Warning About Brexit 2012
In an LBC interview with Clare Foges today I mentioned I first used the word “Brexit” in 2012. She asked if I was the first to use it. I don’t know. Others may have better claims. Her question sent me to do a quick search and I came up with this article in a 2012 when I talked of “Brexit.” Alas, further research will be needed to find out where this article was published. The date suggest September 2012 when I was still MP for Rotherham. My filing is dreadful. I write to make an argument and move on to the next one. Nonetheless when the history of Brexit comes to be written I first first used the wretched term a decade ago. You have have to read to the bottom for Brexit to pop up.
Brexit – Will Britain Exit the EU?
Denis MacShane
As the autumn chills cool down the summer’s over-heated speculation about the bust-up of the Euro or the idea of Grexodus, the expulsion of Greece from the single currency, there is one nation’s political class that remains stolidly Eurosceptic. In the House of Commons and amongst key Conservative ideologues like the influential Tory MEP and polemicist, Daniel Hannan, the clamour for referendum and for Britain to quit the EU grows and grows. Hannan’s latest book has the splendidly unambiguous title “Britain and Europe : A Doomed Marriage”. His Tory colleague in the Commons, Douglas Carswell MP, has an even more vivid metaphor. He says that Britain “is shackled to a corpse” – Europe and should cut itself free.
Meanwhile across the Channel, the death of the Euro, has again been postponed. In Germany, the Constitutional Court has declared that Germany agreeing to the €500 billion bail-fund, the European Stability Mechanism, was legal. The Court made cleat the decisions on Europe lay with the Bundestag, Germany’s parliament, and it was up to elected politicians to make decisions about Germany’s treaty obligations and decisions.
In the Netherlands, the main pro-EU parties of the right and left scored a decisive victory in Wednesday’s elections. The ugly racist, Islamaphobe politician, Geert Wilders, who swapped his rants against Muslims for UKIP-style proclamations that the Dutch should turn their back on the Euro and Brussels, saw his vote halved. The ex-Maoist, populist, anti-EU Socialist Party lost to the centre left Dutch Labour Party which came back from trailing in the polls to win nearly as many seats at the ruling centre-right Liberal party.
The Dutch are the most pragmatic voters in Europe. They flirt with populist nationalist politics of right and left but their heads and wallets know that Dutch prosperity is built on open trade, open markets, and open borders. The currency Balkanisation of Europe promoted by those who want the Dutch to revert to the guilder, the French to the franc, the Germans to the DMark or the return of the drachma and peseta for Greeks and Spaniards has little attraction for the Dutch. They follow British politics closely and know that despite the massive devaluation of the pound sterling since 2008, there has been no improvement in the British economy while Britain’s trade deficit with the world has increased from £20 billion in 2009 to £24 billion last year despite the low value UK currency.
British business is silent on the question of Britain’s future in Europe. Business leaders know how neuralgic the Europe question is for the Conservative Party, especially in its tortuous coalition relationship with Nick Clegg’s pro-European LibDems. But with the news that BAE is looking to merge with EADS to create a giant European defence conglomerate, the need for British firms to look to Europe grows as the US economy falters and the Pentagon budget is slashed. William Hague and other Eurosceptic Conservatives like David Davis and Liam Fox make much of the need to look to rising economic powers like China, India and Russia. Yet Britain runs massive trade deficits with all three nations and growth is slowing down across the BRIC world. In 2011, Britain exported more to Spain than to China, more to Austria than to Brazil, more to Poland than to India, and four times as much to France as to Russia.
The BRIC nations are important but UK exports to the Netherlands and Italy produce more profit for British business. Might the CBI, the EEF and the other business outfits decide that the bottom line is more important that allowing the anti-EU line of the Conservatives, UKIP and the off-shore owned London press always to remain unchallenged?
To be fair, the mood of the nation has never been more Eurosceptic. All recent opinion polls show a majority of voters believing that the European project is over and Britain’s membership of the EU should now be up for revision. The next stage will be the proposed Banking Union treaty outlined by the EU Commission president, Jose Manual Barroso in the European Parliament this week. As in 1950, when it was decided that leaving the coal and steel industries under national sovereign control had been an error today there is a broad acceptance that Europe’s banks need to accept supranational supervision after their disastrous performance in recent years.
The Banking Union will require a new Treaty. The ECB will have new powers to dictate the terms of trade for banking and linked financial services. This is a nightmare for David Cameron and George Osborne. Just as the City has to abide to US regulatory rules to trade in New York or Boston, so too will British banks, insurance firms and other City operators have to obey and ECB banking rules in they want to trade in the world’s biggest market – the EU.
Eurosceptic Tories would like to repatriate powers and William Hague has ordered a review by all ministries of regulations or competences that could be clawed back from Brussels. But this supposes agreement from 26 other nations to Britain having its tailor-made à la carte EU menu. If as is likely this is not forthcoming, then Cameron will find it impossible to avoid a referendum – the dream of UKIP and Tory Eurosceptics come true. And a referendum may well produce a Brexit – Britain quitting Europe. For the first part of the coalition’s existence, the European issue has been quiet. But if the Banking Union treaty goes ahead, it will return to the heart of British politics with consequences no one can foretell.
Denis MacShane is Labour MP for Rotherham