Economics

Britain and Europe : From a Christian Perspective A Public lecture

Last January at Bloomberg the Prime Minister, David Cameron made one of the two most important speeches by a British Prime Minister of the last 30 years on the topic of Europe.   It may prove to be more important than that made by Mrs Thatcher in Bruges on September 1988.  Although neither address contained significant detailed and specific criticism, or indeed suggestions for change, both tonally reflect the United Kingdom’s continuing negativism towards European integration.  In this both followed a long standing tradition.

Cameron’s speech was mainly about the fact that there would be renegotiation of the relationship with Europe and that, following this; there would be a referendum on membership.  This served the purpose of temporarily appeasing approximately a hundred and ten Conservative members of parliament who are particularly sceptical about the European project and indeed apparently anxious to leave the European Union.  It also tempered the approach of the overwhelmingly euro sceptical press at least for a time.

However it raised two essential issues neither of which have been answered since by the Prime Minister or the Foreign Secretary.  The first of these relates to the identification of what precisely the United Kingdom wishes to renegotiate and the second to the details of how this renegotiation (apparently to involve treaty changes) is to be conducted.

As to the former the speech itself and subsequent comments by the Prime Minister focussed specifically only on the aspiration in the Treaty of Rome to a “greater union of the Peoples of Europe”.  This aspirational objective would appear to be unacceptable to the United Kingdom.  Its exclusion, if it were to occur, would have no practical effect.  However it would, if the aspiration were deleted generally or even just for the United Kingdom, change the perception of the essence of the project.  This fundamental objective is the essential element of the undefined destination of the European Project.

We still have a tabula rasa on specific and operational changes.   Apart from this intended deletion, for example, is the Common Agricultural Policy to be included in the list of demands for exclusion or the Common Fisheries Policy or just elements of the common Social Policy? Or is it to something else?  One way or another it seems clear that the whole exercise was launched without any clear roadmap as to where it would end up.  One of the effects of this is to create a prolonged period of uncertainty.

Since the speech was made, a number of events have taken place.  For one thing British departments of State have apparently communicated with counterparts in other Member States requesting their views on the repatriation of competences.  If any substantive replies were received we have not heard of them but in the review of competences being conducted by the departments of state here so far the conclusions seem to be that the EU policies are positive for the UK rather than negative.

We do not know either how such renegotiation as may be thought necessary will be conducted in due course but we do know that any treaty change will require an Intergovernmental Conference and all remaining twenty seven members will be required to agree to any treaty changes.  If such changes amount to anything this will not be easily obtained.  The current strategy appears to be premised upon a belief that an IGC will not have to be called by the United Kingdom because one will be required anyway to agree changes to Economic & Monetary Union and this this could be used also to pin on the British changes.  This scenario may or may not actually happen.  I do not think that it will.

However, whatever transpires on this aspect of procedure it is time that the British issue be addressed here and the British people should make their decision without illusions.  Britain is part of, and if it remains will continue to be part of, a unique undertaking but one which, at the least, has some federal characteristics.  This has implications for national sovereignty which cannot be denied or obfuscated any longer.

The history of British engagement in the European integration project so far gives some idea of the challenges in making the case for staying in.  From the outset United Kingdom has been uniquely sceptical about the whole idea.  Winston Churchill’s speech at the University of Zurich on the 19th September 1946 is often cited by both sides in support of their case regarding British participation.  He said then “we must build a United States of Europe”.  However, he based this United States of Europe on “a partnership between France & Germany”.  The clear implication from his speech was that Britain would remain apart though supportive of the venture.   He made this absolutely clear, in June 1950, in a speech in Westminster.  In addition Britain never really favoured the idea of a federation even for the others although, as an ultimate objective for the main founders this was the clear objective from the outset.  As Adenaur told the Bundestag on the 3rd May 1950 the purpose of the Schumann Plan (the Coal and Steel Community) proposed by France was “to create a European Federation”.

Going back through the earlier history of the United Kingdom the seeds of an attitude that resisted entanglements with Europe were evident as long ago as the Reformation.  These grew in the “blood enriched soil of numerous conflicts up to and including the two world wars”.  In the 1830 George Canning expressed a view that has some resonance today.  He delighted in the collapse of the Congress of Vienna and applauded the notion of “every nation for itself and God for us all”.

When the seminal conference that was to create the EEC took place in June 1950 in Messina and Britain played no role in it.  When offered the floor in that conference towards its conclusion in November 1955 the relatively junior civil servant representing the UK said of what was to become the Treaty of Rome.  “The future treaty which you are discussing has no chance of being agreed; if it was agreed it would have no chance of being ratified; and if it were ratified it would have no chance of being applied.  And if it was applied it would be totally unacceptable to Britain.  You speak of agriculture which we do not like, of powers over customs, which we take exception to, and institutions, which frighten us.  Monsieur Le President, messieurs, au revoir et bonne chance”.  (Charles Grant Delors London Nicolas Brealey pg.62).  He then walked out and did not return.

When Britain did join the EEC and the other European Communities it was in truth a reluctant marriage forced by necessity.  Hugo Young who of course had strong pro-European views has written “Britain has struggled to reconcile the past, she could not forget with the future she cannot avoid”.  This is not an altogether unfair comment.

Having regard to this history it is difficult not to feel a sense of déjà vu today.  We have seen this debate before but in the referendum held on the 5th June 1975 following another “renegotiation” the result was 67% of those who voted opting for continuing British membership.  Every region except the Western Isles and Orkney and Shetlands decided in favour of British membership (Missed Chances Roy Denman Cassell pg.  250).  This result came notwithstanding the great unpopularity at the time of the EEC which is not a new phenomenon.  So the similarities to the present situation abound.   Then, and now, the Germans tried to be helpful and conciliatory (although nothing substantive was in fact achieved in the renegotiation “that could not have been obtained in the continuous negotiation month by month which is a fact of Community life”) (Denman pg.  249).

However the substantial vote in favour of membership in 1975 did not imply enthusiasm for Europe and therefore did not change Britain’s consistent opposition to and indeed obstruction of a deepening of the Union or the provision of resources to it.  Over the years this has impeded the integration process and, ever since, the United Kingdom has been therefore a thorn in the side of those who believe, as I do, in a greater union of the peoples of Europe.  One can conclude that even Britain’s subsequent positivism to enlargement (sometimes cited as a positive contribution) was in part largely motivated politically by an intention to undermine integration by diluting the core.  So, much though Britain’s attributes have been properly admired (and indeed are deeply needed) by the EU the constant background of obstructionism and negativism has created recurring crises between the majority and the United Kingdom particularly regarding its budget.   The United Kingdom has always argued for the principle of juste retour and rails against the very idea of net transfers between the rich and poorer states.   So the concept of solidarity is rejected.

Federalists are an endangered species here.  They are considered by some to be basically unhinged from reality.  Furthermore the illusion that what the British people voted in 1975 for was “a Common Market” and no more is constantly repeated by sovereign States that they were deceived into joining a supranational enterprise.  This has been fostered constantly by Eurosceptics either as a result of ignorance of history or malign intent.

There is still a frightening degree of ignorance about the reality of the extent of the sharing of sovereignty that has already been agreed by the United Kingdom.   Apart from the Treaty of Rome, and the direct applicability and effect of European law that flows from it, Mrs Thatcher agreed by the Single European Act that far more majority voting would be permitted where, previously, unanimity had been required.   Majority voting is, of course, an expression of the sharing of sovereignty and is at the heart of the project.  So no use of euphemisms about only having agreed to “co-operation between sovereign states” should be allowed to continue to distort the reality of Britain’s agreed position as a member of the EU.  It is no longer the case that the supremacy of parliament is the unadulterated expression of the British constitution as it once was.

The object of the European project as Geoffrey Howe famously said in November 1991, is “the taming of nationalism without suppressing patriotism, sharing sovereignty without destroying nations”.  This is the central political objective of an “ever closer union of the peoples of Europe” the objective expressly now denied by the Prime Minister.   It is an expression of Christian principles in essence related to the concepts of the dignity and equality of man.

Jean Monnet in his Memoirs properly wrote of Britain’s great contribution to civilisation.  He singled out “Respect for freedom and the working of democratic institutions:  habeas corpus and Magna Carta and parliament”.  He was absolutely right then and this is equally true now.  Britain’s contribution to global political developments has been and remains of great importance.  Its standing and influence in the world means that if it were to leave the EU it would be immeasurably diminished.  Unfortunately Monnet wrongly concluded in the early days that, on joining, Britain would become as many hoped the foremost champion of European institutions.  He explained the negative British attitudes then by saying with some truth that Britain suffered, paradoxically, from not having its pride broken as others had done.   Britain today remains justifiably proud of its freedom, its democracy and its independence.   It was and is different because of its island history.  It has not been invaded for over a millennium and is a prime example of respect for the rule of Law.   Who can be surprised at its reluctance to change course so dramatically by joining in what at least is a quasi-federalist project?  I think that there is some understanding of this as there should be.   The dilemma though must be that in an increasingly interdependent world Britain itself cannot rationally wish to stand relatively alone.   More than emotion is needed for a proper analysis.   Surely it has to be part of Europe?  Hugo Young wrote, “It is not possible to be a European in any reasonable sense and to be against the EU”.   This dichotomy has to be recognised but there are very few political voices explaining it.   Suspicion of continental entanglements may be understandable but it is not viable as a national strategy.

The debate which must be had now about Britain’s future in Europe should surely rise above the mundane arguments about the economic pluses and minuses.  These arguments need to be addressed but they are secondary to the real debate.  The purpose of European integration was in its early days and still remains far more fundamental than arguments on international trade or access to services.  The basic purpose of the integration process, memorably put as I said was, to tame nationalism.  Behind this laudable aim was something even more fundamental.  It was to create a political entity that was an expression of the Christian values of the dignity of man and the equality of man.  Even the solidarity demonstrated by the transfer mechanisms of Social fund and the Regional Fund were rare expressions of this.  Nationalism is essentially a denial of these values.  George Orwell said that “nationalism is the worst enemy of peace”.  He also said that “nationalism is a feeling that one’s country is superior to another in all respects”.  I think that there is no better way of putting it.  It is sensible and clear.  He may not have been driven by a Judaeo Christian ethic but he was expressing one.

It is no surprise that UKIP, a party of nationalists, expresses its rationale for its own existence primarily in terms of antipathy to European integration and to immigration.  UKIP itself provides the clearest testimony as to why a constructive engagement with Europe is necessary.

It is worth noting that just as the British in Euro barometer polls have been consistently the most reluctant of the Member States populations about integration more Britains see immigration as a problem than other nationalities.   This has been established by a poll across Europe and the United States published a couple of weeks ago (Transatlantic Trends the Times 19th September).  The figure was the highest among the people questioned in the US, Turkey, Germany, Italy, Netherlands, Poland, Portugal, Romania, Sweden, Slovakia and Spain and is not explained by the extent of immigration here.  It must in part be a response to the level of political criticism of migrants which UKIP fosters.   This is also a challenge to Christianity here.

Monnet, Schuman, de Gasperi and Adenaur, the Founding Fathers of the European integration process were all Christian Democrats.  They had witnessed a terrible European conflict that many of us appear to have forgotten.  They all rejected nationalism and had, from the outset, a moral purpose.  (I referred to it some years ago in greater detail the Cardinal Newman Lecture in Oxford University).  In 1951 Adenaur wrote to Monnet about the fact they were all motivated by a desire to provide “a new constitution of Europe on Christian foundations”.  The Catholic Bishops Conference identified the core motivation of the Schuman declaration of the 9th May 1950 that launched the process as being “essentially an approval for mutual forgiveness and, as such, a profoundly Christian act”.  But in addition to forgiveness the whole exercise was about, and still is about, harnessing national sovereignty and containing it.   This was to be achieved  by a new system that rejected the old concept of the nation state that has been with us at least since Bodin wrote of it in De La Republique in 1583.  It was of course the Treaty of Westphalia that copper fastened the idea in legal terms of separate sovereignty that played such a role in the malign history that followed.  Jacques Maritain, the Catholic philosopher who played a decisive part in advancing the cause of universal human rights following World War II, wrote that “the concept (of sovereignty) is intrinsically wrong”.

While it would be absurd to expect that the tribalism that unfortunately has scarred Europe so badly will disappear we can surely fashion and develop political institutions that will constrain it.  Pure integovernmentalism, as exemplified by the United Nations system or the World Trade Organisation (both of which I have served), are important elements in ethical governance but, as we know, they have their limitations.  The European Union is an unprecedented attempt to go further through supranational law and governance.  Surely this unique experiment can still inspire us? Surely Christians in particular can still see in this experiment not merely an attempt to provide a new political context for the advancement of Christian principles but also the means to enforce them.  There have been for example in recent times some signs of the possible re-emergence of policies in at least one  new member State from Central Europe which seemed to threaten those values.  The European Union has played a crucial role in inhibiting this development.  So also has the European Union played a central role in the Balkan crisis and in Greece where, without it in the background, the trauma of the economic crisis might have led to even worse political consequences that those that we have witnessed.  The poll of attraction provided by the EU to aspirant new members and the desire of the vast bulk of its Member States to remain tells its own story.

If one can conclude that the motivation and purpose of the integration process is admirable then the question as to whether membership works to Britain’s immediate advantage arise.  Pragmatically in other words has it justified itself? There is an overwhelming amount of corroborative evidence to the effect that it has.

Apart from the positive evidence of the importance for Britain to have influence in the European Union as its neighbours and main trading partners, the question might be asked “what would happen if Britain left the EU?” Clearly it would have to renegotiate its relationship with the EU.  It would, no doubt, be in the interests of the other EU Member States to retain access to the British market and vice versa.  However, the result of this common objective would have to be negotiated and this would not be as easy as it might seem.  Britain would either have to join the European Economic Area (with Iceland and Norway) or agree to a free trade arrangement as Switzerland has done.  If Britain followed the Norwegian example it would still have to pay money to Brussels (in fact Norway pays more per capita today than Britain).  Also it would remain bound by EU regulations.  Having rejected the EU the question would surely be asked here as to what advantage was gained by leaving in the first place.  Surely the British people would be unlikely to accept such an arrangement and the fact that it would have no say in the adoption of future EU legislation.

What about the Swiss example? Switzerland under its bilateral arrangement is forced to comply with EU regulations relating to free movement of goods and it is not part of the free market in financial services.   If this were to be the result for the United Kingdom, as it well might, the impact on financial services here and on the economy as a whole would be terrible.

In summary, Britain will have great difficulty in negotiating a Treaty with the EU on the Swiss Model and in my view much of the City will be at risk of leaving the UK then because even the fear of losing the single Banking Licence that permits banks located here to a function throughout the EU will drive the sector to consider other alternatives.

The conclusion of the Economist of Dec 8, 2012 was that, if Britain left, “the most likely outcome would be that Britain would find itself as ascratchy rightoutside with somewhat limited access to the single market almost no influence and few friends.  And one certainty is that having once departed, it would be all but impossible to get back in again”.   Surely this must be an accurate conclusion.

So, everything may rest on a successful and substantive renegotiation.    To obtain this will pose difficult issues not merely for Britain but for other Member States also.  In my opinion, if the United Kingdom achieves anything meaningful in these negotiations, it will probably be at the expense of the integrity of the integration process itself.   Britain is already semi-detached in various respects (in particular from the Euro and Schengen).  It is only a part participant in the Justice and Home Affairs treaty chapter.  So the concept of a single undertaking shared by all has already been undermined substantially and largely by Britain.  Any more derogations would open up the reality of a Europe à la carte becoming the norm as France has, amongst others, already commented.   Others would be likely to have their own list of possible concessions to seek and this would undermine the whole project even more than has already occurred.

The other alternative would be to undertake general treaty revisions reducing the powers of the EU.  These would be applicable to all and therefore might be argued to avoid a Europe à la carte.   This, presumably would entail removing competences from the treaties for everyone or, at least, substantially reducing them.  This might be presented as the application of the subsidiarity principle in repatriating policy areas that, it will be argued, should never have been given to the EU in the first place.  However, I find it hard to imagine what these exclusions might be.  Unwinding treaties already adopted, in some instances by referendum, is not a task lightly undertaken and for some Member States might itself require a referendum.  I doubt that the required unanimity will be forthcoming for any substantive treaty change.  Contrary to some views this is a matter not simply decided by Germany.  And, for myself personally, I think that any substantial changes are not at all desirable.  It has taken a long time and very difficult negotiations to get to where we are.  We should not now attempt to unscramble the egg.

So the best that one can say is that today we are on a road to a very uncertain destination and not one that looks inviting.  This is evident when one looks to the details of possible repatriations.  One attempt to identify such areas for repatriation has identified twelve.  This is in the Civitas Report recently published.  These include the Common Agricultural Policy and the Common Fisheries Policy (retaking UK fishing waters).   Also it is proposed to install a new voting system creating a double majority voting for all measures affecting the single market so that a qualified majority is needed both from the Eurozone countries and, separately, from the non Eurozones.  Repatriating social regulation to British competence is another idea suggested.  This is the sort of list that many parliamentarians here might seek.  However it is not conceivable that anything approaching these changes will be achieved.

In the light of the foregoing it is clear that we may well be on a collision course.  If the Conservatives are in power on 2017 we will certainly have a referendum on membership, and it will probably be premised upon either a failed negotiation or on one that will have yielded far less than what might be considered acceptable to many Conservative M.Ps.  If Labour wins the next election it is unclear whether they will have committed themselves to hold a referendum but the pressure on them to do so will be great and it is not clear that it will be avoided.

The industry and services sector here should wake up to what is at risk.  Looking at the advantages of membership to be potentially foregone is instructive.  The EU provides about 50% of UK trade.  Far from globalisation reducing this percentage in recent years it has been growing each year for the last decade.  For example since 2004 the annual average growth in this trade has been over 4% (4.46% for exports and 4.32% for imports).  Total trade in goods with the EU has increased from £960 in the first quarter of 2000 to £1756 in the first quarter of 2013.  In addition membership does not interfere with other international trade involving the UK – it helps it.  The financial services sector has an enormous dependence and is the most important contributor to the national economy.  As I said being in the EU is vital for this.

Being within the EU provides a simpler more assured and legally enforceable access internally and externally than could be had outside it.  The strident positions taken by Japanese industry located in Britain has made the point.  (I do not even make the point that Britain exclusion from the proposed transatlantic trade and investment pact with the EU (if it even comes about) would be both ironic and damaging in the extreme).

So I hope that the current debate in Britain rapidly starts to focus on facts rather than emotion.  It should also focus on the broader political issue of the value in principle of the whole experiment.  Other Member States too should put down clear markers that whatever the strength of their wishes to keep Britain in the EU that their own room to manoeuvre is very limited.   For Germany, Ireland, the Netherlands and Sweden to be sympathetic to keeping Britain in as a part of the family is one thing but for this sympathy to be interpreted as being likely to give rise to substantial concessions would be a mistake.   I am afraid that expectations are already too high here and when and if they are dashed the threats to British membership will be exacerbated.

If there is a moral value in what European integration seeks to achieve as I believe there clearly is then Christians have a part to play in this historic debate.

This article was first delivered as a speech at Heyhrop College, The Specialist Philosophy and Theology College Of the University of London on Thursday 26 September.