David Rennie, the Economist's 'Bagehot' and 'Charlemagne Correspondent

Thursday, Feb 2, 2012

at the Christ's Politics Society

Redactor: Ksenija Osmjana

 

THE UK AND EUROPE'S CRISIS

In his talk at Christ’s College David Rennie discussed Britain’s current difficult relationship with the European Union.
According to Mr Rennie, entering the European Common Market was a bargain which included benefits but required compromises. Its main disadvantage was the excessive EU regulation, which requires compliance with employment and environmental laws. Its main benefit undoubtedly was the single market, which created jobs and employment.
   Public opinion in Europe is wrong in the sense that it fails to understand that every country has a unique relationship with the EU, therefore each of them has its own reasons to be excited about it or not. Thus, Spain was very eager to enter EU because of its consitution, freedom and human rights that the country missed greately during the fascism years. Germany has its reason to like the European Union as a way to become a superpower, whereas France, despite being a nationalist country, enjoys its position of the horseman riding on the back of Europe. Britain, however, does not have any reason to be obsessed with the idea of EU anymore due to the historic implications. The UK finally entered the EEC in 1973 not because it fell in love with it, but because it wanted to get rid of its sick-man-of-Europe position since Europe appeared to be more dynamic and more successful, which opened great prospects for trade and growth, so much needed to Britain in the post-war era. Nowadays, however, two things went wrong. First, Europe is not dynamic anymore, especially at the time of the eurocrisis. Second, Europe has become a synomim to immigration and Britain is not eager at all to bear its negative consequences.
   David Rennie thinks there is no prospect for the situation to get better, hence it is a perfect time to leave the common market. However, he admits that there is no better alternative. UK is running a huge trade deficit with Europe since 50% of its trade is with EU and 40% with the Eurozone. Britain thinks that this gives her a possibility to dictate its own conditions, which is not true. The EU trade with UK does not constitute such a great proportion and, above all, trade deficit is not the reason for having a right to exert power.
   Single market does not offer anything that could not be achieved through bileteral relationship. However, why would any other country establish an FTA with Britain and give her such a gift? Should UK leave the European single market, much of production, such as Nissan plants, would quickly move to the continent to avoid tariffs. For example, each car imported into the country is subject to a tariff of minimum 10%. Moreover, Britain definitely cannot become another Switzerland because it is is a large free-trade country, which, if walks out of the EU, will cause a great disbalance of power (Germany sees Britain, together with the Scandinavians, to be the counterbalance to the French).
   British are eurosceptics because they assume that better alternatives do exist. In reality, as points Mr Rennie, there are none and EU also realizes that it is only one of our fantasies. Hence, there is no prospect for improvement in the situation, which is likely to stay as it is.