My piece for Total Politics: Do EU policies serve our economic interests?

Labour Party

The latest issue of Total Politics magazine has an article wrote about whether or not the European Union still serves our economic interests. I have pasted my argument here in the blog, and it is available in the latest issue (February) Total Politics.

Do EU policies still serve our economic interests?

by Mary Honeyball MEP and Michael Fabricant MP / 17 Jan 2013

Mary Honeyball MEP warns against the dangers of ‘single market-lite’, but Michael Fabricant MP believes our economy is too different from those of other member states

This article is from the February 2013 issue of Total Politics

Yes, says Mary Honeyball

Certain elements of the British political class have for too long treated the European Union as a scapegoat for our economic woes. Always a simplistic view, this attitude to the EU is becoming increasingly untenable.

As far as the broad economic argument is concerned, the essential point is that much of the western world is in recession. We are, inevitably, all in this together. Britain’s economy and that of the eurozone are inextricably linked.

The eurozone is the UK’s biggest trading partner, and the decline in the bloc’s fortunes – the 17-nation eurozone contracted by 0.1 per cent between July and September 2012, following a 0.2 per cent decline during the previous three months – contributed to our falling back into recession earlier in 2012.

It is the eurozone, and by extension the EU single market, that really matters to the UK. The majority of our exports go to the single market, and as a result any dip in the eurozone economies will have an adverse effect on Britain.

Given the single market’s importance, it seems extraordinary that anyone in government would think about upsetting the balance so necessary for the UK’s prosperity, yet this balance would be utterly undone if our much-vaunted repatriation of powers were to be applied to the single market. The government, along with London mayor Boris Johnson and assorted eurosceptics, think they can negotiate a “single market-lite”. What they mean is bringing EU employment law, health and safety regulations and anything else to do with working conditions back to the UK, presumably with a view to reducing these social provisions once they are safely restored. And it’s not only employment legislation. Trying to negotiate this single market-lite would have serious implications for London’s financial services. More euros are traded in London than Paris and Frankfurt combined, but would this still be the case after a ‘Brixit’?

EU leaders have made it clear they don’t see an attempt by Britain to repatriate powers as a plausible action. French President François Hollande has already insisted EU member states must comply with the terms of EU treaties they have signed and ratified, saying: “Europe is not a Europe where you can take back competencies. It is not Europe à la carte.”

The single market agreements and treaties serve a very real purpose and are not simply a means for the EU to impose its will on recalcitrant member states. For the single market to function, there needs to be a level playing field. This is the reason employment law and other work-related matters need to be broadly the same across the EU. If one country were able to have an easier time than the others, it would have an unfair advantage and undermine the power of the single market and its ability to function.

Given that the EU single market, which Britain entered under the premiership of the eurosceptic Margaret Thatcher, is so important for our exports, attempts to repatriate powers from this economically beneficial part of the EU seem like a prime example of cutting off our nose to spite our face. Britain’s economy needs a fully functioning single market – it is the most crucial reason Britain needs the EU.

What is more, any proposals for repatriation of powers would need the agreement of the 26 other EU member states, an unlikely scenario if the French president is anything to go by. The fact that there is little likelihood of any new treaty negotiations happening before the European Parliament elections in 2014 just adds another layer to a misguided fantasy.

The UK is one of the big players in the EU. German chancellor Angela Merkel does not want a ‘Brixit’. A source close to her recently said: ”The chancellor and her closest advisers are trying very hard to make it easy for Britain to keep the EU door open. The chancellor does not belong to the school that is fed up with Britain; she believes it is essential Britain remains at the heart of Europe.”

Given that there is still such goodwill towards Britain, it would be sheer folly to throw this away in a desperate bid to attempt to repatriate powers from the single market and thereby undermine Britain’s economy. We should, instead, take stock of where our economic interests lie in relation to the European Union before it is too late.

Mary Honeyball is Labour MEP for London