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People have been saying that since the EU was created. Excuse my scepticism.

by untog 9y ago

jrs95 9y ago
Yeah, that's a fair point. Perhaps I'm a little too caught up in recent events and not seeing the forest for the trees.
- jopsen 9y ago
  From the big picture perspective brexit might just be a fluke... The Euro sort of makes EU a pretty permanent thing. Sure it could change (probably very slowly), but isn't that what democracy is about :)
Silhouette 9y ago
Scepticism is reasonable, but the future of the EU -- or the EU in its current form, if you prefer -- is also a reasonable thing to consider. Among the discussions I had before the referendum, perhaps the clearest pro-Leave voices were a couple of very highly qualified and experienced economists. Their basic position was simple enough: the EU has not fixed the fundamental vulnerabilities in its economic and political structure that caused the big problems a few years ago, and so they considered it more likely than not that the EU would run into serious problems again in the not-too-distant future. Between that risk and the general trends in global trade, they felt that on balance it would be healthier to shift our economy and foreign trade to be less dependent on the EU and build stronger trading relationships with the rest of the world. That in turn requires distancing ourselves from the "ever closer union" vision and being free of the constraints that come with belonging to the EU's customs union.
- pjc50 9y ago
  > were a couple of very highly qualified and experienced economists Name them.
  - Silhouette 9y ago
    Not playing that game, sorry. Suffice it to say that they were post-doctoral researchers and subsequently worked for several years in major City companies you've heard of, both reaching senior positions unusually quickly. [Edit: This was a private discussion at a mutual friend's house, on a controversial subject. I have no idea whether the people in question have expressed their views publicly, and no intention of outing them if they have not, particularly given that their personal views may be at odds with their employers'. In any case, they aren't public figures and it's unlikely anyone here would know them unless they happened to have worked with them. And even then, there is still no good reason anyone needs to know their names unless an ad hominem is about to follow. Downvote all you like, but downvoting isn't an argument.]
    - pasabagi 9y ago
      Can you outline the argument? I know there's a conventional (and strong) argument against the EU in that it combines the 'worst of both worlds' for many of its members, since they have a single currency but they don't have the kind of federal system that would balance that out. I don't see how that would effect the UK though - since it still has the pound. I also don't see how the UK could conceivably be said to be disadvantaged by the EU - given that financial services + co seem to depend upon EU membership.
      - Silhouette 9y ago
        I know there's a conventional (and strong) argument against the EU in that it combines the 'worst of both worlds' for many of its members, since they have a single currency but they don't have the kind of federal system that would balance that out. Yes, that was essentially their position. The EU when it was smaller was mostly a group of member states in at least broadly equivalent economic situations. As it has grown, there are much wider disparities, and that undermines some of the original assumptions behind the Single Market. For example, if there is an incentive to have cheap labour move from a relatively poor economy to a relatively wealthy one, you have potential for abuse on the relatively wealthy side, and you also have a risk of a "brain drain" effect that holds back growth in the poorer economy. Likewise, trying to unify the markets across such widely different EU states is economically unsound. They aren't really one big market, because basic factors like cost of living and household income vary widely from one member state to another. Forcing businesses to treat all member states equally (which subsequent to that discussion the EU actually has been working to legislate) means you usually price the poorer member states out of the market, which is good for neither the potential customers in those states nor the businesses who would have been happy to supply them. I also don't see how the UK could conceivably be said to be disadvantaged by the EU - given that financial services + co seem to depend upon EU membership. The EU is mostly a good thing for trade with the EU. But by belonging to the EU, and in particular the Customs Union, the UK gives up the ability to negotiate its own trade agreements with non-EU trading partners. Instead, it is required to impose the EU's standard tariffs and other non-tariff barriers when trading outside the bloc, and the EU is rather protectionist in its stance there. Put another way, just as EU membership brings well-documented advantages in terms of tariff-free trade and ease of access to the EU market, it also imposes directly analogous disadvantages in terms of forcing tariffs and other barriers when trading with non-EU markets, and the UK has limited ability to change that situation while remaining in the Customs Union because any relevant trade agreements are negotiated via the EU and not the UK itself. The argument being made at the time was that since our foreign trade has been shifting steadily towards a greater proportion being with non-EU partners, the balance between the benefits on the EU side and the costs on the non-EU side was shifting in the wrong direction. (And if the EU did then suffer further economic troubles, that would reduce the benefits of continued membership significantly, pushing the balance further/faster in that other direction.)
- tonyedgecombe 9y ago
  That in turn requires distancing ourselves from the "ever closer union" vision and being free of the constraints that come with belonging to the EU's customs union. Wasn't that exactly what Cameron negotiated before the referendum.
  - Silhouette 9y ago
    I don't think that was quite the same thing, for a number of reasons. Firstly, just looking at the negotiated opt-out of the ever closer union principle, how legally binding those negotiations were was never resolved. There appeared to be some doubt about whether they would get past the European Parliament, and the Brexit referendum happened before any definitive position could be established. Secondly, even if they were binding in theory, how would that have worked in practice? For example, 26 out of 28 EU member states are either in the Eurozone already or in principle required to join in the future. Is it really credible that so many member states would always remain honest and neutral on any policy that might disadvantage the Eurozone just to be fair to those with opt-outs (the UK and Denmark)? Similar arguments apply in other respects, the Schengen Area being maybe the next most obvious case. Thirdly, that issue was distinct from membership of other EU-based mechanisms such as the Single Market and the Customs Union. The latter in particular seemed to be a big concern for the people I mentioned, not just because it precludes negotiating future trade agreements independently as widely discussed in Brexit-related forums, but also simply because while it makes trade within the EU nice and easy, it also makes trade with partners outside the EU a lot harder, because all members are required to impose the EU's standard barriers and tariffs on external trade. Obviously whether or not you think ever closer union within the EU is a good thing is a personal/political view and reasonable people can reach different conclusions, but if you had thought it through and concluded that it wasn't, I don't think Cameron's negotiations would have done much to affect your logic or your final decision on that point.
    - tonyedgecombe 9y ago
      It seems extremely unlikely all 26 of the 28 are going to join the Euro, most of them are dragging their feet over it and I wouldn't be surprised to see some (Italy?) even drop out. I always thought that talk of ever closer union was scaremongering just like the threat of an invasion of people from Turkey. Possible in theory but the reality is somewhat different. Trade outside of the EU isn't impossible, Germany sells three times as much to China as we do. If we were really worried about that we would have done something about it years ago. The reality is even in the modern globalised world most of your external trade is going to be with near neighbours. Personally I think closer union is a good thing in principle but the fly in the ointment is our lack of fiscal discipline. If we had been in the Euro we would probably have suffered as much as Greece has. Even if the vote had gone for remain there was almost zero possibility of us joining the Euro. This isn't to say the EU is perfect, there is plenty of room for improvement, I just think on balance we were better in than out and there are severe risks if the whole thing collapses.
- pwtweet 9y ago
  'qualified and experienced economists' Name them!
- jimnotgym 9y ago
  What you just described as constraints are what brush bureaucracy aside for me every day in business with the EU. The customs union is a dream, it even makes dealing with countries outside of the EU much easier
  - Silhouette 9y ago
    The customs union is a dream, it even makes dealing with countries outside of the EU much easier How does imposing high tariffs and onerous non-tariff barriers make dealing with countries outside the EU easier? The advantages of the Customs Union for internal EU trade are clear, but this is the first time I've ever seen someone argue that it's advantageous for external trade as well.
    - jimnotgym 9y ago
      Because there is a common well established set of rules with lots of other countries that makes the (electronic) paperwork really easy. In fact admin wise it is no harder to import from Chile than France. The CCT is to much simpler than having 28 sets of rules for countries who want to sell into the EU. Tariffs are there but that is not unique to the EU, indeed one might point to the USA and metal tariffs... When you say 'non-tariff barriers' do you mean the safety standards or the quality standards? They are both barriers I'm very happy to have.
      - Silhouette 9y ago
        Interesting perspective. As someone who's on the services side rather than goods, I'm not so familiar with the practicalities here, so thanks for sharing. I'm still rather surprised to see someone write that importing from outside the EU is no harder in terms of admin than importing from within. Surely importing from elsewhere within the EU needs very little admin at all, so if goods crossing the EU border are also not a big deal in practice, why do you think parts of our business community are so concerned about the overheads of trade with the EU post-Brexit if we wind up outside the SM/CU?
        9y ago

People have been saying that since the EU was created. Excuse my scepticism.

by untog 9y ago

People have been saying that since the EU was created. Excuse my scepticism.

jrs95 9y ago

Yeah, that's a fair point. Perhaps I'm a little too caught up in recent events and not seeing the forest for the trees.

jopsen 9y ago
From the big picture perspective brexit might just be a fluke... The Euro sort of makes EU a pretty permanent thing. Sure it could change (probably very slowly), but isn't that what democracy is about :)

Silhouette 9y ago

Scepticism is reasonable, but the future of the EU -- or the EU in its current form, if you prefer -- is also a reasonable thing to consider. Among the discussions I had before the referendum, perhaps the clearest pro-Leave voices were a couple of very highly qualified and experienced economists. Their basic position was simple enough: the EU has not fixed the fundamental vulnerabilities in its economic and political structure that caused the big problems a few years ago, and so they considered it more likely than not that the EU would run into serious problems again in the not-too-distant future. Between that risk and the general trends in global trade, they felt that on balance it would be healthier to shift our economy and foreign trade to be less dependent on the EU and build stronger trading relationships with the rest of the world. That in turn requires distancing ourselves from the "ever closer union" vision and being free of the constraints that come with belonging to the EU's customs union.

pjc50 9y ago
> were a couple of very highly qualified and experienced economists Name them.
- Silhouette 9y ago
  Not playing that game, sorry. Suffice it to say that they were post-doctoral researchers and subsequently worked for several years in major City companies you've heard of, both reaching senior positions unusually quickly. [Edit: This was a private discussion at a mutual friend's house, on a controversial subject. I have no idea whether the people in question have expressed their views publicly, and no intention of outing them if they have not, particularly given that their personal views may be at odds with their employers'. In any case, they aren't public figures and it's unlikely anyone here would know them unless they happened to have worked with them. And even then, there is still no good reason anyone needs to know their names unless an ad hominem is about to follow. Downvote all you like, but downvoting isn't an argument.]
  - pasabagi 9y ago
    Can you outline the argument? I know there's a conventional (and strong) argument against the EU in that it combines the 'worst of both worlds' for many of its members, since they have a single currency but they don't have the kind of federal system that would balance that out. I don't see how that would effect the UK though - since it still has the pound. I also don't see how the UK could conceivably be said to be disadvantaged by the EU - given that financial services + co seem to depend upon EU membership.
    - Silhouette 9y ago
      I know there's a conventional (and strong) argument against the EU in that it combines the 'worst of both worlds' for many of its members, since they have a single currency but they don't have the kind of federal system that would balance that out. Yes, that was essentially their position. The EU when it was smaller was mostly a group of member states in at least broadly equivalent economic situations. As it has grown, there are much wider disparities, and that undermines some of the original assumptions behind the Single Market. For example, if there is an incentive to have cheap labour move from a relatively poor economy to a relatively wealthy one, you have potential for abuse on the relatively wealthy side, and you also have a risk of a "brain drain" effect that holds back growth in the poorer economy. Likewise, trying to unify the markets across such widely different EU states is economically unsound. They aren't really one big market, because basic factors like cost of living and household income vary widely from one member state to another. Forcing businesses to treat all member states equally (which subsequent to that discussion the EU actually has been working to legislate) means you usually price the poorer member states out of the market, which is good for neither the potential customers in those states nor the businesses who would have been happy to supply them. I also don't see how the UK could conceivably be said to be disadvantaged by the EU - given that financial services + co seem to depend upon EU membership. The EU is mostly a good thing for trade with the EU. But by belonging to the EU, and in particular the Customs Union, the UK gives up the ability to negotiate its own trade agreements with non-EU trading partners. Instead, it is required to impose the EU's standard tariffs and other non-tariff barriers when trading outside the bloc, and the EU is rather protectionist in its stance there. Put another way, just as EU membership brings well-documented advantages in terms of tariff-free trade and ease of access to the EU market, it also imposes directly analogous disadvantages in terms of forcing tariffs and other barriers when trading with non-EU markets, and the UK has limited ability to change that situation while remaining in the Customs Union because any relevant trade agreements are negotiated via the EU and not the UK itself. The argument being made at the time was that since our foreign trade has been shifting steadily towards a greater proportion being with non-EU partners, the balance between the benefits on the EU side and the costs on the non-EU side was shifting in the wrong direction. (And if the EU did then suffer further economic troubles, that would reduce the benefits of continued membership significantly, pushing the balance further/faster in that other direction.)
tonyedgecombe 9y ago
That in turn requires distancing ourselves from the "ever closer union" vision and being free of the constraints that come with belonging to the EU's customs union. Wasn't that exactly what Cameron negotiated before the referendum.
- Silhouette 9y ago
  I don't think that was quite the same thing, for a number of reasons. Firstly, just looking at the negotiated opt-out of the ever closer union principle, how legally binding those negotiations were was never resolved. There appeared to be some doubt about whether they would get past the European Parliament, and the Brexit referendum happened before any definitive position could be established. Secondly, even if they were binding in theory, how would that have worked in practice? For example, 26 out of 28 EU member states are either in the Eurozone already or in principle required to join in the future. Is it really credible that so many member states would always remain honest and neutral on any policy that might disadvantage the Eurozone just to be fair to those with opt-outs (the UK and Denmark)? Similar arguments apply in other respects, the Schengen Area being maybe the next most obvious case. Thirdly, that issue was distinct from membership of other EU-based mechanisms such as the Single Market and the Customs Union. The latter in particular seemed to be a big concern for the people I mentioned, not just because it precludes negotiating future trade agreements independently as widely discussed in Brexit-related forums, but also simply because while it makes trade within the EU nice and easy, it also makes trade with partners outside the EU a lot harder, because all members are required to impose the EU's standard barriers and tariffs on external trade. Obviously whether or not you think ever closer union within the EU is a good thing is a personal/political view and reasonable people can reach different conclusions, but if you had thought it through and concluded that it wasn't, I don't think Cameron's negotiations would have done much to affect your logic or your final decision on that point.
  - tonyedgecombe 9y ago
    It seems extremely unlikely all 26 of the 28 are going to join the Euro, most of them are dragging their feet over it and I wouldn't be surprised to see some (Italy?) even drop out. I always thought that talk of ever closer union was scaremongering just like the threat of an invasion of people from Turkey. Possible in theory but the reality is somewhat different. Trade outside of the EU isn't impossible, Germany sells three times as much to China as we do. If we were really worried about that we would have done something about it years ago. The reality is even in the modern globalised world most of your external trade is going to be with near neighbours. Personally I think closer union is a good thing in principle but the fly in the ointment is our lack of fiscal discipline. If we had been in the Euro we would probably have suffered as much as Greece has. Even if the vote had gone for remain there was almost zero possibility of us joining the Euro. This isn't to say the EU is perfect, there is plenty of room for improvement, I just think on balance we were better in than out and there are severe risks if the whole thing collapses.
pwtweet 9y ago
'qualified and experienced economists' Name them!
jimnotgym 9y ago
What you just described as constraints are what brush bureaucracy aside for me every day in business with the EU. The customs union is a dream, it even makes dealing with countries outside of the EU much easier
- Silhouette 9y ago
  The customs union is a dream, it even makes dealing with countries outside of the EU much easier How does imposing high tariffs and onerous non-tariff barriers make dealing with countries outside the EU easier? The advantages of the Customs Union for internal EU trade are clear, but this is the first time I've ever seen someone argue that it's advantageous for external trade as well.
  - jimnotgym 9y ago
    Because there is a common well established set of rules with lots of other countries that makes the (electronic) paperwork really easy. In fact admin wise it is no harder to import from Chile than France. The CCT is to much simpler than having 28 sets of rules for countries who want to sell into the EU. Tariffs are there but that is not unique to the EU, indeed one might point to the USA and metal tariffs... When you say 'non-tariff barriers' do you mean the safety standards or the quality standards? They are both barriers I'm very happy to have.
    - Silhouette 9y ago
      Interesting perspective. As someone who's on the services side rather than goods, I'm not so familiar with the practicalities here, so thanks for sharing. I'm still rather surprised to see someone write that importing from outside the EU is no harder in terms of admin than importing from within. Surely importing from elsewhere within the EU needs very little admin at all, so if goods crossing the EU border are also not a big deal in practice, why do you think parts of our business community are so concerned about the overheads of trade with the EU post-Brexit if we wind up outside the SM/CU?
      - 9y ago