Pull and Push

Push-pull-2Commentary on Brexit focuses mainly on the attractions of independence and on the risks that are inherent in separating the country from a 44-year ‘engagement’ (the ‘pull’ of exit). In this post we ask why so little attention is being paid to the ‘push’, the reasons that the EU offers such an insecure future to its members.

In June last year, just before the Referendum, we asked the question, “Why do supporters of the EU not factor the possibility [that the EU may break up] into their economic arguments?” Remainers continue to focus on a “Leap in the Dark” when Britain leaves; they assume bad outcomes and feed these into their models. Where is the full story?

The EU will change; the heads of its institutions have a plan, and have had the same plan for decades. (for an update of the plan see the Five Presidents Report from 2015, the more recent White Paper and our commentaries on these). The quotes below in A give a fair taste of their Plan; how does the plan compare with reality and the desires of EU citizens? See B for links to our posts that pick up this question.

Structural weakness-1Evidence for the structural weakness of the EU, which makes its future uncertain and continuing membership risky, can be gathered under two headings, which highlight the contradictions. Here is a summary:

A: Overweening ambition

  • Four strands of ever-closer union (economic, financial, fiscal, political – “all euro area Member States must participate in all Unions.“)
  • Unbelievable goals (“A complete EMU is … a means to create a better and fairer life for all citizens … and to enable each of its members to prosper.”)
  • Unsubstantiated claims (“a deep and genuine EMU would provide a stable and prosperous place for all citizens of the EU Member States that share the single currency“.)
  • Disdain for democracy (“intergovernmental solutions were chosen to speed up decisions and overcome opposition.”   “The President of the euro group, and he alone, should represent the euro zone.”)
  • ConvergenceDistrust of divergence (“… to address the still significant margin for discretion at national level.”   “Today’s divergence creates fragility for the whole Union. We must correct this divergence and embark on a new convergence process.“) 
  • Contradictions (“Our European Union is not in a good state.”  The EU “has achieved this by acting with one voice on the global stage.”   In the “international financial institutions, the EU and the euro area are still not represented as one.”)
  • Lack of critical reflection (“My first priority will be to put policies that create growth and jobs at the centre of the policy agenda of the next Commission.” from Jean-Claude Juncker, ‘My Priorities’, http://juncker.epp.eu/my-priorities)

B: Underwhelming achievement

A project such as the EU should be firmly underpinned by sound economic theory. It is not. There is no broad consensus in either economic or political theory, so there is no widely accepted foundation that could support the argument for economic and political union.

Because it is inconceivable that the EU/EMU as currently structured will be able to deliver jobs and growth, which are always created at a sub-national level, its failures are experienced by those who do not get jobs or see the benefits of growth, and those who are dissatisfied will continue to drift towards populist ‘solutions’ on the extremes of right and left.

CentralisedThe central problem is that the EU project, subservient as it is to EMU, is misdirected. It is about centralising power and as such it is doomed to fail, like all previous empires.

The case to remain is based on fear but the greatest fears should arise from the risks and uncertainties of remaining, in whatever form.

 

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