Milošević cough) NATO members don’t have to sign the ECHR, they don’t have to have strong democratic government, and most of all: NATO can’t provide trade deals and investment to nations hoping to escape Putin’s claws. The Eastern block can attest to this.
Also, the EU is a military alliance distinct from NATO; this is important if you happen to be, say, the Ukraine.
So the EU is undeniably beneficial to Europe. ‘But what about Britain!’ some of you may cry.
Now this is where it gets interesting. Firstly, it’s worth realising that the problems inherent in a military and political union can be much worse than under the EU. Among EU nations, Britain is an equal. NATO? The US is king there.
But let’s consider more than just the military. What of other diplomatic, legal and economic considerations?
I will not deny that the EU acts on the interests of all of Europe; if this occasionally conflicts with the interests of the UK, so be it. Indeed, the EU’s interests frequently do conflict with many other member states aside from Britain.
But you know what? If the EU didn’t exist, we would all suffer. If every country in Europe simply pursued its own interests, Europe would be fragmented and weak. Strength is in co-operation; and sometimes, one has own to accept an unfavourable stance on one issue in order to accept a favourable stance on a dozen other issues.
This concept, however, seems to elude the Brexit brigade.
The Case Against Brexit: Myth and Fatuous Argument
Let me now address the many claims made against the EU, and why they don’t hold up to scrutiny.
The EU is Undemocratic/Unaccountable
This claim is made by both left and right Eurosceptics, and it’s preposterous in both cases. The EU:
The EU is democratic from top to bottom. It has significant separation of powers not unlike the American system.
It also reeks of hypocrisy when these critics complain about the EU’s democratic process, but not our own. We, after all, have an appointed House of Lords! (Not that I’m against the House of Lords: I think it’s a good idea in need of some reform. I’m just pointing out inconsistencies.)
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As for the claim that the EU is not accountable, I find that hard to believe seeing as to how the UK:
- Has a number of MEPs;
- Has Councilors;
- And regularly participates in negotiations.
The critics seem to be labouring under the impression that if the UK doesn’t always get its way, the EU must be unaccountable. Sorry to break it to you folks: it’s called a union. An accountable and democratic union means that everyone in the union has a say—NOT that one member dictates policy. That is known as ‘imperialism’.
But think of the Greeks!
This line of argument is the one taken by leftwing Eurosceptics. It is a stupid argument, of course, since it fundamentally misunderstands the nature of the EU towards individual member states.
Here’s the situation:
- Successive Greek governments ran high deficits and failed to implement important structural reforms regarding industry, employment, pensions, and most importantly tax evasion.
- Come the world financial crisis, Greek tourism went down the pan and the Greek economy went with it.
- The Greek government asks the EU, and more specifically a few EU member states, for help.
- Merkel, Sarkosy and EU top dogs grant Greece a rescue package composed of loans; however, Greece must undertake some reforms in order to get this rescue package. These reforms are intended to prevent a similar situation from occurring again.
- The IMF also gives Greece loans, and again with strings attached.
- The Greeks suffer rocketing unemployment, recession, and quite a few cuts to important government services.
- The Greek economy worsens, Tsipiras is elected, and we know the rest.
The EU has no legal obligation to help Greece. I would say that it does have an economic and political obligation, because the economy of one member states affects other members states; and because, more broadly, the European Union requires a certain modicum of solidarity to function politically.
The EU leaders, including Merkel and Sarkosy, accepted this—they offered Greece a rescue package.
But to understand why the terms were so harsh, you have to see it from their perspective. The financial crisis affected nearly all developed economies. In the US, house prices collapsed, many were left unemployed, in debt and destitute. In Europe likewise, we were bailing out our banks, suffering recession and dealing with high unemployment. What could Merkel and co do? Their countries were faring comparatively well, but the key word here is comparatively. Merkel still had to bail out Deutsche Bank; Germany still saw recession. France saw high unemployment.
Could Merkel justify spending her own taxpayers’ all too finite money on other countries—especially when the other countries’ economic crisis was not her fault? Did she not need to ensure that her loans would be repaid, and that Greece and co. would undertake the necessary reforms to prevent such a disaster from happening again?
And remember Spain and Italy—their economies weren’t in as much shit as Greece’s, but they were much larger and therefore potentially more disastrous. Remember that Germany and co. gave loans and rescue packages to them as well.
In short, it is pure fantasy to suggest that Greece was a blameless victim of EU neoliberalism. The Greek economy was the fault of Greek governments over many years (along with the bankers’ insane gambling, but that’s a different kettle of fish). And the EU did in fact offer to help them; they could have just said ‘not our problem’.
Were Merkel’s austerian ‘reforms’ effective? Obviously not: Greece has seen almost no recovery and is suffering from political and economic chaos. But this is not because Merkel was an adherent of neoliberalism; her government, if you recall, renationalised the Federal post office and was quite happy to play nice with the unions.
Merkel may have been influenced by the economic establishment (remember: the IMF was all for austerity until recently) but her decision was not made on establishment economics. It was made on something even worse: household economics. Merkel believed that if the Greeks ‘tightened the belt,’ and paid off their debts (just like a household) it would be fine. This proved disastrous.
Nevertheless, it is not a fault of the EU. It is not even enough to damn Merkel—her actions were the result of ineptness, not malice.
And why am I so resolutely confident of this? Because it is in Germany’s interests to have a strong Greek economy—to suggest anything else would be ludicrous. A strong Greek economy means customers to buy Mercedes. A weak Greek economy means loans you may not get back, bad political PR, and political chaos in the EU.
But Norway and Switzerland do well!
This rather amusing comparison is sometimes trotted out by Eurosceptics. It has two fundamental problems. The first is that Switzerland and Norway are part of the EEA, and have to abide by EEA rules; this immediately makes the argument rather suspect. After all, Farage and co. are not suggesting we be part of the EEA, since that would involve free movement of labour.
The second problem is to do with cause and effect: Norway’s and Switzerland’s economic performance is not only partly because of being in the EEA, but also because Norway has large reserves of North Sea oil, and because Switzerland has been a banking haven for tax-dodging elites since the days of WW1. One can hardly point to their success and claim Britain can follow it.
But the EU is Rubbish
To be perfectly honest, I think that what this argument lacks more than anything is perspective. Political systems are almost by definition imperfect; the EU is one of the better examples. Somehow, it managed to turn a war-torn continent into a peaceful world power, and indeed an economic Great Power. There aren’t many political unions that can claim to have done that. (Oh, and if you’re going to be gloat about the EU economy, gloat on this: the EU’s GDP is $18T—the largest in the world. Per capita, the EU has a GDP of $36,447; the world average is $10,700.World Bank)
The truth of the matter is, the EU is in most respects a world model. It mostly succeeds in juggling the interests of 28 member countries—through linguistic, economic and historic differences—without becoming gridlocked in the fashion of the American Congress. It is democratic and has proportional representation; that’s more than the US can say, and certainly more than what China can say.
In light of this, the complaints leveled against the EU are positively trivial. Maximum power ratings on vacuum cleaners? Really? (And by the way, this EU directive led to more efficient and quieter vacuums that clean no less effectively. Europa)
I’m not going to bother with complaints against the EU court of human rights. While in some instances their rulings may be a bit short of common sense, it is nevertheless an institution that does a good deal to uphold human rights and to guard against state abuses.
The Immigration Question
And now, finally, to the main driving factor behind the whole Brexit affair.
Some Eurosceptics claim their worries are related to the other issues I’ve mentioned, and not specifically to immigration. In some cases—especially if the Eurosceptics are left-leaning—this is credible. In many cases, however, this is a smokescreen for the issue other Eurosceptics make front and centre.
Now: I am not going to discuss the numerous complexities of immigration in too much detail here. I don’t have the time and it is not the scope of the essay.
I will, however, say a few things. Firstly, the immigrants don’t seem to have any negative effects on the UK economy. They do not ‘steal our jobs’ since labour economics is not zero-sum game—what jobs the immigrants take, they make other jobs buying from supermarkets and cars and utilities and all the other million-and-one things we buy.
Secondly, many of these immigrants’ children—and sometimes even the immigrants themselves—do, for all intents and purposes, become British.
Thirdly, not all immigrants are equal. How many Polish suicide bombers have you heard of?
Finally, it seems quite silly to leave the world’s largest trading block, an immensely influential and effective democratic world power, and to forego all those benefits in tackling climate change and tax evasion... over immigration. Dare I say it seems rather xenophobic?
Conclusion
Inevitably, to satisfyingly address an issue like the EU referendum, I have had to go into quite a bit of detail. Nevertheless, I hope you found my essay informative, reasonably succinct, and perhaps even convincing.
My essay has two broad conclusions.
The first is that the EU is a Good Thing. It has been a powerful force for good in Europe—having turned a broken continent into a relatively prosperous continent, and having turned the formerly corrupt Eastern block into something resembling transparent government—and it will continue to be at the forefront of battling tax evasion, climate change, and many more issues besides.
The second is that the arguments against the EU are either outright false or not particularly convincing under scrutiny. The EU is not anti-democratic. It may have a few flaws, as does any political institution; but it is still far better than most.
In short: leaving the EU would be burning the orchard because of one bad apple.
