Why is the EU different in the eyes of the British?
The Brexit referendum was dominated by simplistic views of the European Union. Critics have portrayed the EU as sucking money from the UK to support an oversized Brussels bureaucracy, while supporters of Remain seemed speechless in arguing positively to stay in the EU. Building on a new book, Richard pomfret argues that the process of European economic integration has alternated between periods of reform and an apparent deadlock, but with substantial cumulative changes over the past 75 years. At every important step, the UK hesitated or followed the wrong track.
For Belgium, France, Germany, Italy, Luxembourg and the Netherlands, economic integration was an instrument to prevent a new war in Europe. The project was successful. In the 75 years leading up to 1945, Europe suffered three increasingly devastating Franco-German wars; in the 75 years since 1945, France and Germany coexisted peacefully
In a recently published book, I argue that European integration has been an evolutionary process, using economic integration as a means of promoting political harmony. Or, if harmony is too strong a word for an institution often characterized by dissent before agreement on a way forward, a way to keep the peace in Europe. Member governments were cautious in resisting changes that could negatively impact the perceived national interest, but eventually came to an agreement on how to proceed.
The purpose and nature of European economic integration was viewed differently in England. For London, economic integration was about balancing economic costs and benefits and avoiding ceding too much sovereignty. At every major stage of European economic integration, the UK was out of step, either reluctant to participate or defending its own priority.
The original six members started with a limited sectoral agreement before agreeing in the Treaty of Rome in 1957 to establish a customs union. The UK has stayed on the sidelines. The customs union took a decade to come into being, including a convoluted special regime for agriculture. As an alternative to the customs union, the UK has set up a free trade area with six other countries. Without a common foreign trade policy and excluding agriculture, the free trade area was simpler than the customs union. However, the most dynamic Western European economies were in the customs union.
The UK abandoned the free trade area and joined the customs union in 1973. In less than a decade, Margaret Thatcher was complaining about the UK’s positive net contribution to the budget and was struggling to recoup it. Great Britain’s money. The idea that contributions should be balanced was not accepted by other members. They preferred to respond to UK concerns with reforms, reducing the share of spending on agriculture and increasing funding for the poorest regions of Europe and other joint projects.
At the start of the 1980s, the integration project was in difficulty. Members used non-tariff barriers to bypass the free internal movement of goods in the customs union, and little progress had been made on the free movement of services, labor or capital. Margaret Thatcher’s budgetary difficulties alienated other members who foiled her by adopting the Single European Act in 1986. Members agreed to strengthen economic integration by creating a single market.
Thatcher initially supported the creation of a single market, of which his ally Lord Cockfield was the main architect, but radically reversed his position when it became clear that the single market could include the adoption of a single currency. It was too great an invasion of UK sovereignty. By then it was too late, and Thatcher’s stubbornness helped cause him to lose his job. The single market was codified in the Maastricht Treaty of 1993 and followed by the creation of the euro. The Maastricht Treaty was passed with the lukewarm assent of Thatcher’s successors who demanded waivers of the social charter and common currency – and amid strong opposition from Eurosceptics in the Conservative Party.
All signs are showing that the EU is here to stay, whatever its future development.
EU at 21st century differed from the European Communities of the 1970s not only by its deeper integration, but also by its expansion from 12 to 28 members. The situation called for new decision-making rules, formalized in the 2007 Lisbon Treaty. Although the UK generally supported enlargement, Eurosceptics were cautious about the further integration foreseen in the Lisbon Treaty. , despite the increased emphasis on subsidiarity. Brexit was not inevitable, but the battle lines were drawn.
There may be a political debate about accepting the constraints of being a rich country in the EU. Switzerland and Norway have decided not to join. Denmark and Sweden continue to have doubts about monetary union, but prefer to work inside rather than outside the EU. Such a debate has hardly taken place in the UK, in part because positions for and against the EU were established early on, on the basis of simplistic or outdated views of what European integration might entail. and without public debate or on the UK’s role in the EU as it evolves or practical issues such as the Irish border or fishing rights.
The integration process has not been without dangers. The 2010s were dominated by three crises which were the unexpected results of deeper and broader integration: the Euro / Greek financial crises, the refugee crisis and Brexit. By 2020, all three had been resolved, imperfectly but sufficient to remove the label of âcrisisâ. For the first two, the EU is moving cautiously towards deeper integration through coordination of fiscal policies, a stronger European Central Bank, a better funded border service (Frontex) and other measures. In the 2020s, the Commission affirmed its commitment to a green Europe.
The EU remains a work in progress and can always remain so. Institutionally, the “democratic deficit” of a Parliament with limited powers (and whose members are often elected with a low turnout) must be corrected. Economic areas that still require reform include regulation of the banking and financial sector, portability of social security and other benefits as the population becomes increasingly mobile across national borders, and management of the economy. ‘immigration to the European borderless zone (including the treatment of refugees). These are not easy questions, and some members may resist the change to the point of following the UK out the door. However, all signs show that the EU is here to stay whatever its future development.
For more information, please see the author’s companion book, The economic integration of Europe (Harvard University Press, 2021)
Note: This article gives the author’s point of view, not the position of EUROPP – European Politics and Policy or the London School of Economics. Image credit featured: Pippa Fowles / No 10 Downing Street (CC BY-NC-ND 2.0)