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Membership of the EU: pros and cons

Nigel Lawson, ex-Chancellor of the Exchequer,  recently criticised the UK membership of the EU, the media has covered his mainstream view as if he is a bad boy starting a fight in the school playground, but is he right about the EU?

What has changed that makes EU membership a burning issue?  What has changed is that the 19 countries of the Eurozone are now seeking political union to escape their financial problems.   Seven further EU countries have signed up to join the Euro but the British and Danish have opted out.  The EU is rapidly becoming two blocks – the 26 and Britain and Denmark.  Perhaps it is time to reconsider EU membership.  What would be the consequences of withdrawal?

If you know of further benefits of EU membership, please add these to the comments section at the end.

Trade

The balance of payments deficit between the UK and the European Union countries has been growing and was £106 billion in the year to September 2014:

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Balance of Payments: Surplus with non-EU, Deficit with EU

“A deficit of £28.5 billion was recorded with the EU in Quarter 3 2014, compared with a deficit of £27.9 billion in Quarter 2 2014.”  See ONS: Balance of Payments Q3 2014  This level of deficit is unsustainable.  (See Note 4).

The 2014 deficit is about 5% of GDP  whereas the pro-EU IPPR report, “Staying in: A reform plan for Britain and Europe” calculated that “It is estimated that withdrawal could result in UK GDP being permanently lower by 2.25 per cent.”  You can be 2.25% worse off “getting out” or 5% worse off “staying in” – the choice is yours.

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It is sometimes said that the EU is the major trading partner of the UK and so the UK would “lose out” if it left the EU.  The truth is that the EU is indeed the major trading partner of the UK and this results in huge losses.  In 2014 the UK deficit provided about 50% of the Eurozone’s balance of payments surplus and was the Eurozone’s largest source of net export revenue. It is the EU that would lose out if the UK decided to leave. In fact the EU would help the British economy if it raised tariff barriers and the UK responded in kind.

Fortunately the UK economy has done well exporting to countries outside the EU and since 2012 the EU has formed less than half of the UK’s export market:

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UK Export Market Growth ONS Data

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Total UK Exports

On further analysis (see Note 1) our relationship with the EU is destroying our manufacturing industry because £77 billion of the manufacturing deficit was with the EU.  Imports from Germany are a large contributor to the loss of domestic manufactures. Germany is anomalously competitive because it is in the Eurozone – if Germany still had the Deutsche Mark it would be valued much higher than the Euro and this would make German manufactures far less attractive.

Two thirds of the manufacturing deficit is with the EU

The Euro is a way of allowing the Germans to have a huge advantage in currency exchange – they can use a low value currency  (relative to the DM) without paying the social costs.

If you have any doubt about the truth of these terrible balance of payments figures follow the links above to the ONS data, also see The Benefit of the EU for UK Trade and Industry where the strange negative effect of the EU on UK exports is noted and The Imbalance of UK-EU Trade and its Consequences.

Does size matter?

Does our wealth depend on size?  The 10 richest countries in the world, in terms of GDP per head and excluding oil kingdoms, are:

Luxembourg     92,297 (GDP per capita, $ per annum)
Macau              61,638
Singapore        59,871
Norway            58,715
Bermuda          53,565
Australia          49,460
United States    46,569
Switzerland      45,397
Netherlands     42,594
Canada             42,591

The 10 richest countries in the world in terms of total wealth are:

United States     15,684,750 (total GDP $m per annum)
China                 8,227,037
Japan                 5,963,969
Germany           3,400,579
France              2,608,699
United Kingdom     2,440,505
Brazil                2,395,968
Russia              2,021,960
Italy                 2,014,019
India                1,824.832

Notice that only the United States appears in both lists and 9 out of 10 of the countries with the highest income per head of population have little international influence.  It is not necessary to live in a country that has international influence to be wealthy.  The argument that we can only be wealthy in a large, influential country is simply untrue.

Each citizen has more influence in a small democratic State than in a large State. An Indian person is one of about 1.5 thousand million people and has a very small voice indeed.

International Trade Treaties

Tariffs were an important reason for voting to become a member of the EEC, however, in the past 20 years the World Trade Organisation has reduced tariffs and the EU has striven to remove tariffs in its trade with the rest of the world.  Many non-EU countries pay no tariffs to the EU and do not pay any membership fees for this free trade – see The Myth of EU Tariffs.  Fear of Tariffs is no longer a valid reason for wanting to be part of the EU.

The European Free Trade Area, EFTA already has Free Trade Agreements in place with much of the world and has invited the UK to join should it leave the EU:

EFTA Free Trade Agreements

You can look at these agreements in detail at EFTA Free Trade.  The UK is a very major trading nation and will make EFTA into a full competitor with the EU.  The close relations of the UK with India, Canada etc. holds the promise of expanding EFTA to an organisation that is larger than the EU and able to impose terms on our neighbouring European megastate rather than vice versa.

There is a myth that as a member of EFTA the UK would need to pay as much in fees to the EU as it does today.  This is simply a lie.  It is a deliberate confusion of EFTA and the EEA (the European Economic Area).  EEA countries pay to the EU, EFTA membership does not carry an EU fee any more than the Free Trade agreement between Canada and the EU carries a fee (Canada, and many other countries pay no or low tariffs to the EU).

Most importantly, the entire extra cost of export tariffs to the UK economy would only be £7.4 bn even if there were no EFTA membership and no negotiations to lower the tariffs. However, the EU has Free Trade Agreements with much of the developed world so the cost would be much less than £7.4bn.  Furthermore the UK pays £11.3 bn a year to be in the EU to enjoy this £7bn of “relief” which other countries get for free.  The EU does not have an insurmountable tariff barrier for foreign imports and being IN the EU is more expensive than being OUT.

All of those arguments about how the UK could not survive outside of the EU are historical.   Sunderland Nissan is not protected by EU membership –  Japan is about to sign a Free Trade Agreement with the EU so the argument that the UK benefits from selling tariff-free Japanese cars to the EU is history and exhorbitant tariffs are history.

Three million jobs will not be lost when the UK leaves the EU, as Nick Clegg has famously claimed, not only have the original authors of the report that Clegg was quoting denied this would be the case but the report was produced in 2000 and the terms of trade have got precipitately worse and tariffs have been greatly reduced since then so the UK would gain jobs by leaving, not lose them.

Mismanagement and Corruption

The EU accounts have not passed their audit for 19 years.  The former European Commission Chief Accountant, Marta Andreasen, said of the latest failed audit that:  ‘If this report, outlining as it does the continued gross mismanagement of EU funds, doesn’t set alarm bells ringing in Downing Street then nothing will.’  This mismanagement and probable corruption is always ignored in discussions of the EU.  The EU is not a place where politics and government are cleaner and better, it is the opposite. As Daniel Hannan put it: “The EU is no longer an ideological project, but a racket – a mechanism for redistributing wealth to people who, directly or indirectly, are on its payroll.”  The EU is certainly no utopia where everything is fairer and better than the UK, it is the opposite.

Politics

The pro-EU lobby in Britain perpetually stress that Europe is not going to form a “superstate” based on the Eurozone.  What do the Europeans say?  All of the leading figures in the Eurozone are crystal clear that they are working towards political union.  In Note (2) you will find a long list of quotes and references showing that Angela Merkel, Francois Hollande etc., etc. are all committed to European political union.  Merkel says:

“we need a political union first and foremost”

The only real mystery is why this is not just common knowledge in Britain as it is common knowledge in Europe.

Britain and Denmark are the only countries that opted out of the Eurozone.  This means that the other 26 member States are now supporting each other on financial policy within the EU and moving towards full union, sometimes against the interests of the UK.  Britain can only opt out of full Union in the long term by withdrawing from the Lisbon Treaty, signed in 2007, which isa treaty for full Union that came into full effect in 2014.

Few people seem to understand that the EU really will be European “Union”, not a group of separate countires.  The UK really will be gone as an independent country.   Since November 2014 EU decisions are based on majority votingwithout a veto.  The UK has only one in twelve of the votes.  As the EU progresses towards full union the voice of the UK will disappear entirely from the world stage.  The UK economy will be aligned with EU norms and foreign policy and defence will be EU matters.  Britain will have little voice in its own affairs, let alone those of the world. (This is all described in the EU Constitution – see Where is the EU going?).  Supporting the EU is indeed supporting the end of the UK.

Most pro-EU supporters acknowledge that the UK must obey EU directives on all of the matters which they might consider to be beneficial.  The EU has been sovereign in many areas for the past 22 years and has passed regulations that may or may not have been passed as laws by the UK government.  The key feature here is that the EU was SOVEREIGN in these areas, not the UK, and EU supporters admit it where they think the change was beneficial.  However, ask a pro-EU supporter as to whether the EU is sovereign in any area that they do not like and they will reply that the UK is not bound by the EU!

The regulations in the list above are EU directives that, had the UK been sovereign, it might have enacted as laws for itself (certainly during 13 years of Labour).  The issue is that the UK was not sovereign in these areas and had to obey the EU.  As pro-EU supporters are implicitly pointing out with posters such as these, there is no way out of EU control.  The Treaties are real.  If you feel it is wonderful that the EU enacted these policies just consider how you would feel if the EU enacted highly Conservative policies, indeed, this will probably happen in the next 40 years.  Will you then want the UK to leave?  The policies could be torturing the people in the UK but by then no-one will be able to leave.

If you do not believe that the EU is involved in almost every aspect of UK life then consider these articles about EU actions and lack of action in the last few months – the media suppress coverage so that you do not get upset about the EU:

EU Sanctions Hinkley Point Nuclear Power Station
The Death of Redcar, Tata and the EU
Theresa May implements EU Counter Terrorism Strategy
The VW Emission Fraud was an EU Responsibility
Dairy Farmers Devastated by Changes in EU Regulations
Is the EU Wonderful for Ending Roaming Charges in 2017?
UK Floods are Partly due to EU Directive on River Management
EU Directives in UK Laws
EU Consumer Legislation enacted as Consumer Rights Act 2015
Two Speed EU – Internet to favour corporations

Democratic Deficit

As pointed out above, it is undoubtedly the case that the EU will become an ever closer political union.  Britain will be an offshore island with special needs, the UK in Europe will be more exceptional than Scotland in the current UK but the Scots endlessly claimed there was a democratic deficit until they obtained near independence.  The UK will need to be independent once it is absorbed by the EU and the movement for independence will grow decade by decade.  If we ever joined a United States of Europe we would leave it again – the German majority in Europe will not know what is best for an island in the North Atlantic.

Law

The European Union has a legal system based on Romano-Dutch Civil Law and its successor, the Napoleonic Code.  The English use Common Law.  English law says that whatever is not illegal is permitted.  European Law says that if something is not specifically permitted under some codified rule, then it is illegal.  This difference in legal systems is so profound that the UK should never have joined the EU.  

British politicians have been desperately trying to amend English law so that it aligns with European Law by attempting to abolish trial by jury and by accepting that EU Statutes override Common Law (See Note 3).  Britain has the paradox that, for at least 50% of the law, its highest court, the European Court of Justice, is based on Civil Law whilst its ordinary courts are based on Common Law.  This means that appeals to the European Court can override English court decisions purely on the basis of a mismatch between the two systems.  

There is now a large body of EU regulation controlling life in the UK.  Some of these laws have good effects, some bad but what they all demonstrate is that the UK is being governed by the EU.

The British legal system is fundamental to our culture and constitution, it should not be abandoned.  Patronising lawyers will tell you that they can sort out the system to their satisfaction, but, of course, we do not want it sorted out to their satisfaction..  In particular the British have trial by jury but almost all EU countries use trial by judges controlled by the state without juries(see Note 3), trial by jury is fundamental to the British idea of freedom. 

It is the clumsiness of the European Civil Law system of regulation by Statute that is enveloping British industry in “red tape”.  

See The Common Law and Civil Law Traditions.
and The British Constitution

Incidentally, the other major court, apart from the European Court of Justice, is the European Court of Human Rights.  It is a non-EU body that all EU members must agree to recognise. However, this has been superceded by The EU Charter of Fundamental Rights that was implemented by the Lisbon Treaty and contains far reaching definitions of “Rights”.

Working out the proportion of Laws in the UK that are due to the EU is difficult because, as pointed out above, the EU implements law directly as Regulations rather than using the UK system of Acts that must be interpreted and if necessary, judged in Court.   About 53% of new UK laws are due to EU Regulations, a further 10-14% of UK Laws are implementations of EU Laws and 9-14% of UK Regulations are EU regulations that required further statutory approval in the UK.  Given that some EU regulations do not apply to the UK (such as those about olive growing etc) the fair figure for the proportion of government due to EU Laws is probably about 50%.  We are currently half-governed by the EU.  Do you want this to become full government from Brussels?

See UK Law: What proportion is influenced by EU?
and How much Legislation comes from Europe?

Free movement of Labour

All 28 countries of the EU teach their children English at school.  The British do not teach 27 languages to their children.  This creates a huge imbalance in the flow of labour because England is the obvious place to go if work is scarce or wages are low.  Wages are very low in many parts of Eastern Europe and so hundreds of thousands of Europeans come to the UK.  England has about half an acre of land for each resident, it is overpopulated, the huge influx of Europeans drives up rents and house prices so that the ordinary English person cannot afford a home.  The influx also drives down wages which can be seen from the way that the UK has an ever increasing workforce but very low GDP growth.  The principle reason for free movement of labour is to keep wages down.  The influx also takes jobs from English people in times of recession.

In the long run each migrant simply becomes another citizen of the UK, just swells the population.  This means that migration is about population.

House prices are expressed as multiple of median wage

If you love the English countryside it breaks your heart to see the ever expanding urbanisation due to migration fuelled population growth.  The UK is likely to have over 70 million inhabitants by 2035, this is an unsustainable population that may be starving to death by 2100 if current predictions of climate change come to pass.  The idea that net migration is so wonderful that it should continue for ever is insane, there will be an end point to population growth.  There is no real physical possibility that the UK could sustain 200 million people so net migration will have to end sometime: the only issue is whether we let the UK become so overpopulated that no-one wants to come here any more or stop migration whilst the country is still vaguely pleasant.

There have recently been strange arguments about free movement of Labour such as the scare story that European countries will repatriate British pensioners if Britain leaves the EU.   This is absurd because the British taxpayer pays the pensions and medical care of British pensioners in the EU.  No country would turn down this free money.

The crazy truth is that Internationalism and the free movement of labour is racist, it destroys difference,  especially cultural difference.  Can you spot the Euro-Racism in this clip?

The clip is a genuine EU PR film and deserves close attention.  This is “racism of the second kind”, the destruction of all diversity out of fear of difference. If you are pro-EU are you sure that you do not have this form of racism? Do you believe that you will only be safe when everyone is the same?

The single currency

Few people in England realise that the principle motivation for creating the Euro was to drive Europe towards political union. As a European Bank position paper on the Euro put it in 1999:

“The monetary order established by the Maastricht Treaty with the detailed statute of the European System of Central Banks by itself represents an important building block for the development of a European statehood.”

Unfortunately the Maastricht Treaty did not provide the financial union that was required to make the Euro work.  Currencies are usually associated with single nations  and these nations achieve social stability because rich regions subsidise the poor regions.  The Germans specifically excluded this possibility when the Euro was created.  Norman Lamont has spotted the German position: “At Maastricht, one of the Germans’ main objectives was to secure a “no bail-out” clause to joining a single currency, because they were worried about the large indebtedness of Italy. But the logic of currency union is that the strong countries should assist the weaker ones.”

The creation of the Eurozone means that European economic decisions involve two blocks of countries: the Eurozone and the rest.  Britain is most of the “rest” and, without Britain joining the Euro, the EU will become the Eurozone and Britain.

Welfare and health

Britain has a largely non-contributory welfare system.  Social security and healthcare is provided to those who have never worked or contributed as well as to those who have paid taxes.  Most of the other countries in Europe have a contributory system so that you get out what you have put in.  This is one of the reasons why so many Europeans come to Britain, they can obtain healthcare and unemployment pay even if they have contributed nothing in taxation.  In the long run Britain can only remain a member of the EU if it adopts the EU standard of contributory welfare and health.  At present the UK is attempting to wriggle out of the problems by deals for each type of benefit but with Lisbon this will be increasingly difficult.

How Corporations pay low tax

The recent tax avoidance scandals involving Starbucks, Google etc. are due to EU rules, not international agreements outside the EU.  The worst offenders are EU companies such as Siemens and Total (See Use of EU to dodge corporation tax)

According to international agreements Corporates are allowed to play with intra-company transfers of cash from country to country only in certain restricted circumstances: “International tax rules allow companies to deduct royalty payments to associated entities, provided they are at “arms length”.(Reuters Special Report: Starbucks’s European tax bill disappears down $100 million hole).  

Notice that these charges and payments must be “at arms length”, according to international rules Starbucks can charge another company for using its logo and recipes but cannot charge itself except in exceptional circumstances.

It is European Law, not international law, that allows transfers that are not at “arms length”.    The Reuters article goes on to say:

European Union rules allow the transfer of such fees within the bloc without tax deductions, but require withholding taxes to be levied when the fees are moved outside the bloc.”

Individual countries, such as Holland, get around the problem of witholding taxes:

“But Dutch tax law allows companies to send royalty fees earned in other countries on to tax havens without incurring taxes.”

This means that companies can trade in Britain, charge the British part of their company millions for the priviledge of trading, take these millions in Holland without tax then transfer them to Bermuda, the USA etc.  The European Union has designed its tax system to allow this tax avoidance.

Defence and Foreign Relations

Many people spotted that defence and foreign affairs were scarcely mentioned in the General Election.  There is a good reason why this happened.  The UK has signed the Lisbon Treaty in which member States agree to the EU setting the defence and foreign policy agenda (SeeWhat happened on November 1st 2014?).  Although the UK may have an independent policy, if the EU regards an issue as important the UK must abide by EU policy.  The current government is clearly viewing the new EU sovereignty over defence as a “Lisbon Dividend” that allows it to cut forces – see EU Defence Policy and British Forces.  In practice, with the loss of the UK veto in 2014, the UK is no longer sovereign in matters of foreign policy and defence, the EU sets our policy.

The role of the EU in foreign relations is scarcely discussed in the UK media. We should be shocked at the lack of media coverage and angry at the way the media is manipulated by the Establishment.  Here are some links to how the EU has been involved in recent events:

EU Obtains British Troops for Somalia Mission
UK Foreign Policy: the EU-Ukraine Association Agreement
The Migration Crisis is EU Incompetence
is the EU at War with ISIS?

Universities and Further Education

The EU provides about 900 million Euros per year in R&D funding, but the UK contributes about 960 million Euros to this R&D fund.  It has been said that UK Scientists are being bribed with their own money to support the EU.

Fortunately EU funding for educational purposes is largely available to non-EU countries as well as EU countries. See Business for Britain paper 27.  In particular, the Erasmus scheme does not require EU membership.  Dame Julia Goodfellow, President of Universities UK, which is agitating for continued EU membership, is a Board Member of the extremely pro-EU campaigners, British Influence, and she contributed to a 2003 paper that stated “There is no going back from the euro”.

German aspirations

If the Germans, from the outset, torpedoed the Euro as a currency that would serve both the North and the Mediterranean countries then what was their motivation?

Anyone who has been to Northern Italy or Eastern Europe will have noticed that there is a cultural and architectural border that corresponds to the boundaries of the old Holy Roman Empire (ie: the Frankish/German Empire).  This Empire was vigorous four hundred years ago.  We easily accept that the Scots, Irish or Catalans might still be attached to a common culture from three or four centuries ago but the English “intelligensia” will simply scoff at the possibility that the Germans might have similar feelings.  Despite two World Wars that transiently re-united the Empire and some modern German historians openly describing these wars as the “European Civil War” the British still believe that the Germans have no nationalist sentiment at all.

The country that has benefited most from the Eurozone Crisis is Germany (See Reuters Report: Analysis – What Euro bailouts? Eurocrisis saves Germany money. )

The Mechanics of “Brexit”

According to the Lisbon Treaty the UK must give two years notice of leaving the EU.  During this period it will be possible to negotiate a Free Trade Agreement like that between South Korea and the EU or Canada and the EU.  These involve zero tariffs and, in the case of Canada there is also an agreement for trade in wines and spirits that includes Geographical Indications etc. so even the Scotch Whisky exporters needn’t worry.  The UK is in an excellent position because all of its exporters know what is needed to be compliant with EU regulations.  The EU will not be in such a good position with compliance with UK regulations and this should benefit our Balance of Trade with the EU.

Are there any “pros” to being in the EU?

Some people say it is better to be in a large country because that gives “you” power.  No, “you” become just a 500 millionth part of the large country rather than a 60 millionth part of the UK.  Big countries make the individual smaller.   Do you really want to be part of a United States of Europe that plays military brinkmanship with the Russians, Americans or Chinese?

Pro-Europeans say that Britain will have more influence if it stays in the EU but of course, it will be the United States of Europe that has the influence, not Britain.

Some say that travel is so much easier in the EU but English motorists were just waved through border posts prior to the EU so ease of travel will be little different if England were outside the EU.

Maastricht brought discord

Although it is NATO that has prevented war in Europe some people argue that being part of the EU will stop future wars in and involving Europe.  It will be interesting to see if this is the case when the Eurozone forms the United States of Europe and starts to throw its Germanic weight about.  Certainly the level of cooperation found in the EEC helped European harmony but since the Maastricht Treaty, that created the EU in 1992, harmony has not improved.  There are riots in Greece and Spain with protesters embittered at the Germans.

It has been said that the employment protection legislation passed by the EU would be lost if Britain withdrew.  This is nonsense because, if desired by the British electorate, this legislation can be enacted by Westminster.  A sensible withdrawal from the EU would leave existing Statutes in place, each being reviewed before either being abandoned or enacted as British legislation.

There are no pros to the EU that can be sustained.  The pro-EU lobby has no answer to the “cons” of trading losses, mass migration, constitutional change and democratic deficit.  It is time to leave.

Given that there are no “pros” to being in the EU why do people support it?  The three main parties in the UK are all internationalist.  Labour is postmarxist which implies it is working towards world government, the Tories are in the pocket of hedge funds and international finance and the Lib-Dems are either postmarxist or naive, believing that Europe will end war – rather than becoming big enough to fight wars.  Yes, bizarrely, the allegedly peace loving pro-EU lobby are often worried that the UK is not powerful enough to declare war on China or Russia or powerful enough to bully smaller states.  The desire to get rid of all national and racial differences might be called Euro-Racism – it is the fear of difference and diversity.

If you believe that there are concrete reasons why Britain should stay in the EU then please use the comments section below.

Summary

Size and influence are not important for trade and prosperity.  Canada, Australia and Switzerland are some of the richest countries in the world and are all richer than most EU countries.  It is not necessary to be in a powerful country with a large population and international influence to be rich.  Most of the non-EU world has concluded Free Trade Agreements with the EU so there are no insurmountable tariff barriers to leaving.

The idea that Britain must become ever closer to the EU to retain “influence” is false. If the EU becomes a political union then the UK will disappear, it will just be a region of Europe.  Europe might have more influence once it has swallowed Britain but Britain will be gone. European political union will give Europe great power to threaten wars and bully smaller states.

Tax avoidance by Starbucks, Amazon, Google etc. is due to EU tax laws.  The EU is preventing Britain from levying the correct amount of tax. 

Statements that millions of jobs depend on the EU are false.  The economic arguments are in favour of withdrawal from the EU. The trade deficit of the UK with the EU is enormous and damaging the UK economy.  In particular the deficit is damaging manufacturing industry.  Withdrawal from the EU will benefit the UK economy.

British culture is based on “Common Law”, involving trial by jury and freedom, European culture is based on “Civil Law” which has trial by the state and regulation. This is a large constitutional difference.

(Reference this article with http://tinyurl.com/cne3t95 )

POLITICAL THOUGHTS click here to see the whole POLITICAL THOUGHTS magazine!

Note 1:

It is useful to look at the actual data to put the trade deficit figure in perspective. Exports and imports are composed of actual supplies of good and services and also income from investments, transfers of funds etc.

Goods and services are the most important aspect of trade.  The total goods and services trade of the UK was £488 billion exports and £525 billion of imports in 2012 (ONS figures – Table H). The trade with the EU was £224 billion of exports (46%) and £265 billion imports (50%) (ONS – table C).  There was a deficit of about £41 billion in goods and services.  The deficit on goods – manufactures – was £54.6 billion and the surplus on services was £13.6 billion.

Almost half of the deficit is with Germany (£5 billion a quarter or £20 billion a year).

In 2014 the deficit in trade in goods with the EU was £77 billion.

Note 2:

All the important players in Europe are moving towards political union.

Angela Merkel, the German Chancellor said:

“we need a political union first and foremost” (BBC News).

Francois Hollande, the French president said:

“Political union is the step that follows fiscal union, banking union, and social union. It will provide a democratic framework for successful integration.” (Le Monde)

President Sergio Mattarella of Italy’s inaugural speech Feb 2015:

“The EU is now once again a perspective of hope and true political union to be relaunched without delay.”

Mariano Rajoy Brey, Spanish prime minister:

“We need to fix these objectives – fiscal union, banking union, political union…And we must set a time scale. We are giving a message that we really want greater European integration. We can’t say something is this first, then something else, without saying where we’re going,” Rajoy said at a news conference with Italian Prime Minister Mario Monti. (Reuters report).

What the European Commission says:

José Manuel Durão Barroso, President of the European Commission  said:

“This is why the Economic and Monetary Union raises the question of a political union and the European democracy that must underpin it.”…

..”A deep and genuine economic and monetary union, a political union, with a coherent foreign and defence policy, means ultimately that the present European Union must evolve.” (State of the Union 2012 Address to the European Parliament on 12 September 2012).

The EU’s Blueprint for a deep and genuine economic and monetary union (and political union) states that:

“This Blueprint for a Deep and Genuine EMU describes the necessary
elements and the steps towards a full banking, economic, fiscal and political union.”

What the European Central Bank says:

1999 paper by the European Central Bank: Europe: Common Money – Political Union?   In this paper it says that:

“The monetary order established by the Maastricht Treaty with the detailed statute of the European System of Central Banks by itself represents an important building block for the development of a European statehood.”

The importance of the connection between monetary union and the establishment of a single state was well understood at the new European Central Bank in 1999:

“So what does the future hold? Anyone who believes in the role of a single currency as a pace-setter in achieving political unity (Europe will be created by means of a single currency or not at all (Jacques Rueff 1950)) will regard the decisive step as has having already been taken. This does not provide an answer as to how the “rest” of the journey should be approached. ”

How does the European Central Bank see the current Euro crisis evolving? Here is an extract from an ECB approved presentation on the subject, Short Term Crisis Management and Long Term Vision, describing the 4 steps to a solution:

  1. The first is a financial union, with a single framework for supervising and resolving banks and for insuring customer deposits. This would build on the single supervisory mechanism now under development and ideally lead to a European version of the FDIC, financed by contributions from the private sector.

  2. The second building block is a fiscal union, with powers at the euro area level to prevent unsustainable fiscal policies and to limit national debt issuance. With these powers in place, a path towards common debt issuance would also be possible, but only at the end of the process.

  3. The third building block is an economic union, which would help euro area members to remain fit and to adjust flexibly within monetary union. This could entail, for example, moving from soft coordination of structural reforms in Member States to an enforceable framework at the euro area level.

  4. And the fourth building block is a political union, which aims at strengthening democratic participation. This final building block is equally important, as the other measures cannot be effective unless they are legitimate. This requires innovative thinking as regards the involvement of the European Parliament and national parliaments in decision-making on euro area issues.

Note 3:

“In France, a defendant is entitled to a jury trial only when prosecuted for a felony (crime in French) that is an offence which may bring least 15 years’ imprisonment”

In Italy “Only serious crimes like murder can be tried by the Corte d’Assise.” ie: with a perfunctory jury.

“In Sweden, juries are uncommon;”

http://en.wikipedia.org/wiki/Jury_trial

“Germany used jury trials since medieval times, but during an Article 48 (of the Weimar Constitution) state of emergency, and about one month before the February 1924 trial of Adolf Hitler for the Beer Hall Putsch of November 1923, the Emminger Reform (a Notverordnung, or emergency decree) was passed in January 1924 abolishing their use and replacing them with a mixed system of judges and lay judges which is still used today.

http://en.wikipedia.org/wiki/Judiciary_of_Germany

Note 4: Balance of Payments Deficits

Commentators often simply shrug off the UK-EU balance of payments deficit but it is a persistent and extremely large deficit.  There is a succinct summary of the effects of a large and persistent deficits at Balance of Payments – Trade Imbalances which notes the following adverse effects:

What are the Key Dangers from running Persistent Trade Deficits?

  1. A deficit leads to lower aggregate demand and therefore slower growth
  2. In the long run, persistent trade deficits undermine the standard of living
  3. Trade deficit can lead to loss of jobs in home-based industries
  4. Deficit countries need to import financial capital to achieve balance
  5. A trade deficit can lead to currency weakness and higher imported inflation
  6. Countries may run short of vital foreign currency reserves
  7. A trade deficit is a reflection of lack of price / non-price competitiveness
  8. Currency weakness can lead to capital flight / loss of investor confidence

About John Sydenham

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Dr John Sydenham has worked in International Pharmaceuticals and for one of the "big four" International Consultancies. He ran a successful company for 15 years and after selling the company devotes his time to travel, science, black labradors and freedom.

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