The full title of Derek’s talk is The EU is it Sustainable and Should the UK Remain In It. After studying the arguments he finds himself arguing the case against remaining in and we have been able to show his paper to Sir Graham Watson the former MEP for the South West. He has unrivalled experience of working in the EU and believes strongly that we should stay in.
Download, print offf and read both Derek’s paper and Graham’s and then send in to me an email to book your place on this most topical and important of subjects asap.
Johnbaxter@nullgetshot.co.uk .
Britain’s membership of the European Union,
IN or OUT
| Para 1 | Introduction |
| Para 2 | Details |
| Para 3 | Two previous negotiating processes |
| Para 4 | Further details |
| Para 5 | Legislating |
| Para 6 | An alternative for the UK |
| Para 7 | Political aspects of the UK’s membership of the EU |
| Para 8 | Conclusion |
- Introduction
The question of the UK’s membership of the European Union is usually posed as a dichotomy, meaning that we have to make a black-or-white choice between remaining IN or OUT of the EU. Very few commentators have tried to find out if there is a third possibility, which may be summarised as “half-way IN the EU”. This paper examines this third way of looking at the UK’s most important political and economic decision of our generation.
In order to carry out this idea, I have read widely, but the troubkle is that all the books I have read are either passionately in favour of the UK remaining in the EU, or equally passionately in favour of leaving. I haven’t been able to find any books which attempt to add up the advantages and subtract the disadvatages, so this paper tries to make up for this failure.
One of the founding principles of the EU was the need to prevent France and Germany from going to war against each other, but that objective has now been successfully taken over by NATO. That is not to say that it is impossible for France and Germany to go to war again. In colloquial terms, that particuar problem has now “been sorted”, in my opinion. The fall-back position is to depend on NATO, whose constitution militates strongly against war between any two member states.
In the early days of the EU, the member countries all had similarly high standards of living. This had the effect that approximately as many Brits (about two million of them) went to live and work on the continent, as continental Europeans came to live and work in the UK.
Starting in the 1960s, however, a concerted effort was made to bring in a long list of poorer countries on the east of Europe. This had thje inevitable effect that far more (poorer\) eastern Europeans came to live and wqrk in the richer west and north of Europe than went in the opposite direction,
- Details
In order to proceed with the debate, it is helpful to look for a counter-factual situation which may throw light on Britain’s dimemma, IN or OUT of Europe. In order to find a useful counter-factual argument, we need to look no further than the experiences of Norway and Switzerland, which were faced with a similar choice. These two European countries carefully examined their options and then decided NOT to join the European Union (EU). Both countries have prospered as a result of these decisions, each with a continuation of their own (half IN) free trade agreement with the EU, and each with their own very strong currencies.[1] No jobs were lost, nor did their inrternational standing suffer.
I ask the question, would it suit the UK to follow these two examples?
- These two countries’ previous negotiating processes
In order to achieve what they wanted, both Norway and Switzerland had to have very tough negotiating sessions with the EU, long before David Cameron thought it would be a good idea for the UK to do so as well. Norway and Switzerland each negotiated their own free trade agreements with the EU. They decided NOT to agree to the free movement of European people[2] and not to join the Eurrozone. Instead, they have set up a system of work permits and permits for refugees which allow them to choose which immigrants to accept and which to refuse. They have also retained their original currencies, both of which have turned out to be a lot stronger than the Euro.
As a quid pro quo, the EU in turn asked these two countries to provide generous “voluntary” contributions to the EU’s two international aid funds, one for the poorer countries of the EU and the other for aid to developing countries in Africa, Asia and Latin America. Norway and Switzerland have both agreed to this request from the EU and they accordingly make annual payments to thgese ntwo aid funds of the EU. I assumne that the same kind of thinking would apply if the UK decided to leave the EU.
As a further important part of their negotiating with the EU, Norway and Switzerland agreed to accept the majority of EU legislation. However, they retained an opt-out clause if there were ever to be any particular European law that they did not agree with. So, in many ways, they look similar to actual EU members. But they have saved themselves the very high costs of being EU members.[3]
This of course comes at a cost. They obviously don’t have any Members of the European Parliament, but this is no great loss. The European Parliament exists mainly to examine (and amend, if necessary) the draft laws that are prepared for it by the European Commission. The European Parliament is not permitted to originate its own legislation.
Norway and Switzerland decided instead to continue with their long-standing membership of the European Free Trade Association (EFTA), with its tiny number of employees, something like 450, compared to the EU’s 45,000. This involved them in paying a very small annual membership fee to EFTA, only a small fraction of what they would have had to pay to join the EU. I see this the kind of “half way IN” situation that I envisage for the UK.
Both Norway and Switzerland have saved a small fortune by not having to pay the EU’s enormous annual membership fees. [In the case of the UK, our gross membership fee is about £53 million per calendar day.[4] ]
The one point on which the Norwegian and Swiss negotiations foundered was the principle of the free trade in invisibles. Since this would be of very great importance to the UK, this would obviously be a major negotiating point for the UK if it ever wanted to leave the EU.
- Further details
The EU has a very large staff of about 45,000 personnel[5], including the staff of the EU Commission, the Members of the European Partliament (MEPs), the staff of the European Court of Justice, the staff of various other “parastatals” such as the EU Court of Auditors, and its own foreign embassies[6]. The EU is also closely affiliated withte European Space Agency which is planning to put a man on the moon within the next ten years, at some enormous cost.
By contrast, Switzerland and Norway belong to the very lean European Free Trade Area (EFTA), which has a staff of about 450 and only costs a small fraction of the EU’s overall costs to run. EFTA has no foreign embassirs. The EU’s staff are all paid generous tax-free salaries and have incredibly generous unaccountable allowances[7], free schooling for their children at one of the EU’s three top rated international schools, etc.[8]
Several top EU civil servants earn considerably nore than the British prime minister. When a senior EU civil servant retires, they get a very generous golden handshake (about 6 months salary), and are free to go to work straight away as a lobbyist for any lobbying firm that wants to lobby the EU in the retiree’s field of expertise.
The EU’s accounting standards are so lax that the EU has failed for the last 20 years to get a clean bill of health from its own auditors. It is suspected, but is difficult to prove, that money sloshes around the EU coffers to such an extent that blatant fraud is rampant. Whistle blowers have been fiercely penalised, even losing their jobs, for speaking out.
- Legislating
The European Parliament produces between 2,000 and 2,500 new laws every year. These laws are drafted by fonctionnaires, ie international civil servants in Brussels. Like British civil servants, they are not liable to stand for election every five years, nor are they required to form themselves into political groupings and publish a political manifesto from time to time. There is no such thing as a recall if any EU citizen is dissatisfied with any fonctionnaire’s performance. The MEPs who analyse the draft laws are only allowed to submit amendments, never anything which rejects the principles involved.
Once a law has been approved by the MEPs, the civil servants then draw up detailed regulations with which to enforce the new laws. The accumulated corpus of EU legislation[9] currently fills some 60,000 pages. Any new applicant to join the EU such as Turkey, has to adopt all 60,000 pages as their own laws.
If there is ever any clash between UK laws and EU laws, the EU’s laws have precedence.
The European Parliament meets in Strasbourg at the rate of roughly one week per month, excluding mid-summer. Each move from Brussels to Strasbourg is accompanied by some 2,000 civil servants and a convoy of heavy duty trucks which carry relevant documentation backwards and forwards between these two cities. This looks to me like a shocking waste of money. The headquarters of the EU’s statistical office are in Laxembourg. May fonctionnaires necessarily have to travel backwards and forwards between Brusssels, Luxembourg and Strasbourg, in order to do their jobs properly.
- Intra-EU migration
In the late 1960s, when the EU started, the founding members all had similar standards of living[10]. The result was that the citizens of one EU member country tended to work and live in any other EU state in such large numbers that they more or less balanced the number of other EU citizens who cane to live in their own country. For example, something like 2 million Brits lived in the other parts of the EU, including the many British citizens who commuted to work in southern Spain from Gibralter every day. This “outward migration” more or less balanced the number of EU Continentals who came to live in the UK.
This was a win-win situation in which every EU country maximised its Gross National Product by having its citizens free to maximise their incomes by working in whichever member country would pay them the highest salaries. So at that point in time, the free movement principle definitely benefited the UK.
- An alternative possibility for the UK is to revert to its membership of the European Free Trade Agreement (EFTA), which it resigned from in 1973. There would be large financial advanges for us,. [Net of the EU’s subsidies into the UK. Our annual NET EU membership fee amounts ro £36 million per day]. We would obviously cease to depend crucially on how successful David Cameron and George Osborn could be when negotiating our departure from the EU.
It is almost certain that the rest of the EU would be very keen on retaining a visible free trade agreement with the UK, since the rest of the EU has a large trade balance in its favour. So, the free movement of goods is not a debatable issue. Anyone who talks about British manufacturing jobs being “lost” if we were to leave the EU is just plain dishonest. At the same time, the UK would be free to construct its own free trade agreements with the USA, China or India.
Conversely, the UK wouild have to negotiate hard to preserve its freedom to trade in invisibles, something which is of enormous value to the UK.
- The political aspects of the UK’s membership of the EU
The UK has made it plain that it does not believe in a future “United States of Europe”, a phrase that was originally coined by Sir Winston Churchill. This is in sharp contrast to the views of several high level Eurocrats[11], including both the founding father of the EU, Jacques Delors, and the current Commission President, Jean-Claude Junker, who believe in ever closer union of the EU under an ever more powerful European Commission. These Europhiles actually want the majority of Britain’s laws to be made in Brusssels, not at Westminster. They are trying all the time to take on more responsibility for the Commission so as to justify their own existence. They would also like to be able to dictate many other policies to the UK, eg in railways (eg the EU wants the UK to have more freight trains), education, taxation and health. This is in sharp contarast to the EU’s founding principle of “subsidiarity”, the phrase which the EU coined to summarise the principle that the EU should only legislate in those areas of competence where the individual countries could not beneficaially do so.
Similarly, there is no appetite in the UK to join the EU’s nascent army. The UK is entirely happy with its membership of NATO, and sees no need to joing Jean Claude Junker’s “army”. In addition, the UK is entirely happy to be represented abroad by its own foeign embassies, and sees no reason why the UK should pay for the EU to represent it abroad in addition to its own foreigtn diplomatic missions.
What the people of the UK want is the ability to trade freely with the rest of the EU, while not having to accept an unlimited number of European migrants or unlimited number of EU laws and directives. The UK also feels uncomfortable about the steady stream of regulations coming out of Brussels at the rate of several per day, including several regulations which are at cross purposes with the UK’s own employment laws.
While it is highly likely that the vast majority of European migrants to the UK have been economic successes, the fact remains that they place enormous pressure on the UK’s education, health and housing facilities.
Some smaller businesses in the UK have complained vociferously about the economic burden of having to comply with the EU’s employment directives, which they consider to be overly protective of their employees[12]. This costs these firms quite a lot of money, none of which woiuld apply if we left the EU.
9, My conclusion
A: For leaving
In my opinion, the UK could “have its cake and eat it” if it were to leave the EU and rejoin EFTA. Under the conditions that I have outlined above, this would allow the UK to save a small fortune in annual membership fees and to set up its own immigration policy, according to what it believes to be in its own best interests. Such a plan would establish beyond any doubt that the House of Commons is the chief law making body of the UK, NOT the EU Commission in Brussels. It would obviously also protect the UK from being buillied into becoming a founder member of the “United States of Europe”, which the EU wants but which the overwehelming majority of Brits don’t want.
B: For remaining in
If Britain stays in, the UK will continue be of considerable assistance to the poorer members of the EU. The UK will also benefit from being a member of one of the world’s largest trading communities.
The much higher per capita membership fee that the UK pays effectively cross-subsises the much lower per capita membership fees paid by the poorer eastern European members. We are currently giving much needed foreign aid to eastern Europe while not actaully explaining this act of generosity to the British public. These poorer countries have demonstrated that they use such aid productively and that their standard of living is thereby increasing steadily.
In summary, “YOU PAYS YOUR PRICE and YOU TAKES WHAT YOU GET!!
REPLY TO DEREK HUDSON’S PAPER
by Sir Graham Watson, UK Representative on the European Economic & Social Committee
Item 1 (Introduction), para 1
The UK is already effectively half way out of the EU. No other country is as ‘semi-detached’ as the UK. We are not members of the Euro, not members of the Banking Union treaty, outside the most important provisions of the Schengen Convention – and we have a number of opt outs in other areas. What is left is the core of the EU’s single market, in which we still participate.
Item 1, para 2
Any of the books by recent EU ambassadors to the EU would make up for the absence of reading material which you lament. ‘A stranger in Europe’ by Sir Stephen Wall is among the better ones in my view.
Item 1, para 3
Keeping the peace between France and Germany has not been ‘taken over’ by NATO: NATO has existed for far longer than the EU or its predecessor EEC. Moreover, France is not a full participant in NATO. The EU was created to provide the economic mortar around the military bricks of NATO to ensure lasting peace by tying its members’ economies together. And though it no longer needs to keep the peace between France and Germany it still has a role in keeping the peace between Serbia and Kosovo, and even between Croatia and Slovenia.
Item 1, para 4
There are currently 2.2 million British citizens residing in other EU countries.
Item 1, para 5
It was not in the 1960s but in the 1980s that an effort was made to bring central and eastern European countries into the EU. And in order to help finance this project, Sweden and Finland and Austria were invited to join first. The idea was pioneered by UK Prime Minister Mrs Thatcher, who sought a larger consumer market for UK goods. The UK is one of the most successful exporters to these countries.
Item 2, para 1
Where is the evidence to suggest that Norway and Switzerland have prospered AS A RESULT OF their decisions not to join the EU rather than DESPITE those decisions? Indeed, Switzerland’s troubles since their recent vote to pull out of the free movement provisions of their agreement with the EU suggests the latter is more likely to be the case. And what about the disadvantages that Swiss and Norwegian citizens suffer in EU countries because they are not members? For example, a Norwegian working in Sweden has far fewer rights than a Brit or a German working in Sweden.
Item 3, para 1
How right you are about the tough negotiations Norway and Switzerland endured. It took the latter 12 years to agree a free trade agreement. What if we vote to leave and then find it takes us the same length of time? What happens to our exporting businesses during those 12 years?
Item 3, para 2
You fail to point out that the contributions Norway and Switzerland pay in to the EU’s international aid funds total more than their net contribution if they were members. If you are outside, the privilege of trading with the rest costs you more than if you are a member.
Item 3, para 3
Under their bilateral arrangements, Norway and Switaerland MUST adopt all EU single market legislation, which is the major part of all EU legislation. They have no choice. But having no representation in Parliament or Council they have NO SAY WHATEVER in the framing of the legislation. Are you sure not having MEPs is ‘no great loss’?
Item 3, para 4
If you look back at Hansard at the time we joined the EEC you will see that the reason we joined was that EFTA was not sufficiently big or strong.
Item 3, para 5
Not true. See answer to Item 3, para 2 above.
Item 3, para 6
Indeed! And why would continental EU member states agree to free trade invisibles with the UK when the UK has such a huge advantage?
Item 4, para 1
You call 45,000 officials ‘a very large staff’. If you take out the interpreters and translators, many of whom are part time contract staff, it comes down to around 30,000. Have you looked at the numbers employed by one single department in national government – the Ministry of Defence, for example, or HM Revenue and Customs – to make a comparison?
Your point about the European Space Agency also begs a reply. The EU’s space programme has been a huge success, commercially and otherwise (eg landing a spacecraft on a meteorite). So much so that the EU is taking over provision of global GPS systems from the USA.
Item 4, para 2
It is not true that EU staff have tax free salaries. Like UN or NATO staff they pay an institutional tax which contributes to funding the agency they work for . And as for terms and conditions, have you looked at pay and conditions for UK diplomatic staff to provide a fair comparison? As somebody with a brother in law in DFID I can tell you that UK foreign staff fare better.
Item 4, para 3
Are you not aware that several top UK civil servants also earn more than the Prime Minister? Or that top UK civil servants are paid on average more than top EU civil servants?
It is not true that top EU officials can go straight from the civil service to work as lobbyists. There is a period – length according to rank – of up to two years in which this is not allowed.
Item 4, footnote 8
The EU has no officials working in SW England. If your friend in Milborne Port is employed by the EU it must be from London or Brussels.
Item 4, para 4
This is simply not true. As in the UK, the Auditors report on spending checks and Parliament debates their report in public. There are always qualifications, as in the UK. But discharge is givne to the auditors and problems are followed up with the Commission by Parliament’s powerful Budget Control Committee. True, the accounting standards are tough, at the European Parliament’s insistence. And you don’t need only to take my word for it. The UK Auditor General Sir John Bourn wrote in 2007:
‘There are 500 UK Government accounts. In the last year, I qualified 13 of the 500. If I had to operate the EU system, because I qualify 13 accounts I might have to qualify the whole of British central government expenditure’.
Item 5, para 1
You misrepresent fundamentally how laws are made in Brussels. Your claim that the EP produces ‘between 2000 and 2500 new laws every year’ is ludicrous. And it is not true that there is ‘no recall’ for civil servants; they can be sacked just as in any national administration.
Item 5, para 3
Of course EU law has precedence over the national law of its member states. How could the EU ever work if it did not? But remember that this is only in areas where member states, including the UK, have agreed to pool their sovereignty by giving the EU powers.
Item 5, para 4
Yes, and this is precisely why UK LibDem MEPs have led the campaign to get rid of Strasbourg as an official seat. And we are not the only ones. What makes our campaign harder is that the requirement to meet in Strasbourg is written in to the Treaties, as agreed at a meeting chaired by Prime Minister John Major during an EU summit in Edinburgh.
But don’t you come from South Africa, Derek? And does not your Parliament meet half the year in Cape Town and half the year in Johannesburg?
Item 6, paras 1 and 2
Your dates are wrong again. The EU (or its predecessor the EEC) have been in existence since the Treaty of Rome in 1957. And there was never a balance. There were always more Italians living in Belgium or Greeks in Germany, for example, than vice versa. It was and remains a win-win situation for the host country when lower cost labour is available.
Item 6, para 3
Here you make three points: our net membership fee, the balance of trade, and free trade agreements. Let me answer each one in turn:
Our annual net EU membership fee is actually about half the figure you quote. But why don’t you give the cost of UK government per day, to allow a fair comparison. It is more than twenty times higher.
Nationwide, 52% of our exports go to other EU countries. In the South West it is 58%. Only 5% of the exports of other EU countries come to the UK. Are you sure they would be ‘very keen on retaining a visible free trade agreement’ with a country which had just turned its back on them?
You say the UK would be ‘free to construct its own trade agreements with the USA, China or India’. But the reason we negotiate jointly with these countries as the EU, a market of 520 million consumers, is that we get a much better deal because we have more clout.
Item 8, para 1
Jacques Delors retired nearly twenty years ago! True, some other Europeans want a more federal Europe with more decisions taken at the centre, but many do not. Paris and The Hague, for example, do not wish to be ‘dictated to’ (your words) any more than London. Why do you feel that the EU is a plot against the UK? Do you believe the UK is treated differently from other member states?
The EU wants the UK and other member states to have more freight trains because the heads of state and government of the member states have asked the EU to devise policies to get freight off the roads and onto the railways to help us meet our climate commitments.
Item 8, para 2
What is this ‘nascent EU army’ you talk about? Where is its HQ? How may staff does it have? If you care to look more closely you will find it is a figment of the Daily Telegraph’s imagination.
And if the UK is indeed ‘entirely happy to be represented abroad by its own foreign embassies’, why are we closing them down so fast in favour of joint embassies with other EU member states? No EU country now maintains embassies in more than two thirds of the countries outside the EU; and only Germany maintains them in that many. The costs are too high and the cost savings from sharing are too tempting; especially for a small country like Luxembourg, but even for the UK.
Item 8, para 3
Again, it is ludicrous to suggest that there are ‘several [new regulations] per day’. But of which of those which ‘are at cross purposes with the UK’s own employment laws’ do you object to? The one that obliges employers to give paid leave to part time workers, perhaps? Or the one which makes maternity leave mandatory?
Item 8, para 4
You are no doubt aware of the many studies carried out by the UK government about the costs of immigration versus the benefits. Why do you not refer to them? Why do you not point out that ALL of them show a significant net benefit to the UK exchequer?
Item 9, para A
How do you justify your statement that ‘the EU wants a United States of Europe’? Who do you mean when you refer to the EU? The Danes? The Finns? The Hungarians? The EU is made up of 28 member states, each with its own approach. It is by nature a carefully crafted compromise between the interests and wishes of each of them. Of course there can never be a British Europe any more than there can be a French Europe or a German Europe. By definition, we can only ever have a European Europe. And I defy you to show me any statement produced by this European Europe that says it wants a United States of Europe.
ENDS (Graham Watson)
Derek Hudson’s paper ends with the following Appendices
| Appendix 1 | The EU’s subsidy schemes |
| Appendix 2 | The EU’s transport freedoms |
| Appendix 3 | The EU’s fisheries commission |
| Appendix 4 | The Euro |
| Appendix 5 | The European Arrest Warrant |
| Appendix 6 | Differences between standards of living within the EU |
| Appendix 7 | The EU’s six main treaties |
| Appendix 8 | Weak democracy in the EU |
| Appendix 9 | GDP per head in Europe |
| Appendix 10 | Gross and net membershup fees |
A1. The EU’s subsidy schemes
The EU’s main subsidy scheme is the Common Agricultural Policy (CAP). The EU effects this subsidy by asking farmers to fill in a quarterly return which inter alia states the number of hectares being farmed and the quantities of each kind of livestock. This allows the EU to subsidise all its farmers pro rata according to their farm sizes and numbers of livestock. The policy is supported by the EU’s high customs duties on all agricultural produce imported from outside the EU.
Unfortunately, however, such large amounts of money are given out to our farmers with so little verification that abuse does happen. It is estimated bny one author that cheating on the amounts claimed under the “CAP” with regard to both the amount of land claimed to be farmed and the numbers of livestock claimed to exist but never independently verified, amounts to billions of euros every year. However, this same author acknowledges that modern satellite observation has reduced the cheating on the number of hectares claimed to be farmed.
The effect of the high external[13] tariff on imported agricultural produce (bananas, milk, beef, etc) is huge. It is estimated th British consumer pay something like £40 billion per year more than they would have had to if the EU hadn’t had such hefty customs duties on all agricultural produce imported from outside the EU, especially beef but also applicable to fresh milk. We pay nearly double the world price for beef, for example.
On the other hand, many people believe that it is morally correct to ensure that all our farmers have a reasonably high standard of living. If the UK left the EU, similar moral pressuer would apply to an independent UK.
The EU’s subsidies also include support for those rural areas, such as the south west of England and the far north of Scotland, which are ripe for development. We also benefit from the EU’s generous support for small start-up and innovative businesses which have great economic potential; but of course all these subsidies are paid for out of our own annual EU membership fees.
An analysis carried out for the “Daily Telegraph” estimates that the UK has paid in £85 bn more than it received between 1979 and the present. To be fair to the analysis of the cost of membership of the EU, one should deduct the value of all the subsidies paid to the UK by the EU. Besides the CAP, the UK receives subsidies which support the development of our poorer rural areas, money to support the development of new innovative business ideas, and the famous EU rebate which Margaret Thatcher negotiated.
A2. The EU’s transport freedoms
The UK’s airlines and truckers benefit from the EU’s free movement of goods principle. Any UK trucker can for example carry one load from the UK to Greece, then pick up a load in Bulgaria which is to be delivered to an address in Germany.
Similarly, the UK’s low-cost airlines benefit considerably from the EU’s “freedom of the skies” principle. This allows them to pick up and fly passengers from any one EU point of departure, and then disembark them anywhere else in Europe. This is in sharp contrast to the pre-EU system where national airlines often succeeded in freezing out small start-up and low-cost airlines by denying the freedom of the skies principle to their smaller competitors.
He maintenance of these and all similar EU schemes would need to be renegotiated if the UK were to leave the EU.
A3 The EU’s fisheries policy
The EU’s Fisheries Commission originally struggled to come up with a coherent policy. Now, however, there is a policy which mandates sustainability of fish stocks throughout the EU’s fishing areas. In addition, if any EU country’s fishing trawlers go fishing somewhere else, eg off the coast of Senegal, the fleet owner has to pay a royalty to the country concerned, for fishing in that country’s territorial waters.
A4. The Euro
The Euro has been a great disappointment to me. It was originally created at a time when the founding members all had similar standards of living and were countries at very similar levels of economic development and had sim ilar fiscal policies.
From the beginning, the Euro was supposed to be protected by three financial principles, called the “Maastricht conditions of convergence”. These safeguards were intended to make the Euro a sound international currency. All members of the Eurozone had to pledge to:-
(a) keep their respective rates of inflation close together,
(b) restrict their annual government budget deficit to less than 3% of their Gross Domestic Product (GDP), and
(c) keep their accumulated government debt to less than 60% of their GDP.
Very sadly, these eminently sound principles were not provided with any kind of sanction, nor was there any effective policeman, in case any Eurozone country were to break these rules. So nothing was done when both France and Germany strayed beyond the path of fiscal rectitude, with larger than permitted fiscal deficits, nor was there any objection to Greece being allowed to join the EU at a time when its accumulated government debt was far, far greater than the maximum of 60% of GDP that was allowed.
Greece then naturally took advantage of a helpful Eurozone principle by financing its ballooning government debt by selling Eurobonds. This device enabled Greece to finance its huge official debt at the cheaper borrowing rates that were paid to holders of Eurobonds, because of the high credit ratings of France, Germany and the UK. Greece would have had to pay much higher rates of intertest if it had tried to borrow in its own name.
A5. The European Arrest Warrant
The UK benefits from its adoption of the “European Arrest Warrant” scheme. Any one member of the EU can issue a complaint to any other member that one of the latter’s residents is wanted by the police of the first member country, on suspicion of having committed a crime in the first country.
The evidence submitted by the complaining country is first examined by a judge in the country where the suspect is currently residing. If the judge is satisfied that the evidence is sufficient, he or she will issue a European Arrest Warrant. The suspect will then be quickly arrested and transferrred to the complaining country. This new, streamlined judicial process has turned out to be much more efficient than the previous laborious extradition process. There have been a few miscarriages of justice, but these have fortunately been quite rare.
This policy would be well worth retaining if the UK were to leave the EU (another example of the “half-in” principle.)
A6. Differences between the standards of living of EU countries
When one considers the disparities (roughly 10 to 1) between the richest EU members’ GDP per head and that of the poorest members, it is not at all surprising that the residents of the poorer members in the east often look to the richer members in the west as a place where they would like to live and work. In retrospect, it could have been anticipated that Bulgarian, Croation, Hungarian, Polish, Romanian, and Slovenian citizens, for example, would logically want to work in the richer EU countries, including Germany and the UK. This should never have caught the UK by surprise, nor should david |cameron have been caught by surprise when the UK’s membership fee increased after our GDP increased.
I am not against the UK helping the poorer countries of the EU. What bugs me is the secrecy surrounding this intra-European aid program.
If the UK were a member of EFTA, the UK could choose for itself how it intends to control the inflow of would-be residents from the rest of the EU. Just as one hypothetical example, a future UK government might prefer to give refuge to Syrian refugees, rather then East Europeans. This kind of thinking underlies what Norway and Switzerland have done, and Germany to a lesser extent.
A7. The EU’s six main treaties
As indicated above, the Commission is constantly seeking to give itself ever more areas of responsibility.
This is in sharp contrast to the EU’s founding principle that the EU should only legislate in areas where the member countries were unable to do so. [In technical EU jargon, this idea is known as the “EU’s subsidiarity principle”.} There are however a number of senior Eurocrats who only pay lip service to this principle. They appear to ber more interested in creating more areas of responsibility for themselves. I see this as a kind of “political grab”.
A8. The weak form of democracy within the EU
The EU is not a democratic institution, in the normal sense of the word. All the top positions are filled by an indirect process. For example, the Commission President is appointed by an “electoral college” which consists of the prime ministers of the 28 member states. In effect, we the voters have delegated our prime minister to make all these appointments on our behalf, without him having to consult any of us. There has once been a weak attempt to introduce direct elections for the top EU posts, but this idea never got off the ground.
In the past, when the EU’s own constttution offered a national referendum in each member state to approve a proposed constitutional amendment, the EU went to extreme lengths to avoid losing such referenda. On two occasions when the EU lost national referenda in support of proposed treaty changes the first time the matter was put to a referendum, the EU lent on the countries concerned to re-word the question so that the “correct” result could be obtained in a second referendum.
The European Parliament has very restricted powers. It cannot itself originate legislation. It can only approve or disapprove draft legislation that has been drafted by the civil servants of the European Commission.
The so-called democratic way of making the EU’s laws may be illustrated by the following chart.
The EU’s law making process
Step 1
The staff of the Commission are appointed with generous contracts
Step 2
The Commission proposes new legislation to the European parliament
Step 3
The MEPs consider the proposals in committee. They can modifyor amend the draft legislation, but cannot change any of the basic principles inherent in the proposals
Step 4
The EU parliament as a whole considers the legislation, but is not permitted to change any of its principles
Step 5
The Commission finalises the legislation, including writing all the regulations that are needed to implement the principles in the EU act that has just been passed
Step 6
The MEPs are given one last chance to scrutinise the legislation
Step 7
All 28 member countries are then required to implement the legislation in their own countries
PS The members of the EU Commission never have to face any voters, because they are regarded as
permanent international civil servants; nor do they need to publish their own manifestos because they are civil servants.
Appendix 10 Gross and net annual contributions to the EU
[“net” means after deduction of CAP, rural development, entrepreneurial support and EU rebate]
The following table demonstrates just how heterogeneous the EU became after the accession of a large number of eastern European countries, starting in 2007.
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| Name of country | GDP/head, in 2010 purchasing power parity dollars |
| Bulgaria | $ 6,300 |
| Serbia | $ 7,040 |
| Romania | $ 9,620 |
| Poland | $ 12,270 |
| Hungary | $ 13,230 |
| Croatia | $ 13,400 |
| Slovakia | $ 18,440 |
| Czech Republic | $ 19,100 |
| Cyprus | $ 20,600 |
| Malta | $ 21,270 |
| Portugal | $ 23,930 |
| Greece | $ 34,830 |
| Spain | $ 41,570 |
| Italy | $ 41,260 |
| Germany | $ 46,350 |
| Belgium | $ 44,300 |
| United Kingdom | $ 45,730 |
| France | $ 49,490 |
| Finland | $ 53,620 |
| Netherlands | $ 54,640 |
| Denmark | $ 56,500 |
| Sweden | $ 56,500 |
| Iceland* | $ 62,490 |
| Switzerland * | $ 64,970 |
| Ireland | $ 68,570 |
| Norway * | $103,590 |
| Luxembourg | $118,540 |
| * members of EFTA, not of the EU |
By comparing GDP per head among the countries of Europe, one can rteadily see the disparity In living standards referred to ea
[1] Switzerland revalued its already strong currency by 25% early in 2014.
[2] When I lived in Switzerland, I was impressed with how smoothly their work permit system opoerates. Every “guest worker” is meticulously clocked in and out of Switzerland. Every Friday evening, there si a special train taking Italian visitors back to Italy for their annual holidays. Workers from other European countries are only allowed tolive and work in Switzerland if they have a job waiting for them.
[3] See appendix 10
[4] In 2014, David Cameron was shocked wehen he found just how high this fee had actaually become after Britain’s Office for National Statistics revised the UK’s GDP upwards, .
[5] One joker has suggested that the number of new EU laws every year is in direct proportion to the number of EU civil servants
[6] Including Eurostat, the common statistical office in Luxembourg, for example.
[7] The way this works is that the EU prefers to give MEPs a generous flat rate subsistence rate, rather than reimburse the MAPs’ actual expenses. This means that MEPs don’t have to keep any receceipts.
[8] Including a friend of mine in Milborne Port. She is the EU’s representative in south-west England for selecting those regional development projects which will receive EU financial support.
[9] In EU jargon, this enormous corpus of laws and regulations is called the ”Acquis communautaire”
[10] See appendix 8
[11] In 1993, Jacques Delors, then the Commission President, said that “We’re not just here to crearte a single market, but a political union”. In 1999 Commission President Romano Prodi stated, “We must now face the difficult task of moving towards a single economy, a single political unity”.
[12] For example, the EU does not allow a ‘houseman’ or trainee doctor to be on call during working hours to anything like the same extent as the rules of the Royal College of Physicians permit.
[13] In this context, “external” refers to the common customs duties that all EU countries are required to charge on imported agricultural produce from the rest of the world.
John