Its detractors will say plenty. Yet it remains the most successful grouping of independent nations in human history. Yes it is bureaucratic. It has too many restrictive rules which are hindering its competitiveness in global markets. It’s institutions of governance are peculiar and detached from the people governed. But all of that can be fixed. What cannot be fixed is a spoiler member who is forever out of step. That is Britain. To succeed long term the EU has to have two countries in it. One, Britain, it may be about to lose. The other, Russia, it has been slow to invite in and is now quarrelling with. A good measure of the shuddering halt to growth in the EU stems from its sanctions on Putin.
In judging what to do about these two countries at opposite ends of its landmass, the EU must begin by seeing that its own interests will be served by finding solutions and this will have to go further than laying down conditions. Britain runs a trade deficit with the EU, which is powerful ammunition for those who want it to leave. But Britain is also the EU’s biggest export market upon which four million of EU jobs depend, which is a powerful argument for Brussels to find a way to keep Britain in.
At the heart of the problem lies the failure to persuade the UK to join the single currency at the beginning. Had Britain joined the Euro, the two speed Europe argument would never have developed and with London partnering Frankfurt, a far better economic model for both the EU and the UK would have emerged. At present everybody in the UK lauds the fact that the country kept the pound. Yet the outcome has been exploding house prices and the inability to create economic growth without house price inflation as the driver, making Britain the world’s second most indebted country and debt per household the highest on the planet. Anybody who argues this is good is economically illiterate, however distinguished and lauded an economist they are.
These issues will soon have to be explored in much greater depth as Britain begins to seriously consider its exit. If judgements are made not on hard facts but emotional opinions founded on prejudice and driven by fear, the outcome is likely to be chaos for everybody, in or out of the EU.
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