26th October 2011
It was an answer which the even more anti-European UK Independence Party or UKIP told Mindful Money was "negative". The French and the Germans will sell to whoever will buy their goods – what was lacking in his response was a list of economic benefits that might come from leaving the EU.
The rebel Conservatives and the smaller, and virtually unnoticed, group of Labour MPs who voted for a referendum on continuing EU membership, have, like the devil, all the best tunes. Backed by the great bulk of the press and some of the more strident inhabitants of the blogosphere, they know that an appeal to emotions is a winner. A poll in The Guardian states that 49% would definitely vote for withdrawal and only 23% definitely against. No one even bothers to ask whether respondents would like even closer union with the rest of Europe.
But what would withdrawal mean to UK PLC? Which corporates, if any, would benefit? And what might happen to those booze cruises which arose as a result of free movement and harmonisation? Under EU rules, countries cannot tax already taxed products again even if one country has lower rates. So would leaving the EU mean an end to cheap wine from France, and even cheaper rolling tobacco from Belgium where the economy of some small towns would collapse without UK smokers?
Most of the answers – of which more later – are centred on macro-economics, effectively offering investors a take it or leave it choice. Fund managers were stumped when asked to come up with portfolios of UK companies that would gain or lose if we left the EU – essential knowledge for investors.
But on the micro issue of cut price booze and fags, UKIP has an answer. It says that quitting the EU would allow the UK freedom to set up its own trade deals instead. So this country could come to some sort of cigarettes and beer arrangement across the Channel.
The UKIP spokesperson agreed that probably meant the end of cross Channel shopping – it's hard to see UK governments with their traditional high taxation on alcohol and tobacco agreeing to low cost imports, especially when the UK state is hard up anyway. Still, as UKIP says, EU taxes are being harmonised upwards – it reckons the gap will eventually narrow to nothing.
But leaving will not be easy or speedy. No country has ever left the EU although Greenland has quit despite its links to Denmark. UK offshore islands such as Jersey and Guernsey are also outside the EU. The UK is the only country to have ever held a referendum after joining – two out of three voted for continuing membership in 1975.
Mindful Money economics blogger Shaun Richards believes that there would be no immediate difference in people's pockets if the UK quit the EU.
He says: "There would be no immediate difference to our balance of trade with Europe – it is balanced against us. But we would over time break away from EU social policy. This is often restrictive of business initiatives – and while these rules are often ignored elsewhere, we tend to goldplate and featherbed the regime out of Brussels."
Investors may have noticed that EU financial passporting rules allow firms to operate in the UK even though these would not be approved under FSA rules.
But for Richards, the big change should the UK leave would be the end of "obsessing over Europe."
He says: "We could get on with looking at other parts of the world and not wasting our time on this continuing debate. We could positively look at the rest of the world. But while much of the EU is involved in managing long term decline, we could accept that we have a lot to learn from the successful part of the EU – Germany and its near neighbours – and change industrial policy accordingly. We need a resolution to all this and to move on."
But if the anti-EU chorus relies on emotion such as "taking back control from Brussels" and lines such as "EU leaders are not elected", where do those who are emotionally wedded to Europe – including greater integration – go for mental ammunition and moral sustenance?
A good starting place is this listing of European think tanks. But as you work your way through this, you could be forgiven for thinking "how reasonable and how boring". It may be that the consensus and coalition politics that dominate Europe have somehow infected the English language sites, replacing the cut and thrust of adversarial debate. Or it could be that Europeans take the European Union for granted, unable to conceive of a world without it or of one where land borders require passports. The arguments are measured, there is the willingness to accept that not all is for the best of all worlds in the EU and the desire is to improve on what is now there. Lobby Planet is also worth considering.
But just because the devil has the best tunes, it does not necessarily mean the words are more truthful.
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