If we were not in the EU, would we want to join it? I doubt it.
The EU’s recent track record is far from impressive, highlighted by the eurozone’s poor growth and criticism that it suffers from a democratic deficit.
But if we wouldn’t want to join, why, then, should we vote to remain in it? Moreover, a vote for Remain is not a vote for the status quo. It is worse than that and would bring considerable future uncertainty. Here’s why:
The EU will change, but not in the way we want.
We continue to be told we can reform the EU if we remain in. This is nonsense.
We were not able to achieve meaningful reform during our renegotiation over the past year. Following the referendum, we will have even less bargaining power.
The EU will continue towards its long-run goal of a United States of Europe.
That means more political power creeping towards Brussels, and greater empowerment to bureaucrats there. The loss of UK sovereignty, already a worry now, would become an even bigger problem.
The euro is unstable and could collapse.
The euro is as unsteady now as it was when the UK decided not to join. The Greek crisis has yet to come to a head but could. This could be followed by an Italian crisis. The euro feeds a deflationary mentality within the EU, contributing to its weak growth and high unemployment and to the rise of extremist political parties across the EU.
We would have tied ourselves to the slow-growth region of the world economy.
Innovation is a vital contributor to growth. EU regulation and its bias towards big firms, who lobby Brussels extensively, acts as a deterrent to innovation and will put the EU and UK at a future disadvantage to the US and Asia.
If we remain we will not have a sensible migration policy.
The solution to slow growth for many EU countries is to accept more migrants; witness Germany in 2015. Once accepted as EU residents, people will be able to settle, live or work in the UK. It is an open-ended promise. In turn, we then discriminate against those from outside the EU. I am in favour of immigration. It is good for an economy, but there needs to be a credible policy underpinning it.
The City will face an uphill battle if we remain in the EU.
London will still be the financial capital of Europe, but its ability to compete globally with New York and Singapore will be hindered.
Just look at what the Government said in its 2014 Competency Report on how the EU impacts the City. It wasn’t good, highlighting the declining ability of the UK to influence the regulatory agenda in financial services, and the intrusion into domestic retail markets. After a Remain vote, it would be unlikely to get any better. Would, for instance, the financial transactions tax hit us? The inability of the UK to secure a veto for the non-eurozone economies leaves the City vulnerable to the aims of the eurozone and when there is disagreement we would have to rely on the European Court of Justice to decide.
There is economic uncertainty from remaining in the European Union. The EU is not Europe. With Brexit, we would still be part of Europe but we would no longer be bound by the failing, inward-looking, insular EU. Instead, we would co-operate with all of Europe as part of our global future.
Dr Gerard Lyons is chief economic strategist at NetWealth and his ebook is The UK Referendum: An Easy Case to Leaving the EU
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