EUROPE IN OR OUT: More facts (Part 2)

I read more books and articles about the possible implications of leaving the EU. Globally there exist eighteen trade blocks, such as NAFTA, ASEAN, the African Union or the Union of South American Nations. Most require political and economic integration. Usually we read about countries wanting to join rather than leaving, which makes the EU Referendum and interesting case.  

#9 BE CAREFUL WITH STATISTICS: A mathematician, a physicist and a statistician went hunting for deer. When they chanced upon one buck lounging about, the mathematician fired first, missing the buck's nose by a few inches. The physicist then tried his hand, and missed the tail by a wee bit. The statistician started jumping up and down saying "We got him! We got him!"

Politicians from both camps love to play with figures. And so do I. It is correct that the annual UK net contribution to the EU budget is ￡8,473m a year, ￡163m a week and ￡23m a day. This sounds a lot, but when divided by a population of 64.761, the average costs are just ￡2.50 per person per week or ￡0.36 per day. You even wouldn't get a Starbucks Latte for this.   And compared with the budget of welfare (￡110.5bn), education (￡89.4bn) or defence (￡45.1bn), the EU budget is low.  

#10 CUSTOM DUTIES: Under the banner "protect British producers", there is evidence that HMRC would reintroduce import duties for some consumer goods such as cars, dairy products and electronic products. If Britain would not be able to immediately strike a trade deal with the EU, or would simply reject it, then import duties negotiated at the World Trade Organization would kick in. If ￡10,000 worth of consumer products were imported from the EU, the UK border agencies would charge ￡800 as import duties and also collect ￡2,000 as VAT on the imports. We all got so used moving goods and services from and to the EU, that we completely forgot how it is to deal with customs. Have you ever ordered any products from Amazon.com (US) and were surprised that you had to pay duties when the parcel arrived? I recently posted a book to the US, and the first thing that the post office asked me to complete was a custom declaration form.

#11 INDUSTRY COLLABORATION:   Markets have become without doubt more global and competitive, and the EU common market has generated cross-EU collaborations. The European Airbus is a successful response to the US-Boing: the wings from the UK, the fuselage from Germany, the nose and cockpit from France, and the engine from a consortium of European manufacturers that includes Rolls-Royce.   Collaboration for the exploration of the space is essential, and the European Space Agency (ESA) is the European answer to NASA. Galileo, the European global satellite-based navigation system allows European researchers and communications providers access to an affordable infrastructure.   The list goes on.

#12 TRAVEL:   The whole travel industry has benefited from the common market. Budget airlines own their existence to EU deregulation. If the UK leaves the European Common Aviation Area, British airlines would have to renogiate both intra-EU flight rights and transatlantic slots.   Everybody who worked in this industry understands which implications this would have on BA and EasyJet, and that this could affect fares for customers. Considering the competition in the industry, British airlines could lose intra-EU routse for good. For travel by road, British companies that run commercial vehicles on the continent would still have to comply with EU rules.

#13 FARMING AND FISHING:   EU subsidies account for 50% of British farm incomes and 73% of UK farming exports go to the EU. It could be considered a negative point that the EU’s Common Fisheries Policy sets rules for the amount of fish each country’s boats can catch, but then this helps to prevent over-fishing. One obvious argument for leaving the EU is that Britain would regain sovereignty over its Exclusive Economic Zone extending 200 miles from its coast.  

14# TRADE NEGOTIATIONS: Barack Obama has warned that the UK would be at the “back of the queue” in any trade deal with the US if the country chose to leave the EU. WTO negotiations are tough, complex and take years. And even when a deal has been reached, it doesn't mean that the case is closed. China with a population more than 20 times the size of the UK is not an easy partner to negotiate with, and whoever believes otherwise is either naive or needs a reality check. Obviously, when it comes to negotiations size matters and the EU has been able to secure better deals just because of economies of scale. Of course, not everybody is always winning and common ground needs to be found.

#15 SOVEREIGNTY: EU regulations are binding across all member states and Regulatory Impact Assessments are compulsory for all new regulations. One wonders why laws and regulations for health and safety, ICT, data and consumer protection, education, employment, trade and industry, and so on should be different in every European country. Most people would not be able to name three EU laws that should be different in the UK. "Red tape" exists on all level of public services. I admit that some of the financial services reporting requirements (e.g. for MiFID and capital requirements/ liquidity) is not for the light-hearted, but then this has been created to protect investors and another financial crisis.

#16 IMMIGRATION: The UK has not signed-up to the Schengen Agreement and thereby maintains it's internal border controls and visa policy. What the leave campaign doesn't tell you (or probably doesn't know) is that even four non-EU-members are part of the Schengen Area: Iceland, Liechtenstein, Norway Switzerland. Looking at immigration levels, Liechtenstein is leading with 33.1%, followed by Switzerland with 28.9%, Norway with 13.8%   and Iceland with 10.7% (based on the 2015 UN report Trends in International Migrant Stock). Compared with 11.3% of immigration in the UK, Boris & Co should seriously consider reviewing their key argument.

#17 BETTER AND FAIR REGULATION:   Finding a common ground for 28 Member States is not always easy, but it is less likely that the EU would consistently produce bad regulations as this would lead to a lot of tension. Over night my Council, who is encouraging fitness, started charging ￡5 for parking 4 hours at my local sports centre. At they same time they promote public health.   You might have also noticed that the tax on your car insurance increased last year and that you have to pay tax on your private health insurance, instead of rewarding you. What we all really want is less government bureaucracy and fair laws and regulations at all levels, and this is not specific to the EU.

#18 BRITISH EXPATS AND DEMOCRACY:   UK citizens are not eligible to vote on 23 June if they have lived outside the UK for more than 15 years.   Two Britons (Harry Shindler and Jacquelyn MacLennan) living abroad have lost their Supreme Court battle over the right to vote in June's EU referendum. They argued that the 15-year rule acted as a penalty for them having exercised their rights to free movement, and was an infringement of their common law right to vote. It is estimated that more than two million British expats are affected by the decision, which marks the end of the legal battle for an expat's right to vote. These expats fear a vote to leave the EU will lead to them being deprived of EU citizenship and the rights that go with it. (Sorry Mark W., your country has forgotten you.)   On the other hand, around 960,000 Commonwealth citizens (including Cyprus and Malta which are EU countries as well) are eligible to vote in the forthcoming referendum, which doesn't make any sense.

CONCLUSION:   In the age of globalisation, radicalism and terrorism, we are without any doubt stronger if we remain part of Europe and have a chair at the negotiation table. History has shown that isolation and "building walls" NEVER works in the long term. And we all know what happened to countries that build walls and tried to isolate themselves: The all failed, or ended up in a much weaker position than economies that opened up to the world