Can anyone think of a good reason why Britain should Join with Europe?

Great Debates
1

I for one cannot. I know that in Britain the media is not exactly unbiased and is constantly preaching prophecies of death, doom and destruction if we join with Europe so I am not in the best position to get 100% unbiased information.
However I watch BBC News24 every day and that source is about as unbiased a source as I can realistically hope to find. From News 24 I have learned the following things.

  1. The Euro is falling and falling quite quickly too.
  2. Joining with the European union will mean that our subsidies which we are paying now will increase as the EU incorporates more countries with poor economies and the EU might feasibly struggle to support them.
  3. Scrapping the pound and joining the Euro will result in Britain having to harmonise our taxes to bring them into line with European tax rates which are much higher than ours.
    None of these things strike me as good so can anyone tell me a couple of good reasons why Britain should become more intertwined with European affairs?
2

Ireland are in Europe and Our taxes are lower than in the UK. Its the UK markets oppposition the the Euro that is one of the factors in the weak euro (well, weak compared to the dollar and the pound.) The Euro just needs backing, and a united EU on this subject would do wonders for the Euro.

3

I don’t understand the question. Are you asking if we should join the euro zone, or if we should withdraw from the EU entirely?

4

I’m afraid that I don’t have time to post comprehensively on this subject at this time (actually those who have seen my previous efforts will probably be thankful).

However, suffice to say:
[ul]
[li]Having a strong currency is not in and of itself a good thing:[list=1][/li][li]As the pound rockets against the Euro we risk the onset of heavy cost-push inflation.[/li][li]Industry begin to find situating themselves in Britain untenable, risking unemployment.[/li][li]The uncertainty invloved with dealing with an unnecessary additional currency, with the attaching currency risk, means that many companies may find themselves deciding to expand in Europe rather than into Britain.[/li][/list=1]

[li]The three principle economic tasks facing a government are:[list=1][/li][li]Control inflation[/li][li]Control unemployment[/li][li]Control the exchange rate[/list=1][/li]
As the above point seeks to point out, it’ll be increasingly tough to do any of these whilst remaining outside the Euro.

[li]It is difficult to be a full member of the decision making process without being an integral part of the outcome.[/li][/ul]
Saying all that, I could provide some good economic argument for staying outside the Euro also. I suspect that I’ll be playing this side of the economic debate for the time being though. Maybe I’ll switch if this side gets too popular :slight_smile:

[/quote]

So, in summary, I think that economic pro/anti Euro arguments can lead you either way. The decision is probably not an economic one. Rather it is a sociological one. Do we want to be part of a brotherhood of countries? Do we want to stand alone - an island apart? As someone who likes to think of himself as a member of humanity rather than an Englishman, I’d prefer the former.

regards,

pan

5

Gomez – The OP isn’t overly clear. Given that the UK is already “joined” with Europe (Treaty Of Rome, Maschctrict Treaty, etc,), I’ll assume you are referring to the on going debate about the merits and demerits of joining the 12 partners in creating a common currency. This is my view on where the debate should centre.

The (above) mentioned Treaties, along with shed loads of Directives have already brought a harmonisation in (primarily) law, environmental and in social issues. One may be tempted to think that if sovereignty was the real sticking point, the Tory party might have made more of an issue of UK courts – including The House of Lords – being subordinate to both Brussels and Strasbourg. Perhaps it’s worth noting, also, that Tory Prime Ministers were responsible for signing up to all legislation that has affected UK sovereignty.

I am tempted to believe that given the much used ‘get out clause’ that Tories rely on (we can leave when we want) when questioned about the sovereignty already transferred to Europe – and that ‘clause’ still exists in relation to the single currency – the real issues lie elsewhere.

My view:

There exists no model of a modern democratic capitalistic society in which an Executive does not act as the check and balance (being the elected representatives of the people) against those mandarins responsible for running that society’s economic policies. IMHO, a central bank (The Fed, The Bank of England, The Bundesbank, etc.) acts as a conduit between the Governments (elected) mandate and the needs of the international and national financial markets to have confidence in the Governments financial plans. The relationship is obviously much more complex than that but hey, lets assume the link and relationship is crucial to all concerned

It would then follow that:

If you then create an international Bank vested with the actual powers of a national bank (for example, capable of determining collective interest rates, spending, PSBR, etc, etc) it follows there must be an equivalent (elected) Executive counter balance. Thus a new tier of European Government needs to put in place – in practice, of course, this means dramatically increasing the powers of the existing European Parliament. “There is no alternative” (sic).

In other words, IMHO, there is absolutely no question that the implications of a single currency - and all its attendant trappings - constitute the arrival of, somewhat by the back door, a true Federation, a de facto United States of Europe. I believe that is an unavoidable consequence of a single currency and is the real political agenda of both France and Germany.

It matters not a jot what we think about the single currency because it is happening. The only question for the UK is: What are the social, political, legal and economic consequences of joining this fledgling Federation, what are the implications for national identity and what will happen if we don’t join ?

6

So, if I may ?

  1. The Euro is falling and falling quite quickly too.
    The American economy is stronger than expected, and that boosts the dollar. Can’t be helped. The Euro will find its natural level.

  2. Joining with the European union will mean that our subsidies which we are paying now will increase as the EU incorporates more countries with poor economies and the EU might feasibly struggle to support them.

This is of course a question of personal priorities. I think it’s a whopping good idea to give poorer countries an incentive to join our little club - because that also means that they’ll have to live up to our standards as to minimum wages, human rights, social security etc. etc. I don’t want to see our neighbours decay into a Russia-style robber capitalism, and the chance of Union membership works against that. If it costs me money, then so be it. If you believe otherwise, vote against.

  1. Scrapping the pound and joining the Euro will result in Britain having to harmonise our taxes to bring them into line with European tax rates which are much higher than ours.

I believe that’s not entirely correct. AFAIK, there are two demands a country has to live up to in order to be part of the Euro: Low inflation and low state deficit. That’s it.

OK, as you can tell, I like the European idea. The Union most certainly has it drawbacks and its construction could be improved in ways too numerous to mention.

I do believe, however, that the EU is one of the better ways to make our voice heard, world-wide, and to further some of the ideals that the European societies attempt to promote.

Yeah, so I’m naive.

S. Norman

7

Hey Spiny

Wouldn’t you include subordinating national tax raising and spending limits to the priorities of the Central Bank (with all the restricting consequences for the ability of a nationally elected Government to carry out its elected mandate) ?

8

A good summary, London Calling. I would however like to ‘clash’ with you on one point*

I thought long and hard about replying with what to you may seem a nit-picking response. However I’d like to bring it forward before others get a chance to veer off in one direction too much.

Whilst I appreciate that your question does include the line “and what will happen if we don’t join ?”, I suspect that those answering will centre on the “What are the social, political, legal and economic consequences of joining this fledgling Federation, what are the implications for national identity?” part of it. I’d like to emphasise:

What are the social, political, legal and economic consequences of not joining this fledgling Federation and what are the implications for national identity?

Thing is - as you (emphatically) said, the single currency is a reality. We can’t ignore it and assume that our own affairs will continue as usual. They won’t (see my previous post).

In view of this, in many ways the debate ought not to centre on why we should join, but why we should not.

regards,

pan

*sorry - no doubt this one’s been used before.

9

London_Calling says:

Eh - I probably would have to, but I have to admit that I’m not completely sure of what you’re saying, which is most likely my fault. If I read you correctly, you’re saying that a national Government will have to adjust its policies on taxation and spending according to the directives of the central bank, rather than to the wishes of the electorate ?

I honestly wasn’t aware that the central bank had any power over the member nations’ tax rates and public spending, except for the two points I mentioned (inflation & deficit). If that’s the case, then of course it should be included, probably above the other two.

S. Norman

10

London_Calling,

Fiscal policy would no more be subordinated to the ECB if we joined the euro than it is currently subordinated to the Bank of England. We’re going down the tax harmonisation route anyway, even without joining the euro, but it’s not the ECB driving it, it’s the Commission.

For reference, the criteria for memership of the euro set out in the Maastricht Treaty were:

  1. Long-term (12 month) interest rates < 2 percentage points above the three best-performing countries.*

  2. Inflation (deflator of private consumption) < 1.5 pp above 3 best performing countries.*

  3. No increase in gross public debt and gross public debt < 60% of GDP.

  4. No increase in general government deficits and deficits < 3% of GDP.

*on interest rates and inflation, respectively, not overall.

11

What I never understood is why Britain (or should I say England) never really joined it’s own neighbors. Whales has it’s own council and Scotland it’s own laws and Northern Ireland it’s own struggles.

Why haven’t the British Isles made peace with themselves after all these centuries of common rule?

12

Yes, I meant Wales. (I’m not a good speller, but not that bad!)

13

“3) Scrapping the pound and joining the Euro will result in Britain having to harmonise our taxes to bring them into line with European tax rates which are much higher than ours.”

By “having to”, do we mean:
*legally, because some EU treaty or law says so; or
*practically, because the euro wouldn’t work unless everyone’s on the same page fiscally?

I don’t know about the former, but the latter is nonsense. The United States has a central bank and a common currency. And every one of the 50 states – and thousands of counties, cities, and special districts – have their own tax rates and structures. Uniform MONETARY policy doesn’t in any way require uniform FISCAL policy.

14

Most of the Eurobashing is frankly racist and would never be tolerated if it was about blacks.

Froggie bashing, sausage noshers, and garlic eaters are just some of the standard fare of the low brow press.

The Tories are on their knees and they are looking for a populist issue and so they go to the lowest level possible.Europhobia is their answer.I remember very well the disgraceful use of race by the Tories in the '60’s in election campaigns - they are still at it now with the exagerration of illegal immigration fears and the barriers they put up tp asylum seekers during their last term in office.Much of the UK media is in the hands of theur supporters hence the large amount of ‘anti-furriner’ rubbish spouted.

If Britain were part of the Euro many financial services would get a rude shock except that they already are aware of the implications.
Our interest rates are higher than Europe, our financial institutions simply borrow money on the European markets and lend it to us at a higher rate.

Monetry union would sweep this away.

Interest rates have been used in the UK as a major tool in economic control but it hits all areas of the country and economy at once and is often as damaging as it is beneficial.
Using interest rates to squeeze spending has not been recognised by the public as simply increasing tax but that is what it effectively is.Increasing direct taxation is always a big vote loser.
Maybe without this blunt instrument our leaders would actually have to consider how to manage the economy rather than make all suffer the consequencies of things such as pre-election spending sprees and suffer the inflationary hangover once they have been returned to office.

Having a separate currency is not cost-free and we pay dearly for it when we do business in Europe which is just about our biggest trading region.

15

Well, yes and no.

The important taxes like Corporation Tax and Income Tax are determined by the Fed and the State determines some of the lesser (often indirect) taxes like sales tax (VAT) - as i understand.

Uniform monetary policy doesn’t require uniform fiscal policy but the two are inextricably linked. Of course you can determine the overall tax burden as long as it sits within the parameters decided by the Central Bank and spend accordingly. But if your tax raising abililty has to fall within parameters and you have spending obligations determined by Brussels (by setting either standards or minimum levels of provision in for example, welfare) you do retain a degree of elbow room but;

(1) - it is restricting,
(2) - the normal built in flexibility of public borrowing is either absent or out of your hands, and
(2) - there is nothing to stop Brussels changing the parameters as time goes on. If we have learned one lesson from joining the community it must surely be that nothing stands still - there is a constant push toward greater integration at all levels (that is, after all, their job).

Given that, I tend to view any entry level flexibility as (to some extent) a sweetner.

16

Something else to consider - in many ways London’s economic needs are far closer to those of Berlin than they are to Rotherham.

Consider that London is probably the largest financial centre in Europe. The needs of that kind of economy are vastly different to those cities with a manufacturing base.

Manufacturing cities in this country are already ignored when it comes to the Bank of England setting base rates to minimise inflation in the south. Potentially they would be better off through interest rates being set under consideration of the rest of Europe.

regards,

pan

17

Fiscal policy has no real teeth without monetary policy to back it up.

Increased government spending in an attempt to excite demand in a non-optimal economy will be of very limited success unless you have the power to expand the money supply. (Of course there are those who will probably argue that it will be of limited success anyway…)

regards,

pan

18

The answer to this lies largely in the following

I’ll expand a little on it.

After the last election follwing 18 years of rule by the Conservative party Scotland returned not a single Conservative representative to parliament and a very similar thing happened in Wales.
These areas and huge tracts of the North did very badly on the London centric policies of the Conservative administration and residents of those areas decided that they would be better off if they had some control over their own affairs.
The issue of regional ‘Parliaments’ became a vote winner for the opposition Labour party.

The irony is that the Conservatives are more toward the Nationalistic side of the political spectrum and have always advocated a strong united British Isles, note I said British Isles there, yet they have probably done more with their policies centred around London to ensure a weaker federation.

On a brighter note I have serious doubts that the Conservatives would have had the political culture to set up the Irish Assembly which is part of the regional parliament framework, especially since they were in bed with the Unionist party for many years.

For decades British consumers have had to pay the highest prices for goods common throughout Europe, cars being the big eycatcher at the moment.
Monopoly commissions have looked at these issues many times and have been swayed by the obviously biased opinions of the manufacturers and traders themselves.
To the chagrin of many Brits some of the decisions reek of something not very savoury but still they keep coming up with reasons why we should pay more.
Continental companies selling goods in the UK have dubbed us ‘treasure island’.

If we were to adopt the Euro there would not be the easy hiding place of exchange rates to make comparisons that much harder.
We Brits have had to take case after case to the European courts to demand rights that are denied to us by the cabal of business and government.
Frankly I do not genuinely believe that UK institutions have the interests of UK citizens as their priority so I would prefer to remove the dead hand of their control from our currency so that they would actually have to come up with real economic strategies.

And before anyone points out that the rest of Europe has its own priorities other than those of Brits, well at least we would not be deluding ourselves as we seem to do now.

Whilst we remain outside the Euro we are always likely to be used as a hedge against currency weakness in Europe which has the tendency to make the pound strong which in turn makes excahange rates less favourable for the export of our goods into Europe, we also end up sucking in more improts from Europe and find we have to keep our interest rates high as a result which again compounds the problem of a high value pound.

Just think, if we had the Euro then it would be a simple matter for me to buy mortagages and financial services from any provider in Europe and our institutions would be forced to compete, they have a captive market right now and they do not want to lose it.It comes as no surprise to me that the party of business as the Conservatives like to dub themselves are opposed to the Euro.

19

::checking map of tectonic plates::

Um, too late?

20

To return the favour of elaborating on a post:

Note that even during the years of Tory government, Wales, Scotland and to a certain extent large parts of Northern England had next to no Tory MPs. Thus London-centric decisions were being made that adversely affected millions of people who had not voted for that government. I’m thinking of such policies as poll tax, mine closures, interest rates set to control inflation at the expense of manufacture.

The Conservatives learned that to keep the reigns of power they essentially just had to appease London and the South-East. And there was nothing anyone could do about it, until Labour cottoned onto the fact that they could just do the same. So now the non-London regions have even less representation, since they have lost the one ally they had!

Whilst London is all powerful in the British economy and to British politicians, other regions of the UK will never be truly represented under a UK system of government. This leads me to the conclusion that paradoxically these regions would be better represented by a European government which cares about its agricultural and manufacturing regions than a UK government who doesn’t.

The Euro means loss of control? Control for whom?

regards,

pan