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Wednesday, November 07, 2012

Beyond posturing, Germany knows that the UK is needed in the EU

Our Director Mats Persson has a piece in today's Telegraph, where he argues,

Last week, even as British MPs were voting down the Government’s position on the EU budget, I was attending a European discussion of a very different kind. In a conference room in Berlin – at an event marking the launch of Open Europe’s new German partner organisation – hundreds of academics, journalists and policymakers sat listening to a brilliant speech by Otmar Issing, the former chief economist of the European Central Bank, about the intricacies of the eurozone bail-outs and where the single currency must go next – all blissfully unaware of the fraught debate in the House of Commons.
When you spend time in both Britain and Germany, it is impossible not to notice how distant their stances on Europe have become. When Angela Merkel meets David Cameron at Downing Street today, to discuss the EU budget, they ought to have plenty of common ground. Berlin actually stands to lose more than London: under the current plans, its contribution would rise by about 30 billion euros over the seven years, whereas the UK’s would go up by 17 billion. Nor does Merkel need to be told that the budget is a nonsense: even her Europhile foreign minister, Guido Westerwelle, says that the current set-up “leads to aberrations such as EU subsidies going to day-spas or romantic hotels”. 
So why are the talks expected to be frosty? The problem for the UK is, first, that the EU budget just isn’t that important to Germany at the moment. For the past two years, Berlin has been preoccupied by the eurozone bail-outs, and endless bickering over the lending capacity of the relevant funds (among other fascinating topics). 
Second, Germany still perceives its contribution as a necessary sign of its commitment to the greater good. Indeed, the bailouts – despite their unpopularity – have actually made Berlin more reluctant to kick up a fuss over the EU budget: a few billion more, in return for a bit of goodwill in the austerity-fatigued Mediterranean, is seen as a sound investment given the trillions at stake over the euro. Such subsidies are also a convenient way to hide part of the Länderfinanzausgleich – the unpopular transfer payments to the East. 
Allowing Cameron to take the flak over the budget therefore suits Merkel down to the ground. But what is really driving a wedge between them is the eurozone crisis. A host of recent stories have suggested that Merkel is “losing patience” with Britain’s reluctance to accept more integration, and with hints that the UK is prepared to leave the EU altogether (her best line likened Britain to the old men heckling from the sidelines in The Muppet Show). 
Part of the problem is that Germany and Britain keep on talking past each other. This is not just down to diverging views of the role of the market, or the merits of European project. It’s also down to bad diplomacy. Cameron and George Osborne have made a habit of lecturing the Germans on the “inexorable logic” of the eurozone becoming a debt union – for which German taxpayers would foot the bill. This is a spectacular own goal, since it obscures a key area of agreement: namely, that Europe’s economic malaise should be dealt with by structural, free-market reforms rather than doling out cheap cash. 
Recent reports suggest that Merkel’s frustrations have reached the point where she’s prepared to wave goodbye to Britain altogether. In the past, so the analysis goes, Berlin needed London to balance the Mediterranean bloc. Now, Germany’s chequebook does all the talking. Certain people in Merkel’s office have taken to slipping this into chats with journalists, in case those in Westminster have missed it. 
Beyond this posturing, however, Berlin knows that an EU without the UK would be a much less pleasant place. The single market would shrink by 15 per cent, with 75 billion euros in annual German exports facing extra costs. Germany’s contribution to the EU budget would increase by an additional 10 or 15 billion euros. Nor would Britain’s global clout be easy to replace. If it really came to a situation where the UK was on the verge of leaving the EU, Germany would almost certainly crunch the numbers and conclude that, as Ludwig Erhard said, “without Britain, Europe would only be a torso”. But taking the long view, I am optimistic that a new Anglo-German deal is still there to be struck – one that would not just keep Britain in Europe, but create a Europe that Britain could live with. 
How could this happen? First, both Cameron and Merkel need fundamental change within the EU in order to keep their domestic audiences on side. Almost two thirds of Germans, for example, oppose the idea of giving more cash to Europe.
Second, many in Germany now accept that a flexible Europe, allowing for different modes of membership, is inevitable. Such diversity could be a very good thing. It is also exactly what Britain wants. 
Third, Germany is desperate to ensure that integration does not destroy the single market, which remains an asset. This should include making sure that any eurozone banking union doesn’t push the City of London “offshore”, which would cut off a facilitator of investment and a gateway to global markets for Germany. 
Both London and Berlin support the prudent use of public money, and oppose the papering over of economic cracks through fast and loose money. Both want to boost cross-border trade, in Europe and across the world. If the British Government stops its misguided lecturing, and advocates that kind of change, it may find it has more friends than it realised. 


Rollo said...

The EU is a tottering and badly designed edifice. It is held up by even more tottery columns: any pretence that France is able to support it is false. It is already like a tripod with two legs: one of them is us. Of course Germany needs us to carry on sharing the burden with them, but that is not the question: do we need to carry the burden? NO WE DONT.

Sue said...

As per usual, no mention of democracy in this article. Britons want their country back, plain and simple. They don't want to pay for other countries to catch up to the 21st Century. They don't want to pay foreign fatcats to tell them what to do and how to live their lives. They want control of their borders, industries and civil services.

Part of Europe, NOT IN THE EU! That's what WE WANT. WE WANT OUT!

Rik said...

The EU after it moved to the stage where it started influencing considerably the daily affairs of people needs simply to be accepted by and be credible to these people. This has been completely forgotten.
Basically for the UK the situation has now gone so far that it will need a lot of councilling to save the marriage.
In that respect different tiers seem simply unavoidable.

The UK is a bit of an exception, however who thinks that there will be a structural majority support in all other Northern countries while the thing is run like a semi-bananarepublic will most likley be proven completely wrong.
An EU that for one reason or another becomes the (partly at least) daily government for many people (and wants own revenue) will only be longer term and structurally supported when the governance is taken to a Northern level.
Anyway that is necessary to stay in the top end of the per income countries. If too much money has to go to all sorts of nonsense that is very unlikely to be sustainable.

Looking at the more layer structure. Basically it is Common market that brings in the bacon. The rest hardly has substantial economic advantages.
Which opens for the UK the question is 100+ Bn annually really necessary to operate a Common market?
The answer is imho clearly no. Most big budget items are either a transfer abroad (often to keep archaic sectors alive). Structure/regions, probably a direct transfer by the UK to the respective countries would serve the UK national interest better.
Research: apparently plans to use it to subsidise totally uncompetative car industry. Better done at local level. Should be for new activities not for sectors like the French carindustry that is already several decades uncompetitive and has huge overcapacity problems as well.

Anonymous said...

Why does the author keep referring to "Europe" as though it were a discrete political entity?

It is not.

The EU(SSR) is the political entity.

"Europe" is nothing more than a continent.

Please stop this lazy thinking and expression, and take more care to be accurate in your writing.


Anonymous said...

I really don't think that the stances on the EU are that distant in GB and in Germany. One just has to read the comments sections of conservative newspapers like FAZ or Die Welt. A lot of people are fed up with this political experiment and want to re-reduce the EU to the common market.
To me the only major difference is the UKIP. If the CDU and FDP were faced with an anti-European party, they would be forced to take a much tougher stance towards the EU.

ps: Länderfinanzausgleich is not the mechanism that transfers payments to the East. That mechanism is called Solidarpakt. The Länderfinanzausgleich transfers payments from richer to poorer states.

Average Englishman said...

I agree with Rollo and Sue. To take up Rik's 'failing marriage' analogy, we are way beyond the stage where counselling will do any good; it's 'lawyers at dawn' time.

A block of 'United States of Europe' enthusiasts want ever further integration. The UK and others want to go in the opposite direction and obtain far, far less involvement in their country's affairs by unelected bureaucrats and revert to the basic Common Market that the UK voters (including me) thought a good idea in 1975. It won't work in the long term to have a confusing mix of some states in this agreement and others in that agreement, any more than it would work having one's ex wife and children living in the same home as one's new partner. Everybody would be pulling in different directions.

Let those states who's people really want more integration (note; not who's politicians want it but who's people show they want it after proper democratic procedures) join together more closely and let the others obtain their full sovereignty back prior to the agreement of more traditional trade agreements.

The continual use of 'sticky tape and glue' diplomacy plus copious amounts of money from Germany, UK, etc., will not hold the EU together any better than it is at the moment and right now, it's falling apart.

A serious dose of realism is required all round.

Agincourt said...

"Beyond posturing, Germany knows the UK is needed in the EU." Rubbish. No, what is true is: that beyond posturing, Britain knows in its heart that it does NOT need the EU.

Denis Cooper said...

Bugger what the EU needs; the EU should never have been created and the world would be better off without it; my paramount concern is the future of my country, not that of an intentionally anti-democratic international treaty organisation which from its very start was defective, and which inevitably and quickly degenerated into corruption and now outright and unashamed lawlessness; if people in other countries are so foolish and naive that they can't see that, then let them sink into subjugation to the likes of that evil bitch Merkel; I don't give a tinker's cuss whether she's losing patience with us, she can go and stuff herself; as far as my nation is concerned we should just get out of it.

Idris Francis said...

There are so many flaws in Matts' analysis I cannot deal with them all before I have to go out, but will this evening.

Those who comment on this site are few in number, but almost all constantly make these points (1) the EU is anti-democratic and getting worse every day(2) we do not have to be in the EU to trade with it (3) public opinion is now heavily in favour of leaving - including more senior politicians almost every day.

I am baffled therefore that Open Europe continues to argue for staying in the EU, on some sort of a carte basis that the EU elite have made clear for 50 years they will not allow.

What part of "ever closer union" does Open Europe STILL not understand?

What parts of "democracy", "independence", "sovereignty" and "freedom" does Open Europe still not understand?

“A nation can survive its fools and even the ambitious. But it cannot survive treason from within. An enemy at the gates is less formidable, for he is known and carries his banners openly.

But the traitor moves among those within the gate freely, his sly whispers rustling through the alleys, heard in the very halls of government itself.

“For the traitor appears not a traitor - he speaks in accents familiar to his victims, and he wears their face and garments, and he appeals to the baseness that lies deep in the hearts of all men. He rots the soul of a nation - he works secretly and alone in the night to undermine the pillars of a city - he infects the body politic so that it can no longer resist. A murderer is less to be feared.”

Cicero 42 BC

christina speight said...

There is a large consensus amongst those posting here that Mats Persson has got it wrong and in being wrong he discloses Open Europe's true stance. In his article he says that a new "Anglo-German deal is -- there to be struck - - - that would - - - keep Britain in Europe". The EU has gone so far down the road to perdition that it is a most inconceivable that in any truly democratic choice the British people would vote to stay in the EU. This is far from "What Britain wants" [per Mats P.]

Mr Persson misses the point when he avers that German is irritated by "Britain's reluctance to accept more integration". The pfennig if not the penny ought to have dropped by now. We are - even our government - totally opposed to the integration we have got already, let alone any extension of it.

He also claims that Germany is committed to "the greater good'. Many of us do not see that atr all. We see Germany's insistence in supporting a failed currency as being committed to the greater EVIL of mass unemployment, starvation, increased suicides and despewreation which no possuible end in sightr. Germany is utterly committed to pursuing its goal of integrationb on the backs of the miseries it is inflicting on the people oof Greece, Portugal, Spain, Italy and - it seems - now France. Do they want a bloody revolution for they are going the right way about it?

No Mats Persson's article is blinkered and - like so much in the affairs of the EU - deceitful

I fear we must treat (As Idris warns via Cicero!) Open Europe as the enemy within in future.

Jesper said...

Good diplomacy is about finding common ground and building on that.

Selling news is about shocking the public about something that may or may not happen or may have happened or etc.

The meeting might be frosty, however, that is not a reason for it to end up with a lose-lose situation. If it is not possible to agree to a new budget, then so be it.

Btw, I don't see much sympathy coming for farmers protesting against not getting even more free money, not even in the net recipient countries. France: Pension age increased and VAT increased but hey lets give more money to farmers? Vote-winner or vote-loser?

Also, since the proposal to increase the budget actually exists and didn't appear out of nowhere, who is backing it? Which politicians (MEPs, commissioners, national politicians)? Or is this a proposal without backers?

Open Europe blog team said...

Thanks for your comments.

@Anonymous You're making excellent points and we agree with you. What we were referring to is the diverging strategic focus between the two governments. But absolutely, there's a lot of (and growing) frustration from within Germany about current state of EU affairs.

regarding the Solidarpakt, our point is that the Länderfinanzausgleich is what is partially going through the structural funds at the moment (as Solidaritätszuschlag is raised through income tax as opposed to raised at the state level)though we appreciate that his is also redistribution across Germany as a whole.

christina speight said...

To Blog team.
You reply to 'Anonymous' when he says nothing that you haven't already said. Almost all the rest of us are angry at the deviousness of the article. I particularly think of Denis and Idris above.

You suggest that Germany is losing patience with us. That phrase has a chilling ring to many of us who remember how Germany's head in the 1930s kept announcing that His patience was exhausted before sending in the troops.

Why not deal with the accusation that has been levelled at you that Open Europe has its own agenda which is not that of many of the British people.

Rik said...

@Most of the above.

Sometimes I really wonder if this is not more about frustration than about finding a solution.

1. In wanting to get out irrespective of the economic costs.
I have never seen a proper answer on how the UK wants to keep its export going in the process of leaving the EU.
Which should happen, for most at least, by Dave going to Brussels and 'middlefingering' Barroso (the idea is of course appealing but..). Several times it is mentioned that it likley will create for a couple of years a mountain of paperwork (and likely extra levies), but all we get is we import more from them than we export to them. Simply a completely useless answer to the original question.

2. Is it about getting only an in/out referendum or is it to have arrangements in place for the decades to come that work. Again it looks like the former. Again it doesnot make clear why the split will not tank the UK economy. We hear that now less than 50% is EU trade, well the UK can simply not afford to lose that other 48% or even a part thereof.
And that will be hold against you in an in/out referendum. And you know as well as I that if business start to advertise for an 'in', because they are rightly afraid of the consequences the majority will likely vote for an 'in'. They are simply afraid of their job. You simply donot make your case and give answers to the most important questions (like will it not tank the economy).

3. The UK is part of Europe. May be not Europe as in EU, but in a geographical and economical sense it is. Whether you like it or not there will be (and remain) relations between the UK and the EU. And these will be necessary to keep the UKs standard of living at what it now is. You donot come up with any realistic ideas about that relation in the future. The next period will of course give rise to irritations but that should not be made worse than it is. Barroso and Co are dodgy and hardly democratic but they are no Hitler and Mussolini. Several democratic countries simply want to be part of it.

4. Coming back to my point that it looks largely frustration. If you want an in/out referendum AND want that that to succeeed, for likely most of the voters you will have to come up with answers to the questions asked above. This way it is not going to work and you probably know that.
The issue is simply to complicated to arrange properly by having Dave going tomorrow or so to Brussels and come back the same day as the PM of a truly free/liberated country.

crapshooter said...

Of course Open Europe has an agenda. It is a lobbying organisation and all lobbying organisations have agendas: that's why they were created.Open Europe's original agenda was to promote overall change in the EU to make it more focussed on
economic liberalism, free trade,open markets and deregulation. All very respectable goals. The problem is that outside the UK few politicians in Europe see these as the only tasks the EU should undertake and there seems to be no general interest in re-casting the EU on these lines. So Open Europe has had to re-invent itself as an organisation principally concerned with the reationship of the UK to the EU, not with the EU's wider identity. It has never advocated the UK's complete withdrawal. Rather, it struggles to find an arrangement under which the UK can still be a full member of something (?a European Economic Community)while the other 26 member states are also members of something else. Whether this is achievable has yet to be proved. Those four or five individuals who regularly post comments on Open Europe's blog - often in rude or incoherent terms -clearly favour a different agenda. But in this case why don't they take themsleves off to another blog site which more accurately reflects their anti-EU views?

Denis Cooper said...


"EU to be federalised in the long run, Merkel says"

"The EU commission will eventually become a government, the council of member states an "upper chamber" and the European Parliament more powerful, but fixing the eurozone problems is more urgent for now, German Chancellor Angela Merkel told MEPs on Wednesday (7 November)."

"Of course the European Commission will one day become a government, the EU council a second chamber and the European Parliament will have more powers. But for now, we have to focus on the euro and give people a little bit of time to come along," she said."

Rik said...

I realisied why some things I mentioned might look like contradicting things I said earlier, but let me explain why they are not.

1. At present the UK population looks to be divided 40/25/35 (resp no/yes/donot know). Spreading the 35 over the rest which is basically a standard method you come at 60+/40- (no/yes). Figures look relatively stable as well.
2. It looks like a 60+ is rather on the rise than going down. You get that with every day a bad press for the Euro.
3. Who can change that percentage. Basically the 2 big parties and the businesssector. Let's be honest what Merkel think is of no real importance for this percentage (it might however be in the negs).
If both big parties move to the Euro sceptic camp the 'follow the leader'/go for sure effect will likely increase this percentage if both are against it will decrease likley but not necessarily.
Business is probably more important. If they start in these economic bad times screaming 'bad for business lose you all your job', that will have a huge impact.
4. The Tories basically had to do something with the UKIP at 10% (because that will be nearly totally at their expense) and they did.
Labour saw that there are no votes to win with being Pro-EU so has moved as well. Plus this strategic move makes strategic voting Conservatives by potential UKIP voters considerably more unlikely, certainly on the EU issue.
5. So we are likely at 60-65/35-40. However this assumes that the outs can hold a proper campaign that is the big ??.
Business is likely strongly against an out especially when they cannot oversee the consequences (as the situation is now).
6. Cards still to be played:
-how to assure that an exit doesnot tank the economy. My idea is that if the outs will not have an answer on that (and they donot have one now) you can forget it that a majority will vote 'out'. People value holding their job much more than they hate the EU burocracy. This is at present a big negative for the out camp. It can be solved , by doing your homework. It is however not that easy. You cannot reverse 10s of international agreements that have been signed, as if it were Christmas cards iso Constitutionlike material, in a day or a week or a month or even a year. Simply technically impossible, requires in general lengthy negotiations one way or another. Not even to mention the new agreements that might be necessary for the future.
7. Another card is that the population simply doesnot see the difference between a substantial reneg and an out yet. They partly might have the idea from before that it is impossible to reneg (however with everything moving it has become a possibility now). Not a 100% guaranteed one but one which is really a possibility, not a shot in the dark like before.
It might even under the current circumstances be easier to do than a totally new arrangement. And the final result could be very close to an out plus a new arrangement.
8. It all depends how the campaign around a referendum is done by all sides. With the out side likely having a much better chance to get a full reneg approved than a plain out (as the consequences are not known business will simply be heavily against and with a so so economy you cannot have that and it will likley swing voters massively as well.
Labour doesnot really fully realise this point. But it is hard to see how they would be happy with an in/out referendum (which might lead to an out) and being the government that has to clean up the mess thereof. A reneg is much safer and they take alot of voters via the UKIP side from the Tories anyway. Labour is not really worse as it is now so fewer people will move at electionday from UKIP to the Conservatives to avoid the greater evil.

christina speight said...

Rik and C***shooter are totally missing the point and the facts too.

We have a trade deficit with the EU and trade will not cease not least because the EU companies won't let it. Secondly the share of our exports going to the EU is nowhere near 48% because that figure includes all our trade with the Far East and other continents that happens to get routed via Rotterdam and Antwerp. This has been an oft repeated fact over the last couple of decades or so and you, Rik, should know it.

Maybe you haven't noticed that even those figures are falling as exports are diverted. Merely as an example Jaguar-Land Rover is doubling its sales overall (and doubling its production) while stagnating in the EU. (As long as they keep the euro the EU will continue to stagnate - - see today's Commission forecasts. 0

JLR is not the only one. Glaxo says much the same as does JCB, Diageo - the world's biggest drinks company is booming everywhere but the EU. And Standard Chartered has record profits this month because it doesn't have much trade with the EU. The picture is perfectly clear - The EU economy as a whole is in terminal decline.

As for C***shooter I am only on here questionning Open Europe's agenda because of a pack of untruths in an article that Mats Persson penned for the Telegraph. It was shameful.

Denis Cooper said...

Rik and crapshooter -

I suggest that you read what Merkel told the EU Parliament, link given above, and in particular note how she starts with the words "of course":

"Of course the European Commission will one day become a government, the EU council a second chamber and the European Parliament will have more powers. But for now, we have to focus on the euro and give people a little bit of time to come along".

If this arrogant woman really thinks that with "a little bit of time" the British people will voluntarily be made subject to her EU federation then she should think again.

God knows why the UK government has signed up to help her Save the Euro, when it's long been clear what she would want to follow on from that, including:

"Our goal must be that all EU member States join the euro one day”

without making any exception for the UK.

I see her as not just as an arrogant enemy of democracy, and at heart an enemy of my country, but as a downright evil woman.

Have you forgotten that it's above all thanks to Merkel that the Lisbon Treaty has been imposed on the population of the EU?

That above all others it was Merkel who insisted that the legal contents of the EU Constitution, rejected by the French and the Dutch in their referendums, must be decanted into her "Reform Treaty" and relaunched in new packaging?

That above all others it was Merkel who insisted that the second time round there must be no referendums, and even got Brown to put pressure on the Spanish Prime Minister when he seemed to be weakening and about to allow a referendum in Spain?

That above all others it was Merkel who refused to accept the result of the first referendum in Ireland on the Lisbon Treaty, and set out to bully and threaten the Irish to vote again, and vote as she wanted?

And have you forgotten the vile propaganda campaign she had launched against President Klaus of the Czech Republic after the Irish had given up opposing her, to force him to sign off the Lisbon Treaty, including references to previous "defenestrations"?

perdix said...

The fact is that the Germans are on to a good thing - a weaker currency than they would have as a truly independent trading nation. They want the EU and the Euro to continue. They also like order and predictability in their affairs. It would have been better for the long term future of the EU for rejections of treaties to have been been accepted rather than asking countries to vote again until they got the "right" answer.But the political classes don't like such uncertainty.

Average Englishman said...

Ref. Xxxxshooter's observations. Open Europe's stance is clear; they want to 'square the circle' and have the UK remain in Europe under altered terms that will lead to long term harmony and prosperity. This is not an unreasonable aim but their solution will not work because the likes of Merkel and Barroso want a federal state of Europe that the vast majority of the UK population will not accept being part of.

Why do I for one keep reading this blog and posting on it when I could join others of a similar view on anti-EU blogs? Well, I like to be well informed and see no point in preaching to the converted. I think it is important that the readers of this blog and the O.E. team should get a proper idea as to how strongly many people like me feel about retaining our country and our freedom. We will not be silenced, we will not give up - ever, and we will not conveniently go away to other blogs or anywhere else. We are here for the duration and O.E. and every other party with a desire to unpick or rearrange this particular Gordion knot must listen to us. It's called democracy and it's often kind of difficult and inconvenient for intellectuals with a lot of knowledge on any given subject to accept that the opinion of the retarded erk who just keyed their car has the same weight at the ballot box as their own. History shows that alternative arrangements would ultimately involve said erk putting a bomb under one's car instead. I know which I prefer.

This brings me to Rik's point about the practical difficulties of the UK leaving the EU and the effect upon trade, jobs, etc. A march of a thousand miles start with a single step. I want Dave to start walking; simples! If elected politicians and overpaid bureaucrats can get the people of the UK into this mess then they can get them out of it as well. They only need the right incentive and I believe that the UK people will give them that incentive at the ballot box. The matter is really very simple, either the UK follows Merkel's lead and staggers on to become part of a federal Europe led by a resurgent Germany or she walks in the other direction and regains her sovereignty as a 100% free country. As for the potential cost of this last move to UK voters Rik, how many UK people do you think gave their lives in two World wars in the name of freedom? A short term loss of some prosperity seems a cheap price to pay for my family's present and future freedom from where I am standing and the more that Frau Merkel tells us what to do the cheaper that price will seem.

I expect others with the necessary knowledge to do what is required over a reasonable time frame to disentangle the UK from the EU but I want it done nonetheless.

If an 'in-out' referendum were to be held tomorrow and for the economic reasons Rik explained the UK people decided against leaving the EU say, 60:40 the matter would not end there. That would leave the UK to go further down the road to EU federal integration and the ant-EU cause would get stronger not weaker, as the results of that integration became clearer to the UK population. An initial defeat would just postpone the inevitable not stop a UK exit altogether.

So, sorry Xxxxshooter but I'm going to around this blog for as long as it takes.

Open Europe blog team said...

Dear Christina, Idris et al.

Open Europe has a clear stance on the EU – it is on our website – essentially, “Our vision is of a slimmed-down, outward-looking EU.”

In practice this means more decisions being taken by the member states. We are not however a lobby group, arguing for a special interest (as our extensive research on other areas such as the eurozone crisis shows), but a think tank – as such we welcome debate as to the best way forwards. We are grateful to you for your engagement with the debate and all who comment and show an interest in this important area.

You are of course correct to say that the UK’s trade is moving away from the EU, this is something we have looked at in detail in our report “Trading Places” where we looked at trends in UK trade and the alternatives to EU membership. We concluded that, at the moment (this could change), the alternatives all present drawbacks for trade in the narrow sense.

We are the first to point out the huge problems with democratic accountability and policies such as the CAP, EU budget, over-regulation, crime and policing etc. If the UK is to remain in the EU, these areas will need to be addressed. But it is important to remember that all the alternatives based on a new free trade agreement would require negotiations with the EU, hence, we would like to see a stripped back EU and think the current upheavals represent an opportunity to secure this. See: www.openeurope.org.uk/Content/Documents/Pdfs/2012EUTrade.pdf

We would also agree that if the UK left the EU, trade would not grind to a halt, but nor would it dramatically improve our ability to trade with non-EU states. Trade with the EU will remain significant for the foreseeable future. We looked into this again in more detail here which acknowledges the ‘Rotterdam/Antwerp’ effect as well.
See: http://www.openeuropeblog.blogspot.co.uk/2012/09/new-figures-show-that-514-of-uk-goods.html

Regarding C’Shooter’s comments on what happens if other EU states do not agree to a slimmed down EU. Firstly, as we argued in the Telegraph article there are states in the EU that share many of the UK’s interests – of course we accept it will be difficult but this does not mean the UK should not try. Germany for instance shares many ideas on the economy and trade. We also firmly agree that any solution has to be firmly anchored in democratic consent and have looked at the question of referendums and strategies for renegotiation. See: http://openeuropeblog.blogspot.co.uk/2012/03/what-will-next-conservative-manifesto.html

On this point, we do not think at the moment an in/out referendum is the answer not least because the result is far from clear, particularly because there has not yet been a campaign where the cost/benefits of the ‘in’ and the ‘out’ options have be spelt out in detail. The ‘in’ camp would have the advantage of the status quo and the proponents of the ‘out’ option would need to spell out exactly how ‘out’ would work. As Peter Lilley MP noted in Parliament recently:

“A detailed study of every referendum since the second world war, where there is opinion poll data, shows that on average there is a 17% swing back in favour of the status quo. I remind my hon. Friends that that means one has to start with a 34% lead for change to have a 50% chance of winning. If we start from the present position, with roughly half of people being in favour of leaving and a third in favour of staying, as my hon. Friend the Member for South Northamptonshire said, the idea that we would automatically win a referendum and that a majority would vote for “out” is probably a mistake.”

We hope that answers some of your comments. We will continue to blog on many of these issues, as we have done, and hope that this provides a basis for constructive discussion of what is a complex and emotive issue.

Kind regards,
Open Europe blog team

Idris Francis said...

Thanks for clarification of Open Europe's positions on different issues. I agree entirely on the importance of debate, that all opinions should be heard, and in that context recognise and welcome how these blogs do not censor critical comments.

I will circulated the link to this page again to my email list - as usual those who comment are only a tiny proportion of those who read.

I will try to find time to write a more detaailed response, but essentially:

The EU is corrupt because it was designed to be corrupt.

No one here would choose to me a member of a corrupt organisation because of benefits made available by membership, so why would we do collectively what none would do individually?

The last point is even more true given that membership does not benefit this country overall - in fact it costs us about £150bn pa.

The half-in, half-out involvement that Open Europe calls for is not, never was and never will be available, it is the antithesis of everything the EU was designed to be.

Only this week, Merkel, in saying how much she wants Britain to stay in, made the point that all members of the EU will in due course have to join the euro - in other words, she wants Britain in on the EU's terms, not on any half-hearted pick-and-choose basis.

Such a basis for us would inevitably lead to other member States (Colonies) wanting the same, which would not be acceptable to the EU elite, they have been working for the precise opposite for 50 years or more.

I am absolutely confident that from where we are now, a referendum on leaving would be won - the same lies as in 1975 simply would not work.

There will however never be a referendum, because the EU is disintegrating so fast that nothing can stop first the euro and then the EU itself breaking up - and it will soon be so obvious to everyone, even the former europhiles who are increasingly admitting that the game is up, that Cameron will see that he has two choices - the ex PM who failed to take us out, or the 2nd term PM who did.

Its all over bar the shouting, all that remains is to close down the "we must stay in the EU on renegotiated terms" objective that Ruth Lea described a year or so ago as "delusional". As indeed it is. just as is keeping Greece in the euro and all the other nonsense we see every day.

Average Englishman said...

Dear Open Europe Team

I understand where you're coming from and commend your objectives but I think Idris has just summed things up very well. Indeed, your position is delusional.

Mike Hanlon said...

@Open Europe blog team

You say "we do not think at the moment an in/out referendum is the answer not least because the result is far from clear".

It seems to me that what is unclear is there being any prospect of achieving a UK-EU relationship along the lines you propose, renegotiated from within.

You're doing supreme work researching and highlighting the EU's failures. It's just a shame you pull your punches with respect to the only possible solution - a referendum on whether Britain should stay in the EU and swallow total integration -or- set a date to exit the current treaty and, in the intevening period, negotiate the looser, more democratic relationship which respects democracy and Europe's diversity that I'm sure we would all agree we need.

It looks to me that, before long, the status quo will no longer be an option - just the two options above. This is the only area where I believe you are behind the curve. But please keep up the excellent research!

best wishes, Mike

Anonymous said...

Having read the feed I would like to say that I have been following Open Europe for years. Their stance of wanting to be in Europe is encouraging that their analysis is likely to be middle of the road. I am an ardent out of EU person but like to be more sure of the balance of my information. Everything I have ever read over the years from Open Europe has increased my scepticism. If we ever get a vote then I will be for out. My children are of the same opinion and the delay in having the referendum has allowed them to come of age and be able to vote.

I agree that the pain of parting is worthwhile in order to regain our sovereignty.

Doctor-Spa said...

Why is it seen by so many as inevitable that we will all become one combined state..... Why this rush of blood to the head that links one EU nation as something akin to a Startrek type dream.... and while some seem to believe it is evolution, I would disagree - nothing is pre-ordained, and the EU model is the worst possible type to merge nations together under. I still cannot understand why the concept of the commission becoming THE EU government appeals to anybody. They lack every trait that makes for a decent government, are third rate politicians horse traded into high office, and are broadly incompetent with no vision. Surely nobody in their righ mind would want such a government!

Mike Hanlon said...


"Of course the European Commission will one day become a government, the EU council a second chamber and the European Parliament will have more powers. But for now, we have to focus on the euro and give people a little bit of time to come along"

~ Angela Merkel, speaking to the European Parliament, 7 Nov 2012

Anonymous said...

We are hearing the death throes of the EU.

David Barneby said...

I can see that Cameron tries to keep a balance between Britain's banking and financial services sector , the conservatives and Lib/dems , against the views of the general public . I can understand the fear that Britain leaving the EU could destroy the former ; but I believe not . I do not believe that Britain leaving the EU would change her business relationship very much . The EU needs Britain and Britain could manage perfectly well being independent .
I do not think Cameron understands that unless there is a British IN/OUT referendum he will be out of office in 2015 . Promising it after the election will be too late , because he breaks promises .

Gosporttory said...

As usual I fully agree with Christina Speight. She fully covers my own views on the completely undemocratic profligate gravy train. The gravy train fiasco is now detested by the majority of the British people and Cameron and his liberal socialist mates know only too well what the result would be if we got the cast iron guaranteed referendum promised by Cameron before the last election.

Many of us lifelong Tory members are having our patience tested to the extreme and Cameron can not guarantee that we will all not vote UKIP next time around. I would not be surprised to find that the 2 red Ed run Socialist Party gives us the promise of a referendum again in order to get re-elected and give away the rest of our so called gravy train rebate, and carry on with their borrowing and squandering policies.

It is so frustrating watching democracy being flouted throughout the gravy train and in our own country!Open Europe does not help either with its pro gravy train blogs.

Idris Francis said...

Thanks, Average Englishman. Throughout my 20 year involvement in the fight against EU membership I have tried not to get bogged down in the detail. For instance, there is no point in debating the precise words of EU rules and laws, because their meaning changes whenever necessary e.g:.

I challenged at a debate the British man ennobled for getting a Yes vote in 1975, about the lies told by Wilson in '75 - including

"There was a threat to employment in Britain from the movement in the Common Market towards an Economic & Monetary Union. This could have forced us to accept fixed exchange rates for the pound, restricting industrial growth and putting jobs at risk. This threat has been removed."


The speaker then told us that I had misunderstood those words, they did not mean the threat of a single currency had been removed, only that while the prospect of a single currency remained in place it no longer threatened those adverse effects. See what I mean?

Saturday at the Bruges Group annual Conference the mood was upbeat, but not so much about the prospect of winning a referendum and leaving as a result, but more about, as Andrew Lilico and others said, that we have in effect already left - the decision has already been taken.

All that remains is a decision or a Referendum on whether we wish t be (a) well out of it (akin to Norway) or (b) completely out of it, like Switzerland - or indeed like the other 170 countries in the world which are not in the EU, half of whom have free trade agreements with the EU and the other half are in negotiation to do so.

How and when was the decision made? Simple - the EU has in recent weeks made it absolutely clear that it intends to become a single State - with a single Government in charge of all economic and other important policies.

As was stated more than once at the Conference, it is absolutely clear even to the most dedicated British Europhiles that up with this the British people would simply not put. And if Cameron understands anything at all - as we know he does not understand much about the EU but this he cannot fail to understand - there is not the slightest chance in a thousand years that we would say Yes to such arrangements - and of course his and Hague's promise of a Referendum Lock means that we would have to be consulted.

That being the case, all that remains is to decide whether we move to the outer fringes or completely outside.

For me the choice is very simple indeed - I would no more wish to be even an associate member of this corrupt, incompetent, doomed, devious, self- aggrandising, anti-capitalist, near Marxist organisation that of the Mafia, any other gang of crooks or for that matter a paedophile ring.

There is a very old business principle akin to Darwin's Survival of the Fittest, and related to Buffett's comment that when the tide goes out we see who has been swimming naked - and indeed the occasional Great Storm - and it is this.

It is necessary from time to time that incompetent, inefficient, corrupt and otherwise useless or worse than useless organisations go into liquidation or collapse in other ways, so that from the wreckage better methods and better people may emerge to make business, or in this context, the world, a better place.

In the case of the EU that is a consummation devoutly to be wished - and I say that not because I wish upon the innocent people who will be caught up in that collapse in the short-term consequences of the chaos that will ensue, but because I wish on them the better lives they can achieve only after that chaos subsides and the EU is just a very bad memory indeed.

As for those who campaign to save the EU, or to keep us entangled in it even on a reduced (but still highly dangerous) basis, may the Lord forgive them, for they know not what they do. Which incidentally, was what I said to myself as Labour supporters drank themselves under the tables at Winchester Guildhall in 1997.

Idris Francis said...

In response to @Doctor Spa: You are of course right to say that nothing is pre-ordained and that there is no certainty that the EU will become a single State. But what IS certain is that this is and always was the INTENTION of the EU elite for more than 50 years, as Mike Hanton's quotation and innumerable other references from "ever closer union" onwards confirms beyond rational doubt.

Those who fight against EU membership do so not because they think the single EU State is inevitable, but that it is very likely unless we do oppose it - though of course it is far less likely now than it once seemed. Our main concern in Britain is of course that Britain should not be subsumed as little better than a Colony of this EU State. However as we believe that much of what we think objectionable, in democratic and economic terms, should be just as objectionable to people in other member States. That is of course up to them, not us, but we believe that our exit and consequent recovery, both economic and in terms of democracy, might well encourage other countries to follow - which is of course what the EU elite are terrified of seeing happen.

It is of course still possible that the coming collapse of the EU will not be total and that a much smaller number of countries will merge into a single State - the smaller the number and the more alike they are, the more likely it might work. On the other hand, the refusal of the EU elite to face economic facts, forcing many millions into poverty and even civil war, might well lead to total collapse.

Every other point @Doctor spa makes is spot on