Friday, 25 January 2013

A dishonest deputy

Nick Clegg is extraordinarily dishonest, even by political standards.
The Lib Dem leader said it was "wholly implausible" to think the rules could be rewritten to "benefit us and disadvantage everybody else".
Clegg suggests that this is a zero sum game – that our gain must necessarily be someone else's loss. There was nothing in David Cameron's speech to suggest that he intends to stack EU rules in Britain's favour. That would indeed be "wholly implausible", as I'm sure Cameron would agree, but it is not what is being proposed.

What's entirely plausible is that Britain could leave the EU. If the EU rules cannot be rewritten so that the benefits to Britain exceed the costs, it is surely right for us to leave. If our exit causes disadvantage to "everybody else", it will be to the extent that we are currently exploited.

The truth is that current EU rules – most notably the CAP, the CFP and the EU budget – disadvantage Britain and benefit most other European states.

Consider the data from the European Commission itself, as presented by The Telegraph:

I haven't yet managed to find the raw historical data, but this situation isn't new. This BBC chart from 2007 shows net contributions by population:

There are also less obvious ways that other EU states profit at our expense.  The EU's 9.6% duty on garlic, for example, benefits continental garlic farmers while harming British consumers.  The duty hurts continental garlic consumers too, of course, but the point here is that the costs and benefits of EU protectionism are not uniformly distributed across the nation states.

Equally, it's easy to imagine reforms that would benefit Britain as well as everyone else.  Regulations that are burdensome to us are also burdensome to citizens of other EU countries; repealing them would benefit us all.  When you consider matters at an individual level, protectionism means that consumers in each EU country are being exploited by producers (some foreign, some domestic).  Often it is wealthy landowners who profit at the expense of the poorest.  Free trade with the rest of the world would be a net positive for the vast majority of Europeans.  In general, and in the long run, all Europeans would benefit from reduced government activity.  The EU pulls us in the other direction, with directives that require or encourage large, active, redistributionist governments.

Even a passionate believer in freedom would be unable to convince the leaders of France and Germany to abandon dirigisme. Cameron is on even weaker ground, because he himself favours a large, interventionist state (we're not even as free as the EU would allow us to be). But despite Cameron's aversion to transport metaphors, a two-speed Europe is both plausible and desirable – the distinction should be formalised, as Daniel Hannan has argued:

Britain's strategic aim should be to provide for the development of two parallel bodies: the European Union (EU) and the Fiscal Union (FU). The former should be allowed to subside gradually into an amplified free trade area, while the latter becomes a federation. I suspect that, at that stage, the numbers would be far more evenly matched than 26 to one.

Of course, such an EU would be so hollowed out as to scarcely warrant the term 'union'. And I suspect the eurocrats are quite attached to their brand, and would want to retain 'EU' as the label for their federal superstate. But whatever political and semantic games ensue over the coming years, I hope that we edge our way to the exit.

If this upsets our dishonest deputy PM, so much the better.

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