January 22 2013 marks the 50th anniversary of the Elysées Treaty between France and Germany: an agreement that signified post-war reconciliation and first promoted the ideals of a newly unified Europe.

These two countries are set to commemorate this event with a meeting of over 1000 MPs from both countries in the symbolic Reichstag, engaging in a cross-border celebration that highlights the historic triumphs of the European Union.

It is perhaps no coincidence therefore, that David Cameron was initially intending to deliver his Europe speech, outlining his view on Britain’s role within the EU, on this day as well. Only after harassed telephone conversations between Berlin and London did Cameron hastily decide to give his speech on the Friday just gone (it has since been postponed to an unannounced date). What this signals is perhaps not merely a political faux-par of proportions almost synonymous with our coalition Government, nor does it reflect a vindictive assault on the ideals of the EU. It may in fact be something more sinister: a sign as to how out of touch Britain has become when considering our strongest European allies. Since Cameron announced the impending “big speech” last autumn, there have been increasingly tense and vocalised opinions about our place in the EU, and neither side seems to be giving way.

…time-consuming, narrow-minded and largely myopic reforms of fundamental European institutions…

On the one hand, Cameron faces a lot of aggressive political pandering from Tory hardliners within his own ranks, as well as from long-standing eurosceptics, UKIP. The consensus amongst these right-winged politicians is that the UK should not continue committing to a Union whose interests are largely disparate from their own. That is, as single-currency members of the EU grind closer towards transformation into a federalised superstate, the role of the UK in such a set-up becomes ever more irrelevant. Further gripes relate to the recent fiscal implosions of key Eurozone member states. Already it appears that the EU has lost its sure-footedness and what follows, it is argued, will be time-consuming, narrow-minded and largely myopic reforms of fundamental European institutions, drawing the UK further into an agreement to which it is currently only half-heartedly committed.

So what then is there to lose through non-membership in the EU? The time-tested argument relates to the freedoms typically afforded through membership: free trade in labour, goods, services and capital. Realistically, it is almost inconceivable that non-membership would validate an exclusion of the UK from free trade areas within Europe, thus the effects on a macroeconomic level are initially made largely redundant. However, a more subtle argument arises when assessing the impact on firm and industry level alongside the loss of political impetus. Foreign attitudes towards investment in our native industries would be altered, due to the political uncertainty that would arise through a movement out of the EU. Flows of foreign direct investment from sources external to the EU, such as from SE Asia or the Tiger Economies, are likely to subside without the promise of access to the larger common market. The effects of these can be seen as very real macroeconomic risks to prosperity, growth and employment within the UK, limiting the relationship Britain has with it’s closest trading partners.  

…European federalisation…

A resurgent champion of the eurosceptics is Margaret Thatcher, who was infamously cutting when it came to ideas of European federalisation. Yet she also understood the advantages that came with entry into the EU – a view she shared during her 1988 Bruges speech: “Britain does not dream of some cosy, isolated existence on the fringes of the European Community. Our destiny is in Europe, as part of the Community”. Wise words, Maggie.

 

 

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