Membership of the European Union, despite its imperfections, is right for the UK in every respect
The European Union is a beautiful idea. Obviously it is less than perfect in reality. But the notion of Europe’s nations coming together to forge a common destiny is inspiring – an exemplar of how different countries sharing the same continent and many of the same values can enrich themselves and their peoples. Engagement, exchange and openness are virtues that underpin any civilisation.
Yet Britain, it is confidently proclaimed by the army of Eurosceptics who dominate our national conversation, wants no part of this project, a position apparently supported by a majority of public opinion that they have helped to create. In their world view, the European Union represents an attempt to force Europe’s diversity into a Brussels-made bureaucratic mould, making a mockery of democracy and good economics. Whether it is the single currency, human rights or minimum standards of consultation in the workplace, in this account, Europe is anti-liberty, anti-enterprise and anti-British.
A growing proportion of Conservative MPs, an insurgent Ukip and the centre-right media believe that the precondition of a British economic and social renaissance is to leave the EU, based on an in/out referendum that they believe they would comfortably win. Others on the right, more keenly aware of the reality of Britain’s economic interests and position, are prepared to countenance only some form of trading relationship with the EU, but one that they know is essential to sustain inward investment and many business models of UK enterprise. Otherwise, they make common cause with those who want out.
It is against this background that the prime minister is set this month to make a long-awaited speech on Europe setting out his stall.
His audience is allegedly the nation. In fact, it will be the one-third to two-fifths of the centre-right electorate split between wanting out altogether and those wanting a semi-detached relationship, a division that threatens to make British conservatism unelectable. For decades, leading Conservative politicians have connived with the centre-right press to present a highly ideological view of what constitutes a vigorous capitalism, which they say is anathema to all things European. Now they are reaping the reward for never having had the courage to tell the truth.
Britain’s political, social and economic fortunes are intertwined with the continent of which it is part. Whether it was the rise of Protestantism in the 16th century, the Enlightenment in the 18th century or the bitter struggles between communism and fascism in the 20th, Britain has been a pivotal part of the European story. The idea that we can leave Europe is fatuous. Geography has its own brutal logic.
So has economics. Britain has been a member of the EU for 40 years. Every British industry is now predicated on free access to the European single market. The renaissance of the British car industry, owned and spearheaded by foreigners, for example, relies on the capacity to export to the EU. British agriculture, an under-praised success story, has reinvented itself courtesy of the Common Agricultural Policy. The international financial services industry – ranging from insurance and banking to law and futures trading – is based in London in order that it can enjoy both the benefits of access to New York and to the EU. Even British higher education, another success story, has built its success on freely attracting European students. For Ukip, the centre-right, much of the Tory party and too many members of Britain’s economic establishment, these are facts that either are disputed or ignored as inconvenient. The greater good is served, for them, by freedom from Brussels.
The limitations of this ideological view of the world were brutally exposed during 2012. A procession of British economists, along with Ukip leader, Nigel Farage, announced with mounting certainty the imminent break-up of the euro. It was taken as self-evident that floating exchange rates were superior to any form of managed currency relationship. Britain, experiencing a double-dip recession with a threat of a third dip, and already entering its fifth year of depressed output, was curiously praised as embodying the virtues of a freely floating exchange rate. Greece was urged to forget the protections the EU offered it and convert back to the drachma, becoming an inflation-ridden Balkan republic exercising the freedoms enjoyed by Britain.
Nobody in Britain seemed to understand the unattractiveness of this option. Hedge funds, when not being offered the chance of endorsing Mr Osborne’s crass economic policy, sold all euro assets, confident that doing so was a guarantee of making money. They all lost fortunes; the only winner was the single hedge fund that bought Greek assets.
The euro will have further strains, but the realisation is growing that Chancellor Merkel and European Central Bank president Mario Draghi are a formidable duo who will do whatever is necessary for the euro to survive – whether creating a banking union or buying euro bonds.
Moreover, on many fundamentals – inflation, productivity, public debt, trade, investment and innovation – the euro area as a bloc looks a great deal stronger than Britain. European recovery is forecast for 2014. Sadly, the same cannot be said for the UK.
It would be good if Mr Cameron could acknowledge that Britain’s membership of the EU – and the EU itself, together with the euro – has some virtues. He is a politician capable of taking a brave stance. It would be a better option than the other choices. If he calls for an immediate in/out referendum, he will split his party because, as a responsible sitting prime minister, he will be compelled to campaign to stay in. If he calls for a renegotiation of Britain’s relationship, to become a permanent semi-detached member and hold a referendum on the result in the next parliament, he condemns the British economy to three or four years of crippling uncertainty. Nor is semi-detached status desirable or perhaps even negotiable. If he says nothing but wait and see, he will be damned as indecisive.
The euro crisis has created a pan-European democratic conversation – the first of many. Britain’s best choice is stay with the EU, neither such a bad economy nor as anti-democratic as it is portrayed, and organise itself so that it does. The EU is a beautiful idea – if imperfect – and Britain’s fortunes are irrevocably tied to it. Mr Cameron should address the nation rather than his party and say just that.