Debates about the European Union (EU) are invariably filled with myths, prejudices and ill-founded assumptions. Whether it is in exaggerated claims from those who favour integration or unfounded fears from those who advocate withdrawal, the EU is an issue that has the capacity to divide people.
Those who promote the virtues of the EU are quick to suggest a range of benefits springing from European integration. For example, it is often stated – as though an incontrovertible fact – that the EU has brought about and maintained peace and stability in Europe. An alternative view might credit other factors such as the complete defeat of Germany in World War II and Germany’s subsequent occupation; the realisation across Europe of the horrors and costs of war; the American military presence in Western Europe (with its nuclear umbrella); the establishment of NATO; the bilateral rapprochement between France and Germany; the ongoing Soviet threat throughout the Cold War; the economic recovery and growing prosperity after the war; the discrediting of political extremism; and the entrenchment of stable democratic systems in post-war Europe.
It is churlish to deny that the EU’s existence has helped to cement relationships between many of its member states but equally it is absurd to suggest that the EU has been the main factor in maintaining peace and security in Europe.
Where the EU has been most effective is in encouraging former communist states (and others) to reform themselves in preparation for membership – though the reforms are enacted by the individual countries themselves, it is the magnet of EU membership that has acted as an incentive to push through sometimes unpopular measures.
It is clear that the European Union is a political project and not the free trade area that some once imagined. Indeed, its credentials on free trade are very poor. The issue is not whether we are ‘pro-European’ or ‘anti-European’ but whether or not the goals and institutions of the EU are ones that we can support.
In trying to answer this question, we need to consider the alternatives. Any alternative that involves national protectionism is clearly not a solution. Hence we need to identify the problems that exist with the EU as it stands and look at whether these issues can be tackled by meaningful reform.
There are in fact six main problems with the EU as it currently stands. First, there is a democratic deficit. This is partly due to the institutions themselves, which are designed to shield progress towards European integration from national and public concerns. There is not yet any clearly discernible "European public" or demos; over-hasty attempts to create a pan-European identity by legalistic measures are likely to result in a backlash. Yet progress has been made towards enhancing the role of the European Parliament in decision-making.
Second, the EU places enormous costs on business through unnecessary regulation and a failed economic and social model. The conditions being imposed on European businesses will make Europe increasingly uncompetitive and lead inexorably to economic decline. We should strive at an EU level, as at the national level, to oppose such measures.
Third, the EU puts up trade barriers against other countries, undermines progress in trade talks through its Common Agricultural Policy and protectionist policies and destroys the livelihoods of farmers in developing countries. Reform and ultimately abolition of the CAP should be high on any agenda.
Fourth, the EU’s decision-making process through endless horse trading has led to an elaborate system of subsidies to secure the support of different countries and lobby groups at various times. These subsidies are extremely difficult to dismantle and normally require the acquiescence of those countries who benefit – which, unsurprisingly, does not come without compensating benefits in their favour. The programme of subsidies also distorts public policy by creating incentives for resource allocation in a way that is far from optimal. Reform in the EU must remove the power of vested interests.
Fifth, the cultural and linguistic diversity of Europe mitigates against the centralisation and uniformity that is the hallmark of the Brussels Commission. The EU must guard against the temptation to impose uniformity where it will not work.
Finally, the EU’s muddled foreign and security policy needs drastic revision. It is simply not possible to maintain a credible foreign policy with 27 governments holding a veto. EU splits on issues such as the Ukraine and Georgia have been damaging.
These problems are real and they apply in varying degrees to every member state. In the UK we have already experienced the excessive cost of membership and the major shortcomings of the EU diplomatic and trade initiatives.
But say no to the victim mentality
However, to focus solely on the UK’s problems with the EU is to miss the point. If we were to believe that the UK was alone in suffering these problems we would fall into a xenophobic loathing of others rather than identify solutions. It also begs the question of whether we would think everything was right with the EU if we suddenly became net beneficiaries instead of net losers. Victimhood is neither attractive nor the answer to our predicament.
A sensible starting point is to ask what sort of economic and political arrangements we would like to see for Europe and ourselves. For us, it can be summed up in one simple phrase: open Europe. Our vision of Europe is one of member states with open, flexible, dynamic and competitive economies, co-operating together and trading freely. Political and social initiatives at the European level are to be welcomed but the way of achieving them must be reformed.
We need therefore to work towards an open Europe embodying the ‘four freedoms’ that would most benefit us all: the free movement of goods, services, capital and people. Beyond that, we advocate a system in which member states can opt in or opt out of programmes, maintaining maximium flexibility whilst leaving open the possibilities of co-operation in a wide range of policy areas.
The prospects for an open Europe
The key question is whether this can be achieved through internal reform.
We should not dismiss the idea that a significant number of states may come together to promote reform. It is difficult to achieve substantial reform from within, not least because treaty revisions require the consent of all member states. The Lisbon Treaty and the originally proposed Constitutional Treaty have shown the difficulties in getting reforms through.
However, the case for substantial reform, if properly argued, could seem attractive to a number of member states. And since all member states retain the ultimate option of withdrawing from the EU, it is clear that the EU would need to find ways of accommodating major differences if a number of states were to put the case. We are optimistic that a different type of Europe could emerge if the effort was made.
It is ultimately possible that we would fail to achieve our hopes for reform and the EU goes in a different and more negative direction. In such circumstances we would have to be prepared to withdraw from membership and negotiate a new relationship with the EU, such as a trade agreement, on the basis that free and open trade is paramount. But we are clear that a closed protectionist Britain would be far worse than even an unreformed EU.
Thus our approach is to work for change across Europe and look to the tools we have to start to effect that change.
Why this strategy is different
So if we are unhappy with some aspects of the EU, why do we not simply call for the UK's withdrawal? There are five important differences between our approach and the approach of withdrawalists.
First, the objective is not to remove the UK from the European mainstream but to transform the European mainstream itself. It does not make sense for the UK to withdraw from the EU and leave the EU intact as an economic and political power to which the UK, inevitably, would have to pay obeisance. It would be preferable to work for an alternative set of arrangements.
Second, we are framing the debate in terms of concerns that are common to many EU member states, not just complaining about the UK’s share of the burdens. Thus we specifically reject the victim mentality and the associated xenophobia to which many in the anti-EU movement fall prey.
Third, since our starting point is our participation in an open, flexible and dynamic Europe, and beyond that meeting the challenges of globalisation, we absolutely reject the protectionist outlook adopted by some who oppose free trade. Nor do we accept that the free movement of people within Europe need be a problem, and indeed it can in many ways be a great benefit if managed properly.
Fourth, we do not accept the spurious arguments about the financial benefits of EU withdrawal such as the notion that there is a massive ‘pot of gold’ just waiting to be spent on higher pensions or more funding for the NHS. While we believe that our policy would bring great economic benefits over time through less regulation, greater competition and new trade links, the sums accruing to the Treasury in the first instance would be relatively small. Ours is a policy for long-term growth and prosperity, not a panacea for the immediate problems of government finances.
Fifth, we recognise that the UK outside the EU, without any reform of the EU itself, would still effectively face unnecessary burdens and regulations on our business through trade and other arrangements, not to mention the position of UK firms with employees and customers across Europe. It is therefore preferable to reform the EU, not simply pretend that it does not exist.
So ultimately we are proposing an expansive programme for reform and opening up new opportunities in Europe, not a narrow policy of withdrawing and shutting ourselves off from others.
The policy of 'open Europe' accords perfectly with free societies which rely on individual initiative, personal responsibility and free enterprise. If we lose that, Europe is dead. While the UK could gain some limited short-term benefits by withdrawing from the EU, there is a great deal more to be gained by persuading the rest of Europe that the values of freedom are worth fighting for.