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International
21 January 2013

Is leaving the EU that big a deal anyway?

The Financial Times has a long record of being the most loftily europhile of British newspapers. It is therefore refreshing to see a regular FT columnist take such a relaxed attitude to the prospect of Britain’s exit from the EU:

  • “Should the UK remain at the heart of Europe?
  • “If you believe that this is where the UK is actually located, then the answer may well be yes. But then you would either look at it from a very long distance – the US state department for example – or suffer from perspective distortion.
  • “...It is completely unsurprising that there is now a debate inside the UK about membership. People are asking themselves a perfectly logical question: since we are not in the eurozone, nor likely ever to become a member, what is the point?”

Well, thank goodness for that! No swivel-eyed nonsense about Britain escaping the evil clutches of the ‘EUSSR’, but equally no conniptions over the idea that a project centred on saving the single currency might not be our scene.

Munchau does make a useful distinction between the macro- and microeconomic consequences of a British exit:

  • “In macroeconomic terms, EU membership is virtually irrelevant for a member state that is simultaneously large and not in the eurozone. The EU budget is tiny, and free trade and free capital movement would continue under any conceivable scenario...” 
  • “If you go one level down – to the level of individual industries, including finance – the impact of EU membership is more subtle.” 

There may, for instance, be unwelcome regulatory consequences for Britain’s financial sector. But Munchau doubts whether a “eurozone power grab” can be fended off forever anyway.

EU leaders might also want to ponder whether trade-based revenge for a British exit is more valuable to them than a constructive relationship with Britain on the international stage. 

Munchau does, however, foresee a genuine complication – a possible yes vote in the independence referendum due to take place in 2014:

  • “Any hypothetical UK referendum [on EU membership] would happen afterwards. If Scotland were to vote for independence, the situation would get messy. The legal services of all the three main EU institutions believe that by formally leaving an existing member state, a region would also formally exit the EU. Like any European country, Scotland would have the right to reapply, but any one member state could veto a Scottish application.”

As things stand, the Scots are set to reject independence, but it would be foolish to discount the possibility of a turn around. The yes campaign has yet to get its ducks in a row, but it when it does it will be bigger and better funded than the opposing camp.

If Alec Salmond does manage to snatch victory from the jaws of defeat – and it wouldn’t be the first time – what would that mean for UK membership of the EU? 

Well, assuming that the Scots wish to be free from London, but subject to Brussels, a rather neat solution presents itself. Instead of Scotland leaving the United Kingdom, it would be England that left. That way the Scots would remain in the EU with no need to reapply for membership, while the English would be out. The minor difficulty with this cunning plan is that Wales and Northern Ireland would remain with Scotland in an exclusively celtic United Kingdom. 

England would just have to struggle on alone.

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